An Act To Authorize a General Fund Bond Issue To Provide Funding for a Program of Student Debt Cancellation and Refinancing
Maine Legislature, Session 128, LD 1163
Committee: Appropriations and Financial Affairs
Sponsors: LIBBY, DAUGHTRY, BELLOWS, BREEN, CHENETTE, JACKSON, MILLETT, SAVIELLO
Amends: 10 MRSA §1013

Legislative Document
No. 1163
S.P. 384
In Senate, March 23, 2017
An Act To Authorize a General Fund Bond Issue To Provide 
Funding for a Program of Student Debt Cancellation and 
Refinancing
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator LIBBY of Androscoggin.
Cosponsored by Representative DAUGHTRY of Brunswick and
Senators: BELLOWS of Kennebec, BREEN of Cumberland, CHENETTE of York, JACKSON 
of Aroostook, MILLETT of Cumberland, SAVIELLO of Franklin.
Preamble.  Two thirds of both Houses of the Legislature deeming it necessary in 
accordance with the Constitution of Maine, Article IX, Section 14 to authorize the 
issuance of bonds on behalf of the State of Maine to provide funds as described in this 
Act, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  Authorization of bonds.  The Treasurer of State is authorized, under 
the direction of the Governor, to issue bonds in the name and on behalf of the State in an 
amount not exceeding $250,000,000 for the purposes described in section 5 of this Part.  
The bonds are a pledge of the full faith and credit of the State.  The bonds may not run for 
a period longer than 10 years from the date of the original issue of the bonds. 
Sec. A-2.  Records of bonds issued; Treasurer of State. The Treasurer of 
State shall ensure that an account of each bond is kept showing the number of the bond, 
the name of the successful bidder to whom sold, the amount received for the bond, the 
date of sale and the date when payable. 
Sec. A-3.  Sale; how negotiated; proceeds appropriated.  The Treasurer of 
State may negotiate the sale of the bonds by direction of the Governor, but no bond may 
be loaned, pledged or hypothecated on behalf of the State.  The proceeds of the sale of the 
bonds, which must be held by the Treasurer of State and paid by the Treasurer of State 
upon warrants drawn by the State Controller, are appropriated solely for the purposes set 
forth in this Part.  Any unencumbered balances remaining at the completion of the project 
in this Part lapse to the Office of the Treasurer of State to be used for the retirement of 
general obligation bonds. 
Sec. A-4.  Interest and debt retirement.  The Treasurer of State shall pay 
interest due or accruing on any bonds issued under this Part and all sums coming due for 
payment of bonds at maturity. 
Sec. A-5.  Disbursement of bond proceeds from General Fund bond issue.  
The proceeds of the sale of the bonds authorized under this Part must be expended as 
designated in the following schedule under the direction and supervision of the agencies 
and entities set forth in this section. 
Provides funds for student debt cancellation and refinancing. 
FINANCE AUTHORITY OF MAINE 
Student Debt Cancellation and 
Refinancing Fund 
Total 
$250,000,000
Sec. A-6.  Contingent upon ratification of bond issue.  Sections 1 to 5 do not 
become effective unless the people of the State ratify the issuance of the bonds as set 
forth in this Part. 
Sec. A-7.  Appropriation balances at year-end.  At the end of each fiscal year, 
all unencumbered appropriation balances representing state money carry forward.  Bond 
proceeds that have not been expended within 10 years after the date of the sale of the 
bonds lapse to the Office of the Treasurer of State to be used for the retirement of general 
obligation bonds. 
Sec. A-8.  Bonds authorized but not issued.  Any bonds authorized but not 
issued within 5 years of ratification of this Part are deauthorized and may not be issued, 
except that the Legislature may, within 2 years after the expiration of that 5-year period, 
extend the period for issuing any remaining unissued bonds for an additional amount of 
time not to exceed 5 years. 
Sec. A-9.  Referendum for ratification; submission at election; form of 
question; effective date.  This Part must be submitted to the legal voters of the State at 
a statewide election held in the month of November following passage of this Act.  The 
municipal officers of this State shall notify the inhabitants of their respective cities, towns 
and plantations to meet, in the manner prescribed by law for holding a statewide election, 
to vote on the acceptance or rejection of this Part by voting on the following question: 
"Do you favor a $250,000,000 bond issue to fund student debt 
cancellation and refinancing?" 
The legal voters of each city, town and plantation shall vote by ballot on this question 
and designate their choice by a cross or check mark placed within a corresponding square 
below the word "Yes" or "No."  The ballots must be received, sorted, counted and 
declared in open ward, town and plantation meetings and returns made to the Secretary of 
State in the same manner as votes for members of the Legislature.  The Governor shall 
review the returns.  If a majority of the legal votes are cast in favor of this Part, the 
Governor shall proclaim the result without delay and this Part becomes effective 30 days 
after the date of the proclamation. 
The Secretary of State shall prepare and furnish to each city, town and plantation all 
ballots, returns and copies of this Part necessary to carry out the purposes of this 
referendum. 
PART B 
Sec. B-1.  10 MRSA §1013, sub-§16, as amended by PL 2001, c. 417, §12, is 
further amended to read: 
16.  Maine College Savings Program.  The Maine College Savings Program, as 
established in Title 20-A, chapter 417-E; and 
Sec. B-2.  10 MRSA §1013, sub-§17, as enacted by PL 2001, c. 417, §13, is 
amended to read: 
17.  Maine Dental Education Loan Program.  The Maine Dental Education Loan 
Program as established in Title 20-A, chapter 426.; and 
Sec. B-3.  10 MRSA §1013, sub-§18 is enacted to read: 
18.  Student Debt Cancellation and Refinancing Program.  The Student Debt 
Cancellation and Refinancing Program as established in Title 20-A, chapter 441. 
Sec. B-4.  20-A MRSA c. 441 is enacted to read: 
CHAPTER 441 
STUDENT DEBT CANCELLATION AND REFINANCING PROGRAM 
§12941.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Applicant.  "Applicant" means a person who is eligible and has applied for debt 
cancellation and debt refinancing under section 12942. 
2.  Authority.  "Authority" means the Finance Authority of Maine. 
3.  Fund.  "Fund" means the Student Debt Cancellation and Refinancing Fund 
established under section 12945. 
4.  Program.  "Program" means the Student Debt Cancellation and Refinancing 
Program established under section 12942. 
§12942.  Establishment of program; eligibility 
The Student Debt Cancellation and Refinancing Program is established.  Debt 
cancellation and refinancing under the program pursuant to section 12943 may be 
provided only to a resident of the State who possesses an associate or bachelor's degree, 
qualifies for the tax credit for educational opportunity under section 12541 and Title 36, 
section 5217-D and has applied for debt cancellation or debt refinancing under the 
program according to schedules and procedures of and on forms developed by the 
authority. 
§12943.  Student debt cancellation and refinancing 
An applicant may apply and the authority may provide for student debt cancellation 
of 1/2 of the applicant’s total outstanding nonfederal student debt.  An applicant may 
apply and the authority may provide for student debt refinancing of any of the applicant’s 
nonfederal student debt.  The authority shall charge the applicant an interest rate no 
higher than the prime rate of interest plus 0.5%, as determined by the authority, and shall 
require of the applicant a monthly debt payment of not more than $100 per month.  In 
cases of student debt cancellation and refinancing pursuant to the program, the authority 
shall pay in full the original creditor on the applicant’s behalf. 
§12944.  Program administration 
The authority shall administer the program and may adopt rules to carry out the 
purposes of the program.  Rules adopted pursuant to this section are routine technical 
rules pursuant to Title 5, chapter 375, subchapter 2-A. 
§12945.  Nonlapsing fund 
The Student Debt Cancellation and Refinancing Fund is established as a nonlapsing 
fund administered by the authority.  All money received by the fund from any source 
must be deposited with the authority and credited to the fund.  Money credited to the fund 
must be used for the purposes of the program, including administrative costs.  Repayment 
of loans and payment of interest pursuant to the program must be credited to the fund to 
be available for the purposes of the fund. 
Sec. B-5.  Contingent effective date.  This Part takes effect only if the General 
Fund bond issue proposed in Part A, section 9 is approved by the voters of this State. 
SUMMARY 
The funds provided by this bond issue, in the amount of $250,000,000, will be used 
to fund student debt cancellation and refinancing.  The bill also establishes the Student 
Debt Cancellation and Refinancing Program within the Finance Authority of Maine for 
administration of the funds provided by the bond issue and to provide eligible applicants 
debt cancellation of 1/2 of their nonfederal student debt and debt refinancing of their 
outstanding nonfederal student debt.