An Act to Provide Relief to Federal or State Employees Affected by
Maine Legislature, Session 132, LD 0874
Committee: Health Coverage, Insurance and Financial Services
Sponsors: MATHIESON, DAUGHTRY, BAILEY
Amends: 5 MRSA §160

Legislative Document
No. 874
H.P. 560
House of Representatives, March 4, 2025
An Act to Provide Relief to Federal or State Employees Affected by 
a Federal Government or State Government Shutdown
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative MATHIESON of Kittery.
Cosponsored by President DAUGHTRY of Cumberland, Senator BAILEY of York and
Representatives: ARFORD of Brunswick, BOYER of Cape Elizabeth, CLOUTIER of 
Lewiston, CLUCHEY of Bowdoinham, MASTRACCIO of Sanford, MATLACK of St. 
George, MILLIKEN of Blue Hill, Senator: BALDACCI of Penobscot.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA §160 is enacted to read:
§160.  Government Shutdown Loan Guarantee Program Fund established
The Government Shutdown Loan Guarantee Program Fund is established as a 
nonlapsing Other Special Revenue Funds account within the Office of the Treasurer of 
State.  All money received by the fund from any source, including any transfers from the 
General Fund unappropriated surplus, must be credited to the fund. Money credited to the 
fund must be used to guarantee the repayment of loans made by an eligible financial 
institution to an eligible affected employee pursuant to Title 10, chapter 110, subchapter 
15.
Sec. 2.  10 MRSA c. 110, sub-c. 15 is enacted to read:
SUBCHAPTER 15
GOVERNMENT SHUTDOWN LOAN GUARANTEE PROGRAM
§1100-HH.  Definitions
As used in this subchapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Affected employee.  "Affected employee" means a person employed by the Federal 
Government or the State Government or any federal or state agency who, during a 
shutdown, is:
A.  A resident of the State; and
B.  Required to work as a federal or state employee without pay or furloughed as a 
federal or state employee without pay.
2.  Bureau.  "Bureau" means the Department of Professional and Financial Regulation, 
Bureau of Financial Institutions.
3.  Credit union.  "Credit union" has the same meaning as "credit union authorized to 
do business in this State" in Title 9-B, section 131, subsection 12-A.
4.  Eligible affected employee.  "Eligible affected employee" means an affected 
employee who is eligible to receive a loan as determined pursuant to section 1100-JJ, 
subsection 1.
5.  Eligible financial institution.  "Eligible financial institution" means a credit union 
or financial institution that is in good standing as determined by the bureau pursuant to 
section 1100-II, subsection 2.
6.  Financial institution.  "Financial institution" has the same meaning as "financial 
institution authorized to do business in this State" in Title 9-B, section 131, subsection 
17-A.  
7.  Good standing.  "Good standing," with respect to a credit union or financial 
institution, means that the credit union or financial institution is insured by the Federal 
Deposit Insurance Corporation or the National Credit Union Administration.
8.  Grace period.  "Grace period" means the period beginning with the disbursement 
of a loan under this subchapter and ending 90 days after an eligible affected employee 
receives disbursement of the loan or at the end of the shutdown during which the loan was 
made, whichever is later.
9.  Loan. "Loan" means an extension of credit made by an eligible financial institution 
to an eligible affected employee pursuant to this subchapter.
10.  Loan guarantee payment.  "Loan guarantee payment" means the amount paid by 
the Treasurer of State in satisfaction of a claim filed by an eligible financial institution 
pursuant to section 1100-KK.
11.  Program.  "Program" means the Government Shutdown Loan Guarantee Program 
established in section 1100-II.
12.  Shutdown.  "Shutdown" means a full or partial shutdown of the Federal 
Government or the State Government that lasts longer than 7 consecutive calendar days.  
Each shutdown is considered a separate shutdown for purposes of the program.
§1100-II.  Government Shutdown Loan Guarantee Program established
1.  Establishment; purpose.  The Government Shutdown Loan Guarantee Program is 
established within and administered by the authority.  The authority shall guarantee the 
repayment of loans made by an eligible financial institution to an eligible affected 
employee pursuant to section 1100-JJ. The authority shall submit all approved claims 
pursuant to section 1100-KK to the Treasurer of State, who shall pay from the Government 
Shutdown Loan Guarantee Program Fund, established in Title 5, section 160, any claims 
submitted by the authority pursuant to the program.
2.  Process for credit unions and financial institutions.  A credit union or financial 
institution may submit a request to the bureau to participate in the program. Not later than 
business days after receiving the request to participate, the bureau shall determine 
whether the credit union or financial institution is an eligible financial institution and 
immediately notify the credit union or financial institution and the authority of that 
determination. An eligible financial institution may make loans to an eligible affected 
employee in accordance with section 1100-JJ.
3.  Notification of loan and borrower information.  An eligible financial institution 
that makes a loan to an eligible affected employee pursuant to section 1100-JJ shall notify 
the authority in writing not later than 5 business days after making the loan, specifying such 
information about the eligible affected employee borrower as the authority may request.
§1100-JJ.  Eligibility of affected employees; loan terms; process
1.  Determination of eligibility of affected employee.  An eligible financial institution 
may make a loan to an affected employee who meets the following eligibility requirements.
A.  An affected employee shall provide to the eligible financial institution proof of the 
affected employee's employment status, income and residence in this State. An affected 
employee may meet the requirements of this paragraph by providing to the eligible 
financial institution proof such as a pay stub or bank statement, a federal employee 
identification card or the federal tax identification number of the affected employee's 
employer.
B.  In addition to the proof required in paragraph A, an affected employee shall submit 
to the eligible financial institution a sworn affidavit from the affected employee stating:
(1) That the affected employee is currently a federal or state employee residing in 
this State;
(2) That the affected employee is eligible to receive back pay when a shutdown 
ends;
(3)  That the affected employee is not receiving a loan from any other eligible 
financial institution pursuant to this subchapter; and
(4)  The amount per week of unemployment compensation benefits pursuant to 
Title 26, chapter 13:
(a)  Received by the affected employee, if any, during a shutdown; and
(b)  The affected employee is eligible to receive, if any, during a shutdown.
2. Determination of loan amount.  The maximum amount of a loan is the lesser of 
$6,000 and the affected employee's most recent monthly after-tax pay, offset by any 
unemployment benefits, as determined pursuant to this subsection.
A.  Offsetting unemployment benefits are determined by multiplying by 4 the greater 
of the amount per week of unemployment benefits pursuant to Title 26, chapter 13, as 
reported pursuant to subsection 1, paragraph B, subparagraph (4):
(1) Actually received by the affected employee during the shutdown; and
(2) The affected employee is eligible to receive during the shutdown.
B.  The amount of offsetting unemployment benefits, if any, as determined pursuant to 
paragraph A is subtracted from the lesser of $6,000 and the affected employee's most 
recent monthly after-tax pay.
C.  The amount of the loan is the lesser of $6,000 and the amount determined following 
the calculation in paragraph B.
3.  Creditworthiness.  An eligible financial institution may not use an affected 
employee's creditworthiness as a factor for the purposes of determining eligibility for a loan 
under this subchapter.
4.  Terms of loan agreement. Notwithstanding any provision of law to the contrary, 
the following terms apply to a loan issued pursuant to this subchapter.
A.  A loan agreement may not:
(1)  Require repayment during the grace period; 
(2)  Charge interest on the principal amount before or during the grace period or 
for 180 days after the grace period; or 
(3)  Contain a fee or penalty for the prepayment or early payment of the loan.
B.  The loan agreement must require that the affected employee repay the loan in full 
not later than 180 days after the end of the grace period and permit repayment to be 
made in installments. An affected employee who chooses to repay the loan in 
installments must be allowed to make at least 3 and no more than 6 equal installment 
payments.
C.  After 180 days have elapsed following the grace period, the eligible financial 
institution may charge interest or fees in accordance with the eligible financial 
institution's lending policy and the terms of the loan agreement.
5.  Multiple loans to same eligible affected employee during same shutdown.  An 
eligible affected employee who has received a loan pursuant to this section may apply to 
the same eligible financial institution for an additional loan for each 30-day period beyond 
the first that the affected employee remains an eligible affected employee, except that an 
eligible affected employee may not receive more than 3 loans under the program during a 
shutdown.  An eligible affected employee who applies for an additional loan shall provide 
the eligible financial institution with updated information as required under subsection 1, 
including the amount of unemployment compensation benefits the affected employee has 
been determined eligible to receive or has received during the shutdown. Each additional 
loan must be made in accordance with this section.
6.  Treatment of deferred interest.  Notwithstanding any provision of Title 36, Part 
to the contrary, any interest deferred or not charged related to a loan issued pursuant to 
this section is exempt from all state taxes that may be applicable to such interest amounts 
as they relate to an affected employee. An eligible financial institution shall disclose to 
eligible affected employee borrowers in the signed affidavit or loan documents that there 
may be federal tax consequences to the program loans and that loan information may be 
shared with the authority.
§1100-KK.  Loan guarantee
1.  Claims.  No sooner than the 180th day following the end of the grace period and no 
later than the 300th day following the end of the grace period, an eligible financial 
institution that has made a good faith effort to collect the outstanding principal of a loan 
issued pursuant to section 1100-JJ and has been unsuccessful may make a claim to the 
authority for recovery of an amount equal to the outstanding principal of that loan.
An eligible financial institution shall demonstrate to the satisfaction of the authority that 
the eligible financial institution has made a good faith effort to collect the outstanding 
principal from the eligible affected employee in accordance with the eligible financial 
institution's loan servicing and collection policies and has been unsuccessful.
2.  Loan guarantee payment.  The authority, upon receipt of a properly documented 
claim submitted by an eligible financial institution pursuant to subsection 1, shall submit 
the claim immediately to the Treasurer of State for payment.  The Treasurer of State 
immediately shall pay to the authority from the Government Shutdown Loan Guarantee 
Program Fund, established in Title 5, section 160, any claims submitted by the authority 
pursuant to the program.  The authority shall distribute the loan guarantee payment to the 
eligible financial institution.
3.  Effect of payment of claim.  After payment of a loan guarantee payment to an 
eligible financial institution pursuant to subsection 2:
A.  The loan must be assigned by the eligible financial institution to the authority on 
behalf of the State; and
B.  The duty of the authority to continue collection efforts on the loan pursuant to 
section 1100-LL, subsection 4 applies. 
§1100-LL.  Duties and powers of authority
1.  Maintenance and review of records.  The authority shall maintain records in the 
regular course of administration of the program, including a record of loans issued pursuant 
to section 1100-JJ and loan guarantee payments issued pursuant to section 1100-KK, 
subsection 2 to honor claims on defaulted loans. The authority shall regularly review these 
records to monitor all the loans issued and identify duplicate applications. 
2.  Termination of loan recovery guarantee based on misrepresentation or failure 
to comply by eligible financial institution.  The authority may terminate any agreement 
to pay the claim of an eligible financial institution pursuant to section 1100-KK if the 
eligible financial institution misrepresents any information pertaining to the loan or fails to 
comply with any requirements of this section or section 1100-KK in connection with the 
claim for the loan.
3.  Termination of loan recovery guarantee based on excess claims. If the amount 
expended for loan guarantee payments under section 1100-KK equals or exceeds 10% of 
the total of all loans issued, the authority shall immediately cease to approve claims and 
shall notify the Treasurer of State and each eligible financial institution of the total amount 
of loan guarantee payments made and that the authority has ceased honoring loan claims.
4.  Recovery of defaulted loans.  The authority, on its own or by contracting with a 
private entity, shall make reasonable efforts to recover the amount of loan guarantee 
payments made pursuant to section 1100-KK, subsection 2.  Any funds recovered pursuant 
to this subsection, less reasonable administrative costs, must be deposited in the 
Government Shutdown Loan Guarantee Program Fund established in Title 5, section 160.
§1100-MM.  New loans prohibited after shutdown 
An affected employee may not apply for a loan under the program after a shutdown 
ends.  A financial institution may not approve a loan under the program after a shutdown 
ends.
§1100-NN.  Review of funding needs
The joint standing committee of the Legislature having jurisdiction over appropriations 
and financial affairs, in consultation with the joint standing committee of the Legislature 
having jurisdiction over financial services matters, may report out legislation to address 
any funding needs of the program.
Sec. 3.  Transfer. Notwithstanding any provision of law to the contrary, the State 
Controller shall transfer $250,000 from the General Fund unappropriated surplus to the 
Government Shutdown Loan Guarantee Program Fund, established within the Office of the 
Treasurer of State pursuant to the Maine Revised Statutes, Title 5, section 160, no later 
than 14 days following the effective date of this Act to be used to guarantee the repayment 
of loans made by an eligible financial institution to an eligible affected employee pursuant 
to Title 10, chapter 110, subchapter 15. 
Sec. 4.  Additional transfer and allocation.  The Joint Standing Committee on 
Appropriations and Financial Affairs, after consultation with the Joint Standing Committee 
on Health Coverage, Insurance and Financial Services, may report out legislation to the 
Government Shutdown Loan Guarantee Program established in the Maine Revised 
Statutes, Title 10, chapter 110, subchapter 15.
Sec. 5.  Appropriations and allocations.  The following appropriations and 
allocations are made.
TREASURER OF STATE, OFFICE OF
Government Shutdown Loan Guarantee Program Fund N296
Initiative: Establishes the Government Shutdown Loan Guarantee Program Fund with a 
$250,000 transfer from the unappropriated surplus of the General Fund.
OTHER SPECIAL REVENUE FUNDS
2025-26
2026-27
All Other
$250,000
$0
__________
__________
OTHER SPECIAL REVENUE FUNDS TOTAL
$250,000
$0
SUMMARY
This bill establishes the Government Shutdown Loan Guarantee Program. The 
program, administered by the Finance Authority of Maine, or FAME, provides access to 
no-interest loans for certain federal employees in Maine or State Government employees 
affected by a partial or full shutdown of the Federal Government or the State Government 
that lasts for longer than 7 consecutive days by guaranteeing up to 10% of the loans eligible 
credit unions and financial institutions make to affected employees.  
Under the bill, affected employees are eligible for up to 3 loans during a shutdown, 
each equal to their monthly after-tax pay, less unemployment benefits, up to a maximum 
of $6,000. Eligibility must be proven by the employee based on certain requirements. The 
creditworthiness of an employee may not be used as a factor to determine eligibility for the 
program.
An eligible financial institution that makes a loan pursuant to the program is prohibited 
from requiring repayment of the loan during the grace period, which is the time during the 
shutdown or 90 days after the disbursement of the loan, whichever is later, and from 
imposing interest on the loan for 180 days following the grace period. Following the end 
of the 180 days, an institution that made a loan under the program, after a good faith effort 
to collect the principal amount of the loan, may apply to FAME for repayment of the 
uncollected amount of the loan in default. The Treasurer of State is required to transfer 
funds for the payment of the uncollected amount to FAME, which is required to make the 
payment to the eligible financial institution.  FAME is required to make reasonable efforts 
to recoup the amount of any payments made to eligible financial institutions from the 
employee who defaulted on the loan.
Finally, the bill gives the joint standing committee of the Legislature having 
jurisdiction over appropriations and financial affairs, in consultation with the joint standing 
committee of the Legislature having jurisdiction over financial services matters, authority 
to report out legislation to address any funding needs of the program.