An Act To Authorize a General Fund Bond Issue To Provide for Student Loan Debt Relief
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,
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 $50,000,000 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.
|FINANCE AUTHORITY OF MAINE|
|Maine Student Loan Debt Relief Program|
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 one year 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 $50,000,000 bond issue to provide funds for low-interest student loans and interest rate reductions for student loan consolidation or refinancing for certain Maine residents who agree to live and work in Maine for at least 5 years?"
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.
Sec. B-1. 20-A MRSA c. 441 is enacted to read:
MAINE STUDENT LOAN DEBT RELIEF PROGRAM
§ 12941. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
§ 12942. Maine Student Loan Debt Relief Program
(1) Remain in the State as a resident; and
(2) Be employed in the State for a period of at least 5 years following graduation.
A student may continue to receive a loan bearing an annual interest rate of 0% beyond the expiration of the 5-year period for as long as the student continues to reside and work in the State.
§ 12943. Maine Student Loan Debt Relief Fund
§ 12944. Agreement; repayment
A student applying for a loan or for an interest rate reduction under section 12942 shall enter into an agreement with the authority that includes the following provisions.
§ 12945. Default
A recipient of a loan or an interest rate reduction who fails to repay the interest rate differential or interest rate reduction payments as required is liable to the authority for such amounts, plus interest on those amounts at the highest interest rate set forth in section 12942, subsection 1, plus costs of collection and the authority's attorney's fees. Exceptions may be made by the authority at its own discretion.
Sec. B-2. Contingent effective date. This Part takes effect only if the General Fund bond issue proposed in Part A is approved by the voters of this State.
Sec. C-1. 36 MRSA §5122, sub-§2, ¶QQ is enacted to read:
Sec. C-2. 36 MRSA §5217-D, sub-§2-A, as enacted by PL 2015, c. 267, Pt. QQQ, §5 and affected by §6, is repealed and the following enacted in its place:
Sec. C-3. Contingent effective date. This Part takes effect only if the General Fund bond issue proposed in Part A is approved by the voters of this State.
The funds provided by this bond issue, in the amount of $50,000,000, will be used to provide funds to the Finance Authority of Maine for zero-interest student loans and loan consolidation or refinancing interest rate reductions for certain Maine residents who agree to live and work in Maine for at least 5 years. The bill creates the Maine Student Loan Debt Relief Program. Under the program, zero-interest loans up to $10,000 per year for a maximum of 5 years are available to certain Maine residents who study at qualified in-state institutions of higher education and agree to live and work in Maine for at least 5 years following graduation. Loans bearing an annual interest rate of the prime rate of interest plus 2% are available to those who do not live and work in the State upon graduation. The Finance Authority of Maine may provide interest rate reduction payments to residents who use the authority's existing loan consolidation and refinancing program. This option is available to individuals who studied in Maine or outside of Maine and agree to live and work in Maine for at least 5 years. The bill exempts from Maine income tax any benefits received under the program to the extent included in federal adjusted gross income and prohibits individuals who have received benefits under the program from receiving the Maine educational opportunity tax credit.