An Act To Provide Relief to Federal Employees Affected by the Federal Shutdown
Emergency preamble. Whereas, acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, Maine has many residents who are employees of the Federal Government; and
Whereas, due to the partial shutdown of the Federal Government, these federal employees are not being paid, regardless of whether they are working, which is causing enormous stress, both fiscal and emotional, on those employees; and
Whereas, in addition to the assistance already being provided by the banks and credit unions in Maine, it is imperative that the State respond quickly and in an appropriate manner to the needs of its residents; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Sec. 1. 5 MRSA §157 is enacted to read:
§ 157. Federal Shutdown Loan Guarantee Program Fund established
The Federal Shutdown Loan Guarantee Program Fund, referred to in this section as "the 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 13.
Sec. 2. 10 MRSA c. 110, sub-c. 13 is enacted to read:
FEDERAL SHUTDOWN LOAN GUARANTEE PROGRAM
§ 1100-AA. Definitions
As used in this subchapter, unless the context otherwise indicates, the following terms have the following meanings.
§ 1100-BB. Federal Shutdown Loan Guarantee Program established
§ 1100-CC. Eligibility of affected employees; loan terms; process
(1) The affected employee is currently a federal employee residing in this State;
(2) The affected employee is eligible to receive back pay when the shutdown ends;
(3) The affected employee is not receiving a loan from any other 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 employee, if any, during the shutdown; and
(b) The affected employee is eligible to receive, if any, during the shutdown.
(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.
§ 1100-DD. Loan guarantee
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.
§ 1100-EE. Duties and powers of authority
§ 1100-FF. Termination of program; repeal
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 Federal Shutdown Loan Guarantee Program Fund established within the Office of the Treasurer pursuant to the Maine Revised Statutes, Title 5, section 157 no later than February 15, 2019 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 13.
Sec. 4. Additional transfer and allocation. The Joint Standing Committee on Appropriations and Financial Affairs may report out legislation to the 129th Legislature to address any funding needs of the Federal Shutdown Loan Guarantee Program established in the Maine Revised Statutes, Title 10, chapter 110, subchapter 13.
Sec. 5. Appropriations and allocations. The following appropriations and allocations are made.
TREASURER OF STATE, OFFICE OF
Federal Shutdown Loan Guarantee Program Fund N296
Initiative: Establishes the Federal Shutdown Loan Guarantee Program Fund with a $250,000 transfer from the unappropriated surplus of the General Fund.
|OTHER SPECIAL REVENUE FUNDS
|OTHER SPECIAL REVENUE FUNDS TOTAL
Emergency clause. In view of the emergency cited in the preamble, this legislation takes effect when approved.
This bill establishes the Federal Shutdown Loan Guarantee Program. The program, administered by the Finance Authority of Maine, provides easier access to no-interest loans for certain federal employees in Maine affected by the partial shutdown of the Federal Government, which began December 22, 2018, 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, each equal to their monthly after-tax pay, up to $5,000, less unemployment benefits. The bill prohibits interest on the loans during the shutdown and for 270 days after the shutdown ends. Following the end of the 270 days, an eligible financial institution that made a loan under the program, after a good faith effort to collect the principal amount of the loan, may apply to the authority for repayment of the uncollected amount of the loan in default. The authority 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.
The bill gives the Joint Standing Committee on Appropriations and Financial Affairs authority to report out legislation to address any funding needs of the program.