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129th MAINE LEGISLATURE |
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LD 477 |
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LR 2261(01) |
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An Act To Provide
Relief to Federal Employees Affected by the Federal Shutdown |
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Preliminary
Fiscal Impact Statement for Original Bill |
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Sponsor: Pres. Jackson of Aroostook |
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Committee: Appropriations and Financial Affairs |
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Fiscal Note Required: Yes |
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| Preliminary
Fiscal Impact Statement |
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FY 2018-19 |
FY 2019-20 |
FY 2020-21 |
Projections FY 2021-22 |
Projections FY 2022-23 |
| Net Cost
(Savings) |
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General Fund |
$250,000 |
$0 |
$0 |
$0 |
$0 |
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| Appropriations/Allocations |
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Other Special Revenue Funds |
$250,000 |
$0 |
$0 |
$0 |
$0 |
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| Transfers |
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General Fund |
($250,000) |
$0 |
$0 |
$0 |
$0 |
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Other Special Revenue Funds |
$250,000 |
$0 |
$0 |
$0 |
$0 |
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| Fiscal Detail
and Notes |
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This bill
establishes the Federal Shutdown Loan Guarantee Program Fund (the Fund)
within the Office of Treasurer of State. The Fund will be used to guarantee
the repayment of up to 10% of the amount of loans made by eligible financial
institutions to Maine residents who are federal employees going without pay
during the federal fiscal year 2019 partial government shutdown that began on
December 22, 2018. The bill allows loans up to a maximum of the lesser of
$5,000 or an individual's most recent monthly after-tax pay reduced by any
unemployment compensation benefits. Individuals are eligible to apply for up
to 3 loans under the program. Given that there are approximately 1,200
federal employees residing in Maine and assuming that each receives $5,000 for
each of 3 loans, the maximum potential liability to the State from this bill
is $1,800,000 if every single loan recipient defaulted on their loans.
However, the actual loan default rate is expected to be quite small, the
average amount of loans will be less than $5,000 and many may choose not to
apply for 3 loans. Accordingly, the bill provides a one-time transfer of
$250,000 in fiscal year 2018-19 from the unappropriated surplus of the
General Fund to the Fund and it includes a one-time allocation of $250,000 to
the Office of Treasurer of State to allow expenditures from the Fund. If this
amount is not sufficient to cover the State's liability, additional funding
will be required. Administrative costs incurred by the Office of Treasurer of
State can be absorbed within existing budgeted resources. |
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Because this
legislation includes a provision that allows the Finance Authority of Maine
(FAME) to retain a portion of the funds it recovers from loans in default to
pay for its costs to administer the loan guarantee program, FAME will not
require a General Fund appropriation.
However, this provision will reduce the amount of funds returned to
the Federal Shutdown Loan Guarantee Program Fund from the recovery of
defaulted loans. |
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Any additional
costs to the Bureau of Financial Institutions within the Department of
Professional and Financial Regulation to implement the provisions of this
bill are expected to be minor and can be absorbed within existing budgeted
resources. |
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