Subchapter 3: REVENUE OBLIGATION SECURITIES PROGRAM
§1043. Certificates of approval
(CONTAINS TEXT WITH VARYING EFFECTIVE DATES)
1.Issue.
The authority is authorized and empowered to approve or disapprove projects following submission to it of applications for
approval thereof, in such form and with such supporting data as it may require and, upon approval of a project, to issue a
certificate of approval. The authority shall publish once in the state newspaper and in a newspaper of general circulation
in the area of the State in which the project is to be located, notice of the date on which the authority will consider issuance
of a certificate of approval for the project. The notice shall be published at least 7 days prior to the date scheduled for
such consideration, shall set forth the name of the applicant, describe generally the project and set forth the time and place
at which the application will be considered. In addition to the notice required to be published by the authority, the applicant
shall make all reasonable efforts to give timely notice to any and all known competitors of the time and place at which the
application will be considered. Where individual written notice is not practical, as determined by the authority, the authority
may specify other or additional forms of notice, including display newspaper advertisements and written notice to any trade,
industry, professional or interest group. The certificate of approval shall identify and describe each project as to location,
purpose and the amount of revenue obligation securities to be issued. If a single issue of revenue obligation securities is
to provide for the costs of more than one project, the certificate of approval shall identify the aggregate amount of revenue
obligation securities to be issued.
[
1985, c. 344, §63 (AMD)
.]
2.Criteria.
Before issuing a certificate of approval for any project, the authority shall determine that:
A. The project will make a contribution to the economic growth of, the control of pollution in or the betterment of the health,
welfare or safety of the inhabitants of the State; [1985, c. 344, §63 (AMD).]
B. The project will not result in a substantial detriment to existing business in the State. In order to make this determination,
the authority shall consider, pursuant to rules adopted in accordance with the Maine Administrative Procedure Act, Title 5,
chapter 375, subchapter II, such factors as it deems necessary to measure and evaluate the effect of the project on existing
business, including considering:
(1) Whether a project should be approved if, as a result of the project, there will not be sufficient demand within the market
area of the State to be served by the project to employ the efficient capacity of existing business; and
(2) Whether any adverse economic effect of the project on existing business is outweighed by the contribution which the project
will make to the economic growth of, the control of pollution in or the betterment of the health, welfare or safety of the
inhabitants of the State.
The applicant shall have the burden of demonstrating that the project will not result in a substantial detriment to existing
business in accordance with the requirements of this paragraph, including rules adopted in accordance therewith, except in
cases where no interested parties object to the project, in which event the requirements of this paragraph shall be deemed
satisfied. Interested parties shall be given an opportunity, with or without a hearing at the discretion of the authority,
to present their objections to the project on grounds that the project will result in a substantial detriment to existing
business. If any such party presents such objections with reasonable specificity and persuasiveness, the authority may divulge
whatever information concerning the project which it deems necessary for a fair presentation by the objecting party and evaluation
of such objections. If the authority finds that the applicant has failed to meet its burden as specified in this paragraph,
the application shall be denied. [1985, c. 714, §29 (AMD).]
C. Adequate provision is being made to meet any increased demand upon public facilities that might result from the project; [1981, c. 476, §2 (NEW).]
D. In cases where it is proposed to relocate an industrial-commercial or recreational facility existing in the State, there is
a clear economic justification for such relocation; [1981, c. 476, §2 (NEW).]
E. [1985, c. 344, §63 (RP).]
E-1. In the case of recycling and waste reduction projects, the proposed facility must be consistent with the state waste management
and recycling plan under Title 38, chapter 24, and will reduce the amount of solid or hazardous waste requiring disposal. [1989, c. 585, Pt. C, §12 (NEW).]
F. In the case of projects that are primarily pollution-control facilities:
(1) The proposed users of the facilities make a contribution to the economy of the State;
(2) A public benefit will result from including the facilities in the project; and
(3) It is unlikely that public facilities meeting the needs of the users and securing comparable public benefit will become
available in the reasonably foreseeable future; [1995, c. 4, §5 (AMD).]
G. [1985, c. 344, §63 (RP).]
H. [1985, c. 344, §63 (RP).]
I. The project will, to the extent possible, cooperate with representatives of the Department of Labor and the Department of
Health and Human Services regarding employment opportunities for recipients of the services of those departments; [1999, c. 484, §5 (AMD); 2003, c. 689, Pt. B, §6 (REV).]
J. In the case of major business expansion projects, the applicant is creditworthy and there is a strong likelihood that the
revenue obligation securities will be repaid through the revenues of the project and any other sources of revenues and collateral
pledged to the repayment of those securities. In order to make this determination, the authority shall consider such factors
as it considers necessary to measure and evaluate the sufficiency of the pledged revenues to repay the obligations, including:
(1) Whether individuals or entities obligated to repay the obligations have demonstrated sufficient revenues from the project
or from other sources to repay the obligations, and a strong probability that those revenues will continue to be available
for the term of the revenue obligation securities;
(2) Whether the applicant demonstrates a strong probability that the project will continue to operate and provide the public
benefits projected to be created for the term of the revenue obligation securities;
(3) Whether the applicant demonstrates that the benefits projected to be created by the project are enhanced through the
use of financing assistance from the authority;
(4) Whether the applicant's creditworthiness is demonstrated by such factors as historical financial performance, management
ability, its plan for marketing its product or service and its ability to access conventional financing;
(5) Whether the applicant meets or exceeds industry average financial performance ratios commonly accepted in determining
creditworthiness in that industry;
(6) Whether the applicant demonstrates that the need for authority assistance is due to the reduced cost and increased flexibility
of the financing for the project that result from authority assistance and not from an inability to obtain necessary financing
without the capital reserve fund security provided by the authority; and
(7) Whether collateral securing the repayment obligation is reasonably sufficient under the circumstances.
Financing assistance for any one major business expansion project may not exceed $25,000,000 in loan amount. The authority
may establish, pursuant to rules adopted in accordance with Title 5, chapter 375, subchapter 2, application procedures, approval
criteria and reasonable fees for major business expansion projects; [2003, c. 506, §2 (AMD).]
K. In the case of a paper industry job retention project, the applicant is creditworthy and there is a strong likelihood that
the revenue obligation securities will be repaid through the revenues of the project and any other sources of revenues and
collateral pledged to the repayment of those securities. To assist in making its determination the authority may engage,
at the borrower's expense, independent consultants to assist in the evaluation of the project. In making this determination,
the authority shall consider factors it considers necessary to measure and evaluate the sufficiency of the pledged revenues
to repay the securities, including:
(1) Whether individuals or entities obligated to repay the securities have demonstrated sufficient revenues from the project
or from other sources to repay the securities and a strong probability that those revenues will continue to be available for
the term of the securities;
(2) Whether the applicant demonstrates a strong probability that the project will continue to operate and to provide the
public benefits projected to be created for the term of the securities;
(3) Whether the applicant demonstrates that the benefits projected to be created by the project are enhanced through the
use of financial assistance from the authority;
(4) Whether the applicant's creditworthiness is demonstrated by such factors as historical financial performance, management
ability and the applicant's plan for marketing products or service and its ability to access conventional financing;
(5) Whether the applicant meets or exceeds industry average financial performance ratios commonly accepted in determining
creditworthiness in that industry. In assessing projected financial performance, the authority must consider the value and
effect of any contractual labor cost reductions that will be in effect at the time the financial assistance is provided;
(6) Whether collateral securing the repayment obligation, valued in place and in use, is reasonably sufficient under the
circumstances;
(7) Whether the owner will make an important equity contribution to the project. If the applicant requests financing assistance
from the authority in an amount greater than $25,000,000, the amount financed by the authority may not exceed $25,000,000
plus 50% of the total project costs in excess of $25,000,000. If other financing is subordinate to the financing provided
by the authority, the amount financed by the authority may not exceed $25,000,000 plus 70% of the total project costs in excess
of $25,000,000; and
(8) Whether the applicant demonstrates that the need for authority assistance is due to the reduced cost and increased flexibility
of the financing for the project that result from the authority assistance and not from an inability to obtain necessary financing
without the capital reserve fund security provided by the authority; [2009, c. 372, Pt. D, §5 (AMD).]
L. In the case of transmission facilities projects, the applicant is creditworthy and there is a strong likelihood that the revenue
obligation securities will be repaid through the revenues of the project and any other source of revenues and collateral pledged
to the repayment of those securities. In order to make this determination, the authority shall consider such factors as it
considers necessary and appropriate in light of the special purpose or other nature of the business entity owning the project
to measure and evaluate the project and the sufficiency of the pledged revenues to repay the obligations, including:
(1) Whether the individuals or entities obligated to repay the obligations have demonstrated sufficient revenues from the
project or from other sources to repay the obligations and a strong probability that those revenues will continue to be available
for the term of the revenue obligation securities;
(2) Whether the applicant demonstrates a strong probability that the project will continue to operate and provide the public
benefits projected to be created for the term of the revenue obligation securities;
(3) Whether the applicant demonstrates that the benefits projected to be created by the project are enhanced through the
use of financing assistance from the authority;
(4) Whether the applicant's creditworthiness is demonstrated by factors such as its historical financial performance, management
ability, plan for marketing its product or service and ability to access conventional financing;
(5) Whether the applicant meets or exceeds industry average financial performance ratios commonly accepted in determining
creditworthiness in that industry;
(6) Whether the applicant demonstrates that the need for authority assistance is due to the reduced cost and increased flexibility
of the financing for the project that result from authority assistance and not from an inability to obtain necessary financing
without the capital reserve fund security provided by the authority;
(7) Whether collateral securing the repayment obligation is reasonably sufficient under the circumstances;
(8) Whether the proposed project enhances the opportunities for economic development;
(9) The effect that the proposed project financing has on the authority's financial resources; and
(10) Whether the Northern Maine Transmission Corporation, as established in section 9202, has recommended the project.
Upon request by the authority, state agencies, including but not limited to the Public Utilities Commission, shall provide
necessary assistance to the authority in evaluating the feasibility of the project and its importance for northern Maine.
In providing assistance, the Public Utilities Commission shall consider whether the proposed project enhances the competitiveness
of the wholesale and retail energy market; how the proposed project is likely to affect energy prices for Maine residents;
whether the proposed project will augment or enhance the reliability and stability of the grid; and whether there is likely
to be a long-term need for the product as produced by the proposed project.
The authority may establish, pursuant to rules adopted in accordance with Title 5, chapter 375, subchapter 2, application
procedures, approval criteria and reasonable fees for transmission facilities projects. Rules adopted by the authority under
this paragraph are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A. In addition, the authority may
require the applicant to pay the reasonable costs of an evaluation of the project risks by an independent consultant. If
the authority directs the applicant to pay for such an independent evaluation of the project, the authority shall make every
reasonable effort, in its discretion, to minimize the cost of the evaluation and any delay such an evaluation may cause in
authority action.
The authority may not finance any project involving an electric transmission line capable of operating at 69 kilovolts or
more unless the Public Utilities Commission has issued a certificate of public convenience for the construction of the line
pursuant to Title 35-A, section 3132; [2009, c. 517, §7 (AMD).]
M. In the case of an Efficiency Maine project, as defined in section 963-A, subsection 10-A, there is a reasonable likelihood
that the income, proceeds, revenues and funds of Efficiency Maine Trust derived from or held for activities under Title 35-A,
chapter 97 or otherwise pledged to payment of the bonds will be sufficient to pay the principal, the interest and all other
amounts that may at any time become due and payable under the bonds. In making this determination, the authority shall consider
Efficiency Maine Trust's analysis of the proposed bond issue and the revenues to make payments on the bonds and may require
such information, projections, studies and independent analyses as it considers necessary or desirable and may charge Efficiency
Maine Trust reasonable fees and expenses. The authority may require that it be indemnified, defended and held harmless by
Efficiency Maine Trust for any liability or cause of action arising out of or with respect to the bonds. The principal and
interest of bonds must be made payable solely from the income, proceeds, revenues and funds of Efficiency Maine Trust derived
from or held for activities under Title 35-A, chapter 97 or other provision of law. Payment of the principal and interest
of bonds may be further secured by a pledge of a loan, grant or contribution from the Federal Government or other source in
aid of activities of Efficiency Maine Trust under Title 35-A, chapter 97; [2011, c. 261, §2 (AMD).]
N. In the case of recovery zone facility bonds, the project will benefit the county or counties in which it is located; and [2011, c. 261, §3 (AMD).]
O. (TEXT REPEALED 1/1/18) (TEXT EFFECTIVE UNTIL 1/1/18) In the case of an energy distribution system project regulated by the Public Utilities Commission with respect to rates or
terms of service or that requires, for construction or operation, authorization or certification from the commission, the
following conditions are met.
(1) The energy distribution system project has received all authorizations or certifications from the Public Utilities Commission
necessary for construction and operation of the project. The authority may issue a certificate of approval for a project
that has received conditional approvals or certifications from the commission, except that the authority's certificate becomes
legally effective only upon fulfillment of the conditional provisions of the commission's certificates or approvals. If the
commission has approved rates to be charged by the project or has issued a certificate of public convenience and necessity
for the project, the authority shall take into consideration any findings and conclusions of law of the commission, including
any findings and conclusions pertaining to the need for the project and the financial viability of the project.
(2) The authority has reviewed and considered any comments provided by the Director of the Governor's Energy Office and the Public Advocate.
(3) The authority has determined that the applicant is creditworthy and that there is a reasonable likelihood that the revenue
obligation securities will be repaid through the revenues of the project and any other sources of revenues and collateral
pledged to the repayment of those securities. In order to make these determinations, the authority shall consider such factors
as it considers necessary and appropriate in light of the special purpose or other nature of the business entity owning the
project and the specific purposes of the project to measure and evaluate the project and the sufficiency of the pledged revenues
to repay the obligations, including, but not limited to:
(a) Whether the individuals or entities obligated to repay the obligations have demonstrated sufficient revenues from the
project or from other sources to repay the obligations and a reasonable probability that those revenues will continue to be
available for the term of the revenue obligation securities;
(b) Whether the applicant demonstrates a reasonable probability that the project will continue to operate and provide the
public benefits projected to be created for the term of the revenue obligation securities;
(c) Whether the applicant's creditworthiness is demonstrated by factors such as its historical financial performance, management
ability, plan for marketing its product or service and ability to access conventional financing;
(d) Whether the applicant meets or exceeds industry average financial performance ratios commonly accepted in determining
creditworthiness in that industry;
(e) Whether the applicant demonstrates that the need for authority assistance is due to the reduced cost and increased flexibility
of the financing for the project that result from authority assistance and not from an inability to obtain necessary financing
without the capital reserve fund security provided by the authority;
(f) Whether collateral securing the repayment obligation is reasonably sufficient under the circumstances;
(g) Whether the proposed project enhances the opportunities for economic development;
(h) The effect that the proposed project financing has on the authority's financial resources;
(i) The financial performance of similar projects;
(j) The need for the project, as determined by the Public Utilities Commission and as indicated by any comments provided
by the Director of the Governor's Energy Office, other public officials and members of the public;
(k) The nature and extent of customer commitment to use the project or the fuel or energy the project distributes or transmits;
(l) The cost advantages to end users of the fuel or energy to be distributed or transmitted by the project, to the extent
those advantages may affect market penetration by the project; and
(m) The nature and extent of the applicant's equity contribution to payment of the costs of the project; such a contribution
may not be less than 25% of the expected cost of the project.
This paragraph is repealed January 1, 2018. [2011, c. 655, Pt. MM, §26 (AFF); 2011, c. 655, Pt. MM, §8 (AMD).]
[
2011, c. 655, Pt. MM, §26 (AFF);
2011, c. 655, Pt. MM, §8 (AMD)
.]
3.Effect of certificate.
A certificate of approval issued under this subchapter shall be conclusive proof that the authority has made the determinations
required by this section.
[
1981, c. 476, §2 (NEW)
.]
4.Exception.
This section and section 1044, subsection 2, shall not apply in the case of issue by the authority of revenue obligation
securities for the purpose of acquiring one or more issues of outstanding revenue obligation securities issued by municipalities
or one or more issues of any other bond not eligible for purchase pursuant to Title 30-A, chapter 225.
[
1987, c. 737, Pt. C, §§15, 106 (AMD);
1989, c. 6, (AMD);
1989, c. 9, §2 (AMD);
1989, c. 104, Pt. C, §§8, 10 (AMD)
.]
5.Assistance.
In considering any request for financial assistance from an applicant for a project regulated by the Public Utilities Commission
with respect to rates or terms of service or that requires for construction or operation authorization or certification from
the commission, the commission, upon request of the authority, shall provide assistance in analyzing financial, economic or
technical issues on which the commission has expertise. At the request of the commission, the authority shall assess the
applicant a fee to be paid to the commission to reimburse the commission for any costs incurred by the commission that cannot
be absorbed within its existing resources.
[
2011, c. 261, §5 (NEW)
.]
SECTION HISTORY
1981, c. 476, §2 (NEW).
1981, c. 698, §§60-64 (AMD).
1985, c. 344, §63 (AMD).
1985, c. 714, §29 (AMD).
1987, c. 697, §10 (AMD).
1987, c. 737, §§C15,C106 (AMD).
1989, c. 6, (AMD).
1989, c. 9, §2 (AMD).
1989, c. 104, §§C8,C10 (AMD).
1989, c. 585, §C12 (AMD).
1995, c. 4, §§5-7 (AMD).
1999, c. 484, §§5-7 (AMD).
2003, c. 506, §§2-4 (AMD).
2003, c. 689, §B6 (REV).
2009, c. 372, Pt. D, §§5-7 (AMD).
2009, c. 517, §§7-9 (AMD).
2011, c. 261, §§2-5 (AMD).
2011, c. 586, §3 (AMD).
2011, c. 655, Pt. MM, §26 (AFF).
2011, c. 655, Pt. MM, §8 (AMD).
Data for this page extracted on 10/16/2012 08:20:28.