Maine Economic Development and Job Creation, Question 4 (June 2010)

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This Act would authorize the State to issue bonds in an amount not to exceed $23,750,000 for the activities described below.

Proceeds of the sale of bonds in the amount of $1,250,000 would be placed in a new Historic Preservation Revolving Fund to be administered by the Maine Historic Preservation Commission. The fund would be used to help qualified nonprofit historic preservation organizations purchase significant historic properties and then re-sell those properties at fair market value to new owners (private, nonprofit or public), subject to an easement or covenant requiring the new owner to preserve, and rehabilitate or restore the properties. Net proceeds from the resale would be repaid to the Fund.

Proceeds of the sale of bonds in the amount of $3,500,000 would be placed in the Communities for Maine’s Future Fund, to be administered by the Department of Economic and Community Development and used to provide matching grants to cities and towns for projects to revitalize, rehabilitate and enhance downtowns, village centers and main streets in the state. Statutory criteria and procedures for administering this fund and the Historic Preservation Revolving Fund would take effect if the bond issue is approved.

The Maine Technology Institute would administer $3,000,000 of the bond proceeds to provide matching grants for research and development and commercialization projects, in accordance with priorities established by the Office of Innovation in the current Science and Technology Action Plan for Maine. The funds would be allocated to projects in the areas of environmental and renewable energy technology, biomedical and biotechnology, aquaculture and marine technology, composite materials technology, advanced technologies for forestry and agriculture, information technology, and precision manufacturing technology to public and private entities in Maine, through a competitive process, and recipients would be required to match these State dollars with an equivalent amount of federal or private funds.

The Department of Economic and Community Development would use another $8,000,000 of the bond proceeds for redevelopment projects at the Brunswick Naval Air Station, including rehabilitating buildings to comply with fire codes and the Americans with Disabilities Act, and other site improvements. Up to $4,750,000 of these funds could be used to develop a higher education engineering and economic development center at the site. It is anticipated that these bond funds will leverage $32,500,000 in federal funds.

The Finance Authority of Maine (FAME) would administer $1,000,000 of the bond proceeds in the form of grants for food processing for fishing, agricultural, dairy and lumbering industries in the state. If the bond is approved, FAME would be required to establish rules to administer grants from these funds for food processing for the fishing and agricultural industries in the state.

An additional $3,000,000 in bond proceeds would be distributed by FAME through the existing Economic Recovery Loan Program, which provides loans to Maine businesses that do not have sufficient access to credit but demonstrate the ability to survive, preserve and create jobs and repay the obligations. Projects that may be financed must pertain to manufacturing, industrial, recreational or natural resource enterprises in Maine that are determined by the Authority to provide significant public benefits in relation to the amount of the loan. The loan requirements for this program are more fully set forth in Title 10 M.R.S.A. section 1026-J and in rules developed by FAME.

Another $4,000,000 in bond proceeds would be administered by FAME as part of the Small Enterprise Growth Fund, which is used to provide loans to qualifying businesses with 50 or fewer full time equivalent employees and gross sales of $5 million or less that show potential for high growth and public benefit. To qualify, businesses must be engaged in at least one of the following: marine sciences, biotechnology, manufacturing, exports of goods or services outside the state, software development; provision or development of environmental services or technologies, or financial or insurance products or services; production of value-added goods from natural resources; and other enterprises in retail sales, tourism and agricultural production.

The bonds would run for a period not longer than 10 years from the date of issue and would be backed by the full faith and credit of the State. If approved, the bond authorization would take effect 30 days after the Governor’s proclamation of the vote.

A “YES” vote favors authorizing the $23,750,000 bond issue to finance the above activities.

A “NO” vote opposes the bond issue in its entirety. ^[6]

Total estimated life time cost is $29,628,125 representing $23,750,000 in principal and $5,878,125 in interest (assuming interest at 4.5% over 10 years). ^[6]

This bond issue has no significant fiscal impact other than the debt service costs identified above. ^[6]

States, unlike the federal government, are unable to spend into the red. That’s a good thing. But with interest rates at historic lows, these bonds are a bargain for building and rebuilding Maine. They should be passed. ^[6]

Last week the Journal Tribune endorsed the four bond issues on Maine’s June 8 ballot. We recommended “Yes” votes on Questions 2-5, proposed bond issues that serve the interests of Maine’s people. ^[6]