SUMMARY

This bill enacts provisions to increase the states oversight of student loan programs funded through an allocation of the state ceiling on private activity tax-exempt bonds.

The bill adds the Commissioner of Economic and Community Development or the commissioner's designee as a nonvoting member of the group that makes recommendations for the allocation of the state ceiling and provides that the Treasurer of State will no longer be a voting member of that group. It requires that bond cap allocation must be done with the written agreement of 4 of the 5 voting members of the bond cap allocation group. It requires that the State Planning Office conduct an annual analysis related to allocation of the state ceiling. It requires that recipients of an allocation of the state ceiling provide annual audited financial statements and demonstrate the benefits of their programs to the Legislature. The bill clarifies that any further allocation or reallocation of the state ceiling from one eligible issuer to another issuer must be done with the agreement of a super majority of the bond cap allocation group. The bill also makes the meetings and records of the bond allocation group subject to the freedom of access laws.

The bill prohibits interlocking directors between the Finance Authority of Maine, "FAME," the Maine Educational Loan Authority, "MELA" and the Maine Educational Loan Marketing Corporation, "MELMAC."

The bill retains the requirement that recipients of an allocation of the state ceiling for the issuance of student loans use FAME as the sole guarantor for student loan notes.

The bill prohibits MELMAC from originating student loans or extending credit and from discriminating against financial institutions or credit unions authorized to do business in this State with respect to the acquisition of loans. It retains the requirement that MELMAC use FAME as the sole guarantor for student loan notes acquired on the secondary market. It adds 4 public members appointed by the Governor and confirmed by the Legislature to the MELMAC board. It makes MELMAC's books and records subject to the freedom of access laws. The bill requires MELMAC to use competitive bidding for its loan servicing and administrative services contracts. The bill also requires that MELMAC demonstrate that its use of bond proceeds is consistent