Chapter 1: APPLICATION PROCEDURES FOR LOANS TO GOVERNMENTAL UNITS TO FINANCE PUBLIC IMPROVEMENTS AND FOR OTHER PUBLIC PURPOSES

SUMMARY: The rules of the Maine Municipal Bond Bank include definitions, an outline of procedures for governmental units to apply for a loan to the Maine Municipal Bond Bank under provisions of Chapter 225 of 30-A MRSA and to establish the role and standards of Bond Counsel for any participating unit.

1. DEFINITIONS

1. A. 'Act' shall mean the Maine Municipal Bond Bank Act being Article 3-A of subchapter II of Chapter 241 of Title 30 of the Maine Revised Statute as amended to date.
2. B. 'Administrative Expenses' shall mean the Bank's expenses of carrying out and administering its powers, duties and functions, as authorized by the Act, and shall include, without being limited to the generality of the foregoing: administrative and operating expenses, legal, accounting and consultant's services and expenses, payments to pension, retirement, health and hospitalization funds, and any other expenses required or permitted to be paid by the Bank under the provisions of the Act or the Resolution or otherwise.
3. C. 'Bank' shall mean the Maine Municipal Bond Bank, a public body corporate and politic constituted as an instrumentality of the State of Maine exercising public and essential government functions and created by the Act, or any body, agency or instrumentality of the State which shall hereafter succeed to the powers, duties and functions of the Bank.
4. D. 'Bond or Bonds' shall mean any Maine Municipal Bond Bank Bond or Bonds, as the case may be, authenticated and delivered under the General Resolution pursuant to a Series Resolution.
5. E. 'Bondholders' or any similar term, shall mean any person or party who shall be the bearer of any Outstanding Bond or Bonds registered to bearer or not registered or the registered owner of any Outstanding Bond or Bonds which shall at the time be registered other than to bearer and 'Holder' (when used with reference to coupons) shall mean any person who shall be the bearer of such coupons.
6. F. 'Counsel's Opinion' shall mean an opinion signed by an attorney or firm of attorneys selected by or satisfactory to the Bank as defined in section 3.
7. G. 'Debt Service' for any period shall mean, as of any date of calculation and with respect to any Series, an amount equal to the sum of (i) interest accruing during such period on Bonds of such Series, and (ii) that portion of Principal Installment for such Series which would accrue during such period if such Principal Installment were deemed to accrue daily in equal amounts from the next preceding Principal Installment due date for such Series (or, if there shall be no such preceding Principal Installment due date, from a date one year preceding the due date of such Principal Installment). Such interest and

Principal Installments for such Series shall be calculated on the assumption that no Bonds of such Series Outstanding at the date of calculation will cease to be Outstanding except by reason of the payment of such Principal Installment on the due date thereof.

1. H. 'Fees and Charges' shall mean all fees and charges authorized to be charged by the Bank pursuant to subsection (H) of Section 5954 of the Act and charged by the Bank to Governmental Units pursuant to the terms and provisions of Loan Agreements.
2. I. 'Fiscal Year' shall mean any twelve (12) consecutive calendar months commencing with the first day of July and ending on the last day of the following June.
3. J. 'Governmental Unit' shall mean any governmental unit as defined by the Act.
4. K. 'Loan' shall mean a loan heretofore or hereafter made by the Bank to a Governmental Unit pursuant to the Act and more particularly described in the applicable Series Resolution.
5. L. 'Loan Agreement' shall mean an agreement heretofore or hereafter entered into between the Bank and a Governmental Unit setting forth the terms and conditions of a loan.
6. M. 'Municipal Bonds' shall mean the bonds or other evidence of debt issued by any Governmental Unit and authorized pursuant to the Act and other laws of the State and which have heretofore been or will hereafter be acquired by the Bank as evidence of indebtedness of a Loan to the Governmental Unit pursuant to the Act.
7. N. 'Notes' shall mean any obligations referred to herein issued by the Bank other than Bonds.
8. O. 'Paying Agent' for the Bonds of any Series shall mean a bank or trust company organized under the laws of any state of the United States of America or a national banking association, having a capital and surplus aggregating at least three million dollars (\$3,000,000) acceptable to the Bond Bank and meeting the requirements of the General Resolution.
9. P. 'Required Debt Service Reserve' shall mean, as of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount shall be equal to the maximum amount of Principal Installments and interest maturing and becoming due in any succeeding calendar year on all Loan Obligations then outstanding as of such date of calculation.
10. Q. 'Resolution' shall mean this General Bond Resolution as from time to time amended or supplemented by Supplemental Resolutions or Series Resolutions in accordance with the terms and provisions hereof.
11. R. 'Series of Bonds' or words of similar meaning shall mean the series of Bonds authorized by a Series Resolution.
12. S. 'Series Resolution' shall mean a resolution of the Bank authorizing the issuance of a Series of Bonds in accordance with the terms and provisions hereof adopted by the Bank in accordance with Article X of the General Resolution.

T. 'State' shall mean the State of Maine.

2. APPLICATIONS OF GOVERNMENTAL UNITS

1. A. The governmental unit must file an application for a loan on the forms supplied by the Maine Municipal Bond Bank.
2. B. The governmental unit must provide the Maine Municipal Bond Bank with financial statements and supporting documents as required by the Commissioners and Executive Director of the Maine Municipal Bond Bank.
3. C. The governmental unit must provide the Maine Municipal Bond Bank with an approving legal opinion of a bond counsel of recognized standing in the field of municipal law whose opinions are generally accepted by purchasers of municipal bonds. (See Section 3 for qualification requirements).
4. D. The governmental unit must obtain and provide to the Maine Municipal Bond Bank all required approvals from the applicable State and Federal agencies.
5. E. In the event the governmental unit is a water or sewer district seeking financing for a start up or new system, then it must provide the Maine Municipal Bond Bank with a feasibility study.
6. F. In the event the governmental unit is a hospital district, it must provide the Maine Municipal Bond Bank with a full fledged feasibility study done by a nationally recognized firm of hospital and management consultants acceptable to the Maine Municipal Bond Bank.
7. G. The governmental unit must comply with and meet all of the requirements of Chapter 225 of Title 30-A of the Maine Revised Statutes Annotated.
8. H. The Commissioners of the Maine Municipal Bond Bank must review all applications and make a decision to either accept, reject, table or conditionally approve all applications based upon prudent business judgment and practice.
9. I. The governmental unit must be notified in writing of the decision of the Maine Municipal Bond Bank on its application within 30 days after final action of the Commissioners on said application.
10. J. In the event an application is rejected, the governmental unit must be given written reasons for said rejection.
11. K. In the event the project of the governmental unit is a school construction project approved for subsidy by the Department of Educational and Cultural Services, an Assignment must be executed assigning the subsidy check to the Maine Municipal Bond Bank or its designee.
12. L. The governmental unit shall be afforded a rehearing and the right to appear at the rehearing on its application if it files a request for such rehearing within 30 days of receipt of the Bank's decision.

M. Appeals from the decision of the Maine Municipal Bond Bank shall be governed by the Maine Administrative Procedures Act.

N. After the project of the governmental unit has been completed a project cost form (supplied by the Maine Municipal Bond Bank) must be submitted to the Bond Bank.

O. Any governmental unit that has an outstanding loan with the Maine Municipal Bond Bank must annually submit an audit report to the Bank as long as the loan remains outstanding.

3. BOND COUNSEL

A. The attorney or firm of attorneys whose opinion approving municipal bonds is offered to the Bank is any attorney or firm of attorneys whose opinion on such municipal bonds or bonds of a similar type and tenor is readily acceptable in the financial markets in the State of Maine, New England or the United States of America.

B. The particular attorney or firm of attorneys shall have rendered opinions on municipal bonds of the same type and tenor as the municipal bonds of the Governmental Unit (as defined in the General Bond Resolution) which the Bank is purchasing and for which the opinion of such attorney or firm of attorneys is offered.

C. At least two commercial banks in the State of Maine, with a capital and surplus of at least $3,000,000 who regularly purchase municipal bonds from governmental units have stated in writing in a letter signed by the chief investment officer that as to municipal bonds of the amounts, type and tenor referred to above each would and have accepted the opinion of the attorney or firm of attorneys whose opinion is being offered.

D. In no event shall the Bank accept the opinion of an attorney or firm of attorneys whose opinion is acceptable only on a purely local basis i.e. approval of municipal bonds where purchaser is a local bank or dealer and bonds could not be marketed in financial centers if such opinion were the only opinion offered to a subsequent purchaser.

STATUTORY AUTHORITY: 30 M.R.S.A.§5166 (C) & (N)

EFFECTIVE DATE:

June 17, 1981

EFFECTIVE DATE (ELECTRONIC CONVERSION):

April 13, 1996