Can Maine's Legislature create a trust to lock in dedicated revenue funds and stop a future Legislature from sweeping them?

Plain-English summary

After the February 3, 2003 opinion that the Legislature could move money out of dedicated revenue accounts that were not held in trust, Senator Hall and Representative Bliss came back with the natural follow-up question: could the Legislature simply declare some of those dedicated revenue funds to be in trust, and lock them away from future sweeps?

AG G. Steven Rowe said no. The specific example in the question was the telecommunications education access fund created under 35-A M.R.S.A. § 7104-B, funded by assessments on telecommunications providers. Could the Legislature trust-protect that fund? The AG's answer rested on a constitutional point that runs deeper than any specific statute: a sitting Legislature cannot bind a future Legislature's appropriations power. Calling a public fund a "trust" does not change what it is.

The reasoning came in two parts. First, public funds (assessments, fees, taxes, bond proceeds) are not the same as charitable funds. A charitable fund is private money given by a donor for a stated purpose, and the donor's intent legally binds the trustee. A dedicated revenue fund is public money raised under the State's taxing or regulatory power for a public purpose. The Legislature created the fund, sets its uses, and can change either at will. There is no donor whose intent constrains future legislatures.

Second, even if the Legislature tried to wear two hats and act as both legislator and trust grantor, the trust could not be made irrevocable. An irrevocable public-funds trust would mean the current Legislature had given away its successors' appropriations power. The Maine Constitution does not permit a Legislature to do that. At most, the AG concluded, the Legislature could act as a settlor that "can change its mind" about how the money is used. That is not a real trust.

The practical result is that any dedicated revenue fund created by Maine statute remains subject to reallocation by a future statute. The durable protections the AG identified are the express terms of the Maine Constitution, or a privately or otherwise non-legislatively established trust under which money or property was given to the State for trust purposes.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Why can't the Legislature lock public funds in an irrevocable trust?
A: Because, in the AG's words, "establishing such a trust to be irrevocable would amount to the surrender of legislative power. The Constitution does not permit this." At most the Legislature could be characterized as a trust grantor or settlor "that can change its mind about the appropriate use of funds under its control," which is not a binding trust. The AG noted it had found no legal precedents directly on the issue.

Q: What does protect a fund from reallocation, then?
A: Per the companion February 3, 2003 opinion, funds are insulated only where they are "held in trust or are specifically protected by the express terms of the Maine Constitution." A privately or otherwise non-legislatively established trust, where money was given to the State for trust purposes, can bind the State; a statute that merely dedicates self-raised revenue to a purpose cannot.

Q: Does this opinion mean the Legislature has unlimited power over fees and assessments?
A: No. The opinion addresses only whether a trust label can lock dedicated revenue funds against future reallocation. The AG noted that public funds "must constitutionally be used for public purposes," and that agencies administering a fund remain bound by the terms of any governing statutes. The opinion does not pass on the validity of any particular assessment.

Background and statutory framework

The telecommunications education access fund under 35-A M.R.S.A. § 7104-B was one of several utility-assessment-based dedicated revenue funds in Maine. The Public Utilities Commission administered the fund, drawing on assessments to support certain telecom-related educational programs.

The deeper backdrop is the principle that a Legislature cannot surrender its core appropriations power. The AG noted there were no legal precedents directly on the question, but reasoned that an irrevocable public-funds trust would amount to a surrender of legislative power that the Constitution does not permit.

This opinion sits with the February 3, 2003 opinion as a paired set: the first established that dedicated revenue funds can be reallocated absent trust status, and this one established that the Legislature cannot manufacture trust status to escape the first ruling. Read together, the two opinions effectively foreclose Legislature-side strategies for protecting dedicated revenue funds from future budget sweeps.

Citations

• 35-A M.R.S.A. § 7104-B (telecommunications education access fund)
• ME AG Opinion 2003-02-03 (companion opinion on PUC Conservation Administration Fund)

Source

• Landing page: https://www.maine.gov/legis/lawlib/lldl/agops/agops.htm
• Original PDF: https://lldc.mainelegislature.org/Open/AG/Opinions/2003/ag_20030520.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

STATE OF MAINE
OFFICE OF THE ATTORNEY GENERAL
G. STEVEN ROWE, ATTORNEY GENERAL
6 STATE HOUSE STATION
AUGUSTA, MAINE 04333-0006

May 20, 2003

Senator Christopher Hall, Senate Chair
Maine State Senate
3 State House Station
Augusta, ME 04333-0003

Representative Lawrence Bliss, House Chair
Maine House of Representatives
2 State House Station
Augusta, ME 04333-0003

Dear Senator Hall and Representative Bliss:

I am writing in response to your letter of March 21, 2003. Although this office has provided a verbal response, I would like to put that response in writing. Your inquiry follows from the opinion I issued on February 3, 2003, advising that "[u]nless funds are held in trust or are specifically protected by the express terms of the Maine Constitution, the Legislature has discretion in making allocations for any designated governmental purpose, including allocation to the general fund." You now ask whether the Legislature can establish a trust sufficient to protect from reallocation to the General Fund dedicated revenue funds such as the telecommunications education access fund established under 35-A M.R.S.A. § 7104-B. We have found no legal precedents on this issue. However, for the reasons that follow, it is my conclusion that where the Legislature has exercised its authority to raise funds, even if those funds are dedicated to a specified purpose, its authority to redirect those funds would survive any trust that it could create.

The telecommunications education access fund results from a legislative allocation of certain assessments imposed on telecommunications providers. As noted in your initial letter, other assessments on various utilities are used for purposes such as conservation and support of the Public Advocate. Similarly, a host of other dedicated revenue funds are raised, pursuant to assessments or fees imposed by the State. The resulting funds are public monies, raised by authority of government to be used for public purposes as determined by the Legislature. In administering such funds, agencies are bound by the terms of any governing statutes, but the Legislature is legally constrained only by the terms of the Constitution or the terms of a privately or other non-legislatively established trust from which monies or other property have been given to the State for certain trust purposes.

[Footnote 1: This opinion speaks only to the legal issues raised by your question.]

While public funds and charitable funds may share some characteristics, they are fundamentally different. Charitable funds are private monies that have been given by a person to be used for an identified purpose that benefits some segment of the public. Public funds, on the other hand, are monies raised by government in one or more ways, through taxation, imposition of assessments or fees, issuance of bonds, that must constitutionally be used for public purposes. Even if the Legislature chose to establish a trust to hold public monies for some specified purpose, establishing such a trust to be irrevocable would amount to the surrender of legislative power. The Constitution does not permit this. At most, the Legislature could be characterized as a trust grantor or settlor that can change its mind about the appropriate use of funds under its control.

Accordingly, the Legislature cannot establish a public funds trust sufficient to prohibit reallocation of funds by subsequent legislative action. I hope this information is helpful.

Sincerely,

G. STEVEN ROWE
Attorney General

GSR/dp