Did Maine's 2013 AG opinion approve the legality of LD 239, the bill that would have raised state revenue from liquor sales to pay back Maine's debt to its hospitals?

Plain-English summary

LD 239 was Governor LePage's "Liquor Operation Revenue Bonds" bill, which proposed to raise revenue from the sale of spirits and use it as a source of payment for Maine's hospitals. The Appropriations Committee asked the AG for the office's view on the bill. The opinion is short and was written under time pressure (the AG notes the staffer who worked on the issue was unavailable that day), so it summarizes the office's position rather than working through every issue.

The AG's bottom line had two parts. First, LD 239 as originally drafted raised constitutional questions under Art. V, Part Third, Section 5 (added in 1976), which prohibits using proceeds from the sale of bonds to fund current expenditures, and under Art. IX, Section 14, which caps the general-obligation debt that may be authorized without a public referendum at $2,000,000. Second, the office had already worked with the Treasurer, the Governor's legal counsel, and private bond counsel to redraft the bill, and the AG believed the bill "in its revised form is defensible against a constitutional challenge." The opinion expressly took no position on the wisdom or the public-policy implications of raising revenue this way.

Currency note

This opinion was issued in 2013. 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.

Background and statutory framework

Two provisions of the Maine Constitution framed the AG's concern. Art. V, Part Third, Section 5, added in 1976, prohibits using the proceeds from the sale of bonds to fund current expenditures. Art. IX, Section 14 limits the amount of general-obligation debt the Legislature may authorize without putting it to a public referendum to $2,000,000. A bill that borrows against future liquor revenue to make current payments has to be structured carefully to stay clear of both.

The AG described the legal issues as novel and, to the office's knowledge, not previously litigated. For background on the constitutional questions surrounding similar financing measures, the opinion pointed to the earlier Opinion of the Attorney General of April 23, 2009, and to three Law Court decisions: Allen v. Quinn, 459 A.2d 1098 (Me. 1983); Opinion of the Justices, 146 Me. 183, 79 A.2d 753 (1951); and Farris v. Goss, 60 A.2d 908 (Me. 1948).

Common questions

Did the AG say LD 239 was unconstitutional?
No. The AG said the bill as originally drafted raised questions under two constitutional provisions, but that after a redraft (which the office helped prepare with the Treasurer and bond counsel), the revised bill was, in the AG's view, defensible against a constitutional challenge.

What were the two constitutional concerns?
Using bond-sale proceeds to fund current expenditures (barred by Art. V, Part Third, Section 5) and authorizing general-obligation debt above $2,000,000 without a referendum (Art. IX, Section 14).

Did the AG weigh in on whether funding hospitals through liquor revenue was a good idea?
No. The opinion expressly took no position on the wisdom or the public-policy implications of the financing approach. It addressed only the constitutional defensibility of the structure.

Citations

• Maine Constitution, Art. V, Pt. Third, Section 5
• Maine Constitution, Art. IX, Section 14
• Allen v. Quinn, 459 A.2d 1098 (Me. 1983)
• Opinion of the Justices, 146 Me. 183, 79 A.2d 753 (1951)
• Farris v. Goss, 60 A.2d 908 (Me. 1948)

Source

• Landing page: https://www.maine.gov/ag/about/ag_opinions.html

Original opinion text

MAINE STATE LEGISLATURE

    The following document is provided by the
   LAW AND LEGISLATIVE DIGITAL LIBRARY

at the Maine State Law and Legislative Reference Library
http://legislature.maine.gov/lawlib

Reproduced from scanned originals with text recognition applied
(searchable text may contain some errors and/or omissions)
 -~(;:'! REGIONAL OFFICES
~- ~~ 84 HARLOW ST. 2ND FLOOR
BANGOR, MAINE 04401
TEL: (207) 941-3070
]ANET T. MILLS FAX: (207) 941-3075
ATTORNEY GENERAL
415 CONGRESS ST., STE. 301
PORTLAND, MAINE 04101
TEL: (207) 822-0260
FAX: (207) 822-0259
STATE OF MAINE
TEL: (207) 626-8800 14 ACCESS HIGHWAY, STE. l
OFFICE OF THE ATTORNEY GENERAL
TTY USERS CALL MAINE RELAY 711 CARIBOU, MAINE 04736
6 STATE HOUSE STATION TEL: (207) 496-3792
AUGUSTA, MAINE 04333-0006 FAX: (207) 496-3291

    April 9, 2013


    Senator Dawn Hill
    Representative Margaret R Rotundo
    Chairs, Joint Standing Committee on Appropriations and Financial Affairs
    Room 228, State House
    Maine State Legislature
    2 State House Station
    Augusta, Maine 04333

    Re:         LD 239, An Act To Improve the Return to the State on the Sale of Spirits and
                To Provide a Source of Payment for Maine's Hospitals

    Dear Senator Hill and Representative Rotundo:

    I was unaware until this morning that the Committee wished our Office to provide
    information regarding the Governor's Liquor Operation Revenue Bonds bill. The
    individual who worked most closely on this issue is not available today and I am
    required to be in other committees this afternoon. However, let me simply
    summarize the view of this Office as follows:

    LD 239 as originally drafted raised questions under Art. V, Part Third, Section S of
    the Ma,ine Constitution (added in 1976), which prohibits "the use of proceeds from
    the sale of bonds to fund current expenditures," as well as under Art. IX, Section 14,
    which limits the amount of general obligation debt that may be authorized without
    public referendum to $2,000,000.

    This Office has worked with the Treasurer and with the Governor's legal counsel,
    with input from private bond counsel, to assist in redrafting the bill in its present
    form. See draft attached to testimony of Michael Cianchette of March 11, 2013.

    Although this legislation raises novel legal issues that, to our knowledge, have not
    been litigated previously, I believe the bill in its revised form is defensible against a
    constitutional challenge.

'I

 For background on the constitutional issues surrounding similar measures, please
 see, e.g., Opinion of the Attorney Gerieral of April 23, 2009; Allen v. Quinn, 459 A.2d
 1098 (Me.1983); Opinion of the Justices, 146 Me. 183, 79 A.2d 753 (1951); and
 Farris v. Goss, 60 A.2d 908 (Me.1948).

 This Office takes no position on the wisdom of or the public policy implications of
 raising revenue in the manner proposed in this legislation.

 Thank you.




 ¼-
       erely,


    et T. Mills
 Attorney General

 Cc:     Michael Cianchette, Governor's Office
         Senate President Justin L. Alfond
         Speaker Mark W. Eves
         Senate Majority Leader Seth A. Goodall
         Assistant Senate Majority Leader Troy D. Jackson
         Senate Republican Leader Michael D. Thibodeau
         Assistant Senate Republican Leader Roger J. Katz
         House Majority Leader Seth A. Berry
         House Majority Whip, Jeff M. McCabe
         House Republican Leader Kenneth W. Fredette
         Assistant House Republican Leader Alexander R. Willette