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1977 The Maine Capital Corporation - Seeding The Hegemony


At this moment I am reading a report I received from the Maine Law Library- a report which was used to create The Maine Economic Development Corporation and The Maine Capital Corporation- a private investment corporation chartered by the Maine legislature which offered tax credits for stock. It was chartered contingent to The Maine Development Foundation Corporation.

The Maine Constitution, prohibits the legislature from chartering of corporations by special acts of legislation with an exception for municipal purposes and if the objects of the corporation cannot be otherwise achieved. (Article Iv Part Third Sections 13 & 14)

Article X.Additional Provisions.

Section 3.  Laws now in force continue until repealed.  All laws now in force in this State, and not repugnant to this Constitution, shall remain, and be in force, until altered or repealed by the Legislature, or shall expire by their own limitation.

When originally chartered  the Maine Capital Corporation and The Maine Development Foundation had "sunset laws" providing that each would be phased out at a specified date. The Maine Capital Corporation was phased out. The Maine Development Foundation Corporation still exists today and has generated a network of state corporations. 5 out of six of the recently passed bonds will be channeled through state corporations .

The Report- Governor's Task Force For Economic Redevelopment, Recommended Legislation For An Economic Development Program -110th Congress, 1976 calls for the elimination of local referendums on municipal bond issues

2, eliminate the requirement for a local referendum on municipal bond issues.
The Report- Governor's Task Force For Economic Redevelopment, Recommended Legislation For An Economic Development Program -110th Congress, calls for the elimination of local referendums on municipal bond issues
"2, eliminate the requirement for a local referendum on municipal bond issues."
       According to Marshall J Tinkle,author of The Maine Constitution, a reference manual, in his discussion of the Home Rule Amendment,  legislation previous to 1962's Maine Municipal Industrial Buildings Bonds Referendum, that authorized municipalities to issue bonds for private industrialization was declared unconstitutional because it was not for a public use.

 "As noted in the literature, the amendment ( Home Rule , Section 2 ) makes it clear that general obligations may now be used to assist private industry for certain purposes" .....this section applies only to general obligations of municipalities and not to forms of financing that do not create municipal debt or liability" The Maine Constitution: A Reference manual by Marshall J Tinkle  

BALLODPEDIA shows that 66.31 % of Mainers voted for the Constitutional Amendment:
Maine Proposed Constitutional Amendment No. 2 (1962)
Approved  Yes

Once again we find a class of individuals in Maine who feel the constitution. The heads of industry, private collaborators with the Governor of Maine propose to change by statute, that which has been established by the consent of the governed and embedded into the Maine Constitution. The report then recommends that two corporations be chartered by special acts of legislation, which is unconstitutional by Article IV Part Third Sections 13 and 14 of the Maine Constitution and yet the corporations are chartered.
1969 HOME RULE AMENDMENT provides municipalities with the authority to be agents of economic development. Governor Kenneth M. Curtis

Article VIII.

Part Second.

Municipal Home Rule.

Section 1.  Power of municipalities to amend their charters.  The inhabitants of any municipality shall have the power to alter and amend their charters on all matters, not prohibited by Constitution or general law, which are local and municipal in character.  The Legislature shall prescribe the procedure by which the municipality may so act.

Section 2.  Construction of buildings for industrial use.  For the purposes of fostering, encouraging and assisting the physical location, settlement and resettlement of industrial and manufacturing enterprises within the physical boundaries of any municipality, the registered voters of that municipality may, by majority vote, authorize the issuance of notes or bonds in the name of the municipality for the purpose of purchasing land and interests therein or constructing buildings for industrial use, to be leased or sold by the municipality to any responsible industrial firm or corporation.

A second report dated two years later;

On the basis of its study, the Committee recommends: that the Maine Capital Corporation and its related tax legislation be subject to legislative review during the same period as the Legislature "sunset" review of ·the Maine Development Foundation; and  that the Foundation's statutory purpose of "...promotion of an improved climate for economic development in the State .." be changed to regulate the use of State or other funds available to the Foundation to lobby the Legislature or to advocate to the public a position on initiative and referendum questions. 

Noting that I have in the recent post, Missing Most Of The Economy, referred to Mr Douglas Ray whom the state identifies as a  "legislative liaison" as "a tax payer funded lobbyist for the DECD Corporation". Here you see that the architects creating the foundation stone of the corporate state also  identify Mr Ray's function as a lobbyist. They leave out the part that the lobbyist for the Maine Development Corporation is being funded by taxpayers to lobby the legislature in the interests of "public -private relationships" - code for hegemonic power.

Today, when reading congressional hearings it is remarkable that most of the testimony comes from taxpayer funded lobbyists for the Maine Corporations's subsidiaries- or private members of the "public-private relationships" club.

Whether and to what extent the Foundation ought to be able to implement the statutory purpose of " ...promotion of an improved climate for economic development in the State ..." (10 MRSA §917, sub-§6), and especially the ex­ tent to which the Foundation should be permitted to use State funds or any other resources available to it to lobby the Legislature or to publicly or privately promote its position on a major, controversial issue.The Committee recommends legislation in the first and third areas (a text of the recommended legislation is Appendix 4) :

2. The Committee recommends repeal of the liberal construction clause and revision of the Foundation's purpose clause relating to "creating a climate for economic development." This is to clarify that the Foundation, in creating a climate for economic development, may conduct objective analyses and attempt to develop broad consensus on issues of significance to the economic health of Maine, provided that its activities do not require it to register with the State as a lobbyist employer and that it does not advocate to the public a position on an initiative or referendum question. (emphasis mine)
Commentary Note the careful parsing of the language. The concern is that the Foundation avoid having to register as a lobbyist- NOT that it should not lobby- which indeed it does, if not directly then through it's proxy corporations. And note that it says that it does not advocate to the public a position on an initiative or referendum question- but advocating to the public's alleged representatives at congressional hearings on initiatives and referendum question- that's done all the time ! In fact the "legislative liaisons" of the state's own corporations are the mainstay of testimony at congressional hearings- the legislature's go-to corporations! -As for not lobbying to the public for positions on initiatives- no need for that since most do not make it into the Maine media, and when an initiative is covered by the Maine media, it is seldom done so in a comprehensive manner, often leaving out fundamental facts such as that the limit on the amount of The Expanded and Improved Maine Seed Capital Tax Credit was being expanded by eight-fold!

1977 The Maine Capital Corporation

Investment corporation authorized by.the legislature under 'Title 13-A: MAINE BUSINESS CORPORATION ACT , established in 1971 despite constitutional prohibitions found in Article IV part Third Section 14 prohibiting the legislature from chartering corporations for state purposes. Title 13-A is now repealed as was planned under the sunset laws- but it has been reincarnated throughout the network of Maine State Inc.

The original enabling legislation for the Maine Capital Corporation was passed in l977- the same year that the Maine Development Foundation Corporation was also chartered by special act of legislation.. It was later amended to broaden the purpose of the Corporation and clarify its ability to use a wide range of investment instruments.

The organizational phase of MCC extended over a long period of time, primarily due to the challenge of selling its 10,000 shares of common stock ($1,000,000) to private investors. MCC has never received a direct State appropriation and this meant it had·to find other means for covering its organizational expenses. The stock issue was marketed by the firm of Burgcss & Leith Incorporated for the modest commission of $20,000 plus $5000 expense fee. Burgcss & Leith was assisted by the Maine Development Foundation, (Corporation)which was not compensated for its efforts. 

Tax Consequences

Tax factors related to MCC were detailed on pp. 34-35 of the Offering Memorandum (see Appendix I). The major provision that would affect revenues was the Maine income tax credit of·fifty percent spread over a minimum of five years, available to investors in MCC's stock. We have no knowledge of which investors have availed themselves of this credit and to what degree. We do know it is instrumental in mobilizing the capital, as intended by the legislature * ( emphasis mine)

This tax credit is capped by a number of features,  all included in the legislation. At a maximum it would be $500,000 spread out over at least five (5) years. As MCC makes more investments, with positive economic consequences, tax benefits to the State will accrue which sooner or later will surpass the costs.- Source Governor's Task Force For Economic Redevelopment, Recommended Legislation For An Economic Development Program -110th Congress, 1976

* Commentary:The Maine Capital Corporation is the precursor to The Financial Authority Of Maine Corporation- which tells us in its charter that “Any benefits accruing to private individuals or associations, as a result of the activities of the authority, are deemed by the Legislature to be incidental to the public purposes to be achieved by the implementation of this chapter- which putting one and one together- it may be deemed incidental to the legislature but the legislature knows it is not incidental to their private partners, which is why the legislature used tax credits to sell stocks in a private corporation.- As for the taxpayers who are footing the bill, as far as I know they were never consulted- consistent with the recommendation found in the Governor's Task Force For Economic Redevelopment year 1976 ie: 2, eliminate the requirement for a local referendum on municipal bond issues. The bill for all of the"financial instruments" used by the Corporation of Maine are simply packaged as "creating jobs" on public referendums for bond issues ( see how the constitution has been bypassed on bond questions HERE)  but whenever the channel of distribution of bond revenue is the corporate network of the state of Maine, the "financial instruments" developed for that corporations's use will be implemented- one such financial instrument being tax credits- which in contemporary legislation are usually identified as refundable tax credits. The basis of this opinion is laid out in the statutes- which is the foundational research source for this blog.


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