Can Maine's Legislature take money out of a dedicated revenue fund, like the PUC Conservation Administration Fund, and sweep it into the General Fund?

Plain-English summary

In early 2003, the Maine Legislature was looking to plug a budget gap by sweeping $600,000 out of the Public Utilities Commission's Conservation Administration Fund into the State's General Fund. The Joint Standing Committee on Utilities and Energy asked AG G. Steven Rowe whether such a transfer would run into the Maine Constitution. The AG's answer was no, with the reasoning resting on a single distinction: dedicated revenue funds are not trust funds.

The Conservation Administration Fund was set up under 35-A M.R.S.A. § 3211. The fund collected assessments from utilities to support energy conservation programs. The AG looked for, and did not find, any indication that the Legislature had intended to wall the fund off as a trust when it created the fund. Without that intent, the money in the fund stayed within the Legislature's discretion to allocate, like any other public money.

The opinion drew a sharp line. If a fund is held in trust, or if the Maine Constitution specifically protects it, the Legislature cannot move it. Everything else, including dedicated revenue accounts created by statute, is allocable. The AG observed that if dedicating revenue to a stated purpose alone made an account a trust, "no dedicated revenue account would be available for reallocation by the Legislature." That outcome would gut the Legislature's traditional appropriations power.

A 1989 follow-up letter from AG Michael Carpenter to the Finance Commissioner, attached to this opinion, identified specific funds that were trust-protected even from a generic across-the-board sweep: Baxter State Park accounts, certain Bureau of Parks and Recreation accounts funded by donations conditioned on park use, Bureau of Public Lands accounts restricted to public reserved or submerged lands, monies raised by bonds for designated purposes, and highway trust fund monies.

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: How do I tell whether a Maine fund is a "trust fund" or a "dedicated revenue fund"?
A: The AG looked for explicit legislative intent to create a trust, plus the structural hallmarks of a trust (a settlor, identified beneficiaries, fiduciary duties on a trustee). Dedicating money to a stated purpose alone does not create a trust. The Conservation Administration Fund had a purpose (utility conservation programs), but nothing in 35-A M.R.S.A. § 3211 made it a trust. By contrast, donations to a state park conditioned on park use, or bond proceeds dedicated by constitutional provision, would carry trust-style obligations on the State.

Q: At the time of this opinion, did the AG say the Legislature could sweep highway funds?
A: No. The 1989 attached letter identified highway trust fund accounts as one of the categories that an across-the-board transfer could not lawfully reach. Highway funds in Maine are constitutionally restricted to highway purposes.

Q: Did this opinion bind the courts?
A: AG opinions in Maine are persuasive, not binding. They guide other state officials and represent the AG's best legal judgment on the question presented. If a transfer were challenged in court, the court would do its own analysis; the AG opinion is one piece of authority the court might consider.

Q: Did the Legislature actually transfer the $600,000?
A: This opinion answered the legal question. Whether the Legislature went ahead with the specific $600,000 transfer was a political and budgetary decision that the AG opinion did not control. The opinion cleared the legal path.

Background and statutory framework

35-A M.R.S.A. § 3211 established the PUC's Conservation Administration Fund. The fund collected assessments from regulated utilities and used the proceeds for energy conservation programs the PUC administered. Funds of this type are common in regulated-utility statutes across the country: the regulator collects assessments to fund the work, and the assessments flow through a dedicated account so that the regulator's work is not at the mercy of the annual General Fund budget.

The Maine Constitution does not contain a general bar on the Legislature reallocating dedicated revenue accounts. Specific constitutional provisions do protect specific funds (highway-use taxes, for example). The Legislature's general appropriations authority covers everything else.

The opinion stitches into a small line of earlier AG opinions on the same theme. AG Opinion No. 92-7 (referenced and attached to the 2003 letter) had concluded that the Legislature had broad discretion to allocate dedicated funds absent a trust or constitutional restriction. The 1989 Carpenter letter to Commissioner Millett worked through the categories of funds that were and were not subject to a then-pending across-the-board sweep under "Part KKK" of the appropriations bill. The 2003 opinion applies that earlier framework to the Conservation Administration Fund specifically.

Citations

• 35-A M.R.S.A. § 3211 (PUC Conservation Administration Fund)
• ME AG Opinion No. 92-7 (Legislature's discretion over allocations absent trust)
• 1989 AG letter to Finance Commissioner Sawin Millett re Part KKK across-the-board transfer (attached)

Source

• Landing page: https://www.maine.gov/legis/lawlib/lldl/agops/agops.htm
• Original PDF: https://lldc.mainelegislature.org/Open/AG/Opinions/2003/ag_20030203.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

February 3, 2003

Hon. Christopher Hall, Senate Chair
Hon. Lawrence Bliss, House Chair
Members of the Joint Standing Committee on Utilities and Energy
100 State House Station
Augusta, ME 04333-0100

Dear Senator Hall, Representative Bliss and Committee Members:

You have inquired whether the transfer of $600,000 from the Conservation Administration Fund of the Maine Public Utilities Commission ("PUC") to the State's General Fund would violate the provisions of the Maine Constitution. We believe that such transfer would not violate the Maine Constitution.

Unless 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. See ME AG Opinion No. 92-7 (attached).

It is our determination that the funds in the PUC Conservation Administration Fund are not held in trust. There is nothing in Title 35-A M.R.S.A. section 3211 or of which we are aware that suggests that the Legislature intended to establish the Conservation Administration Fund as a trust. Dedicated revenue accounts are, by definition, funds specified to be used for a designated purpose. If this alone were sufficient to render these accounts trust funds, then no dedicated revenue account would be available for reallocation by the Legislature.

I hope this answers your question. Please feel free to inquire again if further clarification is necessary.

Sincerely,

G. STEVEN ROWE
Attorney General

GSR:dp
Attachment

[Attachment, reproduced verbatim:]

December 15, 1989

Sawin Millett, Commissioner
Department of Finance
State House Station #78
Augusta, Maine 04333-0078

Re: Transfer of Trust Monies to General Fund under Part KKK of Legislative Appropriations Bill

Dear Sawin:

As you know, my office has been in contact with yours regarding the applicability to certain trust funds of Part KKK of the appropriations bill enacted in the last legislative session. Part KKK provides an across-the-board transfer of .9% of accounts to the general fund. It is this office's opinion that Part KKK cannot, however, lawfully effect a transfer to the general fund of monies that the State holds in trust for certain legally designated purposes. Such a transfer would either violate the legal trust relationship by which the State holds the monies involved, or would violate constitutional requirements by which bond or other revenues must be held for expenditure. More detailed legal analysis describing the rationale for this opinion is attached.

In the discussions between my office and yours, the suggestion was made that we provide a concise summary of our views on this issue as it pertains to the trust monies that have been brought to our attention. My purpose then is to simply state what we believe to be the law on the matter and to point out the types of trust-type funds, to the extent known by us, to which this opinion applies. Again, as to the funds described below, an across the board transfer to the general fund as envisioned by Part KKK would violate the trust duties under which the State holds these particular funds. This is in contrast to the applicability of Part KKK to other special or dedicated revenue accounts, held by the State in a non-trust capacity, and over which the Legislature has discretion in making allocations for any designated governmental purpose, including reallocation to the general fund.

These are the funds that have been brought to our attention and from which monies should not be reallocated to the general fund under Part KKK:

Monies in Baxter State Park accounts;

Monies in accounts of Bureau of Parks and Recreation of the Department of Conservation, which were donated to and received by the State with the explicit understanding that the monies would be used for certain park facilities;

Monies in accounts of the Bureau of Public Lands of the Department of Conservation, restricted to the public reserved lands or submerged lands;

Monies raised by bond issues designated for a particular purpose;

Monies in or drawn from highway trust fund accounts.

There may be other trust funds, of which we have not been made aware, and we will respond to these circumstances as they arise. In the meantime, if you have any questions, please let me know.

Sincerely,

MICHAEL E. CARPENTER
Attorney General

MEC/tt

Attachments

cc: Michael D. Pearson, Senate Chair, Legislative Appropriations Committee
Lorraine N. Chonko, House Chair, Legislative Appropriations Committee
Jim Clair
Jack Nicholas