Bill to pave way for sale

AUGUSTA (AP) - The Maine Senate on Wednesday gave final approval and sent to Gov. John Baldacci a bill that's crucial to next week's pending sale of Great Northern Paper Co. to Brascan Corp. of Toronto.

The bill, submitted by Baldacci, was approved without debate, and the governor is expected to sign it, said spokesman Lee Umphrey.

In addition to paving the way for the sale, the measure will ensure that the towns of Millinocket and East Millinocket, where the two Great Northern mills are located, receive $7.8 million in property taxes they are owed.

The transaction will forestall serious financial disruptions in the two communities that include the closing of a local high school, Sen. Stephen Stanley, D-Medway, said after the bill received final approval.

Enactment of the bill was a condition to Monday's scheduled closing of the Brascan purchase of Great Northern, said Kurt Adams, Baldacci's chief legal counsel.

The Great Northern mills have been idle since December, putting more than 1,100 people out of work. Brascan said it plans to restart the East Millinocket mill by mid-May and that the mills eventually will have a work force of 500 to 550.

The legislation makes assets being purchased by Brascan eligible under Maine's business equipment tax reimbursement, or "BETR," program.

In exchange for reimbursements, Brascan will pay tax liens that were lodged against Great Northern prior its January filing for Chapter 11 bankruptcy protection.

The payments include $4.4 million to Millinocket and $3.4 to East Millinocket, said Stanley, Senate chairman of the Legislature's Taxation Committee.

The Finance Authority of Maine, the quasi-public loan guarantee agency, will provide a temporary, interest-free bridge loan until the BETR money becomes available to Brascan.

Brascan was not obligated to pay the tax liens, but also was not eligible for the BETR reimbursement prior to the legislation.

In a letter to officials in Millinocket and East Millinocket, Baldacci noted that Brascan agreed to pay the back taxes "as a gesture of their good faith and willingness to work in partnership with the communities.

"In this spirit, I encourage you to continue your discussions with other to explore opportunities for municipal service consolidation," Baldacci's letter says.

The letter suggests that consolidation of the school systems "would be a good start," but adds that waste disposal, police and fire protection are other possibilities.