AUGUSTA, Maine — Gov. John Baldacci on Monday signed a bill that expands Maine’s prohibition on use of “squaw” in official place names to close what supporters said was a loophole in the law.

The bill, LD 797, would prohibit the use of any derivation of both “squaw” and “squa,” either as a separate word or within another word or phrase. Many American Indians regard squaw as a derogatory term for women.

The legislation, which takes effect 90 days after the Legislature adjourns, is largely aimed at addressing a long-running dispute between a homeowners’ association and town officials in Stockton Springs.

Members of the association objected to Stockton Springs’ Board of Selectmen voting more than a year and a half ago to substitute the word “Defence” for all names on a peninsula formerly known as Squaw Point. The Defence was a privateer ship that was scuttled in the Penobscot River near Stockton Springs during the Revolutionary War.

The members responded by renaming their group the “Squapoint Association” and requesting that the town rename Defence Road as Squall Point Road. When the board rejected the request, the association submitted a petition that would block town officials from preventing the use of names on private roads as long as the name is consistent with state law.

Dan Coulters, a Squapoint Association member, said voters will get a chance to weigh in on the group’s petition on June 20. Coulters is also running for selectman this month.

But even if the petition passes, the group will rename their private road Squall Point Road, not Squaw Point Road, he said.

“We are very content to have it named Squall Point,” he said. “It symbolizes the area we live in.”

Rep. Wayne Mitchell of the Penobscot Nation, who was the lead sponsor of LD 797, accused the leadership of the homeowners’ association of only being interested in finding a legal loophole within the 2000 law or circumnavigating it.

“This fully implements the law,” Mitchell said after the bill signing.

Baldacci said the change is consistent with Maine’s reputation as a welcoming state.

“Maine people have time and time again supported tolerance and respect for others,” the governor said in a statement. “Every Maine person and every Maine community deserves to be treated with dignity.”

The bill had the support of the Maine Indian Tribal-State Commission, the Maine Human Rights Commission and various civic and religious organizations.

During a legislative committee’s work on the bill, several committee members raised concerns about the measure inadvertently prohibiting the use of inoffensive words that begin with “squa,” such as square. The final bill was amended to state that it would prohibit the use of “squa” as a separate word “or as a separate syllable in a word.”

That could seemingly apply to several Aroostook places or geologic features that bear the name “Squapan.” But Mitchell explained that the native pronunciation of the word is monosyllabic and that the bill is not meant to address those places.

Neither the original law nor Mitchell’s bill can force private business owners who do not regard the historic use of the word “squaw” as offensive or derogatory to change the names of their establishments. One example is Big Squaw Mountain Resort, located on what is officially known as Big Moose Mountain near Greenville.