LEGISLATIVE UPDATE # 5 MARCH 1 SECOND REGULAR SESSION – 2004
1) BANKING INDUSTRY PRIORITIES FOR MARCH
2) UPDATE ON MBA’S BILLS
3) UPDATE ON OTHER BANKING-RELATED LDS
4) BANKERS DAY AT THE LEGISLATURE IS MARCH 25TH – REGISTER!
Legislative leadership expects to adjourn this Session before Friday April 9th – but to do so will require tremendous compromise and consensus building on the major and most controversial topics – Budget Issues, Tax Reform, Dirigo Health, and some Labor vs. Business Bills. The final 5 – 6 weeks of the Session will bring longer workdays, late night Sessions and more heated floor debate! The Maine Bankers Association will play a role in debate on several of these major topics.
1) BANKING PRIORITIES FOR MARCH – NEW ISSUES
Most of the routine banking legislation has worked its way through the process and is waiting final votes. However, there are several new banking-related issues, and several major business issues with new developments requiring MBA analysis and input. These developments include:
BUSINES ROUNDTABLE TAX REFORM PROPOSAL - (NO LD NUMBER YET) There are a number of competing tax reform proposals being debated before the Legislature at this time. The Governor will release his proposal on Wednesday of this week. There is urgency on the part of the Legislature and the Governor because of the two referendum proposals that will be before the voters – one is the Maine Municipal Association initiative that would require the State to fund 55% of education costs, which would add as much as $280 million in new state spending; and two is the Carol Palesky initiative that would cap local property taxes at a 10 cent mill rate (for a service center cities such as Bangor, Augusta and Portland, this would force their budgets to be cut in half!). Many legislators, the Governor’s advisers and other “insiders” predict that BOTH referenda would pass if voted on today! Tax Reform will be one of the more contentious issues that will be decided in the final days of the Session.
The Maine Business Roundtable, which Maine Bankers Association belongs to, will propose “guidelines” for tax reform and concludes that Maine taxpayers, including businesses, cannot stand for any increase in taxes, that spending must be cut. “Tax Reform must equal tax relief.” Their proposal will be finalized in the next week.
Some of the tax reform proposals under discussion include:
· Expanding the sales tax base to include amusements, advertising, citizen purchases of some services, and a repeal of a number of sales tax exemptions such as church purchases;
· Constitutional cap on spending and requiring increases in taxes to have a 2/3 vote in the Legislature;
· Increase the Homestead exemption, and mail those checks directly to the individual taxpayer, not to the town;
· Limit property tax payments to 5% of a person’s income, with any additional tax owed picked up by the state
“PAID FAMILY SICK LEAVE” (NO LD NUMBER) – This proposal originates from a Study of Family Medical Leave, and is one of the highest priorities of the Maine Women’s Lobby. It would require employers to offer paid sick leave so that the employee may tend to a family member with a medical condition. One of the more onerous provisions in this proposal is the record-keeping requirement to calculate accumulated sick leave. This proposal will be opposed by the State Chamber and a number of other business groups. There will be a Public Hearing before the Labor Committee on Tuesday, March 2nd.
LD 921, AN ACT to Enact the Uniform Trust Code, will be heard Monday, March 8th before the Judiciary Committee. Maine Bankers Association’s Trust Committee voted to support adoption of the UTC, and MBA will testify in support of this proposal. The bill adopting the UTC is 249 pages long, and includes comments from the Uniform Law that assist in interpreting the new law. Several members of the MBA Trust Committee worked on the Summer/Fall Study that resulted in the final draft.
LD 1700, AN ACT Amending the Motor Vehicle Laws – will have a third Work Session Tuesday, March 2nd before the Transportation Committee. Maine Bankers Association along with other lenders are negotiating with the Maine Auto Dealers and the Bureau of Motor Vehicles (BMV) to resolve a major issue when perfecting the lender’s security interest that causes loss of the bank’s security interest as well as increased fines. As we have researched this issue, BMV has informed lenders that between 50 and 75 titles are filed after deadline EVERY WEEK. This means for these 50 – 75 titles per week, the lender lost its security interest between the date of purchase and the date of filing – as long as 27 – 30 days or more! The UCC requires filing within 20 days to perfect its security interest back to the date of purchase. After much research and negotiation, Maine Bankers Association will offer an amendment tomorrow that allows up to 30 days to file with both BMV and with the UCC, and reduces the penalty from $125 to $50. This Amendment, if accepted would offer significant additional protection to lenders.
AN ACT to Prohibit Banks From Requiring Fingerprints in Order to Cash Checks, still awaits being printed and assigned to a Committee. MBA will oppose this LD.
2) UPDATE ON MBA’S BILLS
LD 1786, AN ACT Making Amendments to the Uniform Commercial Code, was voted unanimously ought to pass as amended by the Judiciary Committee. This bill will be on the House floor as early as this week. MBA Strongly supports passage of this LD.
LD 1802, AN ACT to Permit the Photocopying of Driver’s Licenses in Financial Transactions has been tabled in the House pending the printing of a House Floor Amendment. The Majority Report of the Insurance and Financial Services Committee has passed once in the House. The Floor Amendment would limit the application of the bill to financial institutions, so MBA members are still protected – but most likely the Floor Amendment will be voted down, and the Majority Report as proposed by MBA will pass and be sent on to the Senate.
3) UPDATE ON OTHER BANKING-RELATED LEGISLATION
LD 1843 AN ACT to Require Surety Bonding by Payroll Processing Companies, had its Public Hearing Thursday, Feb. 26th before the Business, Research and Economic Development Committee. Among its provisions are tighter regulation by the Department of Professional and Financial Regulation, and an increase in the bonding amounts. MBA Position: Monitor
LD 1854, AN ACT to Delay Implementation of Restrictions on Information on Electronically Printed Receipts, has been voted unanimously ought to pass as amended by the Insurance and Financial Services Committee. The amendment to the bill was supported by the Maine Bankers Association, and while not delaying the effective date of 1/1/2004, does grant small businesses one year “amnesty” prior to fines and other penalties for a violation. This was the legislation supported by MBA two years ago that limits the information on an electronic receipt, so as to reduce identity theft. Most merchants and all banks have reported they are in compliance with the new requirements. The amended language will be exactly like federal law.
NOTE: There are additional Workers Comp bills and unemployment fund proposals that MBA may take positions on – but most of these LDs are bottled up in the Labor Committee. They will be held until late in the Session. We will update you on these LDs as they move forward in the process.
4) BANKERS’ DAY AT THE STATE HOUSE – March 25th!
Registration is underway for the Annual Bankers’ Day at the State House. If you have not signed up to attend and shadow your local legislator – do so now! Contact Mikaela Foster at the MBA office, 622-6131 or mfoster@mainebankers.com.
