LEGISLATIVE UPDATE – FEBRUARY 4, 2000
- UPDATE ON MBA BILLS
- COMMISSION ON PRIVATE ACTIVITY BONDS REPORT DUE SOON
- OTHER BANKING-RELATED LEGISLATION
- AG PROPOSES TO RECONSIDER TELEMARKETING FRAUD BILL
- ABA ASKS CONGRESS FOR TAX PARITY
- SENATE PASSES BANKRUPTCY BILL – GOES TO COMMITTEE CONFERENCE
- MBA SPONSORED BILLS
LD 2259, AN ACT to Amend the Maine Banking Code Pertaining to Interlocking Directors has been reported out Unanimous Ought-to-Pass. There were no full Sessions of the Legislature this past week so this LD should be before the full House and Senate next week. With its emergency preamble, this LD will become law as soon as the Governor signs it.
LD 2285, AN ACT to Amend Maine’s Probate Code has its second work session Friday, February 04, 2000 and the Judiciary Committee voted unanimous Ought-to-Pass on compromise language that reached by interested parties last week. The final version adopted all the points requested by MBA, and this LD will soon go to the full House and Senate.
LD 2400, AN ACT to Create Employment Opportunities by Clarifying Maine’s Tax Laws Regarding Mutual Fund Companies had its Public Hearing on Feb. 1, 2000. Proponents included Commissioner Levecsque of the Department of Economic and Community Development (DECD), Commissioner Longley of the Department of Professional and Financial Regulation, Chris Hall from the State Chamber, Joe Wischerath, President of Maine and Company and Maine Bankers. There was one opponent, Christopher St. John, who opposed targeting tax incentives for any type of business.
LD 2400 would amend Maine’s tax laws so as to be attractive to mutual fund companies as a possible cite to locate an operations center. DECD and Maine and Company have met with several mutual fund companies who have interest in locating in Maine should Maine adopt these proposed changes. Basically, the LD amends Maine tax laws so that for mutual fund companies Maine uses only a single factor, sales, for the apportionment formula, and then apply that formula only to in-state investors in the mutual fund. This is the law in Massachusetts, Rhode Island, Connecticut and New Hampshire, where mutual fund companies have expanded within the last two or three years.
The Taxation Committee already had discussed the need to change Maine’s apportionment formula to target specific industries, including mutual fund companies. The Taxation Committee may support this proposal since there are no existing taxpayers affected by this proposal, so there will be no fiscal impact to the State by passing this LD. Also, the testimony indicated that the average wage for a mutual fund employee is $45,000, and it is a clean industry.
The Committee will work this LD on February 8th.
II. COMMISSION ON PRIVATE ACTIVITY BONDS TO ISSUE REPORT
The Commission on Private Activity Bonds will issue its Report to the Business and Economic Development Committee within the next two weeks. This Report proposes changes to the process by which Maine allocates the $150,000,000 in private activity bonds allowed by the federal government. The Commission will recommend combining MELA and MELMAC into one student loan authority, and addresses a private loan to lenders program.
The Business and Economic Development Committee will then consider legislation that implements sections of the Report. The Report date and any legislative proposals have not been scheduled at this time.
III. OTHER BANKING RELATED BILLS
LD 1824, AN ACT Encouraging Equity Equivalent Loans or Investments in Community Development Financial Institutions was passed unanimously by the Taxation Committee, and awaits funding by the Appropriations Committee. This proposal allows loans or investments by a financial institution to a CDFI to gain a tax credit.
LD 2072, AN ACT to Clarify the Admissibility of Electronic Records and Signatures is one of at least three bills that would allow contracts through use of digitized signatures. Banks and other businesses using e-commerce need one of these bills to pass. There is strong Administration support, as well as support from legislators for this change.
LD 2182, AN ACT to Improve Air Quality through Market Incentives for the Purchase of Cleaner Vehicles continues to be studied by the Natural Resources Committee. This is the LD that as amended proposes a low-interest loan program administered by FAME for the purchase of low emission vehicles. There may be a summer study of various proposed incentive programs to promote purchase of low emission vehicles. MBA will monitor this LD.
LD 2245, AN ACT to Adopt the Model Revised Article 9, Secured Transactions is a 400-page proposal held over from last session and studied by two separate groups over the summer. The new Article 9 impacts secured lenders more than any other business group. The goal of the new Article 9 is to have law that catches up with the huge technological changes including e-commerce. It will simplify the filing, recording and searching of liens used to secure collateral. Some version of this LD will pass.
LD 2357 AN ACT to Amend the Maine Seed Capital Tax Credit Program would expand the tax credit allowed banks and other investors in the Seed Capital Program. A significant amendment to the bill proposed by former FAME CEO Tim Agnew expands the ability to offer tax credits to investors in start up high-tech businesses.
LD 2373, AN ACT to Prevent Misuse of Mortuary Trust Funds will have its Public Hearing on Monday, Feb. 7th before the Banking & Insurance Committee. MBA will monitor this proposal to assure that no greater reporting burden fall on the industry.
IV. ATTORNEY GENERAL PROPOSES RE-CONSIDERATION OF LD 1402, AN ACT TO CREATE THE TELEMARKETING REGISTRATION AND FRAUD PREVENTION ACT.
Nearly a year after the Utilities & Energy Committee asked the Attorney General to undertake a review of existing State and Federal laws regulating telemarketing and to give the Committee recommendations about how Maine laws might be strengthened to combat telemarketing fraud, the Attorney General has responded to the Committee’s request.
This week, Assistant Attorney General James McKenna, on behalf of the Attorney General, recommended to the Utilities & Energy Committee that three areas of Maine law be strengthened to combat telemarketing fraud.
The first area is that the Federal Trade Commission’s Telemarketing Rule be incorporated into Maine’s Transient Sales Act thereby making a Transient Seller’s violation of the Federal Telemarketing Rule also a violation of the Maine law and an Unfair Trade Practice violation.
The second area is a statutory change that would prohibit two specific telemarketing practices: (A) obtaining access to a consumer’s checking account or savings account without express written authorization; and (B) using a courier service to obtain immediate receipt or possession of a consumer’s payment.
The third area is a statutory requirement that telemarketers contact the National Do-Not-Call-List maintained by the Telephone Preference Service of the Direct Marketing Association before conducting a telemarketing campaign in Maine. If a Maine consumer’s name is on the list then the telemarketer must not call that consumer. The intention of the requirement is to provide Maine consumers with one place to call or write that will inform all telemarketers located in Maine or outside our borders that these consumers do not wish to be called. This particular requirement is the same one being instituted by the Maine Public Utilities Commission regarding telemarketing regulations for companies providing energy and telephone services.
The Utilities & Energy Committee is likely to schedule further consideration of the Attorney General’s recommendations within the next two weeks. Copies of the actual legislative language proposed by the Attorney’s General are available through our office.
V. ABA’S COMMUNITY BANK WORKING GROUP FOR TAX SIMPLIFICATION ASKS CONGRESS TO ESTABLISH TAX PARITY AMONG BANKS, CREDIT UNIONS, AND FARM CREDIT SYSTEM INSTITUTIONS.
The American Bankers Association’s Community Bank Tax Working Group has issued a report this week to Congress on compliance, competition, and the community bank tax burden. In its message to Congress, the report, "Blue Print For Reform." Noted that "the high tax burden and compliance costs associated with tax laws and regulations raises the cost of financial products and services to businesses and consumers throughout this country. Furthermore, community banks have found themselves at a competitive disadvantage when trying to compete with credit unions and Farm Credit System institutions, which are not subject to this heavy tax burden. The passage last year of H.R. 1151, The Credit Union Membership Access Act, further magnifies the need for policymakers to reassess the nation’s tax code as it impacts financial institutions.
In addition to sending this report to community banks nationwide, the ABA is distributing this report to all members of Congress as well as other policy-makers and to the press. Tax reform has moved to the front burner in Congress. This report couldn’t be more timely, as MBA members serving on the ABA’s Government Relations Committee and in MBA’s federal grassroots program will be asking for serious consideration and support for the report’s recommendations in March meetings with our Congressional delegation. Additional information on this report can be found at www.aba.com.
VI. BANKRUPTCY BILL WINS SENATE APPROVAL. HOUSE-SENATE CONFERENCE COMMITTEE IS NEXT.
By a vote of 83-14, the Senate bankruptcy reform bill (S. 625) was approved last Wednesday. The bill now heads to a House-Senate conference committee that will resolve the differences between the Senate and House versions. The Senate bill signifies solid support for a "needs-based" bankruptcy system. S. 625 requires wealthier debtors to repay what they can afford while preserving the bankruptcy safety net for others. Both the Senate and House bills contain financial education provisions to inform debtors of bankruptcy alternatives and require credit counseling prior to filing. The Maine Bankers Association has joined the American Bankers Association in urging Congress to move quickly toward a final version of the bill for the President’s signature.
