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| Legislative Update |
| FEBRUARY 22, 2002 |
VOL. 3, 2002 |
- LEGISLATIVE TRACKING REPORT ENCLOSED
- BANKING LEGISLATIVE ISSUES
- BANKERS DAY AT THE LEGISLATURE – MARCH 19TH
- LEGISLATIVE COMMITTEE WILL MEET MARCH 7TH
- ENCLOSED IS MBA’s LEGISLATIVE TRACKING REPORT
This Report is updated through today, February 22 and previously was distributed to the MBA Board on February 14th . It covers banking and business legislation that has been mentioned in prior Legislative Updates as well as all issues followed by MBA.
- BANKING LEGISLATIVE ISSUES
GOVERNOR’S BUDGET & FEDERAL ESTATE/ RETIREMENT TAX CONFORMITY
MBA has worked on several aspects of the proposed Governor’s Budget. MBA’s greatest concern was NOT conforming with the US Tax Code, including not conforming to the recent changes to the federal estate tax. MBA’s Trust Committee and the MBA Board have expressed great opposition to non-conformity.
After the revenue forecast was revised upward on February 21, the shortfall is many millions less than previously projected, the Governor now proposes full tax conformity! MBA will support this proposal. However, full conformity to all federal tax code changes including the estate tax will require legislation. At least some members of the Appropriation Committee have expressed support for the ORIGINAL budget proposal that does not conform to the estate tax changes – which result in $14 million in revenue. The State Chamber, the Governor’s staff including Maine Revenue Services and MBA will work to pass legislation fully conforming to the new federal estate tax and other federal tax laws.
At this time, no Hearing has been schedule nor has a revised budget bill been written. With budget issues these Hearings could occur at less than 24 hours notice! Trust bankers may be asked to attend a Hearing – especially to address the estate tax issues AND federal changes to 401(k) plan provisions and administration. Having different rules for Maine businesses that offer 401(k) plans would be confusing and prevent greater opportunities allowed by federal law. Administration for these plans would be very complex if there were different state rules from federal law, and would certainly increase the cost of offering these plans by Maine employers.
MBA will attend any Hearings, and inform and invite bankers to attend the discussion about estate and retirement plan changes.
LDs 2100 and 2101, Reports from the Committee to Study Issues Concerning Changes to the Traditional Uses of Maine Forests and Lands had Public Hearings on Wednesday, February 20th and will be worked by the Judiciary Committee on the 27th. Maine Bankers Association monitored the Hearings and may be asked for input on the 27th. These controversial proposals require the landowner who leases their land to provide certain guarantees to their leasees. At the Public Hearings, there were more than a half dozen Legislators who testified on behalf of the Commission that studied this issue and in support of the LDs. After the Legislators testified, there were eight lessees including several sporting camp owners who strongly supported these proposals. Finally there were 7 opponents to the proposals, including the Nature Conservancy, CMP, the Bureau of Parks & Lands and land managers for paper companies, who objected to infringing on the landowners rights to its own land. Of the more than 20 who testified, no less than a dozen stated that banks were willing or NOT willing to lend to the lessees of leased land - Yes, those who testified totally contradicted each other about banks’ willingness to lend!
Maine Bankers Association did not take any position on these issues but because of the questions from legislators and their constituents, we are asked about bank lending practices on leased land today. At the Work Session Legislators will debate how to adopt guidelines providing greater certainty to lessees without infringing on property owner’s rights. MBA will be present at the Work Sessions.
LD 2130, A General Fund Bond Issue in the Amount of $31,500,000 to Stimulate Job Growth in Rural Maine. This proposal is from the Governor and will be heard by the Appropriation Committee on March 4th. If passed by the Committee and the Legislature, this will be a Bond Issue on the November ballot. Included in the $31,500,000 is $10,000,000 bond money for FAME.
This General Fund Bond issue is over and above their Private Activity Bond money - See LD 2091, worked by the Business & Economic Development Committee yesterday, authorizing FAME $25,000,000 in 2002 and $30,000,000 in 2003. Other rural economic development uses of the bond funds include $15 million capitalization of the Maine Rural Development Authority, which develops commercial and industrial buildings in rural Maine; $4 million for the Municipal Investment Trust Fund, which provides loans and grants to municipalities for infrastructure improvements; $2.15 million for research and development at the Schoodic Education and Research Center.
LD 2119, AN ACT Relating to Subdivision Review and Title Search Procedures, places limits on the ability of municipalities to modify the definition of “subdivision.” This is legislation needed to permanently enact guidelines on municipal definitions of subdivisions. It resolves some of the problems lenders, title attorneys and realtors had with proposals for any municipality to have their own definitions of subdivisions. The Hearing should be in early March and MBA will support this compromise legislation.
- BANKER DAY AT THE LEGISLATURE REGISTRATION MATERIALS!
Every bank has received materials for registering to attend Banker Day at the Legislature, which is
March 19th. A first mailing has also been sent to Legislators, informing them about the date, that
they will have banker “shadows” and that there will be a luncheon recognizing volunteer bankers.
PLEASE – PLAN TO ATTEND THE MARCH 19TH BANKERS DAY!
- LEGISLATIVE COMMITTEE MEETS MARCH 7
This meeting will discuss remaining legislative issues, plus make final plans for Bankers Day at the Legislature.
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