LEGISLATIVE UPDATE – JANUARY 11, 2000
I. MBA BILLS PRINTED, SCHEDULED FOR HEARINGS
II. OTHER BANKING RELATED LDS
III. COMMISSION STUDYING PRIVATE ACTIVITY BOND CAP ALLOCATION ISSUES RECOMMENDATIONS
IV. BANKERS DAY AT THE LEGISLATURE SCHEDULED MARCH 21
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The Legislature officially re-convened on Wednesday, January 5th. Even before that, several banking-related LDs had public hearings as Committees began their work on the 600+ new LDs, the 200 LDs carried over from last year, and the approximately 90 LDs proposed from the Governor’s office or from Study Commissions. Legislative leadership hopes to adjourn by April 8th, and certainly no later than mid-April, so there is much work for all Committees and the full Legislature in the next three months.
I. MBA SPONSORED LDS
LD 2259, AN ACT to Amend the Maine Banking Code Pertaining to Interlocking Directors had its Public Hearing Monday, January 3rd, 2000 followed by a work session Friday, January 7th. The Banking and Insurance Committee voted unanimously to support this proposal and attached an Emergency Preamble, so that this LD will become law once passed by the full Legislature and is signed by the Governor. This proposal authorizes the Superintendent of Banking to grant a waiver to the general prohibition against interlocking directors if there is good cause shown, and only in situations involving officers and directors of limited purpose banks and traditional banks.
LD 2285, AN ACT to Amend Maine’s Probate Code will have its Public Hearing before the Judiciary Committee on Wednesday, January 19th. This proposal was suggested by MBA’s Trust Committee and clarifies that Maine trust officers who serve as trustees of testamentary trusts may base their fees on the size of assets within the Trust. The change returns Maine’s Probate Code to the Uniform version and resolves the confusion about determining fees for estate management and trust management.
LD 2400, AN ACT to Create Employment Opportunities by Clarifying Maine’s Tax Laws Regarding Mutual Fund Companies will be heard by the Taxation Committee. No date has been scheduled as of this time. This Concept draft proposal will clarify the tax code so that it is clear that the state will not tax income earned on the assets being managed by the mutual fund company. The goal is to attract mutual fund company operations into the state.
II. OTHER BANKING-RELATED LDS
LD 1166, AN ACT to Establish Occupational Health and Safety Standards for Operators of Video Display Terminals was carried over from last year. The Labor Committee wanted to see if OSHA would write new regulations on this subject prior to legislating here in Maine. MBA opposed this proposal last session. The Labor Committee worked this LD on Tuesday, January 11th and determined that OSHA is working on regulations at this time and therefore this legislation is not needed at this time.
Several LDs were carried over related to Pension Taxation and will be heard before the Taxation Committee Wednesday, January 12th. MBA has supported several of these proposals so as to make Maine more attractive as a residence for retirees. The Governor has included funding for the cost of exempting a certain amount of pension income from the Maine income tax in his supplemental budget. Both parties and Legislative leadership also support similar proposals, so some form of exemption should be passed this session.
Telemarketing Fraud Legislation was defeated last session, but the Attorney General’s office remains interested in reviewing the proposal and conducting a study that may lead to another LD on this subject. The original proposal was introduced by AARP to protect against unwanted telemarketing efforts. It included a registration requirement that was opposed by MBA and other business groups last session. These groups continue to work with the AG’s office to convince them additional legislation is not necessary. The Attorney General is scheduled to address whether there is need for additional state legislation before the Public Utilities Committee on Febraury 2nd, 2000.
LD 1824, AN ACT to Encourage Equity Equivalent Loans or Investments in Community Development Financial Institutions was carried over from last session and was heard by the Taxation Committee on Monday, January 10th. MBA has supported the original proposal, and has worked with interested parties to craft clearer language within the proposal. This LD would allow a tax credit for loans or investments from financial institutions to Community Development Financial Institutions as defined by the US Treasury. The Taxation Committee scheduled at least one additional work session on this LD.
LD 2263, AN ACT to Amend the State’s Fair Debt Collection Practices Laws and to Provide for Nonprofit Debt Management Services had its Public Hearing on Monday, Jan. 3rd and its first work session on Friday, Jan. 7th. The Banking and Insurance Committee will pass some version of this LD after interested parties and Office of Consumer Credit Regulation Director Will Lund agree to final language. This proposal will authorize additional non-profit consumer counseling services who prepare debt management plans to enter the state, though there will be registration requirements and some regulatory oversight by Lund’s office. MBA monitored this issue to assure that there was no impact to banks.
LD 2283, AN ACT to Realign Capital Requirements for Specialty Bank Charters proposes to reduce the capital required to start a merchant bank. The current capital requirement for merchant banks was $20,000,000. The Banking and Insurance Committee voted unanimously to
pass this proposal, which was introduced by the Bureau of Banking and supported by MBA.
LD 2373, AN ACT to Prevent Misuse of Mortuary Trust Funds proposes to reduce the likelihood of mismanagement of mortuary trust funds. The proposal strengthens existing law requiring that these funds go directly into financial institutions. No Hearing date has been scheduled at this time.
III. COMMISSION STUDYING PRIVATE ACTIVITY BOND CAP ALLOCATIONS ISSUES RECOMMENDATIONS
The Commission studying allocation of private activity bond cap allocations voted yesterday on a number of recommendations. These recommendations will be included in their Report to the Legislature, and there will be legislation drafted on behalf of the Commission to implement several of these recommendations. This Report will be delivered to the Business and Economic Development Committee on or about February 1st, 2000.
Among the Commission’s recommendations are:
· Create a new student loan authority by combining the future operations of MELA and MELMAC. Research indicated that the majority of states have all student lending operations consolidated into one operation. This new authority would have an Executive Director who is appointed by the Governor with no relationship to any vendors or affiliates of the Authority.
· To assist an Allocation Committee to determine recipients for the private activity bond money, the State Planning office will provide analysis about markets, demand for certain types of loans and other economic research. This research gives the Allocation Committee members more data on which to base their decisions.
· The Commission will submit its own comment letter regarding disclosure rules, to assure that all lenders would provide information so that competing loan programs that offer discounts be compared prior to the student’s selection of a loan.
· If any entity receives state tax-exempt cap funds, they must use the state designated guarantee authority.
· The private loans to lenders program should receive $25,000,000 and not the $10,000,000 awarded this pilot program by the Legislature.
These recommendations will be drafted into a final Commission Report and submitted to the
Legislature’s Business and Economic Development Committee. There will be intense lobbying
by many parties about certain recommendations.
IV. BANKERS DAY AT THE LEGISLATURE – MARCH 21, 2000
Last year the Maine Bankers Association and Maine Association of Community Banks
jointly sponsored a Bankers Day at the Legislature. The general consensus was that this program was so successful that it would become an annual event, so this year the Bankers Day has been scheduled for March 21, 2000. You will get many more details in the near future, but reserve that day to visit with your Maine legislators in Augusta.
