| LEGISLATIVE UPDATE |
| JANUARY 24, 2002 |
VOL. 2, 2002 |
· UPDATE ON BANKING-RELATED LDs
· BUDGET ISSUES STILL FOCUS OF LEGISLATURE
· BANKERS DAY AT THE LEGISLATURE – MARCH 19TH
· LEGISLATIVE COMMITTEE MEETS FEB. 7TH
Today marks the beginning of the third week the legislure has been in session, and Committees have reported out most carry-over proposals from last session. They are also on a tight schedule to report out all new proposals after their public hearings. That will free the legislure to debate budget issues much of the final month. Their goal is to adjourn in late March, though the deadline is mid-April.
A) UPDATE ON BANKING-RELATED LDs
LD 361, AN ACT to Adopt the Model Business Corporation Act in Maine proposes to modernize Maine’s corporate laws. Twenty-six states have adopted this Model Act, and Maine is one of 13 states that have an older version of the Model Business Corp. Act. This Act will produce greater certainty and predictability in Maine corporate law, while stemming an outflow of incorporations to other states. It would reduce red tape when corporations offer shares of stocks, and when corporations deal with investors and directors. Finally, it will improve how a corporation files with the Sec. of State’s office. MBA monitored the public hearing and supports passage of the Model Act.
LD 1573, AN ACT to Adopt the New Uniform Principal & Income Act (NUPIA) has been reported out unanimous ought to pass by the judiciary committee. MBA and its trust committee strongly support this LD, which should be on the House calendar in a few days.
LD 1770, AN ACT Regarding Conversions of Nonprofit Entities is the major act resulting from two proposals, one from the Attorney General’s office and one from Speaker Saxl. These proposals were worked over the summer and merged into one Omnibus bill. There continues to be drafting sessions by interested parties up until today! At a judiciary committee work session today, they voted out the bill, 9 in favor, 2 opposed and 3 absent. Since the last “Update”, considerable progress has been made in making this legislation more acceptable to those serving on boards of, lending to or managing assets of non-profits, including:
· Limited impact by narrowing definition of “nonprofit conversions”;
· Voidable transactions rather than “void” when there are violations;
· Significantly reduces potential liability for directors of non-profits;
· Amends determination of fair market value
While this law proposes to create sweeping new authority for the Attorney General, it also lays out laws that define how non-profits may convert from one purpose to another and from one form of entity to another. This may result in greater certainty for these non-profit transactions. NOTE: MBA WILL PARTICIPATE IN A TRAINING PROGRAM ON HOW TO WORK WITH THIS NEW LAW.
LD 1835, AN ACT to Amend the Loan Broker Law, was proposed by Will Lund, Director of the Office of Consumer Credit Protection and it will add regulatory oversight, bonding and registration requirements for certain loan brokers. Maine Bankers Association and others worked with Director Lund, offering amendments clarifying the intent of the bill. The banking & insurance committee voted unanimously ought to pass, and this bill will be on the House calendar next week.
LD 1840, AN ACT to Amend the Uniform Commercial Code, Article 9-A was proposed by the Sec. of State’s office to reduce certain filing fees for financing statements filed electronically. The electronic filing system will reduce costs both to the state and its users. The judiciary committee has twice tabled the bill pending comparisons of filing fees from New England states. There is also an issue of termination filing fees which had been eliminated in 1993 but were brought back in New Art. 9.
LD 1856, AN ACT to Amend the Definition of Government Unit as it Relates to the Maine Municipal Bond Bank Act, would add corporations owned entirely by municipalities that “provide water, sewer, or electric services or perform other essential governmental services” as eligible for Bond Bank financing. MBA will monitor this proposal.
LD 1880, AN ACT to Reduce Identity Theft by Requiring Truncated Credit Card Receipts will be heard Friday, January 25th by the banking & insurance committee. This legislation was introduced by Senator Betty Lou Mitchell with support and assistance from MBA. There are amendments to the proposal, but the concept is strongly supported by the industry, regulators and legislators.
LD 1896, AN ACT to Simplify the Process by Which A Financial Institution Transfers Motor Vehicle Title to a Lessee was introduced by Senator Youngblood with support from the industry, as it allows a financial institution to deal directly with its customers when selling a leased motor vehicle. The process today is cumbersome and expensive, to the detriment of both the financial institution and their customers. This LD was assigned to the transportation committee, with its hearing on Feb. 20th .
LD 1959, AN ACT to Eliminate Dept of Professional and Financial Regulation, Bureau of Insurance Travel Restrictions for Obtaining Health Care was introduced on behalf of the Maine Health Care Purchasing Collaberative, and MBA’s Bankers Health Trust is a member of the collaberative. The proposal would allow plans to incent their participating employees to use medical providers based on quality and cost. Currently, Rule 850 restricts delivery of health care to a geographic region within 30 miles (or 50 depending on type of care and location), except under certain circumstances. Maine Hospital Association and Maine Medical Association, along with the Consumers for Affordable Health Care strongly oppose the bill. At its work session yesterday, the banking & insurance committee tabled further consideration of this proposal pending the outcome of meetings among the interested parties.
LD 1972 AN ACT Regarding Trial Offers was prepared by the Direct Marketing Association. Maine-based non-bank telemarketers including Sitel were listed as supporters. LD 1972 proponents testified that in other states, telemarketers only were required to offer an 800 or toll free number for consumers to use to cancel trial offers. Maine’s law specifically says that telemarketers must provide both a mailing address and a telephone number, which may be toll free. The consumer is allowed to choose how to cancel the trial offer. The Attorney General vigorously opposed this LD and cited a number of consumer complaints about non-bank telemarketers not answering the phone number provided to the consumer. The business & economic development committee voted 12 –1 ought not to pass, with Senator Ed Youngblood being the only member to support the bill.
LD 1987, AN ACT to Increase the Penalty for Appropriating Another Person’s Social Security Number increases the above penalty to a Class C Crime. MBA supports the proposal which will toughen state laws against Identity Theft. The work session on this LD is later this week.
LD 1999, AN ACT to Clarify Recent Amendments to the Maine Consumer Credit Code proposes to solve a problem from 2001 legislation. MBA will support this LD, which will be heard at the banking & insurance committee on Friday Jan. 25th.
GOVERNOR’S BUDGET
Much of the legislature’s time will be spend balancing the budget, with a projected deficit of more than $250 million. Governor King’s initial proposed budget includes cuts to Medicaid, which will trigger cuts from federal funds also. Many legislators have expressed opposition to this cut, but have not yet proposed alternative cuts. MBA will monitor budget debates throughout the next two months – with special attention on tax changes - the Governor’s budget does not bring Maine into full conformity with federal tax law, expanding the real estate transfer tax, eliminating tax loss carrybacks, and whether BETR will again come under attack by the legislators.
BANKERS DAY AT THE LEGISLATURE – MARCH 19TH, 2002
PLEASE put on your calendar Tuesday March 19th for Bankers Day at the legislature. Over 150 bankers are expected to attend Augusta and shadow legislators! The day will begin by 8:00 a.m, and conclude with lunch or hearings in the afternoon. Watch for more information!
LEGISLATIVE COMMMITTEE – MEETS THURSDAY, FEBRUARY 7TH IN AUGUSTA!
IF YOU WOULD PREFER TO RECEIVE THIS LEGISLATIVE UPDATE VIA E-MAIL,
PLEASE SEND YOUR REQUEST TO mba@mainebankers.com.
