REMINDER: BANKERS DAY AT THE STATE HOUSE IS APRIL 5TH!
AREAS OF MAJOR EMPHASIS: Over the past two weeks, Maine Bankers Association has spent the majority of its legislative time on the following priority subjects.
TAXATION – With special effort on LD 476, AN ACT to Increase the Bank Franchise Tax, there have been several major tax-related legislative proposals. The Taxation Committee has held its Public Hearing and one Work Session on LD 476, where members of the banking industry made their case for NOT doubling the income portion of the bank franchise tax. The Baldacci Administration, through the Department of Economic and Community Development, opposed this LD, as did the State Chamber of Commerce. While most Legislators on the Tax Committee seemed ready to defeat Rep. Bill Smith’s proposal, several Committee members, especially Senator Ethan Strimling (D-Portland) wanted more information comparing Maine’s bank franchise tax with those of other New England states. LD 476 is tabled within the Tax Committee pending this comparison.
LD 195 and 507, Conforming Maine law to federal law for Health Savings Accounts
Maine Bankers Association took a lead role in supporting HSA tax conformity for Maine, joining insurance agents, insurance carriers, Anthem, Maine Medical Association, and others who believe that HSAs are an important part of the health care product mix, and should not suffer additional taxes here in Maine. (Maine would not allow a deduction from gross income for any contributions into an HSA account, which is allowed under federal tax law.) After a Public Hearing and one Work Session, the majority of the Tax Committee seemed to support these proposals, but two Committee members wanted additional information, especially how HSAs would mix with Dirigo Health. LD 195 will be the legislation that advances, and should be heard again next week.
LD 236 and 740, Ammending Maine's Non-resident Income Tax Provisions had Public Hearings this week and will have their first Work Session on Monday, March 14th at 1:00. LD 740 was introduced at the request of Maine Bankers Association. Both LDs seek to amend the non-resident income tax law passed in 2004 that reduced to 10 the number of days a non-resident must work in Maine in order to trigger the requirement to file and pay Maine’s personal income tax. LD 236 would return the number of days back to 20, while LD 740 would not count days that were for education and training, or not count days non-residents work in Maine for a company headquartered out of state, but has branch operations in Maine. Many businesses joined Maine Bankers, supporting either or both of these proposed changes.
GIFT CARDS: LDs 771, 772, 838, and 1084, as well as Part FF of the Governor’s budget, deal with Maine laws covering Gift Cards. On Friday, Maine Bankers Association hosted a meeting of interested industry groups affected by gift card legislation. The four LDs above will have Public Hearings before the Judiciary Committee later in March, or early April. However, Part FF of the budget is pushing through as the Appropriations Committee considers all sections of the budget. These LDs proposed the following:
LD 771, AN ACT to Protect Consumers’ Use of Gift Cards, prohibits an issuer from charging dormancy fees, or other fees, prior to the date that the gift obligation is presumed abandoned;
LD 772, AN AC T to Prohibit the Placement of Expiration Dates on Gift Cards;
LD 838, AN ACT to Amend the Uniform Unclaimed Property Act as it Applies to Gift Cards (This is the one LD of these that we can support as it would repeal some of the laws governing gift cards that passed in 2004), and
LD 1084, AN ACT to Make Dormancy Fees on Gift Cards Illegal
Part FF changes the presumption of abandonment from three years, our current law, to two years, for gift and stored value cards.
The major concern facing all interested parties is that the Governor has proposed reducing the term of abandonment from three to two years, resulting in $6.5 million of new revenue he has booked into the proposed budget! The Appropriation’s Committee and the State Treasurer seem 100% supportive of making this change to the abandoned property provisions. It’s very possible the Budget will have been approved by the end of March, and then we have the Public Hearings in Judiciary on the other LDs in April. We will keep you informed as this subject progresses in the next few weeks!
BANKING/CREDIT/LIEN PROPOSALS
LD 414, AN ACT to Require a Credit Card to Contain the Photo and Signature of a Cardholder, was withdrawn by the Sponsor at the Public Hearing.
LD 464, AN ACT to Prohibit Uses of a Financial Institution’ Name, introduced by the Maine Association of Community Banks and supported by MBA, was passed out Ought to pass by the Insurance And Financial Services (IFS) Committee.
LD 509, AN ACT to Adopt the Uniform Securities Act, introduced by Maine Securities regulator Chris Bruenn and worked on by a Study Group over this past summer, was heard and voted unanimously ought to pass by IFS.
LD 587, AN ACT to Make Changes to the Banking Laws, the Bureau of Financial Institutions housekeeping bill, had its Hearing and Work Session this week and was voted unanimous Ought to Pass by the IFS Committee.
On both 3/16 and 3/24, there will be Work Sessions before the Judiciary Committee on several lien-related bills, including LD 260, AN ACT to Amend the Laws Governing Mechanics Liens; LD 432, AN ACT to Increase from 90 to 120 days the Time Frame to File Contractors Liens (MBA opposes); LD 469, AN ACT to Simplify the Real Estate Foreclosure Process (MBA monitored); LD 491 AN ACT to Cure an Inconsistency Regarding Judgment Liens (MBA supports this minor technical improvement to the judicial lien process); LD 570, AN ACT to Require the Fair Application of the Mechanic’s Lien law (MBA Opposed); and LD 718, AN ACT to Increase the Amount of Equity in a Principal Residence that is Exempt from Attachment (MBA Opposed).
Part DDD-4 of the Governor’s budget, LD 468, proposed to create a Superpriority lien in favor of MaineCare. After public testimony from a number of groups, including MBA, that this superpriority lien would create major problems for lenders, increasing the costs of certain loans while also reducing the availability of credit to certain lower-income borrowers, this provision was deleted from the budget proposal.
LEGISLATIVE UPDATE # 4
MARCH 10, 2005
