LEGISLATIVE UPDATE – APRIL 11, 2005
AFTER BUDGET PASSES, LEGISLATURE GETS DOWN TO BUSINESS!
During the final two weeks of March, budget-related matters dominated the time at the Legislature. The Appropriations Committee met continuously during this period on LD 486, the Governor’s budget proposal that was more than 300 pages long. Regular Sessions were kept short so that budget issues could have time for additional consideration. During this period there were many banking and business-related legislative issues that were temporarily postponed until after passage of the budget, this passage occurred on March 31st.
There were banking-related issues within the budget. The budget contained the so-called Q-tip estate planning language and funding of this first step in estate tax conformity, so we were pleased with that development.
However, the budget also reduced the presumption of abandonment from 3 years to 2 years for gift cards. Maine Bankers Association, working with the State Treasurer’s Office and the Bureau of Financial Institutions, reached an agreement to amend the Abandoned Property Statutes so bank-issued gift cards are NOT INCLUDED in the definition of cards that abandon after 3 years (this Amendment was introduced last week before the Judiciary Committee on several other gift card proposals – see below.)
The original draft of the budget document included several provisions strongly opposed by Maine Bankers Association, but MBA was successful in defeating these provisions. One section would have created a Super-priority lien in favor of MaineCare for some Maine residents, but this was taken out of the final version.
The Legislature will recess for an April Spring Recess during school vacation week. When they return, MBA’s legislative priorities include:
LD 476, Increase the Bank Franchise Tax. (MBA Opposes this LD) This LD is held in Committee with a 7 – 6 Ought Not to Pass Committee Report. There may be one more Committee review of this LD at which time we hope that several legislators who voted against our position will change their votes. Both the Democratic and Republican House Leadership tell us that we should be able to defeat this proposal, but defeating this LD will require contacts from member bankers! This LD should be on the House Floor late April or early May. WATCH FOR LEGISLATIVE ALERTS ASKING FOR CONTACTS URGING LEGISLATORS TO OPPOSE LD 476!
Gift Card Proposals: (MBA testified Neither For Nor Against LDs 771, 772 and 1084), which would impose various restrictions to terms of offering gift cards. While MBA does not want any of these LDs to pass as presented, we did recommend passage of some form of gift card legislation that accepts the State Treasurer’s Amendment defining gift cards so as not to include bank-issued cards, and requiring disclosure of the terms associated with the cards.
LDs 581 and 956, Acts Preventing Identity Theft, would have imposed “file freeze” requirements on credit reporting agencies. MBA testified in support of some form of this legislation, though recognizing that the proposals required significant amendments. The Credit Reporting industry vigorously opposed the LDs as presented, and Will Lund, Director of the Office of Consumer Credit Regulation supported the proposal though offered an Amendment on behalf of the Department. The Business, Research and Economic Development Committee (BRED) asked that interested parties meet and work on a draft more agreeable to all parties. This draft was prepared and should be presented to the BRED Committee later this week, or after the Spring Recess. MBA believes the draft will be accepted, and is more “user friendly” by the credit reporting industry. It could become model legislation for other states!
LD 788, the So-called Payday Lending proposal, had extensive testimony opposing easier entry into the state by payday lenders, including testimony from AARP, CEI, AFL-CIO, several of the Mid-coast Chambers of Commerce (who opposed this because of the likelihood payday lenders would locate outside the gates of BIW and Brunswick Naval Air Station) and others. After consideration, the BRED Committee voted to hold this LD over, allowing for a Study by Will Lund, Director of OCCR on the accessibility to credit in Maine.
We continue to work on a number of tax-related proposals, including:
HSA Conformity proposals, such as LD 442, which have had their Public Hearings, and were very well received by the Taxation Committee. The only downside to the bill was the potential $600,000 fiscal note that is not included in the budget. Supporters believe there is enough support so that the Appropriations Committee will fund this bill. MBA supported LD 442.
Non-resident Income Tax proposals, LDs 236 and 740; LD 236 was introduced on behalf of MBA, and creates exemptions for days spent in Maine for education and training, and for management to oversee operations in Maine. LD 740 would return the trigger to 20 days before having to file a Maine tax return. A Tax Committee Sub-committee has proposed supporting BOTH LDs combined, though that will increase the cost of passing these proposals. MBA Strongly supports one or both LDs. Work Sessions on these LDs is Tuesday, April 12th.
Full Estate Tax Conformity – Two LDs, 112 and 436, were heard before the Taxation Committee, and while we have gained partial estate tax conformity in the Governor’s budget, many business groups including MBA supported full estate tax conformity. The Maine Revenue Services Dept. estimates full conformity would cost many millions of dollars, so that will be the hurdle! These LDs will be reported out of Committee in the near future.
OF THE SEVERAL LIEN PROVISIONS, THE MOST IMPORTANT IS:
Ld 718, AN ACT to Increase the Amount of Equity in a Principal Residence that is Exempt from Attachment, originally proposed to increase from $35,000 the exemption amount, up to $100,000. Many creditor groups and attorneys representing them testified against this proposal. As an alternative, some legislators have indicated they would support an indexing of this amount, based on a housing cost index, if this index increased by 25% or more, or at least every five years. Some lenders support this approach so that we don’t face this legislation each Session!
NOTE: Next Legislative Committee Meeting will be 9:30 a.m., Thursday, May 5th!
