LEGISLATIVE UPDATE # 6 MARCH 19 SECOND REGULAR SESSION – 2004
1) MAJOR ISSUES FACING MAINE’S LEGISLATURE
2) UPDATE ON MBA PRIORITY BILLS
3) UPDATE ON OTHER BANKING-RELATED LDs
4) BANKERS DAY AT THE LEGISLATURE – MORE THAN 160 BANKERS
1) MAJOR ISSUES FACING MAINE’S LEGISLATURE
From the beginning of the Session we have reported to you that three issues will dominate this Session of the Legislature – Dirigo Health; Budget issues; and Tax Reform. In the first 2½ months, the Legislature worked on many issues, leaving the Supplemental Budget (LD 1919), a host of tax reform proposals, and changes to the Dirigo Health law for the final weeks.
There are numerous diverse and competing proposals to deal with the budget and tax reform and it doesn’t seem like the Legislature will make their way through all of these proposals. But this year, unlike the past 10- 20 years the Legislators have something of a gun to their heads – two tax referenda. The first is the Maine Municipal Association proposal from last November, and would require the state to fund education costs at 55%, costing the state approximately $250 million. The second would have more draconian impact to municipalities –the Carol Palesky tax cap proposal, limiting local property taxes to a 10 cent mill rate. Many service center communities, including Bangor, Augusta and Portland, will lose more than half of their total revenue should the Palesky initiative pass.
Maine Bankers Association is following the progress of tax reform and budget proposals. Earlier this week, the State Chamber distributed a “Common Maine Business Community Position on Tax Reform” which included support from the Maine Bankers Association. The primary points from this consensus business position is to adopt a Constitutional Amendment that providers for annual spending growth limitations for state, county and municipal governments, including schools. This Position Paper includes dedicating a portion of all new state revenue growth to reducing the income tax. Over the next few years, it would call for increasing state funding of Essential Programs and Services to 55% (as called for by the MMA proposal, but over a number of years).
Also this week, one of the Sections of the Governor’s Supplemental Budget calls for eliminating the minimum threshold of days worked in Maine in order to be required to pay the state’s income tax. Currently that threshold is 20 days, but if the proposal passes, a business person doing business in Maine for one day, would trigger the requirement to pay the state’s income tax, on a pro rata basis. Maine Bankers Association will join a number of businesses and trade groups opposing this provision.
The Supplemental Budget also calls for continued de-coupling from the Federal Estate Tax, placing Maine in a position to lose trust and estate business to states such as Florida that fully conform to the federal estate tax provisions. In the long run, the gap between the state and federal estate tax trigger will grow, and more and more citizens may consider changing their residence to avoid Maine’s estate taxation.
Dirigo Health has moved forward slowly, having missed several deadlines contained in last year’s enabling legislation. One of the deadlines missed was placing the Dirigo Plan out for RFP. Originally the RFP was to be issued in mid- February, now it won’t go out until late March at the earliest. A July 1 start up date is unlikely!
2) UPDATE ON MBA’S BANKING BILLS
MBA’s two initiatives are on the way to becoming law:
LD 1786, AN ACT Making Amendments to the Uniform Commercial Code was voted unanimously ought to pass as amended by the Judiciary Committee. The full House will vote on this legislation the week of March 22nd and it should not be controversial at all.
LD 1802, AN ACT to Permit the Photocopying of Driver’s Licenses in Financial Transactions, after being tabled for three weeks in the House, was passed Tuesday for final enactment in the House by a strong 104 – 26 vote. It was then passed unanimously in the Senate and now goes to the Governor’s desk. With its Emergency Preamble it will become effective the date of the Governor’s signature.
3) OTHER BANKING BILLS (Updates on previously reported LDs, and reports on some new initiatives over the past two weeks)
PAID FAMILY SICK LEAVE – (Was never assigned an LD number, was a “concept” from
the Labor Committee) was voted Ought not to Pass, and will not move forward as an LD.
LD 921, AN ACT to Enable the Uniform Trust Code, was passed unanimously Ought to Pass by the Judiciary Committee last week. It will move to the House floor for votes next week. This legislation was the result of a summer and fall study by MBA Trust bankers working with the trust and estate lawyers from the Maine Bar Association. (NOTE: This subject will be covered at MBA’s Annual Trust Conference, Wednesday May 5th!)
LD 1025, AN ACT to Ensure Uniform Code Compliance and Efficient Oversight of Construction in the State proposes to pass a Model Building Code for the State of Maine. After a summer Study and much debate both in 2003 and 2004, some version of this proposal is now likely to pass. Maine Bankers Association monitored this LD to assure that financial institutions would not, in some manner, have to patrol or enforce a Building Code or verify licensed building contractors. This issue will be debated in the House next week.
LD 1700, AN ACT Amending the Motor Vehicle Laws was passed as amended by the Transportation Committee, and will move to the House floor as early as next week. The Amendment was offered by and supported by the Maine Bankers Association, and helps resolve a long-standing problem between Maine’s auto dealers, lenders and the State’s Bureau of Motor Vehicles regarding filing of documents needed to secure the bank’s lien, while also allowing the BMV to issue the Certificate of Title. The changes include extending the filing deadline for both the UCC and the BMV, from 20 to 30 days.
LD 1854, AN ACT to Delay the Implementation of Restrictions on Information on Electronically Printed Receipts, was passed unanimously by the Insurance and Financial Services Committee last week. The final amended version of the LD makes minor changes to the originally enacted law from 2002, so that it is the same as Federal law, and also delays for one year (until January 1, 2005) any civil penalties under the law
LD 1898, AN ACT to Prohibit Financial Institutions from Using Thumbprints or Fingerprints, was voted 12 – 1 Ought Not to Pass by the Insurance and Financial Services Committee on Wednesday, March 17th. Charles Kennedy from Key Bank testified for Maine Bankers Association in opposition to this LD. The sponsors and one Committee member supporting the LD will bring the bill for House Floor Debate.
LD 1903, AN ACT to Further Implement the Recommendations of the Commission to Improve Sentencing, Supervision, Management and Incarceration of Prisoners has had its Public Hearing and several Work Sessions, and contains many proposals to reduce Maine’s prison population. One proposal contained in the LD would increase the dollar amount (from $1,000 to $3,000) to create a crime of theft when passing bad checks or committing other financial fraud. One observer described the impact of the proposal to “decriminalize” theft if its less than $3,000. The dollar amount was changed to $1,000 only two years ago in an effort to enforce the law against passing bad checks. After the work sessions, it appeared that the Criminal Justice Committee would not pass this part of the LD.
