LD 2259, AN ACT to Amend the Banking Code Pertaining to Interlocking Directors has passed the full Legislature and was signed into law by Governor King on March 6^th. With its Emergency Preamble, this law took effect on March 6^th.

LD 2285, AN ACT to Amend the Maine Probate Code has passed in both the House and Senate and should be on the Governor’s desk for signature with in a few days.

LD 2400, AN ACT to Create Employment Opportunities by Clarifying Maine’s Tax Laws Regarding Mutual Fund Companies will be held until very late in the Session awaiting funding by the Appropriations Committee. This LD has strong Tax Committee and Administration support. It may be coupled with another LD that extends similar tax treatment to other industries.

2. BUSINESS & ECONOMIC DEVELOPMENT COMMITTEE HOLDS HEARING ON PRIVATE ACTIVITY BOND ALLOCATION AND COMMISSION REPORT

The Public Hearing and first Committee Work Session were held this week on the Final Report from the Commission on the Ceiling on Tax-exempt Bonds. There were two legislative proposals associated with the Report. The first was LD 2578, which proposes to allocate the private activity bond cap for 2000, and the second was legislation needed to enact recommendations from the commission. As was the case last year and during the commission meetings, these proposals were very controversial as parties lined either in support of, or very opposed to the use of private activity bond money by MELMAC or MELA supporting student lending in Maine.

The Commission Report recommends the following changes which were accepted by the Business & Economic Development Committee:

• Change the allocation process by adding representation from the Dept. of Economic and Community Development as a voting member of the allocation group, joining the state Treasurer, and designees from MSHA, the Bond Bank, FAME and MELA/MELMAC;
• Requiring a Supermajority, not complete consensus or simple majority to reach an agreement on allocating the bond cap; and
• Requiring the State Planning Office to provide economic analysis for the allocation group.

The committee also agreed with the commission’s recommendation to continue bond cap allocations supporting student lending, and will require student loans supported by state bond cap allocation to use FAME as designated guarantee agency for these loans.

The committee continues to debate how to increase oversight and accountability of student loan programs in Maine, and also how private lenders may use bond allocation funds. At this time, FAME has proposed to allow private lenders to use up to $25,000,000 of bond cap in a referral type program, with the lender earning a $50 referral fee. FAME analysis of bond counsel’s opinion is that the private lenders are not allowed to book the loan as an asset of the bank nor sell the loan to any entity other than the issuing authority. The committee will continue review of these issues next Tuesday.

2. LD 2591, AN ACT RELATING TO TELEMARKETING

   This LD had been amended by MBA and as amended has the support of the AG’s office and AARP. The Utilities Committee, however, has held the bill over until Tuesday, March 14^th as Rep. Tom Davidson of Brunswick and Rep. William Savage of Buxton want to add measures that go beyond federal regulations. These measures would create additional burdens for Maine telemarketers. No information has been presented that going beyond federal law would deter fraudulent telemarketers.

3. OTHER BANKING-RELATED LDS

LDs 2072 and 2557, AN ACT to Implement Recommendations from the Internet Policy Study Commission, and AN ACT to Implement the Uniform Electronic Transfers Act (UETA) have been initially passed by the Business & Economic Development Committee. MBA supported these proposals because they enact digitalized signature law. The committee did not adopt a proposed Amendment that MBA opposed. This amendment would have caused certain clauses in existing contracts to be invalid.

LD 2182, AN ACT to Improve Air Quality through Market Incentives for the Purchase of Cleaner Air Vehicles has been passed out of committee without creating a subsidized loan program. MBA will monitor this LD but take no further active position.

LD 2245, AN ACT to Adopt the Model Revised Article 9, Secured Transactions has been passed unanimously by committee and will go to the full House next week. Though this Act has a delayed effective date of 2001, banks must begin preparations for the major revisions in filing security interests during this year. Watch for an Association compliance program on the new Article 9 later this year!

LD 2550, AN ACT to Ensure Cost Effective and Safe Highways in the State proposed to limit entrances to property on state highways. The onerous provision that certain businesses and banks objected to was modified, though MBA will continue to monitor progress on this LD.

LD 2574, AN ACT to Harmonize State Financial Services Law with Federal Law was voted unanimous Ought to Pass by the Banking & Insurance Committee. It will go to the full House next week. This LD contains several sections strongly supported by MBA that amend Maine’s Charitable Sales Solicitation Act so as to exclude financial institutions, their subsidiaries and affiliates.

V. BANKERS DAY AT THE LEGISLATURE ON MARCH 21!

Bankers from around the state will converge in Augusta for the Second Annual Bankers Day at the State House on March 21, 2000. Bankers will shadow more than 75 key legislators. The theme for the day is "Making a Difference for Kids and Communities!" MBA and MACB will present their report on the banking industry’s contributions and commitment to their communities and how these efforts benefit kids. This ties in with the America’s Promise campaign. The Bankers Day at the Legislature will conclude with presentations of the report to Speaker Rowe, President Lawrence and their remarks.