LD 458 is one of MBA’s priority LDs for this session. Maine’s Independent Insurance Agents proposed to tax commission income earned by banks at the corporate income rate, not the bank franchise tax rate. MBA was concerned that as drafted the LD would include trust department income, and it was clear that if passed, this LD would require extensive new accounting administration for banks that receive any form of commission or security sales income. Even more importantly, as the insurance agents argue that they are being taxed at a higher rate resulting in inequitable taxation, they point out the lower bank franchise tax rate compared to the corporate income tax.

The Taxation Committee, however, followed the recommendation of the two Study Committees which concluded this was not the time for a change in the tax structure, as the industries are changing very rapidly, with banks, insurance companies and brokerage firms all offering competing products. MBA President Mike McNamara, who served on the Study Committee appointed by the Governor, testified to the Taxation Committee that with rapid changes and with the Multi-state Tax Commission currently reviewing this tax issue, that Maine should not be out in front in changing its taxation over financial service providers.

Despite calls and letters from insurance agents statewide, Senator Dick Ruhlin moved and Rep. Bonnie Green seconded an Ought-Not-to-Pass motion that was accepted by the Committee. However, this issue will remain active as the Tax Committee will write a letter to Maine Revenue Services requesting that they monitor the impact on state revenues from the purchase of insurance agencies by banks and the resulting change in tax status. The Maine Revenue Service will report back to the Taxation Committee next year.

LD 1402, An ACT to Create the Telemarketing Registration and Fraud Prevention Act was heard and acted upon by the Utilities and Energy Committee this week. The proposed legislation was brought on behalf of AARP and was supported by the Public Advocate. The Maine Bankers Association took the lead in organizing opposition to this legislation that went further than any other legislation enacted at any state level or at the federal level. The Committee agreed that the legislation presented was much too onerous, but at the same time the Committee felt that it would be worthwhile to continue the discussion of how could the State help protect consumers from telemarketing fraud. The Committee has voted to replace the legislation with a request that a stakeholders group be formed this summer to further discuss the issue and then report back to the Committee next year. The stakeholders group will include industry representatives, the AARP, the Public Advocate, the Attorney General, the Department of Economic and Community Development, and legislators. The Committee will discuss the stakeholders group organization at a later date.

LD 17, AN ACT to Require a Mortgagee to Notify Annually the Municipality in Which the Mortgage Property is Located – two meetings among concerned parties will result in the Bureau of Banking issuing new Bulletin (#68) informing banks about rules regarding Real Estate Escrow Accounts and how these rules impact taxing jurisdictions. No legislation will result from this proposal.

LDs 63 and LD 1274 – ACTS extending the sales tax exemption to leased equipment. The Tax Committee is expected to report LD 1274 Ought to Pass at its work session next week. LD 1274 has a lower cost to the state. Maine banks have supported this type of change so that they can offer lease financing as an option for equipment used in the manufacturing process.

LD 208, AN ACT to Prohibit Intrastate Telemarketers from Blocking Caller ID (Business and Economic Development Committee – MBA opposed);

LD 784, AN ACT to Prohibit the Use of Social Security Numbers for Notification Purposes (Business & Economic Development Committee – MBA opposed);

LD 831, AN ACT to Limit the Maximum Finance Charge to10.5% (Banking & Insurance Committee – MBA opposed);

LD 925, AN ACT to Create a Superlien for Condominium Association Assessments (Judiciary Committee – MBA opposed) .

LD 240, AN ACT to Amend the Maine Banking Code as it Pertains to ATM Surcharges, (MBA supported) has been enacted in both the House and Senate and should be signed into law next week. With its Emergency Pre-amble, it will go into affect immediately upon the Governor’s signature.

LD 496, AN ACT to Abrogate the Rule Against Perpetuities was unanimously passed by the Judiciary Committee, with an amendment which is still being worked on by the Committee legal analyst and should be sent to the full House and Senate in next week.

The Business & Economic Development Committee unanimously supported LD 869, AN ACT to Amend Maine’s Payroll Processing Laws. There was debate about whether the Maine Revenue Services or Bureau of Insurance would set the bonding requirement, but the Committee decided to use a formula based on payroll amount.

LD 1719, AN ACT to Amend the Maine Banking Code Regarding Extensions of Credit has yet to be scheduled for Hearing before the Banking & Insurance Committee.

Bi-weekly (MBA SUPPORTS). LD 292 will be the final LD that moves forward after being amended to address concerns raised by the Department of Labor. As amended, the DOL and King Administration will support the LD. The Labor Committee will issue a divided report assuring floor debate on this issue.

LD 1166 AN ACT to Establish Occupational Health and Safety Standards for Operators of Video Display Terminals (MBA opposes) was heard by the Labor Committee and concluded one Committee work session on the LD. The Committee will issue a divided report, though it seems that proponents face an uphill fight.

LD 1155, AN ACT to Amend the Laws Regarding Abandoned Property (MBA SUPPORTS) is scheduled before the Judiciary Committee Tuesday, March 23^rd @ 1:00.

LD 1206, AN ACT to Provide for the 1999 and 2000 Allocations of the State Ceiling on Private Activity Bonds will have its second Public Hearing Monday, March 29^th. This controversial legislation allocates state bond money to MSHA, Maine Municipal Bond Bank and to student lending in Maine. FAME and Maine Education Services are competing for bond money for the student lending piece. MBA banks use both FAME and MES for their student loans and hope that both organizations will continue to be able to serve Maine banks. Both MELA/MES and FISC have hired lobbyists to support their positions.

LD 1586, AN ACT to Require a Mortgagee to Record the Discharge of a Mortgage Within 30 Days will have its Public hearing before the Judiciary Committee March 29^th at 1:00 p.m. MBA will oppose this LD, because it would add severe new penalties (penalty could be as high as the original mortgage amount) should the Discharge not occur within 30 days.

LD 1608, AN ACT to Conform Maine’s Consumer Credit Laws to Federal Law and Make other Changes (MBA SUPPORTS) will be heard before the Banking & Insurance Committee Tuesday, March 23^rd at 1:00 p.m.