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· LEGISLATURE TO ADJOURN NEXT WEEK – THREE IMPORTANT BILLS STILL PENDING
· STATUS OF MAJOR BANKING-RELATED LDS
· DROUGHT RELATED BANKING ISSUES
· BANKERS DAY AT THE LEGISLATURE A ROUSING SUCCESS
· LEGISLATIVE RECAP PROGRAM SCHEDULED JUNE 6
1) LEGISLATURE SCHEDULED TO ADJOURN APRIL 5TH – THREE IMPORTANT BILLS STILL PENDING
LD 2202 – This is the Governor’s proposal to overturn a Supreme Court decision on Workers Comp coverage, strongly supported by the state’s business community including Maine Bankers Association. Without this legislation, workers comp insurance will increase by 15% for this year, and the system will have to make up approximately $200 million in retroactive coverage back to the early 90s. The issue concerns whether non-work related injuries can be included in determining if a worker may receive lifetime benefits. The Court decided in the Kotch case that they may, even if they are not to the same body part - For example, if you previously had a non-work related back injury, and hurt your knee on the job, you could consider the back injury to determine if the worker qualified for lifetime benefits. According to the Maine Bureau of Insurance, Maine would be the only state in the nation that combines an occupational injury with non-occupational impairments.
It may be imperative for bankers to contact their local legislators on this issue – they will hear from organized Labor – so they need to hear from the business community. One legislator reported he has already received more than 120 calls or e-mails, and that was by Wednesday morning, just two days after the bill was printed and one day after the Public Hearing! If you know your local legislator, call him to tell him Maine Bankers supports LD 2202, pass the Governor’s bill! Maine is losing jobs - Hathaway Shirts, Nautica, Bangor Hydro combined to announce the elimination of more than 1,000 jobs just this week - And cannot afford to have an even worse business climate by this very large increase to Workers Comp costs.
LD 2119, AN ACT Relating to Subdivision Review and Title Search Procedures, makes needed changes to the State’s subdivision laws. There are both a Majority Report and Minority Report. Both Reports, as amended, address the concerns raised by the banking and title certification industries, that if a town is to have a separate definition of subdivision, they MUST record it in the County Registry of Deeds. The Majority Report, which is supported by the realtors, by real estate developers, CAP Agencies and the State Planning Office, makes additional clarifications that limit the municipality’s ability to amend the State’s definition of subdivision. Maine Municipal Association (MMA) is working very hard against the Majority Report, saying it takes away from their local “home rule” authority.
As long as either report passes, the problem for title searches is solved. Maine Bankers has been urged to assist in passing the majority report, and that report has initially passed both the House and Senate in their First Readings. But the MMA has stepped up their efforts to defeat this report. This issue will be back before the House on Monday.
LD 2041, AN ACT to Control Internet SPAM, has been passed in the House and Senate, but has language that is inconsistent with other state’s laws on this subject and may create problems for innocent business e-mail. The bill is based on laws in Washington state and Virginia, and has the support of virtually everyone. However, this proposal includes in its definition of what is prohibited an otherwise undefined term that could be read as prohibiting any business e-mail to non-customers. In the bill is the express prohibition against soliciting for the extension of credit to non-customers, if you are sending that solicitation to two or more recipients! This would be the strongest anti-solicitation language of any state in the country, and would be unenforceable against out-of-state businesses. This bill is awaiting a Senate amendment that clarifies the impact and more closely patterns the Virginia law.
2) STATUS OF OTHER BANKING-RELATED LEGISLATION
LD 2080, the Governor’s Supplemental Budget, which was subject to great debate and deliberation as legislators decided how to trim the $150 million budget shortfall. Maine Bankers led an effort on Estate Tax Conformity, urging legislators to fully conform with recent federal estate tax changes. We were mostly successful IF you die after January 1, 2003! Full conformity for the estate tax occurs effective that date, leaving a 9 month gap between federal and state estate tax laws.
Though the budget mostly conforms with federal tax laws, Maine did not choose to adopt the new net operating loss carryback provisions allowed under federal law, and conditionally funded the new federal depreciation schedules. Also, the new budget includes expansion of the Real Estate Transfer tax to changes in control, opposed by MBA and other businesses. There is also some speculation that if additional funding is needed for programs, that the tax rate on the transfer tax would be increased!
The budget continues to fund the Laptop learning initiative – these funds were already allocated from prior years, but the fund was not “raided” for other spending.
The following LDs have been passed into Public Law, with effective dates of:
LD 1573, AN ACT to Enact the Uniform Principal and Income Act of 1997, was signed into Law as Public Law 544. Maine Bankers Association strongly supported this important Uniform trust law change, and testified at the Public Hearing. The new law provides clearer guidelines for trustees when allocating and distributing income from trust earnings. The effective date is generally January 1, 2003.
LD 1770, AN ACT Regarding Charities, Nonprofit Corporations and Conversions of Nonprofit Entities to For Profit Entities, was signed by the Governor as Public Law 550. This Act grants authority to the Attorney General to review certain non-profit conversions to for profit entities, and establishes guidelines for roles of directors on Non-profit Boards. Effective date for Non-profit Board of Director provisions = January 1, 2003.
LD 1835, AN ACT to Amend the Loan Broker Law, has been signed as Public Law 509. MBA worked to avoid any unintended consequences from this law, which adds certain regulatory oversight to previously unregulated loan brokers and loan arrangers. Effective 90 days after the end of the Session, approximately July 5.
LD 1880, AN ACT to Reduce Identity Theft by Regulating Electronically Printed Credit Card and Debit Card Receipts, was signed as Public Law 527. MBA strongly supported this proposal which should reduce identity theft. It takes effect January 1, 2004!
LD 1999, AN ACT to Clarify Recent Amendments to the Maine Consumer Credit Code, was strongly supported by MBA and clarifies the Maine law on charging interest when the first loan payment extends beyond 30 days. Signed as Public Law 482, effective date of February 21, 2002(So this law is not in effect, as it had an Emergency Preamble)
Senator Ed Youngblood, Rep. Matt Dunlap and Rep. David Trahan’s Government Oversight bill has been reported out Unanimously Ought to Pass by the State & Local Government Committee. This LD will be debated next week in the House and Senate.
3) DROUGHT-RELATED BANKING ISSUES
Maine Bankers Association has been asked by the Governor’s office, through the Maine Bureau of Financial Institutions to assist in gathering information about drought-related economic difficulties. As you probably have read, the Governor has asked that Maine be declared eligible for federal disaster relief aid, including some federal funds. He would like to gather more information to support this request.
If you have had either individuals or businesses ask for loans or other banking assistance as a result of the drought, please make sure they report this to the State. Also, any bank employees that have had wells run dry or other problems, should also report this to the State. They can report this information to: http://www.state.me.us/dhs/eng/water/index.htm.
Also, the Finance Authority of Maine is developing a loan program for borrowers needing assistance as a result of the drought. Details should be available for review at the next Maine Bankers Association Board of Directors Meeting, scheduled for April 11th at the Senator Inn, Augusta.
4) BANKERS DAY AT THE LEGISLATURE A ROUSING SUCCESS!
177 bankers shadowed 166 Legislators (15 more would have participated if their shadows had attended as registered!), plus the Governor, on the Annual Bankers Day at the Legislature on March 19th. This was the best attendance ever! Legislators enjoyed meeting and hearing from their bankers, and from all sources, including the Governor’s office with Governor King being shadowed by FNB, Bar Harbor President Tony McKim, the day was valuable and a smashing success. Thanks to all who made this event so successful!
5) LEGISLATIVE RECAP & COMPLIANCE PROGRAM ON THURSDAY, June 6th!
This Program will be in Augusta and will include discussion about the major banking-related LDs passed this year. The afternoon should include a compliance session on recent RESPA changes.
NOTE: There will NOT be a Legislative Committee Meeting on Thursday April 4th – as the Legislature should adjourn the next day! | 