BETR bills. The MBA working with the Maine Chamber and other business associations has successfully opposed a number of proposals that would limit the ability of businesses to receive the Business and Equipment Personal Property tax exemption. The Governor has supported full funding for BETR in his budget proposal. The Business and Equipment Personal Property Tax exemption will not be finalized until the Budget is completed later this month. We will continue to support its inclusion in the final budget.

START ME RIGHT proposals. As reported earlier, a number of bills will be considered in the final budget package to enhance childcare and early childhood education. These bills include offering tax credits to employers for providing childcare benefits. There is some discussion that these proposals should be funded by the Tobacco Settlement. If not, these proposals will be fighting for a share of the funds available in the Budget.

Any bill having a fiscal note is not automatically funded just because it has passed the House and Senate. All bills with a fiscal note must compete for funding in the Appropriations Committee process. We monitor the Appropriations Committee and lobby for funding those bills that we support.

LD 17, AN ACT to Require a Mortgagee to Notify Annually the Municipality in Which Mortgage Property is Located received an "Ought Not to Pass" Committee Vote and is dead for this session. MBA successfully testified that this proposed legislation would not solve the problem identified by the Town Clerks since it will not reach mortgage servicers in the secondary market. However, to make sure that all the interested parties had an opportunity to discuss this issue and how we might better understand each others situation, MBA initiated a series of meetings with concerned legislators, representatives from the Town Clerks, the Bureau of Banking, and our industry. The legislators and town representatives were pleased with these meetings. MBA, MACB, and the Bureau of Banking have agreed to communicate the importance of Maine banks assisting the communities where they have made mortgages with identifying whom the mortgagee is.

LD 63, 1274, ACTS Regarding Sales Tax Treatment of Leased Equipment. The Taxation Committee unanimously passed LD 1274, the more modest of the two proposals and this LD awaits funding from the Appropriations Committee. This is an example of a bill that we are urging the Appropriations Committee to accept. LD 1274 is limited to sale/leaseback transactions of equipment used in the manufacturing process. This LD has very strong support from the Senate Chair of the Tax Committee, Senator Dick Ruhlin. The Taxation Committee paired this LD with another Taxation Committee recommendation that included a positive result on state revenue so that the two LDs combined have no net revenue impact, which will strongly assist final passage.

LD 116, AN ACT to Protect Consumers in Real Estate Mortgage Transactions will require funds to be available for real estate closings. The LD primarily impacts mortgage companies, though MBA participated in crafting the final language of the LD. As amended the Banking & Insurance Committee unanimously supported LD 116, was passed by the full House and Senate, and signed by the Governor as Public Law 145. AS WITH ANY NON-EMERGENCY PUBLIC LAW, THIS LD WILL BECOME EFFECTIVE 90 DAYS AFTER THE ADJOURNMENT OF THE LEGISLATURE, WHICH SHOULD BE AROUND THE FIRST WEEK OF SEPTEMBER!

LDs 20(veteran’s), 146(all pension), 297(Capital Gains), 707(source from outside the state), 1268("public" employees) and 1490(Inheritance) are various proposals that exempt from Maine’s income tax certain types of retirement income. MBA’s Board of Directors have made making Maine more attractive to attract and retain retirees a priority long-term issue for the Association, and the above LDs are proposals from various groups that would help keep or retain retirees as residents of Maine. LD 146, which would exempt all pension and retirement income from the income tax, received strong support in the House, but was defeated 19-12 in the Senate by a mostly Democratic led opposition. This one proposal carried a price tag of more than $60,000,000 in lost state revenue if it passed. There has also been Committee and House support for LD 20, exempting military pensions, from the state income tax. Final action on LD 20 is likely soon.

LD 161, AN ACT to Establish a Lead Abatement Revolving Loan Fund and a Tax Credit for Day Care Facilities for Expenditures Required to Comply with the Lead Poisoning Control Act has been engrossed as amended in the House and is on the Senate Appropriations Table. Like other bills with fiscal impact to the state, this LD will await its final decision when it competes for funding with other supplemental budget items. As its title indicates, this LD creates a revolving loan fund, administered by the Maine State Housing Authority, for lead abatement expenses for day care facilities and creates a tax credit for day care operators who spend their own funds to comply with Maine’s lead abatement laws.

LD 208, AN ACT to Prohibit Intrastate Telemarketers from Blocking Caller ID was opposed by many business groups including MBA. The Utilities Committee unanimously voted Ought Not to pass, so this LD is dead for the session.

LD 240, AN ACT to Amend the Maine Banking Code as it Pertains to ATM Surcharges has passed the Legislature and signed into law by the Governor as Public Law 25. With its emergency preamble it took effect the date of the Governor’s signature, March 22^nd. This law clarifies that banks and credit unions may form alliances and agree not to surcharge each other’s ATM customers.

LD 292, AN ACT to Enhance the Payment Options for Certain Employers is the major legislation authorizing employers to pay employees on a bi-weekly or semi-monthly basis. Many bankers have contacted their Legislators, asking them to pass LD 292 as amended, which is the minority Labor Committee Report. (See April 21^st Legislative Alert asking you to contact your local legislator, urging their support for LD 292!). After much political maneuvering, The House will debate this LD Monday, May 17^th.

LD 458, AN ACT to Ensure Fair Taxation of Insurance and Securities Sales was introduced by the Independent Insurance Agents and proposed to tax financial institution insurance sales income at the corporate income tax rate. MBA and the banking industry referred to the Summer/Fall Study of taxation of financial services, which concluded that no change in this tax was needed. Rep.Bonnie Green moved, and Senator Dick Ruhlin seconded, the Taxation Committee’s motion, Ought Not to pass, which was unanimously voted by the Committee. Please note, however, that the Committee has instructed the Maine Revenue Services to monitor state tax receipts from insurance agencies that are bought by banks and to report back to the Taxation Committee next year.

LD 496, AN ACT to Abrogate the Rule Against Perpetuities was introduced on behalf of MBA, and has received a unanimous Ought to pass Judiciary Committee Report. This LD will move to the House floor next week.

LD 533, AN ACT to Prohibit the State from Competing with Private Industry would not allow the State to perform services that the private sector can provide (One example used was the state contracting to perform printing work for others through the State prison!). The State & Local Government Committee will carry over this LD to next year and has asked for funding of a summer study of this issue. Here again the Appropriations Committee must allocate the funds for the study.

LDs 605 and 1011, Acts to Clarify the Probate Code Regarding Durable Financial Powers of Attorney both make minor changes to the Probate Code and the statutory durable financial power of attorney law that passed in 1997. Both were Unanimously passed by the Judiciary Committee and were passed by the full House and Senate, and the Governor has signed them. LD 605 is now Public Law 66, and LD 1011 is Public Law 118.

LD 689, AN ACT Concerning Municipal Public Library Trust Funds has been amended as suggested by MBA so that it clarifies that other municipal trust funds will be treated the same under required prudent investment guidelines. The State & Local Government Committee unanimously passed the amended version of the LD, the House and Senate have passed this and the Governor has signed LD 689 into law as Public Law 135.

LD 784, AN ACT to Prohibit the Use of Social Security Numbers for Identification Purposes was strongly opposed by MBA, state agencies and other business groups. The Business & Economic Development Committee voted unanimously Ought NOT to pass, and it is dead for this session.

LD 831, AN ACT to Limit the Maximum Finance Charge to 10.5% was heard by the Banking & Insurance Committee and was opposed by MBA and the Bureau of Banking. The Committee voted unanimously Ought Not to pass. This LD is dead for this session.

LD 869, AN ACT to Amend Maine’s Payroll Processing Laws was prepared by MBA to address the need for payroll processors to have liability insurance or bonding. Federal bank regulators suggested that for Maine banks to continue to service payroll processing companies, some sort of bond or liability insurance is recommended for the processor. The Business and Economic Development Committee unanimously supported this proposal, which has been passed by the full House and Senate and signed into law as Public Law 172.

LD 913, AN ACT to Ensure that Persons Issuing Bad Checks are Solely Responsible for Overdraft Charges would limit merchant deposit of bad checks to a $2 bank fee. MBA/MACB and the Bureau of Banking opposed this bill, which was voted, Ought Not to pass by the Banking and Insurance Committee. The full House and Senate also voted Ought Not to Pass.

LD 925, AN ACT to Create a Superlien for Condominium Association Assessments proposed to place condominium assessments in a higher priority than the bank’s first mortgage on the condo. MBA testified against this proposal, and the Judiciary Committee unanimously voted it Ought Not to pass. This bill is dead for this session.

LD 944, AN ACT to Protects Victims of Crimes in the Workplace has been reported out as a divided report by the Labor Committee. This legislation makes discrimination in employment against victims of domestic violence crimes and similar crimes a violation of the Maine Human Rights Act governing fair employment. Business organizations are opposing this legislation because of questions about the liability to employers inherent in the legislation as presented, questions about terminology, and the estimated cost of compliance. One minority report calls for further study that may be supported by business groups.

LD 1130, AN ACT to Implement the Recommendations of the Task Force to Study Telecommunications Taxation has been introduced on behalf of interested parties participating in the Study. MBA participates with the State Chamber’s Telecommunications Policy Committee, which follows any LD that impacts the telecommunications industry. Telecommunication taxation needs considerable clarification (different types of providers of the same service are taxed differently) and needs modernization in order to continue job and business growth in this business area. The Taxation Committee is reviewing dozens of tax proposals affecting telecommunications, including this LD, but has not taken final action. There is considerable revenue loss from this LD so that if the House and Senate enact this proposal the Appropriations Committee must find a way to pay for the loss of revenue.

LD 1148, AN ACT to Amend the Maine Tort Claims Act proposes to exempt the State and municipalities from Y2K liability claims. The Judiciary Committee unanimously voted to pass this proposal, which will go to the full House and Senate next week. The Committee supported the proposal based on concerns raised by the public sectors’ police, fire and ambulance services.

LD 1155, AN ACT to Amend the Laws Regarding Abandoned Property was introduced on behalf of MACB, with our support. This proposal clarifies rules regarding presumptions of abandonment for CD renewals, mortuary trusts and other deposit accounts among other desirable changes. LD 1155 was unanimously supported by the Judiciary Committee and received its final enactment in the House. LD 1155 now awaits final enactment in the Senate on Monday, May 17^th.

LD 1166, AN ACT to Establish Occupational Health and Safety Standards for Operators of Video Display Terminals proposed more onerous guidelines for employee use of VDTs. MBA joined many other business groups opposing the bill as unnecessary. The Labor Committee will hold over this LD, pending action at the Federal level.

LD 1206, AN ACT to Provide for the 1999 and 2000 Allocations of the State Ceiling on Private Activity Bonds has been one of the most controversial LDs this session. An amendment to this LD dramatically alters how the state allocates bond money for student lending. The MBA supports providing access to the state activity bond money for student lending for those financial institutions that are interested, while at the same time not closing the opportunities for banks to direct students and parents to alternative lenders. The final amended version of LD 1206, which received Unanimous Committee support included the following provisions:

• $10 million is set aside from the student loan allocation for private lenders;
• FAME will hold rulemaking hearings that will determine how this $10 million can be allocated. The rulemaking will include determining an appeals process and other issues raised by a variety of bankers;
• There will be Study Commission, which will report to the Business & Economic Development Committee by mid-January of 2000 about many student lending issues, such as the ability of FAME to offer a discount on guarantee fees, whether MES must use the local guarantee Agency, and of critical importance to private lenders, whether they have the legal ability to gain access to the bond money;
• Requires MES to use FAME as its guarantor during the Study.

MBA will continue to work with the Governor’s Office, Commissioner Longley, FAME, MES, the State Treasurer, and members of the Business and Economic Development Committee on this proposal. At least one banker will serve on the Study Committee.

LD 1245, 1282 and 2117 each impact Negotiating Worthless Instruments. Maine Bankers Association testified in support of these proposals, as they would make prosecution of these crimes more likely. Certain District Attorneys around the state are not bringing bad check prosecutions, and these LDs would force them to do so. These LDs failed to pass. However, the Criminal Justice Committee has pledged to write a letter from the Committee to the District Attorneys requesting they bring these types of criminal actions. MBA will leverage the letters to request regional meetings between many of the D.A.s, local legislators, merchants, local chambers and bankers.

LD 1297, AN ACT to Provide for Timely Implementation of the Maine College Savings Program proposed to move this College Savings Program from FAME to MES if Fame is unable to implement the program by this summer. MBA monitored this proposal, which was unanimously voted Ought Not to pass and is dead for the session.

LD 1402, AN ACT to Create the Telemarketing Registration and Fraud Prevention Act would require Maine telemarketers to register with the State and proposes consumer protections against telemarketing. MBA and other business groups opposed the bill, which was proposed on behalf of AARP. After review and debate, the Utilities Committee recommended that the LD not pass which the House and Senate agreed to. However the Committee has asked the Attorney General for recommendations for future legislation. As a result the Attorney General may convene a stakeholders group for this Study. At the same time, the Committee may seek passage of a resolve carrying over the topic to the second session of this Legislature.

LD 1586, AN ACT to Require a Mortgagee to Record the Discharge of a Mortgage within 30 Days was presented to the Judiciary Committee, where 12 of the 13 Committee members sited problems they have experienced firsthand with timely discharge of mortgages. After considerable negotiation with several Committee members who co-sponsored the LD, the bill was amended to:

• require that mortgages be discharged within 60 days,
• with a penalty of $200 per week to a maximum of $5,000 plus attorney fees,
• joint and several liability for the mortgagee who owns the note at time of final payment and/or the servicer who receives final payment, and
• this party shall be responsible for filing the discharge (NOT send the discharge by mail to the borrower)

The effective date is 1/1/2000 and would require a notice of demand in the case of home equities. MBA’s research indicates that most other states (Every New England State) has a similar provision to this, and that in these states the secondary mortgage market, especially servicers, perform their obligations more rigorously. The Committee unanimously voted to support this amended proposal, which has been passed in the full House and Senate and awaits the Governor’s signature.

LD 1608, AN ACT to Conform Maine’s Consumer Credit Laws to Federal Law and Make Other Changes was introduced by MACB with our support, and as amended received an unanimous Ought to Pass Report. While technical in nature, this LD will bring Maine’s consumer lending provisions closer to those in Reg. Z. The Banking & Insurance Committee unanimously supported this LD, which passed the House and Senate and has been signed by the Governor as Public Law 150.

LD 1719, AN ACT to Amend the Maine Banking Code Regarding Extensions of Credit was introduced on behalf of MBA, and would amend the requirement to hold a Directors Meeting when extending credit beyond 10% of capital. The Superintendent of Banking is authorized to waive the required meeting. The Maine Bureau of Banking worked with MBA on the language for this LD, which received unanimous Committee support, has been enacted in the House and Senate and awaits the Governor’s signature. As an emergency bill, it will go into effect immediately after the Governor’s signature.

LD 1732, AN ACT to Prohibit Certain Bank Penalties would not allow banks to charge fees on savings accounts if the account dropped below a certain balance. MBA/MACB testified against this proposal, which was voted 11 – 2 Ought Not to pass. Senator Anne Rand has tabled this LD. She intends to have a full debate next week in the Senate. She has asked the Democratic caucus and Democratic Senate Leadership for their support. Senator and Banking Committee Senate Chair, Lloyd LaFountain (D-Biddeford) and Senator Joel Abromson (R-Portland), the ranking Republican on the Banking Committee will lead the opposition. From the Senate, LD 1732 will proceed to the House. At this time, no House member has indicated that they are interested in having the bill debated in the House.

LD 1777, AN ACT to Update the Laws Concerning Prearranged Funerals was the result of the summer study of the state’s mortuary trust laws. MBA attended the Study Group’s meetings and was represented on the Study Group. This proposal does not impact the requirement that preneed funeral deposits must be made to federally insured deposit accounts. The Banking & Insurance Committee unanimously voted to support the amended version of the LD, which has been enacted in the House and Senate and now awaits the Governor’s signature

LD 1808, AN ACT to Amend the Definition of Lender under the Uncontrolled Hazardous Substance Sites Law updated the definition of lenders who qualify for protections under these laws. The definition did not extend to out-of-state lenders if they did not have branches in this state, a notion that does not accommodate Reigle/Neal or Maine’s Universal Charter Law. The Natural Resources Committee unanimously supported the amended version, which has passed the full House and Senate and now awaits the Governor’s signature.

LD 1824, AN ACT to Encourage Equity Equivalent Loans or Investments in Community Development Financial Institutions would create a tax credit for a business investment in a CDFI. This proposal received considerable Taxation Committee support, but there were several unanswered questions and a need for a re-draft of the LD. As a result, this LD will be held over until next year.

LD 1991, AN ACT to Protect Consumers of Nonbank Cash-dispensing Machines was introduced by the Department of Financial and Professional Regulation to require non-bank ATMs to register with the State. MBA supported the final version of the LD after several concerns were worked out. The Banking & Insurance Committee reported this LD unanimous Ought to pass, and is has been enacted in both the House and Senate and now awaits the Governor’s signature.

LD 2049, AN ACT Providing Recourse and Protection to Vendors Receiving Bad Checks was another LD that proposed to help merchants collect on bad checks. This proposal would require financial institutions to provide account status, including if it was closed or not, and telephone number and address of the issuer to the merchant. The Banking & Insurance Committee unanimously voted Ought Not to pass, so it is dead for the Session.

LD 2152, AN ACT to Amend the Laws Governing Financial Institutions was introduced on behalf of the Bureau of Banking and made a number of minor Housekeeping changes to the Banking Code. One change was to allow Maine banks to open branches in foreign countries. The Banking and Insurance Committee voted unanimous Ought to pass, has been enacted in the full House and Senate and awaits the Governor’s signature.

In addition to the bills mentioned here, the Maine Bankers Association is taking an active role in opposing changes to Maine’s Workers Compensation System. The House and Senate are now taking up bills, which the Democrats on the Labor Committee have advanced as the majority report. It is estimated that the cost of enacting these bills, a cost that would be paid by Maine employers, is over $80 million dollars. If you have the opportunity to speak to your legislator, encourage the legislator to oppose changing the Workers Compensation System.

The Maine Bankers Association is also studying the proposal for funding the Unemployment Compensation System. The Unemployment Fund does need additional funding; however, we cannot support proposals that include extending the benefits to part-time employers and other seasonal groups not now covered.