Around the Capitol
The Louisiana State Legislature adjourned the 2018 State Regular Session on Friday, May 18 and then quickly began a second special session of 2018 on Monday, May 22. This continues the pattern of a regular session and two special sessions per year that has occurred since 2016. This latest special session is again focused on tax and fiscal policy to address the much-reported “fiscal cliff” the state faces when more than $1 billion in temporary tax measures are set to expire on June 30. Raising revenue to replace expiring tax revenue appears likely during the special session, or possibly during another special session in June (if one is called).
Gov. Edwards, who was criticized in past special sessions for not making his call (agenda) for the session broad enough, issued an extremely broad call for this latest special session that must end by June 4. The call includes 32 items related to income tax, sales tax, tax credits, spending transparency and the operating and capital budgets for the state. The broad call gives the legislature and the Edward’s Administration ability to explore many options for raising taxes and other revenue. Click here to view the call.
Despite that broad flexibility, conventional wisdom is that the list of tax or other revenue raising measures that are actually viable during the special session is short. For an indication of that list, one can look to a Senate Concurrent Resolution that was passed overwhelmingly by both the House and Senate during the recently ended regular session. SCR 101 by Sen. Jack Donahue suggests the following options to consider for raising revenue to fund priorities in the state budget: extending up to a half-penny of the temporary penny state sales tax set to expire July 1; repealing exemptions to the state sales tax, including business utilities and manufacturing machinery and equipment (MM&E); and capping various economic development tax incentives at current year levels. Click here to read SCR 101.
While the resolution does not carry the force of law, it seems to be a good indicator of what measures the legislature may have an appetite for during the special session. LBA will remain vigilant during the special session in monitoring for any impact to banking.
As for the recently ended regular session, I am glad to report that we were successful in protecting Louisiana banks and thrifts from harmful legislation. We also worked very hard to pass an LBA-sponsored package of bills that will be beneficial to Louisiana banks and thrifts and their customers and communities. Three of those bills our highlighted below. However, a full summary of LBA-sponsored bill, and other bills of interest to Louisiana bankers, will be provided to our membership in the coming weeks in our comprehensive session report.
SB 315 by Sen. Francis Thompson and Rep. Gene Reynolds was signed into law as Act 154. This Act will improve financial literacy education requirements for high school students. Our state recently received a grade of D from the Champlain College Center for Financial Literacy, which grades all 50 states and the District of Columbia on their efforts to teach the ABC’s of financial literacy to high school students. Act 154 provides that each public elementary or secondary school student shall receive age and grade appropriate instruction in personal financial management based on the concept of achieving financial literacy, and that each student who enters the 9th grade on or after July 1, 2019, shall receive such instruction as a requirement for high school graduation. We have been informed that our state will receive a grade of B in the next Champlain College Center for Financial Literacy report. We thank legislators for voting to significantly improve financial education requirements in Louisiana. Click here to read Act 154.
HB 219 by Rep. Katrina Jackson was signed into law as Act 202. This Act mandates, by July 2020, that all Parish Clerks of Court participate in the Louisiana Clerks Remote Access Authority central portal. The LCRAA central portal is a valuable tool that allows people to quickly and efficiently access certain property records indexes online from clerks offices that are participating. A reasonable mandatory participation deadline is in order so the central portal can be useful to everyone statewide. Click here to read Act 202.
HB 503 by Rep. Thomas Carmody (and 33 co-authors) gives financial institutions the tools and protections they need to help protect their customers from financial exploitation. HB 503 will allow, but not require, banks and thrifts to delay a transaction when exploitation of a vulnerable adult is suspected, and provide more clear authority to banks and thrifts to report suspected exploitation to law enforcement and other third parties, including family members of the victim. The bill was sponsored by the Office of Financial Institutions and LBA, and endorsed as part of Gov. Edwards’s legislative package. Although the bill has not been signed into law as of this writing, the Governor’s office has indicated there support and intention to sign the bill. We thank Gov. Edwards and the legislature for their support on this very important issue. Click here to read HB 503.
We also thank all the bankers and bank counsel members who continue to help us in our efforts at the state capitol.