AROUND THE STATES By Dennis Brown and Megan Kueck States Enact Equipment Leasing Legislation W There is never truly any downtime for state advocacy efforts and volunteer engagement. ITH OVER HALF OF ALL STATE LEGISL ATURES ADJOURNED FOR THE 2015 SESSION, here is a wrap-up of some key issues that ELFA has advocated for thus far this year. In Illinois, ELFA volunteers have made major strides in creat-ing certainty in the tax code. In Washington and Utah, ELFA volunteers wrestled with Uniform Commercial Code (UCC) issues. Legislation enacted by New Jersey and Texas are also of interest to ELFA members. ELFA Supported Illinois Legislation Heads to Governor ELFA-supported legislation (Illinois Senate Bill 1548) was passed out of the Senate (in late May) and the House (in late April) without opposition. The legislation is intended to resolve issues created by new regulations for sourcing of local retail sales taxes implemented as a result of the Illinois Supreme Court’s 2014 Hartney Fuel decision. The bill now heads to Governor Bruce Rauner for final approval before becoming law. Generally, legislation is sent to the governor’s office within 30 days of passage and the governor has approximately another 60 days to sign the legislation. Sources within Illinois indicate the governor is expected to sign the bill. The correct local tax to charge has been uncertain because the regulations source tax to where equipment is located be-fore it is shipped to the customer, which is often not in Illi-nois, or the equipment may not yet have been manufactured. Maine Automatic Renewal Bill Dies in Committee An ELFA amendment exempting “finance companies” was added to the exemptions given to banks in automatic renewal legislation in Maine (LD 894). The bill was assigned to a com-mittee work session and had wide support but eventually died in the joint committee, despite support from various businesses and consumer proponents. Other States In New Jersey , Assembly Bill 2481, signed into law as Chapter 59, is seen by sponsors as providing the central UCC filing office (officially known as the Division of Revenue and En-terprise Services) with new powers to deter fraudulent filings, while also revising N.J. Stat. § 12A:9-502, effective May 11, 2015. Changes to §12A:9-502(a)(2) and (a)(3) impacting fi-nancing statements have generated concern. In Texas , ELFA has supported a successful effort by the National Business Aviation Association to enact Senate Bill 1396, effective Sept. 1, 2015, which provides significant sales and use-tax reforms for general aviation aircraft based in or visiting Texas. The equipment finance industry will benefit as it alleviates double taxation on aircraft leasing structures, pro-vides brighter lines for sales tax planning purposes and pro-motes fairness in private aircraft purchases, sales and leasing. Utah UCC Legislation Enacted Governor Gary Herbert signed Senate Bill 93 into law in late March. Prior to enactment of the law, a workgroup of ELFA volunteers negotiated with proponents of the legislation, pro-ducing amendments designed to curtail the filing of financial statements under the UCC intended to “harass or defraud,” while avoiding negative impacts opposed by all involved in the process. In its effort to protect against bad faith filings, Senate Bill 93 inadvertently created a loophole permitting borrowers to defraud creditors of property rights by selling property to unsuspecting purchasers. It would have the prac-tical effect of constraining financing to entities headquar-tered in Utah or formed under Utah law. Looking Ahead Even though many state legislatures have adjourned for the 2015 session, there is still continued work to do in state advoca-cy. A handful of states have year-round legislative sessions and are continuing to draft and pass legislation. If you or your com-pany would like to be further engaged in ELFA’s state govern-ment advocacy efforts, please contact Dennis Brown (dbrown@ elfaonline.org) and Megan Kueck (mkueck@elfaonline.org). In the fall, many states will start to pre-file bills for the 2016 ses-sion, create regulations that may affect the industry and hold interim study committees, so there is never truly any downtime for state advocacy efforts and volunteer engagement. ■ For more information, please contact Dennis Brown , ELFA Vice President of State Government Relations, at dbrown@elfaonline.org, or Megan Kueck , ELFA Director of State Government Relations, at mkueck@elfaonline.org. Washington Members Push for Reenactment of TRAC Law In 2012, the Washington legislature inadvertently repealed the Terminal Rental Adjustment Clause (TRAC) law. In Jan-uary, ELFA members from Washington State led advocacy efforts to gain reenactment of the TRAC law with Senate Bill 5032, which is not retroactive. ELFA volunteers attended a pre-hearing meeting with the Senate committee chairman, and were an excellent resource to discuss the commercial lease financing marketplace. 44 JULY/AUGUST/SEPTEMBER 2015 EQUIPMENT LEASING & FINANCE MAGAZINE