Session Information

2004 Regular Session Highlights

Commerce & Consumer Protection

by: Jeff Oblesbee
(225) 342-0597

The 2004 Regular Session proved to offer many historic changes in the area of Commerce and Consumer Protection. The legislature tackled such historically controversial issues such as the regulation of the Louisiana River Pilot system and self-help repossession. In addition to providing for these fundamental changes, the legislature also continued to enhance the state's economic development efforts through an expansion of the Louisiana Quality Jobs program to assist small business, as well as by providing the Department of Economic Development additional tools to assist in negotiations with out-of-state companies.

An issue which has been around for several sessions finally managed to find its way through the legislature in the final days of the 2004 Regular Session. Two competing pieces of legislation, Senate Bill 472 by Senator Dardenne (pending House Commerce) and House Bill 1708 (Act 902), each took a dramatically different approach to regulating the pilotage industry in Louisiana, and following much discussion and debate by all parties involved, a compromise was finally reached which all sides can agree is true reform.

As the system is presently set up, each of the four pilotage groups in Louisiana which help guide foreign vessels along the Mississippi and the Calcasieu rivers (The Associated Branch Pilots for the Port of New Orleans, the River Port Pilots for the Port of New Orleans, the New Orleans-Baton Rouge Steamship Pilots Association, and the Associated Branch Pilots for the Port of Lake Charles) have a separate fee commission which has the exclusive authority to set pilotage fees and rates for that particular group. Each of these fee commissions is composed of four industry members and four pilot members. If (and when) the dispute cannot be determined at the fee commission level, the matter is then transferred to the La. Public Service Commission. Due to a variety of reasons, the fee commissions have not been utilized for several years, leaving the PSC with the sole authority (and responsibility) of setting pilotage fees and rates.

With the enactment of House Bill 1708, effective January 1, 2005, the current pilotage fee system will be replaced with a single pilot fee commission which will have the exclusive authority to set pilotage fees and rates. Following much discussion between all parties, the legislation provides that the commission will be composed of four industry members, four pilot members, and three at-large members appointed by the governor, with all decisions to be determined by a simple majority vote. Appeals of the fee commission will go through the judicial system, but only after a finding the commission's decision was either arbitrary or capricious.

House Bill 1708 also establishes a board of pilot review and oversight, which will also be composed of four industry members, four pilot members, and three former judges. The board will be responsible in overseeing the examination procedures for pilots, review all discipline proceedings brought against pilots, as well as review any accidents involving state commissioned pilots.

Although the process to crafting this compromise legislation was sometimes as tricky and hazardous as traveling the Mississippi River, all parties agree that House Bill 1708 provides true reform of a much criticized industry.

The legislature also tackled yet another annual controversial issue during the 2004 Regular Session. Characterized by many as the "repo man" bill Senate Bill 768 by Senator Hollis (Act 191) will transform the procedures a lender must utilize in order to repossess a motor vehicle following default by the borrower.

Presently, a lender must go through a lengthy and costly judicial procedure which will ultimately require the local sheriff to seize the borrower's vehicle. Placing Louisiana in line with the other forty-nine states, Senate Bill 768 will allow the lender to use a licensed repossession agent to seize a borrowers vehicle if they have a payment that is more than 60 days past due, and only after receiving notice from the lender.

In an effort to educate the general public about the change in law, the effective date as been delayed until January 1, 2005 and all future financing agreements will provide the borrower with notice of the change in law. House Bill 1489 by Representative Johns (Act 814) provides additional notice by requiring the lender to file a "Notice of Repossession" with both the local clerk of court and the local law enforcement agency prior to seizing the motor vehicle.

Promoted yet another economic development tool, it is anticipated that by placing Louisiana in line with every other state additional secondary lenders will return to Louisiana which will not only add new jobs to our economy, but also provide an additional opportunity for Louisiana citizens to obtain financing for a motor vehicle.

Following several sessions of legislation which sought to improve, streamline, and modernize the Louisiana Department of Economic Development, the 2004 Regular Session focused on a handful of issues to enhances DED's ability to operate. House Bill 744 by Representative Lancaster (pending Senate Final Passage) would allow the department to categorize certain records pertaining to ongoing, active negotiations with companies interested in locating to Louisiana to be classified as non-public until the negotiations are completed.

Although the legislation has yet to pass, Governor Blanco recently announced a major new business relocating to the state. Dubbed "Project U" by the Department of Economic Development, Union Tank Car Co. has agreed to locate a rail car manufacturing to the state which will employ nearly 1,000 Louisiana citizens.

Building on past efforts to encourage research and development in the state, Senate Bill 593 by Senator B. Gautreaux (Act 672) allows for regional research and development parks to be developed and operated in order to promote, create, develop, and strengthen research and development activities in the state.

In an effort to extend the benefits of the state's Quality Jobs Program to small business, House Bill 1674 by Representative Walsworth (Act 899) and Senate Bill 858 by Senator Kostelka (pending house committee) will allow companies that employ 50 or fewer employees to participate in the program provided that they are (1) one of the Vision 2020 cluster industries, and (2) offer health insurance coverage to all their full-time employees and pay at least 50% of the health insurance premium. Participating companies will receive 50% of the benefit rate for every new direct job they create. Meanwhile, House Bill 1478 by Representative White (VETOED) and Senate Bill 845 by Senator Fontenot (senate subject to call) would have expanded the definition of a "new direct job" for purposes of the Quality Jobs Program. As proposed, a "new direct job" would also have included new jobs with a company with which an employer has a "facility management contract" under which another company agrees to operate all or part of the employer's manufacturing facility, although the company would only receive 80% of the benefit rate granted under the Quality Jobs program.

Finally, in an effort to provide some additional accountability for businesses which receive a direct equity investment from the state, Senate Bill 819 by Senator Marionneaux (Senate subject to call) would have required such business to post a bond or other security in an amount equal to the direct equity investment. In the event the business receiving the investment was not able to succeed, the bond or other security would be forfeited to the state in order to repay the investment.

House Bill 189 by Representative Winston (Act 148) will provide additional exemptions from the provisions of the "Do Not Call" program to calls places by optometrists, dentists, and chiropractors to their patients, as well as by veterinarians who place calls to their clients.

In an effort to consolidate the Louisiana "Do Not Call" list with the "National Do Not Call" list, House Bill 1030 by Rep. Pinac (Act 857)requires the La. Public Service Commission to establish and maintain a single "do not call" list that will include Louisiana consumers who have already requested that their name appear on the "National Do Not Call" list. The measure will also provide an additional exemption to telephone solicitors if they are calling their friends, family, or acquaintances.

During the 2004 Regular Session, the legislature considered, and passed numerous pieces of legislation in an effort to extend additional protections to the consumers of our state.

Senate Bill 295 by Senator N. Gautreaux (Act 69) prohibits any person or entity selling a gift certificate in Louisiana to contain an expiration date that is less than five years. Violators will be subject to any and all actions and penalties associated with the La. Unfair Trade Practices and Consumer Protection Law. The legislation place Louisiana in line with several other states who have prohibited, or severely limited, the use of expiration dates on gift certificates.

Under current law, any person who engages in false advertisement is subject to a civil fine of no more than $500, or imprisoned for no more than six months for each violation. In an effort to continue to discourage such persons from engaging in false advertise, House Bill 120 by Representative Walker (Act 364) increases the civil fine from a maximum of $500 to $2,500.

In an effort to protect a consumer's dirty clothes from the hazards of a laundromat, House Bill 1557 by Representative Marchand (Act 357) will now require commercial laundromats to maintain a boiler which will ensure that hot water being provided to the washing machine will have a minimum temperature of at least 120 degrees.

Finally, in an effort to protect consumers from the certain junk mail, Senate Bill 284 by Senator Marionneaux (pending Senate commerce) would have prohibited a credit card company from mailing unsolicited credit card applications to Louisiana citizens.

In an effort to bring additional international banks to the state, House Bill 911 by Representative Lancaster (Act 420), Senate Bill 551 by Senator Duplessis (pending Senate Commerce), and Senate Bill 573 by Senator Bajoie (pending Senate Commerce) will authorize the creation of International Banks in Louisiana and allow such foreign banks to receive deposits, open offices, operate branches, and transact other business in Louisiana.

Numerous other pieces of legislation were also considered in order to clean-up various banking concerns brought forward on behalf of the office of financial institutions. The legislation includes House Bill 332 by Representative Pinac (Act 151) which extended certain exemptions from licensure and continuing education under the Residential Mortgage Lending Act, House Bill 276 by Representative J. Smith (Act 370) which eliminates certain antiquated requirement for posting a surety bond under the Louisiana Check-Cashing Law, and Senate Bill 239 by Senator Hollis (Act 65) which clarifies that a financial institution may impose a fee when an account is overdrawn when a payment is made by electronic means.

Brought at the request of numerous college coaches, including LSU's Nick Saban and Southern's Pete Richardson, House Bill 1408 by Representative Daniel (Act 351) provides additional safeguards to student athletes before they are approached by an athletic agent. It will require the sports agent to contact, and receive permission, from the athlete's coach and parent prior to contact, and will create a cause of action for tortious interference with contract should the sports agent violate the provisions of this law.

House Bill 419 by Representative Pinac (Act 328) prohibits a horse owned by a member of the State Racing Commission from racing in a claiming race within the state. Meanwhile, House Concurrent Resolution 10 by Representative Townsend (enrolled) will amend portions of the state horse racing rules to allow for races by "paint" horses.

Finally, Senate Concurrent Resolution 44 by Senator Duplessis (enrolled) memorializes Congress to amend portions of the U.C.C. to allow a state or national bank to participate in a lottery for charitable purposes.