2008 General Assembly Session Recap

The 2008 General Assembly session ended at 12 a.m. this morning. During the 90-day session, 2,641 bills were introduced. The Maryland Chamber took positions on 159 of them. Below is a recap of important business issues considered during the session. For more information, visit www.mdchamber.org.

Taxes and the Budget

State Budget: The state general fund budget for fiscal year 2009 will grow by 3.7 percent over the prior year, while allowing a $235 million year-end fund balance in case the economy worsens. Several of the new spending initiatives enacted at the 2007 special session were reduced or delayed in order to build the necessary reserves, including the bay fund, small employer health insurance subsidy, and state helicopter replacement.

Tech Tax: The Maryland Chamber, working with allied business organizations, achieved a significant victory in repealing the impending sales tax on computer services (SB 46). Although the Chamber advocated a different funding source, the bill ultimately included a three-year 6.25 percent income tax bracket for individuals with incomes of over $1 million, as well as a five-year diversion of $50 million per year in transportation revenues. The repeal of this tax is a priority for the Maryland Chamber and will help preserve technology jobs in Maryland. The bill was signed into law today.

Corporate Reporting Requirements: The Maryland Chamber-led business coalition secured changes to the burdensome information reporting requirements that were imposed on corporations during the 2007 special session. The legislation (SB 444/HB 664) reduces the most onerous and unnecessary aspects of the reporting requirements while still gathering the data that the State needs to study corporate income taxation. Passage of this legislation was a priority for the Maryland Chamber.

Other successes included:

• Defeating legislation (SB 561/HB 676) that would have authorized counties to impose discriminatory rates of taxation on business property.
• Defeating legislation (SB 791/HB 663) that would have allowed municipalities to impose a building excise tax on all types of building construction.
• Defeating a bill (HB 1424) that would have permitted municipalities to impose a real estate transfer tax, thus adding a third level of transfer taxation to real estate transactions.
• Passage of legislation (HB 723) to revise the rules for the Biotechnology Investment Incentive Credit, making the credit more attractive and easier to administer.

Environment & Energy

Greenhouse Gas Emissions: The Maryland Chamber, along with other interested business and labor organizations, successfully defeated legislation (SB 309/HB 712) that would have mandated a 25 percent reduction in Greenhouse gas (GHG) emissions by 2020 and set a goal of a 90 percent reduction in GHG from 2006 levels by 2050. Reducing greenhouse gas emissions is a national and global issue. State-specific action could have placed Maryland businesses at a competitive disadvantage. This legislation was overly ambitious and unachievable. It was not the answer to the global warming problem. It could have cost Maryland jobs, increased energy prices, and crippled industries trying to compete in a global marketplace.

Standing: The Maryland Chamber defeated a number of bills that would have expanded standing beyond an aggrieved party to appeal certain court and government decisions like zoning actions, business permits, and more. These bills include HB 246, SB 596 and SB 687.

Labor & Employment

Wage Payment on Termination: The Maryland Chamber successfully authored emergency legislation (SB 797) to correct a recent change in Maryland law regarding the payment of unused leave time to terminating employees. As a result of an unpublished Court of Special Appeals decision and a change in the Department of Labor, Licensing and Regulation’s position, Maryland businesses would have been required to pay out all unused vacation leave to terminating employees, regardless of what the employer’s policy says about payment of accrued leave. SB 797 restores the law to its pre-November 2007 state, which provides that an employer is not required to pay accrued but unused leave at termination where the employer has a written policy in place that is communicated to employees in advance of their termination and states that accrued leave will be lost or forfeited under certain circumstances.

UI Maximum Weekly Benefit: The Maryland Chamber defeated legislation (HB 1580) that would have increased the unemployment insurance (UI) maximum weekly benefit amount by $120 -- $40 a year for three years.

Government-Mandated Breaks: The Maryland Chamber successfully opposed legislation to impose a government-mandated, one-size-fits-all approach to shift break benefits that would have created administrative burdens for private sector employers (HB 654). This legislation was an unwarranted and unnecessary legislative intrusion into the employer-employee relationship.

Lilly Ledbetter: The Maryland Chamber defeated legislation (SB 563/HB 439) that would have effectively abolished the statute of limitations in many employer discrimination court cases, increased frivolous litigation and made suits more difficult to settle by expanding the class of people who could bring claims.

Flexible Leave Act: The General Assembly passed legislation (HB 40) that will require employers of 15 or more employees, who provide paid leave, to allow their employees to use their leave (sick, vacation or compensatory time) for the illness of a child, spouse or parent. Employees who earn more than one type of leave with pay may elect the type and amount of leave with pay to be used. The Maryland Chamber opposed the bill.

Civil Liability

The Maryland Chamber helped to defeat several bills that would have exposed businesses to additional lawsuits and damages:

False Claims: Legislation that would have provided individuals new grounds to sue state government contractors (SB 845/HB 292) and health care providers (SB 215) for an allegation of filing a false claim for benefits.

Market Share Liability: Legislation that would have imposed an unprecedented standard of liability for companies that previously sold lead paint based on their market shares (HB 1241).

Noneconomic Damages: Legislation to increase the cap on noneconomic damage awards for lawsuits alleging wrongful death resulting from medical malpractice (SB550/HB 969).

Market Intervention

Several bills that would have unnecessarily injected state government into the marketplace were opposed by the Maryland Chamber and failed, including legislation to authorize price controls during a state of emergency (HB 1487), regulation of broadband Internet service (SB 515/HB 987), limitation of data retained by vendors following credit card transactions (HB 129 and HB 1108), and legislation that would have required gas station owners to give a right of first refusal to tenants prior to selling the property (SB 604/HB 777).

The Maryland Chamber was also successful in stopping legislation (SB 145) that would have allowed Maryland Correctional Enterprises to use inmate labor to compete against service companies in the marketplace.

State Procurement

The Maryland Chamber was successful in defeating a number of bills that would have detracted from Maryland’s market-based competitive bidding procurement process, including legislation to expand the living wage on service contracts (HB 106) and the prevailing wage on construction contracts (SB 958/HB 970), protectionist bills to limit apparel procurement (HB 28/HB 290), a bill to restrict the definition of a responsible bidder (HB 990), and legislation to require any entity receiving state financial incentives to follow the State’s minority business employment guidelines(HB 1304). Legislation to post more bids to the State’s Internet-based procurement system (HB 865) passed with the Maryland Chamber’s support.

Health

Health care action was limited following the expansion of health care coverage during the 2007 special session. Legislation was passed (HB 462), supported by the Maryland Chamber, to extend until 2011 the termination date for sole proprietors participating in the small group health insurance plan. The Maryland Chamber successfully opposed ERISA-busting bills that attempted to impose employer health care mandates (HB 1282) and pay-or-play payroll taxes (HB 1540). A Maryland Chamber supported bill (HB 737) to require an income tax surcharge for individuals above certain income levels who lack health insurance was not successful.

Transportation

ICC Construction: The Maryland Chamber defeated legislation that would have eliminated funding or further delayed construction of the Intercounty Connector, including:

• Legislation that would have prohibited the Maryland Department of Transportation from funding the ICC (HB 1471).
• Legislation that would have made ICC financing contingent on yet another environmental study (HB 1416).
• Legislation that would have prohibited ICC funding until an assessment is completed to quantify public health impacts from air pollution (HB 1595).