FROM THE HALLS | A Maryland business legislative update | February 2020

We hope you’re enjoying the “Friday Five” emails. During the legislative session, on the last Friday of the month, instead of a “Friday 5,” you will receive a more detailed “From the Halls” newsletter featuring updates on previously shared items of interest, along with the latest news from session.


Below, you will find the February 2020 issue of “From the Halls.” But first, here’s a little trivia about the Old Line State: What symbol of wisdom sits atop the Maryland State House? (See answer at bottom of newsletter.)


Standing strong against a new sales tax on services

HB 1628: Sales Tax on Services poses a grave threat to the business community. We need your help in conveying this urgent message to the General Assembly, so please join us for a “drive-in” and press conference in opposition to the bill this coming Monday, March 2.

Representatives from the following organizations will participate:

WHAT: Joint Press Conference to declare opposition to HB 1628

WHO: Coalition of Maryland Business Organizations (listed above)

WHEN: Monday, March 2, 2020

LITERATURE DROP-OFF: 9 a.m. to 10:30 a.m.*

PRESS CONFERENCE: 11 a.m. – 12:30 p.m.

WHERE: House of Delegates Office Building | Meeting Room 180: Baltimore County Delegation Room | 6 Bladen Street, Annapolis, MD 21401

*At 9 a.m., we will be heading over to legislators’ offices to deliver a one-pager on how HB 1628 will harm the business community. Please meet in Room 180 no later than 8:45 a.m. if you would like to join us for the literature drop-off.

The press conference will begin promptly at 11 a.m. The hearing on HB 1628 is scheduled to take place before the House Ways & Means Committee at 1 p.m., just after the press conference.

HB 1628 would result in a massive tax increase of $2.6 billion for Marylanders, the largest single tax increase in Maryland history. This piece of legislation would lower the sales tax from 6% to 5% but would expand that 5% sales tax to everyday services that have never been taxed before: legal services, accounting services, realtor services, home improvement, auto services and gym memberships—just to name a few.

If you would like to sign on to our legislator letter, which outlines the negative impacts of HB 1628, and/or participate in any of the events on Monday, please contact Ashley Duckman ASAP at aduckman@mdchamber.org.


Family and Medical Leave Insurance (FAMLI) Program

Hearings took place in both the House Economic Matters and Senate Finance Committees this week on HB 839  and  SB 539. This legislation that would establish a Family & Medical Leave Insurance (FAMLI) Program to be administered under the supervision of the Department of Labor’s Unemployment Insurance (UI) Division.

The program generally provides up to 12 weeks of benefits to an employee who is taking partially paid or unpaid leave for certain reasons, except that an additional 12 weeks for benefits appears to be provided in certain circumstances. Leave with benefits is provided for the following reasons: 1) to care for a child during the first year after the child’s birth or after the placement of the child through foster care or adoption; 2) to care for a family member with a serious health condition, 3) because the employee has a health condition that results in their being unable to perform the functions of their job, 4) to care for a service member who is the employee’s next of kin, or 5) because the employee has an exigency arising out of the deployment of a service member who is a family member.

There are any number of additional nuances and complexities outlined in the language, and the Chamber is very concerned that the implementation of this legislation will result in additional costs and administrative burden to employers, especially small businesses. More of the Chamber’s concerns include: the definitions of eligibility laid out in the bill language and the length of leave being granted, up to 24 weeks. It is anticipated that this new program would result in significantly higher absentee rates and lead to additional abuses. There are also concerns with implementation and administrative complexity.

Our own Ashley Duckman testified against both HB 839 on Monday and SB 539 on Thursday. During her testimony, Duckman lamented that the recommendations made by the workgroup the Chamber had previously assembled did not make it into the draft bill. Read more here.

For talking points and more in-depth information about our concerns, please click here.


Tax bills abound

A considerable amount of anti-business legislation has been introduced this session, particularly in the business incentive and tax space. Some of the tax bills we’re watching closely include:

HB 507: Income Tax — Pass-Through Entity — Additional Tax. This bill imposes an additional 4% tax on income distributed to a member of a pass-through entity (PTE) from the PTE’s taxable income that exceeds $1 million. (Delegate Palakovich Carr)

HB 565: Income Tax — Business and Economic Development Tax Credits – Termination. This bill terminates the following tax credit programs: (1) enterprise zone; (2) Regional Institution Strategic Enterprise Zone (RISE); (3) One Maryland; (4) Opportunity Zone Enhancement Program; (5) biotechnology investment incentive; (6) film production activity; (7) cybersecurity technology or service tax credit; and (8) small business tax relief. (Delegate Kaiser)

HB 1354: Sales-and-Use Tax – Services. This bill adds 13 new service-based businesses to the definition of a taxable service. (Delegate Charkoudian)

SB 2 (HB 695): Digital Advertising Gross Revenues – Taxation. This bill will increase the cost of online advertising for all businesses in Maryland. (Senator Miller)

As we enter the second half of the legislative session, the Maryland Chamber is eager to hear your feedback on legislation like the bills listed above. Your opinions and viewpoints inform our advocacy work here in Annapolis.


Racetrack rebuild

On Tuesday, Baltimore community leaders testified before the House Ways and Means and Senate Budget and Taxation Committees in support of the Racing and Community Development Act of 2020. If passed, the bill would authorize the Maryland Stadium Authority to issue $375 million worth of bonds to rebuild Maryland’s century-old racetracks—Pimlico Race Course and Laurel Park—and officially secure the Preakness Stakes’ home in Baltimore. Pimlico has been home to the Preakness since 1909.

The total amount of the work is $389 million for construction at Pimlico and Laurel. Laurel Park would be worked on first and Pimlico would be renovated by 2024, with the first Preakness at the rebuilt track to be held in May 2024, according to the Baltimore Sun.

To date, no one has testified against the bill.


Oceaneering International plans for expansion and new jobs

Oceaneering International, Inc., a leading provider of engineered products and services located in Hanover, is expanding its operations and adding more than 135 new full-time jobs in Anne Arundel County. The company plans to build a mezzanine in one of its three leased facilities along Dorsey Road. The construction will bring the facility’s space to approximately 157,000 square feet. Oceaneering International employs 463 full-time workers in the county and anticipates having a total of 600 employees by December 2023.

“With several facilities and plans to have 600 full-time workers in the state, the company has shown its dedication to growing Maryland’s business community by providing technologically-advanced jobs for our local workforce,” said Governor Hogan.

Read the governor’s full press release here.


Coal workers fight to keep plants open

On Tuesday, dozens of workers from coal-fired power plants testified before the Senate Finance Committee in opposition to a bill that would shut down the state’s six coal-fired plants.

According to the news site Maryland Matters, the bill would require phasing out Chalk Point Generating Station (Prince George’s County), Dickerson Generating Station (Montgomery County) and H.A. Wagner Generating Station (Anne Arundel County) by Oct. 1, 2023. Morgantown Generating Station (Charles County) would close by Oct. 1, 2024, Brandon Shores Generating Station (Anne Arundel) by Oct. 1, 2025, and Warrior Run Generating Station (Allegany) by Mar. 1, 2030 due to a 10-year federal contract.

Hundreds of workers would lose their jobs if the bill became law. The bill’s cross-file will receive a hearing in the House Economic Matters Committee on March 5.


Trivia answer: *What symbol of wisdom sits atop the Maryland State House? An acorn

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