Pass/Fail: The story of six key legislative priorities for 2018

(April 10, 2018–ANNAPOLIS, Md.)–When the clock struck midnight on Sine Die, we closed out a record-setting legislative session that ruled—or didn’t—on 3,127 bills.

Back in January, we shared our legislative priorities for the 2018 General Assembly. So how did we do? Here’s a look at several bills in six key areas, and what they mean for you.

HB 1596/SB1010 (sexual harassment)
Passed

We recognize the importance of productive ways to identify and address workplace sexual harassment, so we were proactive in working with these cross-filed bills’ sponsors and the Maryland Coalition Against Sexual Assault to enact this legislation.

Because of that effort, the final version of HB 1596/SB 1010 removed more onerous reporting and public disclosure requirements included in the initial versions. Employers will not be allowed to require an employee to waive any right or remedy (such as litigation) to a future sexual harassment claim, either through an employment agreement or employee manual. (In cases where federal law allows the requirement, federal law supersedes.) Every two years, the Maryland Commission on Civil Rights will survey employers with 50 or more employees to learn three things: how many times the employer settled a sexual harassment allegation; how many settlements included a confidentiality agreement; and how many times an employer has paid a settlement to resolve a sexual harassment allegation against the same employee in the previous 10 years. The reporting provisions will sunset June 30, 2023.

SB 368, SB 1019, HB 664/SB 543 ($15 minimum wage)
Failed (in committee)

The effort to push the minimum wage to $15 filled several bills, but gained little traction. The Maryland Chamber opposed them all because increasing the minimum wage artificially alters the price of labor and, therefore, goods and services, resulting in high prices for everyone, less purchasing power for those who don’t get a raise and—importantly—fewer available jobs or hours for work due to the additional burden on employers.

None of the bills were voted out of their original committees, so they died when the clock struck midnight on Sine Die. We expect these bills – in some form – to come back in 2019.

HB 99/SB 134 (income tax credits)
Passed (SB 134)

In the later part of the session, we advocated for and secured a significant tax credit to help small businesses provide certain benefits. As we all know, small businesses are often the hardest hit by increased mandates and regulations, and have the lowest profit margins. The final version of SB 134 will provide $5 million a year in tax credits to businesses with fewer than 15 employees who provide employees with paid “sick and safe” leave.

The Senate version of this bill passed both chambers. We expect Gov. Hogan to sign it into law.

HB 842/SB 227 & SB317/HB 951 (combined reporting & carried interest)
Failed (in committee)/Amended

In general, we opposed bills like these, which would increase certain taxes on certain industries. HB 842/SB 227 would have required retail and food services businesses to use combined reporting, a highly complex system of apportioning taxable income among all states where they operate. Other states in the region do not use the combined reporting method. Such a law would make Maryland less competitive and less attractive. These bills died in committee at midnight.

SB 317/ HB 951, in its original form, would have almost doubled the tax on carried interest income in order to fund higher education programs. We testified that the current carried interest tax helps incentivize investment in Maryland businesses and communities and should not be changed. The Senate Education, Health and Environmental Affairs Committee stripped the taxing provisions out of the bill, and we changed our position from Oppose to No Position.

SB 5, SB 30, HB 289 (civil liability)
Failed (in committee)

These bills would have changed caps and formulas for civil liability damages and awards. SB 5 would have eased the burden of proof for punitive damages from actual malice—the standard set by the Maryland Court of Appeals nearly 25 years ago in Owens-Illinois vs. Zenobia—to clear and convincing evidence. SB 36 and HB 289 would have tripled the cap on noneconomic damages in any wrongful death or survival action where there are two or more beneficiaries. The current cap is 150 percent of the statutory limitation.

We testified against these bills because lowering current standards would subject Maryland businesses to more litigation, greater payouts, and higher property and casualty insurance rates. Neither made it out of committee, but we expect them to be back in 2019.

SB 380/HB 1358 (income tax credit – intern tax credit)
Failed (in committee)

These cross-filed bills would provide a tax credit to employers who could not otherwise afford to hire an intern. We testified that this is a win-win, making intern employment affordable and giving students valuable professional experience.

The Senate version of this bill passed out of the Senate Education, Health and Environmental Affairs Committee without amendment and got unanimous approval on the Senate floor. However, on the House side, it and its House cross-filing got stuck in the Ways and Means Committee. We will be working with our members and legislators to see this bill become law during next year’s session.