The Good, The Bad and the Ugly of the 2005 General Assembly Session

The Good

• Successfully advocated the passage of the unemployment insurance reform bill (SB 703/HB 798) by overwhelming margins in both houses of the General Assembly. The legislation will make Maryland’s unemployment system more predictable, stable and equitable.
• Won passage of a compromise funding plan for the Intercounty Connector (SB 255/HB 1352). The plan uses a combination of automated toll revenues, Maryland Transit Authority Bonds, cash, and GARVEE bonds to fund the critical transportation package. Improvements, such as the ICC, to Maryland’s transportation network are critical for the efficient supply chains and timely manufacturing and delivery processes upon which Maryland depends to compete in our national and global economy.

• Secured passage of legislation to extend the State’s Research & Development Tax Credit through 2010 (SB 217). This credit is a necessary tax incentive for Maryland to compete with other states in attracting and retaining manufacturing operations and high technology companies.

• Advocated passage of a tax credit for biotechnology investment (HB 664). The bill provides a credit against income tax of a qualified individual, corporation or venture capital firm investor in the amount of 50 percent of investment in certain biotechnology companies. The Chamber supported this legislation because the technology sector, and especially biotechnology, is proving to be one of the backbones of Maryland's current and future economy.

• Won passage of legislation to require the filing of a certificate of merit in claims against the employer of a licensed professional, such as an architect, engineer or surveyor (SB 143/HB 404). The Maryland Chamber supported this legislation because it will help to reduce frivolous lawsuits. There is equal justification in requiring a certificate of merit in claims against the employer as against the licensed individual of the employer.

• Fought to defeat legislation to impose an alternative minimum assessment (SB 748/HB 1135), tax policy based on a company’s gross receipts. Gross receipts taxes are unfair, bad for economic development, and a disincentive for businesses to expand.

• Defeated legislation that would have made major changes to Maryland’s corporate income tax system by requiring corporations that are members of a “unitary group” to calculate their Maryland income tax using a “water’s edge” combined reporting method (SB 403/HB 676). Combined reporting is time consuming and costly for businesses to administer. It’s also anti-competitive, as none of our competitor states require it.

• Led the fight to defeat the anti-business tax credit disclosure bill (SB 780/HB 1066). The bill would have imposed onerous reporting requirements on thousands of Maryland businesses that receive any tax credit, exemption or DBED subsidy greater than $50,000 annually. The Chamber argued that the legislation would have required the disclosure of proprietary information for thousands of businesses in Maryland for no real benefit.

• Fought to defeat the anti-business health care disclosure bill (SB 471/HB 791). The bill would have required an individual applying for specified Department of Health and Mental Hygiene (DHMH) assistance programs to identify the employer of a proposed beneficiary, or if not employed, the employers of all family members of the proposed beneficiary whose income is counted as family income. The Chamber opposed this bill because it would be difficult and costly to administer, present misleading data, and be used to needlessly harass businesses.

• Defeated legislation to impose price controls on a wide variety of goods and services during a state of emergency (SB 353/HB 556). The broad sweep of the defined term “essential goods or services” would have encompassed virtually every good or service sold in the state. The imposition of price controls on the entire state’s economy would have caused chaos and needless lawsuits.

The Bad

• For the third straight year, the legislature failed to pass a slots bill (SB 205/HB 255). The Maryland Chamber, once again, supported slot machines in limited locations to fund the public education funding mandates passed in 2002.

• Tort reform legislation (HB 114) was passed by the House of Delegates but died in the Senate. The Chamber urged the legislature to enact meaningful, long-term tort reform as a means of helping to control health care costs.

• Legislation to allow associations to offer association health insurance plans (HB 52), without the state mandated services, to members and their employees, was defeated in the House Health and Government Operations Committee. A broad-based group of business representatives, including the Maryland Chamber of Commerce, testified in favor of the legislation.

The Ugly

The General Assembly struck a blow to Maryland’s competitive posture with a one-two punch of a payroll tax and a minimum wage increase. The Maryland Chamber will urge Governor Ehrlich to veto these extremely anti-business bills. Unfortunately, Maryland’s reputation has already suffered a black eye due to the media attention that surrounded the passage of these bills.

• The General Assembly enacted legislation to mandate that large employers offer health insurance to their employees, or else pay a payroll tax to the State if they don't spend at least 8 percent of their payroll on medical benefits (SB 790/HB 1284). This legislation sets two anti-business precedents. First it says that, in Maryland, state government can tell businesses they have to offer health care. Second, it says that state government can tell businesses how much health care they have to offer.

• Legislation raising Maryland’s minimum wage to $6.15 per hour passed (HB 391). The Maryland Chamber strongly opposed this legislation, arguing that wages should be set in the marketplace, not by state government.