2009 General Assembly Session Recap

During the 2009 Maryland General Assembly session the Maryland Chamber took positions on 209 of the 2,674 bills and joint resolutions introduced. Below is a recap of important business issues considered during the session. To view all of our bill positions click here. For more information, visit our website at www.mdchamber.org.

State Budget

The ongoing budget gap between state spending and revenues will remain a serious problem for the next several years. The state general fund budget for fiscal year 2010 was balanced with a combination of funding shifts, temporary cuts and freezes to state aid. Over $1 billion in federal stimulus funds were used to backfill state Medicaid and education funding. The state general fund budget for FY 2010 will decrease by 3.3 percent from the current fiscal year, while total state spending will grow by 3.5 percent. A $96 million year-end fund balance is currently projected for FY 2010, but the recession continues to take a toll on the state’s economy and revenue estimates.

Taxes

Despite the state’s significant budget problems, the General Assembly resisted efforts to adopt new taxes this session. The Maryland Chamber again successfully led businesses in opposition to priority bills (SB 603/HB 1244) that would have implemented a corporate income tax system of unitary combined reporting and jeopardized single sales factor apportionment for manufacturers. The Maryland Chamber also successfully led opposition to legislation (SB 1071) that would have imposed sales tax on out-of-state vendors that advertised in Maryland.

Other successes included:

• Defeating legislation (SB 472) that would have limited the income tax deduction for corporate officers above certain salary levels.
• Passing legislation (SB 88) to provide manufacturers with additional time to file a personal property exemption application with the State Department of Assessments and Taxation.
• Defeating bills (SB 302/HB 188) that would have shifted additional property tax burdens to business real property.
• Defeating legislation (SB 727/HB 983) to impose transfer and recordation taxes on transfers of controlling interests in small real property entities.
• Defeating legislation (HB 1061) that would have required every Maryland employer to annually provide an electronic or written notice to employees that may be eligible for the earned income credit.

Workplace Regulation

Flexible Leave: The Maryland Chamber advocated passage of legislation to clarify the broad language of the Flexible Leave Act, which passed during the 2008 Session, and impacts all employers who have 15 or more employees. This emergency legislation (SB 562) clarifies the key terms including child, parent, employer, and leave with pay and explains that employees may use leave with pay to care for an immediate family member who is ill. It also establishes that an employee may only use leave with pay that has been earned, and provides a leave parity provision, which clarifies that the employee use leave to care for a family member under the same conditions and policy rules that apply for the employee’s own illness. It also narrows the provision prohibiting an employer from discharging, demoting, suspending, disciplining, or threatening to take such actions against an employee.

Government Mandated Shift Breaks: The Maryland Chamber defeated legislation (SB 660/HB 16) to impose a government-mandated, one-size-fits all approach to shift break benefits. This legislation would have created administrative burdens for private sector employers, as well as including a new private right of action.

Employee Misclassification: The General Assembly passed legislation (SB 909) that creates a presumption that work performed by an individual paid by an employer creates an employer-employee relationship. This legislation applies to construction and landscaping businesses, and establishes investigative procedures and penalties for noncompliance. While numerous amendments were made to the legislation placing it in a better posture than when first introduced, the Maryland Chamber opposed this bill due to its presumption an employer-employee relationship.

Unemployment Insurance: The Maryland Chamber supported passage of emergency legislation (SB 270/HB310) that makes an individual whose availability to work is restricted to part-time work eligible for unemployment benefits. The individual must have worked predominantly throughout the year on a part-time basis for at least 20 hours per week. The Maryland Chamber concluded that SB 270 will put money back into the economy.

Other unemployment insurance legislation passed by the General Assembly and supported by the Maryland Chamber include (SB 576/HB 740) compromise legislation between business and labor groups that increases the maximum weekly benefit amount by $30 beginning on October 1, 2009, and by $20 beginning October 1, 2010.

The General Assembly also passed legislation (HB 242) specifying that all severance and dismissal payments are deductible from unemployment insurance benefits, regardless of whether the unemployment is a result of job abolition. The Maryland Chamber supported this legislation.

Other successes included:

• Defeating legislation (SB 831/HB 1249) that would require Maryland employers of 50 or more employees to pay employees overtime for hours worked in excess of eight hours per day, instead of the current requirement that overtime only be paid for hours in excess of 40 in a week.
• Defeating legislation (HB 902) that sought to expand Maryland employers’ obligations under the federal Family and Medical Leave Act (FMLA) by establishing a new group of covered relations for whom leave may be taken under FMLA.
• Defeating legislation (SB 451/HB 1287) that would have increased criminal penalties for violations of specified wage and hour laws from $1,000 to $2,500 as the maximum fine for a first violation. Each occurrence of a specified violation for a specified period would have been a separate offense. Additionally, legislation (SB 452/HB 1288) that would have provided that an employee who prevails in a claim of unpaid wages be awarded treble damages, plus a new penalty of two times the amount of unpaid wages, plus attorney’s fees and cost was defeated.

Energy and Environment

Re-regulation: The Maryland Chamber, working with other interested business and labor organizations, helped defeat legislation (SB 844/HB 1530) that would have attempted to partially re-regulate Maryland’s electric market by allowing the PSC to require utilities to build new power plants and set rates. The proposal would have re-established the integrated resource planning process that was in place prior to electric restructuring in 1999 and required each electric company to develop and submit long-range plans regarding electricity needs and the means to meet those needs. The proposal would have exempted large commercial and industrial companies, but would have imposed a nonbypassable surcharge on these companies, in order to fund the construction of new power plants. While the Senate passed the proposal, the House Economic Matters Committee voted instead to study the issue over the summer.

Standing: The General Assembly passed compromise legislation (SB 1065/HB 1569) between the business and environmental communities, which was supported by the Maryland Chamber. The legislation repeals specified contested case hearing provisions related to permitting decisions by the Department of the Environment. It would authorize judicial review of permitting and license decisions by the Department at the request of certain persons that meet specified federal standing requirements and participate in a public participation process. The compromise provides for increased participation regarding permitting decisions, while ensuring certain protections to the business community, and providing for a more rapid permit process.

Greenhouse Gas Emissions: The General Assembly passed legislation (SB 278/ HB 315) that requires the State to reduce statewide greenhouse gas emissions by 25 percent from 2006 levels by 2020. The legislation, which exempts manufacturers from contributing to the required 25 percent reduction, would be up for review by the legislature in 2016. The Maryland Chamber of Commerce took no position on this legislation due to the broad range of industries the Chamber represents, and the varying positions among its members.

Civil Liability

Maryland businesses again were the targets of numerous bills that would have exposed them to increased liability and lawsuits. The Maryland Chamber helped to defeat the following bills:

False Claims: Legislation that would have enabled individuals to collect bounties from suing state government contractors (SB 830/HB 915) and health care providers (SB 272/HB 304) 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 1156).

Noneconomic Damages: Legislation to increase the cap on noneconomic damage awards for lawsuits alleging wrongful death resulting from medical malpractice (SB 505/HB 237).

Consumer Protection Act Damages: Legislation that would have increased class action lawsuits by allowing up to treble damages for certain violations of the Consumer Protection Act (HB 797).

Health Care

The Maryland Chamber had success working with the General Assembly on a number of health care issues, including:

Small Group Reform: Legislation (SB 637/HB 674) passed that will inject much needed market based reforms into the small group health insurance market, including providing comparative information on the Maryland Health Care Commission’s website, authorization of pre-existing condition exclusions, widening rating bands, and authorizing discounts for new employer groups with healthy enrollees. These reforms are consistent with the Maryland Chamber’s 2009 Business Agenda and will provide stability to the small group market by bringing more young and healthy individuals and groups into the plan.

Wellness Incentives: Legislation (SB 638/HB 610) passed that will expand the ability of health insurance carriers to offer reasonable incentives for employees to participate in wellness programs.

Employer Mandates: Several significant employer health care mandates were defeated, including priority legislation that would have imposed a 2 percent employer payroll assessment to fund a universal health care plan (SB 813/HB 951), required an open-ended employer play-or-pay assessment (SB 515/HB 860), and established a costly health care benefit for individuals with autism spectrum disorders (SB 394/HB 273).

State Procurement

The Maryland Chamber was successful in helping to defeat a number of bills that would have detracted from Maryland’s market-based competitive bidding procurement process, including legislation to expand the prevailing wage on construction contracts (HB 1409) and bills that would have forced all Maryland companies that have state procurement contracts to participate in the federal E-Verify system and be subject to additional sanctions for employment violations (SB 696/HB 502). Legislation (HB 1307) was also defeated that would have required businesses with a state construction contract to provide a state-mandated level of health insurance for their employees, as well as a bill (HB 708) to require any entity receiving state financial incentives to follow the state’s minority business employment guidelines.

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 limit the terms of consumer contracts (HB 1048), authorize price controls during a state of emergency (SB 707/HB 416), and legislation that would have required business owners to give a right of first refusal to employees (SB 820) or gas station tenants prior to selling their property (SB 858/HB 1100).

Transportation

ICC Construction: The Maryland Chamber helped defeat legislation (SB 753/HB 27) that would have prohibited the Maryland Department of Transportation from funding the Intercounty Connector.

Motor Fuel Tax: Legislation to increase the motor fuel tax by $.05 (HB 1214) and $.10 (HB 746) did not pass the General Assembly. The Maryland Chamber continues to support a gas tax to increase funding for key transportation projects.