Legislative Report -- March 19, 2008
Global Warming Bill Would Cost Maryland Jobs
The Maryland Senate debated SB 309 today. This legislation mandates a 25 percent reduction in greenhouse gas emissions by 2020. It also sets a goal of a 90 percent reduction in by 2050.
This legislation is a local attempt at fixing a global issue. It is impossible for Maryland to achieve a reduction goal as large as 25 percent by 2020. This legislation is counterproductive, and would make it extremely difficult for businesses to survive. If enacted, this legislation would force businesses and jobs out of Maryland, and possibly out of the United States. If Maryland manufacturing operations are moved overseas, the state will lose high-paying manufacturing jobs. This would place an even bigger burden on the state and national economies.
Maryland’s emissions from combustion sources, including transportation, electricity generation, commercial and industrial uses will have increased 66 percent by 2020. Therefore, in order to meet levels as required under this legislation, the people of this State would need to undertake major changes in the way they behave on a daily basis.
This legislation is ambitious and unachievable. It’s not the answer to the global warming problem. It will cost Maryland jobs, increase energy prices, and cripple industries trying to compete in a global marketplace.
Contact your legislators and urge them to oppose this legislation. For more information and a sample letter, click here.
Comptroller’s Office Releases Draft Tech Tax Regulations
The Office of the Comptroller last week released draft computer services sales tax regulations and a frequently asked questions document. The regulations outline what services are covered by the new tax and provide insights on how the tax will be applied.
“The draft regulations reinforce the Maryland Chamber’s position that this tax will be an administrative nightmare,” said Maryland Chamber President and CEO Kathy Snyder. “The tech tax will stiffle economic development and job creation in Maryland. We must keep the pressure on to repeal it.”
The tax will apply to a long list of services including web design, web hosting, custom programing, hardware and software installation and maintenance, data processing and storage and much more. Businesses who receive the benefit of the computer services in Maryland will be subject to the tax. The tax applies and must be remitted at the time the sale is made.
Maryland-based computer service providers are required to register for a sales and use tax license. If a Maryland-based buyer purchases computer services from an out of state vendor, the service is subject to the tax. If the vendor does not charge the tax, the buyer is responsible for remitting the use tax to the Comptroller.
You can review the draft regulations and frequently asked questions online here.
Maryland Chamber State Taxation Consultant Karen Syrylo, CPA is preparing recommendations to forward to the Comptroller’s office. To make sure that your questions and comments are included, please send them to techtaxquestions@mdchamber.org. Where you can, please include a description of an example transaction that demonstrates your question or observation.
Contact your legislators today and urge them to repeal the computer services sales tax. For more information, or to take action, click here.
Maryland Chamber Fights to Keep ICC Construction Moving
After decades of studies, legal challenges and delays, construction of the Intercounty Connector (ICC) began last year. The Maryland Chamber continues to fight to keep this critical, and long-overdue, transportation project moving forward.
During the last week, Maryland Chamber President & CEO Kathy Snyder has submited testimony three times in opposition to legislation that would eliminate funding or further delay construction of the ICC. Legislation under consideration includes:
- HB 1471: Legislation to prohibit the Maryland Department of Transportation from funding the ICC.
- HB 1416: Legislation to make financing contingent on yet another environmental study.
- HB 1505: Legislation to prohibit ICC funding until an assessment is completed to quantify public health impacts from air pollution.
The ICC has received the necessary federal and state approvals. A $370 million mitigation and stewardship package fully compensates for unavoidable impacts to the natural and human environment. In November 2007, a federal court judge denied legal attempts by environmental groups to stop ICC construction. Maryland Transportation Secretary John D. Porcari said, “The court’s decision validates the unprecedented scope of the environmental analysis and mitigation undertaken by the state and federal agencies involved in moving the ICC forward.”
“The Maryland Chamber has supported the construction of the ICC and worked in concert with the State, and with other business organizations, to ensure funding for this important project,” Snyder said. “This long overdue project is critical to economic growth, not only for Montgomery and Prince George’s Counties, but for all of Maryland.”
State Budget Cut, Still Grows 4 Percent
The state budget moves toward passage after receiving cuts by the Senate and a further trim by the House of Delegates. The March 6 write down of state revenues of $333 million necessitated about $400 million of fund shifts, spending delays and spending reductions to provide an adequate revenue cushion for fiscal year 2009. The state subsidy for small employer health insurance costs will probably be left with $10 to $15 million. The state general fund budget will still grow by about 4 percent for FY 2009. The budget conference committee will meet next week to iron out Senate/House differences, with final passage set for March 31. Contact Ron Wineholt for further information at rwineholt@mdchamber.org
Chamber Opposes Payroll Tax to Fund Health Care Reform
The Maryland Chamber will provide testimony today in opposition to HB 1540, legislation that would make significant changes to Maryland’s health insurance market, including imposing a payroll tax on employers to fund health care. This bill significantly departs from the market-based health insurance system that we need to serve the needs of Maryland residents.
The legislation would:
- Require guaranteed issue for the individual health insurance market, with community rating, and require individuals to pick from 5 health insurance plans;
- Create a Maryland Cooperative Health Insurance Program under the MHIP Board to develop and offer health insurance plans;
- Capture employers with 51 to 100 employees in the failing small group health insurance program;
- Mandate employers of all sizes to pay or play, with a mandatory assessment equal to 7.5 percent of payroll up to the Social Security wage base for health care expenditures; and
- Impose fines of $1,000 to $3,000 per employee for employers that fail to comply with the terms of the bill.
“The bill attempts to drag more employers into a failing small group program and would impose a payroll assessment on employers that clearly violates the federal Employee Retirement Income Security Act of 1974,” said Maryland Chamber Vice President of Government Affairs Ron Wineholt. “Federal courts have repeatedly held that states may not require employers to offer health insurance nor impose coercive payroll taxes.”
False Claims Legislation Defeated on the Senate Floor
Legislation that would have created a new private cause of action for the enforcement of state fraud statutes was defeated on the Senate floor yesterday by a vote of 25-21. Note that a reconsideration of that vote could occur by tomorrow.
The bill, SB 215, would have established additional penalties for the filing of a false claim for state health benefits. It would have also authorized a person to file suit on behalf of the state for an alleged false claim and recover up to 30 percent of the proceeds of the suit, plus attorney’s fees and costs.
The Maryland Chamber fought to defeat this bill. We believe that the state should directly prosecute any person who defrauds the state under a benefit program or contract. However, we believe it is inappropriate for the state to create a new private cause of action for the enforcement of state fraud statutes. This type of system will lead to needless litigation and harassment of government contractors by overzealous trial lawyers.
While the defeat of SB 215 is good news, there is more work to be done. Similar legislation, SB 845, was heard yesterday by the Senate Judicial Proceedings Committee. If you’d like to learn more about this issue, contact Ron Wineholt at rwineholt@mdchamber.org.
Additional Time to Apply for Manufacturing Personal Property Tax Exemption
The Maryland Chamber is advocating legislation, SB 981/HB 1609, to give manufacturers additional time to apply for and receive a personal property tax exemption on their machinery and equipment.
Under current law, machinery and equipment used in the manufacturing process is exempt from local property taxation in most counties and many municipalities. However, in order to receive the exemption the business must have an approved exemption on file with the Department of Assessments and Taxation or have applied for the exemption by September 1 of the tax year.
A new manufacturer that is unfamiliar with the September 1 requirement can easily miss that deadline. Although personal property returns are filed by June 15 (on extension), assessments of personal property may not be received until well after September 1.
SB 981/HB 1609 would enable businesses to apply for a manufacturing exemption up to six months after receiving a personal property assessment notice and still receive the exemption for the current tax year. This provision is fair and comparable to the existing law for the time allowed to apply for a manufacturing exemption when personal property is transferred.
Upcoming Committee Meetings
March 20, 2008
Environment Committee
MD Chamber of Commerce
60 West Street, Suite 100, Annapolis, MD 21401
8:30 a.m.
Upcoming Events
April 2, 2008
Chamber 101
Sheraton Annapolis Hotel
173 Jennifer Rd.
Annapolis, MD 21401
8 a.m.
April 22, 2008
Annual Membership Meeting &
Business Hall of Fame Awards Dinner
Hyatt Regency Baltimore
300 Light St
Baltimore, MD 21202
5:30 p.m.
Dates
April 30, 2008
GBS HR & Benefit Solutions
6 North Park Drive, Suite 310
Hunt Valley MD 21030
RSVP by April 21
Register
May 14, 2008
GBS HR & Benefit Solutions
1301 York Road, Suite 400
Lutherville MD 21093
RSVP by May 5
Register
May 28, 2008
GBS HR & Benefit Solutions
2400 Research Blvd, Suite 420
Rockville MD 20850
RSVP by May 19
Register
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