The 2021 legislative session of the Maryland General Assembly was a session like no other. Due to restrictions resulting from the COVID-19 pandemic, the normal daily interactions of state legislators, the Governor, lobbyists, and the general public that are part and parcel of the annual session were severely limited. Legislative receptions were cancelled, in-person meetings with legislators were severely restricted, and committee hearings took place over Zoom. The House of Delegates was divided into two rooms for floor sessions: half of the members located across the street in the House Office Building connected electronically.
These and a host of other restrictions in place to prevent the spread of COVID-19 meant that the Greater Baltimore Committee (GBC) needed to develop new strategies to ensure the 188 members of the General Assembly were aware of our legislative priorities for the session and our positions on bills. The GBC focused on promoting and supporting measures to bring economic relief to the business community, especially small and minority-owned business. The GBC also actively supported legislation related to education, transportation, business tax credits, public safety, and issues related to racial equity and social justice.
Senate Bill 496 — Recovery for the Economy, Livelihoods, Industries, Entrepreneurs, and Families (RELIEF) Act passed the legislature and was signed into law by the Governor on February 15. The emergency bill provided more than a billion dollars in tax relief and economic stimulus, grants for small businesses and nonprofits, and direct relief checks for many Marylanders. The legislature passed a number of other bills to support the economic recovery and protect both workers and employers, including a package of bills to reform the state’s unemployment insurance program. These bills protect employers from massive increases in required contributions to the fund, as well as supporting unemployed individuals as they make unemployment insurance claims.
The legislature also passed a bill to provide essential workers with basic protections when they are required to work during emergencies. House Bill 581– Labor and Employment – Employment Standards During an Emergency (Maryland Essential Workers’ Protection Act) as introduced contained a number of onerous provisions that would have created an undue burden on businesses. With amendments pursued by the GBC and other business organizations, the bill no longer requires hazard pay for essential employees, no longer requires that employers cover healthcare costs, narrows the triggering of an emergency, states that essential employers are set by the specific emergency declaration, rather than a pre-existing list, sets requirements that are more closely tied to the specific underlying emergency and to existing workplace safety requirements, and states that any additional sick leave requirements are only applicable if there is federal or state grant money to pay the cost of the sick leave.
COVID-19 Recovery — Funding
As part of March’s federal American Rescue Plan Act, $6.355 billion was allocated to Maryland, with $4 billion sent directly to the State and $2.3 billion to county and municipal governments. Governor Hogan worked with legislative leaders on allocation priorities, with over $1 billion dedicated to the state’s unemployment trust fund, $800 million toward pandemic relief, $600 million for safe school re-openings, and hundreds of millions more earmarked for transit improvements, broadband expansion, job training programs, and state employee support and others. Local governments will have broad discretion in spending their $2.3 billion allocation. Baltimore City will receive the largest grant, at $670 million.
Tax Credits and Business Assistance
The GBC supported a number of bills passed to strengthen and expand tax credits for small businesses, high growth industries like biotechnology and cybersecurity, and businesses that hired veterans. The bills include three bills from the Department of Commerce to improve existing tax credit programs: Senate Bill 19 — Economic Development – Biotechnology Investment Incentive Tax Credit Program – Alterations and Study, Senate Bill 160 — Economic Development – Cybersecurity Investment Incentive Tax Credit Program – Expansion, Extension, and Study, and Senate Bill 196 — Economic Development – Research and Development Tax Credit – Alterations. In addition, House Bill 1086 — Maryland Tax Credit Evaluation Act – Alterations passed, which updates the state’s procedures for evaluating the effectiveness of tax credits. The GBC supported all of these bills, and believes that the new laws will discourage the introduction of bills each year to eliminate these valuable tax credits.
SB 787 — Digital Advertising Gross Revenues, Income, Sales and Use, and Tobacco Taxes – Alterations and Implementation exempts a broadcast entity and news media entity from the digital advertising gross revenues tax, and prohibits a person who derives gross revenues from digital advertising services in the State from directly passing on the cost of the tax imposed to a customer via a separate fee, surcharge, or line-item. The bill also clarifies a number of provisions related to Maryland’s new sales and use tax on digital products, to ensure that items such as online college courses and online events held by nonprofit organizations and business organizations are not subject to the tax. Multiple tax bills regarding combined reporting of corporate income tax, individual income tax bracket rate alterations, and tax increases for pass through entities, did not make it out of committee.
SB 66 — Department of Housing and Community Development – Office of Digital Inclusion – Established (Digital Connectivity Act of 2021) and SB 824 –Economic Development – Broadband Providers – Joint Trenching and Fee (Building Out Broadband Act of 2021) together empower local and state government to ensure high speed internet capabilities for all Marylanders in the near future, with an emphasis on underserved areas and equitable broadband access.
House Speaker Adrienne Jones expressed her intention before the legislative session began to implement major police reform, culminating in HB 670 — Maryland Police Accountability Act of 2021 – Police Discipline and Law Enforcement Programs and Procedures, which passed on April 7. This historic legislation, along with several Senate bills, represents the most comprehensive police reform action in Maryland history. Provisions include repeal of the Police Officers’ Bill of Rights, the requirement for universal use of body cameras, reform of discipline and training policies for police, and establishment of the Maryland Use of Force statue. Three of these bills, after passage by the General Assembly, were vetoed by Governor Hogan. The legislature promptly overrode those vetoes. In addition, legislation passed which will return control of the Baltimore Police Department to Baltimore City after 158 years of state control. Governor Hogan let this bill and one related to the investigation of deaths caused by police officers go into effect without his signature.
Finally, the legislature passed and Governor Larry Hogan subsequently vetoed SB 494 — Juveniles Convicted as Adults – Sentencing – Limitations and Reduction (Juvenile Restoration Act), which would prohibit life sentences and reduce sentences for minors convicted as adults. The Governor stated that parts of the bill were “unnecessary and duplicative” and that existing Maryland law only allows minor offenders who committed the most “heinous” of crimes to be charged as adults. The General Assembly voted to override the veto on April 10.
Education and Workforce Issues
The Maryland General Assembly overrode the Governor’s 2020 veto of the Blueprint for Maryland’s Future and passed a complementary bill that would address new challenges that arose from COVID. HB 1372 — Blueprint for Maryland’s Future – Revisions provides additional funding for technology, summer school programs, tutoring, and behavioral health issues. The legislature also passed legislation to support new child care businesses in areas of the state with inadequate supply. HB 1 — Historically Black Colleges and Universities – Funding was signed by the Governor on March 24 and will allocate $577 Million to HBCUs from 2023 to 2032, and likely bring an end to a lawsuit filed against the state claiming inadequate funding of Maryland’s public HBCUs. Legislation also passed to provide more flexibility in several programs that provide workforce training funding.
For the second year, the GBC supported a proposal to guarantee minimal capital funding levels for the Maryland Transit Administration. House Bill 114/Senate Bill 199 — Transit Safety and Investment Act as passed will ensure safe and continual operations of the Greater Baltimore Region’s transit system by dedicating an aggregate minimum of $2 billion from fiscal year 2023 to 2029 to maintain the system in a state of good repair.