GBC Legislative Priorities for 2020 Session
Every year, prior to the start of the legislative session of the Maryland General Assembly, the GBC releases its Legislative Priorities, which are based on several core policy priority areas. The end of session summary that follows focuses on the core policy areas deemed important for business competitiveness and job creation and outlined in the 2020 GBC Legislative Priorities. See a complete list of the GBC’s 2020 legislative bill positions here.
Advocate for inclusive policies and programs that strengthen economic competitiveness and job creation.
The creation of a strong and competitive business climate is among the most important roles of government. It is critical that government leadership unites with business as a partner. Job creation, a key outcome of a strong business climate, not only provides additional tax revenue, but new opportunities for citizens at all levels of the employment ladder. It is paramount that Maryland’s elected leaders make a competitive business climate part of a comprehensive policy approach.
- SB 987 — Racing and Community Development Act (passed): Following an uncertain year for the future of horse racing in Maryland, the GBC commends the commitment and dedication of the negotiating parties to reach the agreement reflected in this legislation and the General Assembly in passing this important bill. This legislation represents a comprehensive agreement that preserves the historic tradition of the running of the Preakness Stakes at Pimlico, enhances the horse racing industry across the State, and spurs economic development in the communities adjacent to Pimlico Race Course.
- HB 932 — 21st-Century Economy Fairness Act (passed): Lawmakers began the 2020 session in Annapolis indicating that the cost to implement the Blueprint for Maryland’s Future (HB 1300) could be met utilizing existing revenues for the first several years of the reforms. After the session began, however, legislators sought to pass a “revenue package” to ensure funding of the Kirwan Commission reforms. A myriad of tax increases and corporate tax measures were proposed. Before the session adjourned, legislators voted to increase taxes to raise revenue for Kirwan Commission recommendations and other spending priorities.One of those measures, HB 932, imposes a new sales and use tax on the sale of digital products and codes and requires the revenue to be distributed to the Blueprint for Maryland’s Future Fund. A digital product is defined as “a product that is obtained electronically by the buyer or delivered by means other than tangible storage media through the use of technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.” The bill was amended late in the session to allow the proceeds from the first year of the tax to be used for costs associated with COVID-19 and the Rainy Day Fund.The other two notable tax increases were an expansion of the tobacco tax to vaping products and an increase of the tax imposed on a pack of cigarettes from $2 to $3.75. This revenue will be directed to the funding needed as part of the legislative settlement of the extended litigation involving the state and Maryland’s historically black colleges and universities.Finally, lawmakers sought additional revenue through a first-of-its-kind gross receipts tax on online advertising. This new tax, while potentially lucrative for State coffers, will likely face court challenges.If all three taxes go into effect, the State stands to raise roughly $440 million in new revenue, according to fiscal analysts.
- HB 473 — Income Tax – Pass-Through Entities, Throwback Rule, and Combined Reporting (failed):
House legislators introduced a number of bills that would have significantly harmed Maryland’s corporate tax structure. Many of those concepts were amended into one bill, HB 473. Had it passed, this bill would have applied a “throwback” rule, instituted the combined reporting of taxation, and created a new taxing scheme for pass-through entities. Other tax increases that were proposed by House members included a 2% State income tax on capital gains, a millionaire’s tax, and a 17% income tax on income attributable to investment management services.The GBC opposed these measures as being harmful to Maryland’s competitiveness by creating uncertainty, increasing costs, and foisting new administrative burdens on Maryland companies. While these measures did not receive significant support in the Senate, the introduction of so many harmful and burdensome bills likely means we will see some of these proposals again.
- HB 1628 — Sales and Use Tax – Rate Reduction and Services (failed): One of the most controversial bills introduced during the 2020 session arrived at the midway point of what was supposed to be a 90-day session. HB 1628 sought to decrease the State’s sales tax rate from 6% to 5%, but to expand the sales tax to virtually every service (except for seven services identified in the bill). Fiscal analysts estimated that, if fully implemented, this proposal would have resulted in a $2.6 billion annual tax increase to Marylanders. The GBC and numerous stakeholders strongly opposed this proposal as ill-conceived and harmful to Maryland’s business climate. The bill ultimately failed. Another bill sought to apply the sales tax to a more limited number of services. Ultimately, no new sales taxes were imposed on services.
- SB 223/HB 185 — Commission on Tax Policy, Reform, and Fairness (failed): The GBC, in response to the multitude of tax increase and corporate tax measures proposed during the 2020 session, advocated for the creation of a tax commission to study the tax structure of Maryland. In particular, the GBC was supportive of SB 223/HB 185, which would have established the Commission on Tax Policy, Reform, and Fairness. This commission would have required a study of the current revenue structure of the State with recommendations for changes due by December 1, 2021.The GBC supported this bill because it required that the recommendations consider job growth, economic development, fairness, and transparency while seeking to ensure a business-friendly environment. While this legislation failed to pass, the GBC is hopeful that legislative leaders will move forward with a comprehensive review of the State’s tax structure.
- HB 223 — End Ineffective Business Subsidies Act of 2020 (failed): Lawmakers in the House introduced several bills that sought to eliminate business tax credit programs. The GBC strongly opposed these efforts and testified that preserving effective tax credits and incentives is needed to compete for the attraction and retention of jobs and to maintain inclusive economic development efforts around the State. These proposals sent the wrong message regarding Maryland’s competitiveness and had a chilling effect on the State’s business reputation.Instead of a piecemeal effort to eliminate business incentives that some perceive to be ineffective, the GBC recommended engaging in a comprehensive examination to examine the effectiveness of existing business tax credits. A well-thought-out study group involving stakeholders would demonstrate Maryland’s commitment to creating good policy and developing the best set of tools that benefit Maryland’s inherent strengths and ultimately enables the State to compete in a global 21st century economy.
- SB 397 — Sales and Use Tax and Personal Property Tax – Exemptions – Data Centers (passed): During this tumultuous session, the legislature did not consider the creation of many new business incentives. However, there were a few bills that received serious consideration, including SB 397, which creates a new tax exemption for the sale of qualified computer technology, including computer equipment, software, servers, routers, connections and other enabling hardware, for use at a qualified data center. To be eligible, a data center must invest money and create jobs in Maryland.The GBC supported this new tax incentive that will level the playing field with other states, attract data center business to Maryland, and support the State as a leader in innovation and investment in cyber and information technology. Data centers are considered the foundation of today’s digital economy and growing technology sector.
- SB 398/HB 514 — Maryland Small Business Innovation Research and Technology Transfer Incentive Program (passed): Legislators passed two narrowly targeted incentives that seek to advance Maryland’s technology sector.SB 398/HB 514 establishes the Maryland Small Business Innovation Research and Technology Transfer (SBIR/STTR) Incentive Program, which provides awards for an eligible business engaged in research and development that has a strong potential for commercialization. To qualify for an award or investment under the program, a small business must have received an SBIR/STTR Phase I or Phase II grant. The legislature also passed SB 583/HB 521 — Maryland Small Business Innovation Research Technical Assistance Program – Establishment, which provides technical assistance to small businesses to apply for grants under the federal SBIR/STTR grant program. Providing a State matching grant to SBIR and STTR recipient companies enhances the potential to grow Maryland’s innovation sector and increases the likelihood that promising startup companies stay and grow in Maryland due to the increased availability of local capital.
- SB 499/HB 404 — Economic Development Programs – Data Collection and Tracking – Minority Business Enterprises (passed): This legislation requires the Department of Commerce to include information related to minority business enterprises (MBEs) in its annual consolidated report on economic development programs. Specifically, the Department of Commerce is required to report the number of MBEs that received assistance from each economic development program and the percentage of assistance distributed to an MBE from each program compared to the total assistance distributed from each program.The GBC supported this legislation as an important reporting tool to assess the allocation of state resources. It is vital that State incentives, as tools to create jobs and grow economic activity, are equitable and inclusive. Without consistent reporting on the number and percentage of economic incentive dollars going to MBEs, it is unclear whether the State is distributing those dollars in a manner that benefits women- and minority-owned businesses as defined by state MBE statutes and regulations.
- HB 231/SB 530 — Housing Opportunities Made Equal Act (passed): Maryland currently prohibits discrimination in housing transactions based on a number of factors. This legislation adds “source of income,” which is defined as any lawful source of money paid directly or indirectly to or on behalf of a renter or buyer of housing, including wage income, gifts or any government rental assistance. In the past, participation in the Housing Voucher Program was voluntary, but this new provision will require many additional landlords to participate.
- HB 1018/SB 780 — Labor and Employment – Economic Stabilization Act- Revisions (passed): Maryland currently has voluntary guidelines for employers faced with a reduction in operations. This legislation requires the Secretary of Labor to develop new mandatory guidelines, including notification requirements to those employed by the employer. The bill also narrows the applicability of the Economic Stabilization Act by creating a new definition of “employee” as someone who works an average of at least 20 hours a week and has been employed for at least six of the last 12 months. Under current law, a covered employer is one that employs at least 50 individuals. Under the new definition, an employer must employ 50 “employees.”
- HB 1658/SB 1065 — Economic Development – Baltimore Symphony Orchestra – Funding and Reporting (passed): Last year, the Baltimore Symphony Orchestra’s (BSO) fiscal troubles and operating deficits became public and forced the BSO to cancel its summer series and delay the start of the 2019-2020 season. After months of hard work by the BSO Board, management, musicians, community members, and civic leaders, the BSO has created a clear vision and strategic five-year plan to become solvent.SB 1065 provides the BSO with gradually diminishing State funding from fiscal year 2022 through fiscal year 2026. With this State support, the BSO projects that it will no longer operate at a deficit by fiscal year 2025.The BSO is required to report annually on the effectiveness of the funding provided by the State, including a complete statement on the financial condition of the BSO and an accounting of all financial receipts and expenditures.
- SB 4 — Expansion of Commercial Gaming – Sports and Event Wagering Referendum and Minority Business Enterprise Disparity Study (passed): As a result of the 2018 Supreme Court decision that enabled States to authorize sports betting, many states have enacted laws to allow sports betting. An existing Maryland constitutional provision requires any expansion of gambling to be decided by a referendum of the State’s voters. SB 4 originally outlined the entire implementation process of sports betting, but the bill was amended late in session to merely authorize the legislature to implement sports gaming if Marylanders vote favorably in November on the referendum. The bill also requires that any revenues resulting from the authorization of sports wagering would be used primarily for education, and requires a study to determine if remedial measures should be implemented to assist women and minorities in the sports and event wagering industry and market.
- SB 63 — Baltimore City Property Tax Credit for Newly Constructed Dwellings – Reauthorization and Modification (passed): The Baltimore City Property Tax Credit for Newly Constructed Dwelling expired in June 2019. SB 63 reauthorizes the tax credit from July 1, 2020 through June 30, 2025 and makes several changes to the program. Baltimore City is now authorized to grant the property tax credit to owners of some rehabilitated buildings. Under the new provisions, the allowable tax credit varies for the taxes attributable to different amounts of assessed value. The highest tax credit is allowed for tax attributable to the first $300,000 of assessed value, with lower tax credits allowed for the tax attributable to the assessed value from $300,000 to $500,000, and an even lower tax credit for the tax attributable to the assessed value over $500,000.
Improve public safety through enhanced coordination among criminal justice agencies and implementation of comprehensive violence reduction strategies.
Violent crime and public safety concerns threaten the health, well-being, and economic prosperity of our communities. Persistent violent crime rates in Baltimore City require strategic action by state and city officials. Policymakers must join together in a coordinated approach that reduces violent crime while simultaneously addressing the root causes of crime, such as poverty, joblessness, and a lack of education or workforce training.
- SB 929 — Public Safety – Baltimore City – P.R.O.T.E.C.T. (Public Resources Organizing to End Crime Together) Program (passed): This bill establishes the Public Resources Organizing to End Crime Together (P.R.O.T.E.C.T.) Program to maximize the use of State, local and community resources to combat neighborhood decline, support comprehensive strategies to reduce crime and fear in those communities, and ensure that Baltimore City Police Department sworn officers are utilized in direct public safety roles. This is accomplished through the selection of 10 high-crime micro-zones and the creation of a civilian P.R.O.T.E.C.T. coordinator position for each high-crime micro-zone. In each micro-zone there will be a coordinator that must ensure utilization of all existing crime prevention programs and grants, coordinate community and youth programs, assist with community mobilization and activities to reclaim public space, assist with rapid response to public nuisances, and coordinate community engagement with the local law enforcement agency with jurisdiction in the high-crime micro-zone.
- SB 907 — Public Safety – Crime Plan and Law Enforcement Councils (Maryland State Crime Plan) (passed): SB 907 establishes the Law Enforcement Coordinating Council. The purpose of the Council is to prevent and reduce crime by coordinating and focusing State resources and ensuring interagency communications and intelligence-sharing. The bill also establishes a Regional Law Enforcement Council for each of the regions established by the Law Enforcement Coordinating Council. SB 907 requires increased coordination among law enforcement agencies, which many advocates, including the GBC, identify as an important step to reduce violent crime. This bill specifically provides support services for communities with the greatest concentrations of crime and establishes law enforcement regions that prioritize where resources are most needed. The bill acknowledges that specific strategies are necessary to share intelligence between law enforcement agencies, develop patrol agreements across jurisdictions, and provide mutual aid to law enforcement agencies. This increased coordination, required by statute, will better ensure coordination becomes part of Maryland’s overall public safety strategy.
- HB 1629 — Office of the Attorney General – Firearm Crime – Study (passed): This bill requires Maryland’s Office of the Attorney General to study information regarding gun crimes committed since August 1, 2015. The study will include the number and types of firearm crimes, the jurisdictions where the firearm crimes occurred, and 911 requests for emergency assistance involving gun crimes. Also, the bill requires the indication of whether any arrests were made and whether charges were filed and the disposition of those cases. Firearms are used in most violent crimes and while some crime data is available, there is a lack of easily-available information to study violent crime data and trends or judicial actions, which deprives law enforcement officials and policymakers of important data to consider when seeking solutions to deter violent gun crime.
- SB 64/HB 40 — Criminal Procedure – Evidence – Causing Unavailability of Witness (passed): Legislators were able to pass a number of measures that address the scourge of witness intimidation. Most notably was SB 64/HB 40, which lowers, from clear and convincing evidence to a preponderance of the evidence, the standard of proof needed to admit evidence in a criminal case involving felony drug crimes or a “crime of violence” when a party who, through wrongdoing, has caused the unavailability of the witness who made the statement. This eases the burden that prosecutors often face when witnesses fail to show up at trial for fear of retribution. Under SB 64/HB 40, prosecutors could introduce at trial the absent witnesses’ prior statements. The GBC testified that a contributing factor to the high murder rate in Baltimore City is the difficulty to adequately prosecute repeat violent offenders due to witness intimidation. By providing greater protection for witnesses, this bill will increase a prosecutor’s ability to build stronger cases against those accused of violent crime.
- HB 280/SB 234 — Vehicle Laws – Suspension of Driver’s License or Registration – Unpaid Citations or Judgments (passed): The lack of safe, reliable, and affordable transportation options is a primary barrier for many residents of Maryland to obtain and maintain stable employment and also limits access to education, job training, and health care. The transportation barrier is further exacerbated by current state law which authorizes suspension of driver’s license and registration for unpaid fines and fees. This legislation modifies the circumstances under which the Motor Vehicle Administration (MVA) is authorized to suspend an individual’s driver’s license or registration.
- SB 77 — Important Documents and Identification Cards – Inmates (passed): When individuals are released from incarceration, they face a myriad of challenges, including a lack of affordable housing, legal challenges, health issues, and the inability to meet basic needs, such as clothing and food. This legislation reduces barriers to successful reentry to society for individuals transitioning from incarceration by facilitating access to key government-issued documentation that is needed to secure employment, obtain medication, and carry out other necessary functions. The bill requires the Department of Corrections to assist incarcerated individuals with obtaining birth certificates, social security cards, and identification cards.
- HB 1336 — Criminal Procedure – Partial Expungement, Maryland Judiciary Case Search, and Expungement of Misdemeanor Conviction (passed): This bill prevents the Maryland Judiciary Case Search from publishing information on “non-convictions”—specifically, cases that result in an acquittal, a dismissal, or a nolle prosequi, unless the nolle prosequi requires drug and alcohol treatment. Criminal records can be difficult for employers to read and understand, so removing those charges that did not result in a conviction from the Judiciary Case Search will simplify the process for employers and job seekers.This bill also establishes a work group to examine the issue of partial expungement, also referred to as the “unit rule.” This refers to the current prohibition on expungement of a charge within a “unit” of charges unless all of the charges in the unit are eligible for expungement. Removing the prohibition on the unit rule would authorizes the partial expungement of eligible charges within a unit if one or more of the charges is ineligible and establishes procedural requirements for partial expungements.
Strengthen education and workforce systems to prioritize equity, accountability, and alignment with Maryland’s high-growth industry sectors.
Preparing the workforce to be successful in tomorrow’s economy requires innovative thinking, industry-specific training programs and career pathways. Policymakers should enact legislation that ensures the state’s workforce has well-trained workers at all skill levels.
- HB 1 — Built to Learn Act of 2020 (passed): The Built to Learn Act of 2020 was a priority of legislative leadership this session, as indicated by the prominent bill number it was given. The bill authorizes $2.2 billion for school construction to be distributed to counties over five years from bonds issued by the Maryland Stadium Authority. The bonds would be paid back over 30 years using $125 million a year in casino revenues set aside in a so-called “education lockbox.” The bill also establishes a new special fund and a mandate to fund the highest priority school facilities.
- HB 1260 — Historically Black Colleges and Universities – Funding (passed): This session, the General Assembly took action in an attempt to end the nearly 13-year legal battle between the State and Maryland’s historically black colleges and universities. Points of contention between the parties have centered on equity in funding and duplicative program approvals at other Maryland institutions of higher education. HB 1260 requires, contingent upon settlement of the lawsuit, the State to provide $577 million in increased funding for historically black colleges and universities, spread equally over fiscal years 2023 through 2031. In addition, the Maryland Higher Education Commission must establish a new unit to assist in evaluating and reviewing new and modified academic programs. Universities have said the new funding will be used to offer new courses and programs, hire faculty, and offer scholarships.
- HB 1300 — Blueprint for Maryland’s Future – Implementation (passed): HB 1300, the culmination of years of work by the Commission on Innovation and Excellence in Education (the Kirwan Commission), was passed and sent to the Governor on the penultimate day of the abbreviated 2020 General Assembly legislative session. The legislation establishes in law the policies and accountability recommendations of the Kirwan Commission, including creation of a new Accountability and Implementation Board to oversee implementation of the policies and funding provided under the Blueprint. Existing funding formulas are altered, and new funding formulas are established for specific purposes, such as a concentration of poverty grant and publicly funded full-day prekindergarten.The final version of the bill decreased the financial burden on the poorest jurisdictions, including Baltimore City. In fiscal year 2022, Baltimore City’s estimated spending increase will be $54 million, gradually building to $161.5 million in fiscal year 2030. The bill also includes a provision that would limit state and local education aid requirements if the state’s revenue estimates drop by more than 7.5% in a given year. The bill also provides a “checkpoint” to test the success of the reforms by 2026.
- SB 751 — Apprenticeship Start-Up Act of 2020 (passed): As the skills gap continues to grow in industries such as building and construction, health care, and information technology, employers are revisiting apprenticeships as an effective means to train workers in skilled occupations that do not require a bachelor’s degree. This legislation extends the state income tax credit for employers who hire apprentices, increases the amount of credit per apprentice from $1,000 to $3,000 per tax year, and expands the eligibility of the program to include youth apprentices. The GBC supported the modifications to this tax credit as an incentive to create more registered apprenticeship programs in the state and help to close the skills gap.
Advocate for balanced transportation policy and funding priorities that create interconnected, multimodal transportation networks and promote equitable investment in systems across regions, modes, and communities.
Policymakers should strategically invest in interconnected multimodal transportation networks that actively contribute to economic growth, connect workers to employment, and move people and goods safely and efficiently. Transportation investments should be allocated equitably across geographic regions and modes.
- HB 368/SB 424 — Metro Safety and Investment Act (failed): This legislation would have guaranteed minimal capital funding levels for the Maryland Transit Administration. The proposed requirements for capital funding were designed to ensure safe and continual operations of the Greater Baltimore Region’s transit system by dedicating funds to maintain the system in a state of good repair. HB 368 passed the House with strong support (95-36 vote) on March 14 but the bill died as it did not receive a vote in the Senate Budget & Taxation Committee prior to adjournment.
- HB 1263 — Transit – Maryland Area Regional Commuter Train – Expansion of Service (passed): This bill requires the Maryland Transit Administration (MTA) to engage in good faith negotiations with the District of Columbia and State of Virginia to develop written agreements for a pilot program to expand MARC commuter rail service into those jurisdictions. The GBC successfully advocated for amendments to this legislation that would require parallel MARC projects to advance in the Greater Baltimore Region. The final bill also requires MTA to enter into good faith negotiations with the State of Delaware and train companies to reach a written agreement on a pilot program to close the 20-mile commuter rail gap between Perryville, MD and Newark, DE. The bill also requires the MTA to conduct a feasibility study of advancing the Penn-Camden Connector which would enable Penn Line service into Downtown Baltimore and provide access to the new maintenance and storage facility under development in Riverside.