Sine Die State Policy Update
The 2016 General Assembly session ended Monday night with a moderately favorable state budget enacted and several positive legislative results for nonprofits. Many needs and services remain underfunded, and political pressure for serious tax cuts and the prospect of future budget shortfalls remain. Review our “quick and dirty” sine die report wrapping up the legislative session.
We will be circulating more information in coming weeks, and a link the Department of Legislative Services own “End of Session” Report when published. Also, look for a “save the date” coming shortly for the Annual Legislative Wrap-Up in Annapolis.
Update: Please click here for our more comprehensive 2016 Sine Die Legislative report.
MAJOR TAX ISSUES
All but one of the tax proposals emanating from (or attributed to) the Augustine Commission failed to pass, for reasons that will be discussed in coming days and weeks. The Senate President has suggested that the Governor call a special legislative session so ‘work could be finished’ on a tax cut – but there is some doubt whether that will or could be accomplished in the near future. Maryland Nonprofits opposed the proposed broad tax cuts that in our view would have driven future deficits and threatened funding for important services (including funds for program improvements that legislators were in the process of mandating) without meaningful benefit to most taxpayers or the State’s economy.
The efforts to improve Maryland’s Earned Income Tax Credit by extending eligibility for single taxpayers and increasing benefits were a priority for Maryland Nonprofits and many other advocates working in
over the past year. This proposal, in House Bill 1047 (and Senate Bill 294) got wrapped up and buried
the legislation for broader tax cuts that EITC advocates and we opposed.
The lone survivor from the Commission’s proposals was Senate Bill 843, that: (1) alters the tax credits to be evaluated and the process for evaluating those tax credits under the Tax Credit Evaluation Act; (2) terminates the One Maryland, enterprise zone, Regional Institution Strategic Enterprise (RISE), biotechnology investment, and businesses that create new jobs tax credits effective June 1, 2021; and (3) requires the Comptroller to adopt certain procedures and protocols, including a private letter ruling process for tax guidance.
One other tax issue of consequence that gained press and controversy, was the ‘targeted’ tax credit for Northrup Grumman, also known as Senate Bill 1112 – the “Income Tax – Aerospace, Electronics, or Defense Contract Tax Credit Program”, allowing up to $37.5 million in additional tax incentives for that company.
The failed Augustine Commission proposals included efforts to: accelerate reductions (already scheduled) in Maryland’s estate tax (SB 847), create a “tax holiday” for overseas corporate profits brought back (“repatriated”) to US parent corporations (SB 845, HB 1254), reduce the corporate income tax rate (SB 846), reduce the interest rate on tax deficiencies (SB 844, HB 1251), a tax deduction of up to $20,000 from the income derived from ‘pass-through’ entities for taxpayers below certain income levels who also meet certain criteria (SB 841, HB 1250), and a requirement that all multi-state corporations use the ‘single-sales factor’ method of apportioning their total income to Maryland (HB 1252, SB 842). Maryland Nonprofits had opposed several of these.
(Maryland Nonprofits Priorities)
Three of the significant proposals supported by transportation reform advocates and Maryland Nonprofits have been enacted. The centerpiece among these is House Bill 1013 requiring that major transportation projects be scored on transparent, objective public criteria as part of the decision-making process. HB 1013 was passed, vetoed by Governor Hogan, and then passed again as the legislature overrode the veto.
Also enacted were House Bill 1012 improving tax credits for employer-provided commuter benefits, and House Bill 1010 creating a Mass Transit Administration Oversight and Planning Board with representation from the jurisdictions served by the MTA system, and from 3 stakeholder Advisory Councils also established by the legislation.
Efforts to remove the MTA’s minimum “fare box recovery” requirement from the law (House Bill 891 and Senate Bill 1035) both failed. (We supported)
OPEN GOVERNMENT PRIORITIES
Both House Bill 368 and Senate Bill 370, requiring advance public notice of any Board of Public Works reductions to the enacted Budget Bill, were passed and became law during the session without the Governor’s signature when he failed to either sign or veto them within six days of passage. In their amended form, they require published
at least three days prior to the Board of Public Works action, and this must include web-posting in a searchable format. (Maryland Nonprofits Priority)
The other Marylanders for Open Government (MDOG) priority legislation, House Bill 1088 and Senate Bill 754, establishing requirements for training, enforcement and annual reporting under the Open Meetings Act, failed to move out of committee. A similar measure, House Bill 823, did pass the House but had no action in the Senate. (We supported)
Related enacted legislation:
House Bill 984 and Senate Bill 17: Increase to 5 years the time a public body is required to keep a copy of minutes of an open meeting and any recording made under specified provisions of law; require specified public bodies to post online minutes or recordings, to the extent practicable; and provide that minutes may not be required if live and archived video or audio streaming is available, or if the public body votes on legislation and the votes are posted promptly on the Internet.
House Bill 217, requiring advance disclosure of agendas for public meetings, has passed the House
House Bill 1008, enacted, requires increased early voting centers in larger counties, and authorizes an additional center in counties under 125,000 in population.
House Bill 1007, as amended and enacted, requires the establishment of electronic voter registration systems at several state agencies, provides that all clients be offered the opportunity to register or re-register, and also designates the MVA and Maryland Health Benefit Exchange as “automatic voter registration agencies” to transmit information from eligible clients directly to the State Election Board for registration. (We supported)
House Bill 1009, to create a task force to study increased voter participation, failed.
(Maryland Nonprofits supported all three)
Senate Bill 10, enacted, raises the threshold, in the amount of contributions received, that require submission of an audit with annual charity registration from $500,000 to $750,000. As amended and passed by the House, also raises the threshold for a financial review from $200,000 to $300,000.
House Bill 1182 , enacted, clarifies the activities that require registration as “fundraising counsel” by excluding certain activities performed by independent contractors in connection with fund-raising.
House Bill 1488 and Senate Bill 909, enacted, create the Maryland Corps Program to enable selected high school graduates (or GED recipients) to receive stipends for service with nonprofit or government agencies addressing social needs in communities, and to receive scholarship assistance if they successfully complete nine months service.
House Bill 1318 & Senate Bill 929, both enacted, would require standards to be set for adequacy of health insurance provider networks and criteria for network directories. (We signed on in support)
House Bill 420 and Senate Bill 417, both enacted, restrict the circumstances in which work activities centers and sheltered workshops may be allowed to pay persons with developmental disabilities less than the state minimum wage.
Senate Bill 758 and House Bill 445, both enacted, require the State to ensure that all households receiving federally funded benefits under the food stamp program receive a minimum benefit of $30 per month by providing a supplemental benefit if necessary.
Senate Bill 413 and House Bill 1499 would have required the Developmental Disabilities Administration to do reporting, and mandates appropriations to provide services for clients in an urgent need crisis resolution category. (Both failed)
Senate Bill 497 and House Bill 595 (“Keep the Door Open Act”) both failed, would have mandated the funding of inflationary reimbursement rate increases for community behavioral health service providers. (We supported)
Senate Bill 304 and House Bill 423, both failed, would have established a task force to develop procedures ensuring that health concerns are addressed in all major policy decision-making. (We supported)
House Bill 580 – the Maryland Healthy Working Families Act, failed, would have required employers with 15 or more employees to provide paid sick or family leave, and other employers to allow unpaid leave (or shift-sharing) to employees. A well-organized advocacy effort succeeded in getting House passage, but the bill was held in the Senate Rules Committee until sine
and then was referred to Senate Finance, had a hearing, but never reached a committee vote. (A press report indicated it may have become a hostage or bargaining chip in the effort to get approval of the Senate position on the tax cut bill, SB 840, then in conference committee)
Senate Bill 1005 – the Justice Reinvestment Act, enacted, embodies recommendations of a Justice Reinvestment Coordinating Council, altering several provisions relating to sentencing, corrections, parole, and the supervision of offenders. Among other things, it (1) modifies criminal penalties; (2) requires the use of a validated screening tool and a risk and needs assessment in parole and probation decisions and monitoring; (3) modifies provisions regarding drug treatment; (4) specifies graduated sanctions for certain violations; (5) establishes an administrative release process; (6) expands expungement provisions; and (7) provides for the reinvestment of savings.
House Bill 1016 – Adopting recommendations of a Public Safety and Policing Workgroup, the bill (1) reconstitutes and renames the Police Training Commission (PTC) as an independent Maryland Police Training and Standards Commission (MPTSC) within the Department of Public Safety and Correctional Services (DPSCS); (2) makes changes to the Law Enforcement Officers’ Bill of Rights (LEOBR); (3) details the procedures that must be followed for specified whistleblower protections; (4) establishes various requirements for law enforcement agencies regarding community policing; and (5) establishes a Community Law Enforcement Program Fund within the Governor’s Office of Crime Control and Prevention (GOCCP) to fund local “community law enforcement programs.” The bill also mandates an annual appropriation of $500,000 beginning in FY 2018 to that special fund.
Senate Bill 601 and House Bill 1189 – proposed a ‘disclosure’ requirement that in our view implied that tax exemptions for hospitals should be limited to the amounts reported on existing community benefits reports. We opposed this first as unnecessary in view of existing public information, but primarily because it ignored all of the unreported or unquantifiable public benefits and characteristics of hospitals as major nonprofit institutions that distinguish them from taxable for-profit businesses, including that their assets, like those of other nonprofits, are developed and held in perpetual trust for public purposes and benefit. Both bills failed.
Future Bill Signings (current schedule)
April 26, 2016 – 10:30 AM – Bill Signing 3
May 10, 2016 – 10:30 AM – Bill Signing 4
May 19, 2016 – 10:30 AM – Bill Signing 5