|What's New at the Chamber
Legislative Wrap Up 1997
- Your Chamber played a major role in the 1997 session by helping to defeat an initiative by the personal injury lawyers (Plaintiff's lawyers), that would have resulted in hundreds of new law suits being filed against businesses in Maryland. If the bill had been enacted, it would have been very expensive and difficult for businesses to defend themselves against these often frivolous or meritless suits.
Fortunately, no punitive damages bills were filed this year by the Trial Lawyers Association. We have helped defeat these bills for the past three years. They have been proposed by Peter Angelos, owner of the Baltimore Orioles who also is a plaintiff's lawyer with hundreds of asbestos cases backed up in the Courts of Maryland. One very important bill supported by the personal injury lawyers, however was filed this year.
Index of Legislative Updates
Taxes & Spending
Small Business Issues
General Business Issues
This new law encourages businesses to purchase land and buildings that have been contaminated and recycle them, usually for industrial or service work. Under this new law, businesses could buy a contaminated site and then negotiate with the Department Of The Environment on the degree of cleanup that needs to be done by the new owner to allow the site to be used for business or industrial purposes. The degree of cleanup is not specified in the law but it is clear that the department must negotiate in good faith and that the cleanup requirements would be significantly less than are required now. The intent of the law is clearly to use these sites for business not to punish the new owner. The most important part of the new law grants immunity from law suits filed by environmental activists as long as the new owner lives up to the provisions of the contract between the owner and the department. There are over 700 of these sites around Maryland and many of them would make excellent locations for businesses in the industrial or service fields.
This bill was an attempt by the trial lawyers to repeal Maryland's standard of contributory negligence and substitute a standard of comparative negligence. Contributory negligence, that has worked well in Maryland for more than 150 years is based upon the principle of personal responsibility. The doctrine provides that if both parties to a law suit have contributed to the negligence in a case, they should pay their own damages and be barred from recovering against each other.
If this bill had passed, hundreds of new law suits would go to court that would have been dropped or settled under the current contributory standard. Personal injury lawyers who would have advised their client to drop suits under the contributory standard would encourage them to take the case to trial in order to collect a fee if the standard was changed to comparative negligence. Under the comparative standard the plaintiff's lawyer can throw almost anything against the court house wall and hope that enough may stick to reduce the plaintiffts degree of fault. Defeat of this bill was a high priority for the Chamber because even if a business is never sued, the increase in cases will escalate the liability insurance premiums for all businesses.
CERTIFICATES OF MERIT
Required a person who files a malpractice claim against a licensed professional, based upon the licensed professional's alleged act or omission in rendering services, to include in the filing, a certificate from a licensed professional from another State. The statement had to attest that the licensed professional against whom the complaint is filed, failed to meet professional standards of care, Those professions who were included in the bill were architects, interior designers, landscape architects, professional engineers, and surveyors.
The requirements to obtain these certificates would reduce the number of frivolous malpractice suits that actually go to trial.
TAXES & SPENDINGINCOME TAX REDUCTION
The original purpose of an income tax reduction was to enable Maryland to attract new businesses and jobs to the State. It somehow became a bill to reduce taxes on the poor and middle class citizens of Maryland. Business organizations, including your Chamber, set out to reduce the individual income tax rate by at least 10% in the first year and to achieve the reduction by reducing the top rate of the tax. We ended up with a 10% reduction phased in at 2% a year for five years and a gradual increase in the allowance for dependents from $1200 to $2400. The top rate of the income tax will be reduced from 5% to 4.75% by the fifth year. The piggy back taxes for the counties remained intact at their current rates. This may be a step in the right direction but it is a very small step, and it is unlikely to have any impact on the State's economic development efforts. A special provision to help manufactures was included in the tax reduction bill. This provision allows manufacturers to apply for a credit against the sales tax for tangible personal property purchased by the manufacturer to be used in manufacturing process. HB 499 passed that provides a tax credit for job creation. Businesses however are unlikely to use this system because of the added paperwork requirement and the possibility that many employees will leave the work provided, triggering increases for businesses in unemployment insurance payments.
|HB 511 &
TAX CREDITS-CREATION OF JOBS
This bill originated from an idea suggested by a former Chamber President Tom Miller of Miller Properties. The bill enables the County to grant a property tax credit and the state to grant a corporate income tax credit to building owners who construct new buildings or expand existing buildings of at least 5000 square feet in order to accommodate at least 15 individuals in new permanent new full time positions. The descending tax credit begins at 52% for the first two years reducing to 39% in the third and fourth taxable years and 26% in the fifth and sixth taxable years. Enactment of this bill will make competition with Fairfax County, Virginia for new businesses a great deal easier for Maryland property ownersINCOME TAX INCREASE
Going in opposite direction of the remainder or the General. Assembly this bill would have raised the top rate of the income tax to 7%.
LICENSE & PERMIT APPLICATIONS
Requires the Department Of The Environment to publish expected review times for each licensing or permitting program. The department is also required to offer assistance and information to applicants including, written list of information required, common application questions and mistakes, and pre-application meetings with applicants to discuss technical issues. The department must also provide a notice of completed application or the reasons that the application is determined to be incomplete. If the application is not either approved or denied in a reasonable time, the department must return the applicant's filing fee. That is not a sufficient sanction but it is at least a step in the right direction. The department will be required to report to the General Assembly, the number of permits or licenses that were not issued or rejected with in the published time each year.
This is a bill that your Chamber has worked to enact for several years without success. It has passed the House twice but this year it failed to be reported out of the Commerce & Government Matters Committee. The bill provided that a government agency could not adopt a regulation that is more restrictive than a law or regulation on the same subject on the Federal level unless the agency makes a specific finding in the public interest. The agency would be required to provide the cost of compliance and compare it with the cost of enforcing the federal version
TOXIC SAFETY INFORMATION
If this proposal had passed, Maryland would once again exceed the federal standards for reports required of businesses on toxic materials that may be used or manufactured by businesses in Maryland. The bill required businesses to provide these lists annually to the Department of The Environment, the Department of Health & Mental Hygiene, local health departments and local police and fire departments. Additions to the list would be made each year by Chesapeake Bay Foundation and a newly created Toxic Safety
Advisory Council. The bill was debated on the Senate floor on the basis that this bill may require over burdening of Maryland's businesses without achieving significant improvement in Maryland's environment
SMALL BUSINESS ISSUESSmall Business - Wrongful Discharge
For the past twenty years, Maryland's small businesses (less than 15 employees) were not subject to the Human Relations Law. Less than two years ago, the Maryland Court of Appeals ruled that it was not the General Assembly's intent to leave employees of a small business with out a remedy if they feel that they were released from a job for a discriminatory purpose. Consequently, in the Molesworth decision, the Court allowed such persons to file wrongful discharge suits in the circuit courts. This decision created a large disparity for the way large and small businesses are treated under the law.
Currently, an employee of a large business filing a wrongful discharge claim, must file it with the Human Relations Commission. The complainant must then exhaust the remedy of the Commission before appealing the decision of the Commission in the circuit courts. The court in reviewing the appeal is limited to the record established by the Commission. An employee of a small business however, under the Molesworth decision, may go directly to the circuit court. The problem arises because the Commission may only grant an award of back pay and reinstatement of the job. The Circuit Court however can provide an award of unlimited compensatory damages and punitive damages in addition to back pay.
Your Chamber supported a bill this year (HB 602) that would have allowed the complainant of a small business to go directly to a circuit court but the court was limited to an award of back pay. Unfortunately, that bill failed by seven votes on the House floor when a group of liberal legislators, (mostly from Montgomery County) joined with members of the Black Caucus to defeat the bill. The House then passed a bill that allowed compensatory awards of up to $50,000 in addition to back pay and reinstatement of the job. Your Chamber fought and succeeded in keeping that bill in the Senate Judicial Proceedings Committee until after the session had ended. Your Chamber will need to get involved in the 1998 session to enact a law that will limit compensatory damages to no more than $10,000. A $50,000 judgement in addition to a back pay award would put most small companies out of business. Also, many small businesses are financed by home equity loans the owner could lose his business and his home.
SEXUAL HARASSMENT TRAINING
This bill would have required small businesses to place signs in the business facility providing information on how a person who feels that he or she has been harassed can find help and justice. The bill also requires small businesses to conduct sexual harassment sensitivity courses for employees and managers. The Chamber had no problem with the posting provisions if the signs are provided by the State, but we do have problems with the training provisions. This area of the law remains very uncertain and murky. A small business could be held liable if a court found that there was a mistake in the course content or omissions. It would be impossible for a small business to conduct these courses without the expense of retaining counsel to review the material and conduct the course.
MEDICAL SAVINGS ACCOUNTS
Allows small businesses to offer medical savings accounts plans, that qualify under the provisions of the Federal Health Insurance Portability and Accountability law, to their employees if the business already offers the standard health benefit plan for small businesses.
LIMITED LIABILITY COMPANY-REFORM
This bill reformed and modernized our initial law governing the operation of limited liability companies. This bill brought Maryland's provisions in conformance with federal laws and with many of the state laws on this subject. Copies of the bill may be obtained by calling the Chamber office at (301) 652-4900.
REINVESTMENT IN SMALL BUSINESSES
Allowed a tax deduction for persons who reinvest the proceeds of a qualified retirement plan into a Maryland small business.GROUP HEALTH INSURANCE
Provides that an self employed individual is eligible to purchase health insurance under the provisions of the Maryland Health Insurance Reform Act, regardless of how the business is legally organized.
MINIMUM WAGE INCREASE
This bill would have increased the minimum wage in Maryland from the federal level of to $7.70. Maryland has always tied it's minimum wage rate to the amount required by federal law. Your Chamber suggested to the committees that Maryland should maintain this tradition to keep the minimum wage from becoming a factor in attracting new businesses to the State. The Committees responded by killing both bills.
|HB 403 &
Employee RelationsPREVAILING WAGE REPEAL
This law, requiring contractors building state facilities and roads to pay tile prevailing wage rate, continues to cost the citizens of Maryland 15% to 20% more than is necessary to build schools and highways. The prevailing wage is supposed to be the average wage In the locality where the project is built. It has never, however been anything but the Baltimore union wage rate.
We did achieve a victory in the prevailing wage law this year that we have worked on for years. Under current law, if a worker on a prevailing wage project, works over 8 hours a day, he would receive overtime pay for all of the time worked over 8 hours. In all other businesses the worker can not collect overtime unless he exceeds 40 hours in one week. This bill changes the hours on a prevailing wage contract to 10 hours. This will accommodate work styles that are common now where workers work four days of 10 hour duration and will save contractors expensive overtime pay cost.
Under current law, if a worker is involved in an accident and the use of drugs contributed to the accident, the worker may not be denied benefits unless the use of drugs was the sole cause of the accident. These bills would have allowed denial of benefits except medical benefits, if the worker's accident was primarilv caused by the worker's use of drugs. This bill passed by both houses but died in a conference committee when the House Conferees refused to remove a union sponsored amendment.
|HB 736 &
RIGHT TO WORK
Provides that affiliation with a union cannot be a requirement of getting or keeping a job. Maryland unions come down heavy on this issue every year and have always succeeded in killing the bill. Maryland however, will never be able to attract good paying jobs as long as it fails to have this provision in the State's labor laws. Hundreds of jobs go to our competitive states every year that could have come to Maryland if we had a right to work law.
UNEMPLOYMENT INSURANCE RATES
Maryland is due this year to go off of the sur-tax added to the experience rated tax paid by employers. This bill would have reduced the tax increase in order to add funds to the unemployment trust fund. The Chamber believes that the fund level, now at over a 700 million dollar level, is sufficient to allow for payments if a recession occurs. The Committee Chairman agreed to study this issue with a task force during the interim. Your Chamber representative will serve on the task force.
Required employers to provide bonuses to all employees if the employer provided a bonus to an employee Makes one wonder where these ideas come from.
GENERAL BUSINESS ISSUESSMART GROWTH
Directs most state capital spending toward areas in the counties that are already served by water, sewer, roads, and public transportation. The object of this new law is to concentrate growth in these areas and reduce commercial and housing sprawl. It would appear that the Bethesda Chevy Chase area would gain from this idea because of the advanced state of our infrastructure. History, however would indicate that this assumption may be faulty. A similar concept has been stated in all of our area master plans for years. The County Council however, while espousing this concept, has steadfastly failed to allow the density of buildings in our central business districts that would be needed to implement the concept.
|HB 508 &
In addition to all of the other restrictions placed on development, this new law adds another layer into an already difficult and time consuming planning process. The House was ready to assign this bill to interim study but Governor Parris Glendening refused to send down a supplemental budget until the General Assembly had passed this measure.
NEW DEVELOPMENT-TAX CREDITS
Currently, as a part of the development process, the County may designate a road or roads and intersections, necessary to serve the development, as impact roads When this is done, the County agrees to pay 50% of the cost of road building or improvements and the developer agrees to pay the remaining 50% of the cost. There have been times however, when the County has been unable to pay it's share because the County is near the edge of it's self imposed debt limit. In some cases in order to keep the development on schedule or to build the roads at the same time as other roads or intersections are constructed, the developer has paid 100% of the cost up front.
This new law allows the County to give the developer a property tax credit on his land and buildings to repay the developer for paying double his share of the impact roads cost. Under the provisions of the new law, the developer would be required to pass through the money saved by the tax credit to the tenants of commercial property built in the development. That pass through will result in less expensive rents for commercial property tenants and make it easier for the developer to compete with Northern Virginia in the commercial space market.
Required a commercial establishment to pay assessments into a state police fund if the business had been robbed on several occasions. The money from the fund would be used to provide the businesses with cameras, alarms or other burglary reduction devices. The police would also be able to require businesses that are open late at night to keep two employees on the after dark shift.
HIGH TECH BUSINESSES-LAWS
Creates a task force to study the applicability of the State's current manufacturing laws to our modern high tech businesses
MEMORIAL DAY OBSERVANCE
Changed Maryland's date of observance from a uniform Monday holiday to May 31st. Different dates of observance cause mass confusion in the business community.
CONFERENCE CENTERS-LIQUOR LICENSES
Provides a state wide liquor license for all conference centers and their attached hotels that are in part financed by the Maryland Stadium Authority The new license will be known as the Class B-BWL (HC) licence. The provisions of this new law will apply to the North Bethesda Conference Center, (west or east).
AUTO DEALERS-GOOD FAITH
This bill would have established that an auto manufacturer has a duty of good faith to a dealer in performance and enforcement of the franchise agreement, Generally, dealers have had problems with manufacturers in paying auto dealers a sufficient amount for work done by the dealers under the manufacturers guarantee.
HB 436 required at least three inspections each year and additional inspections if significant changes were made in the menu. HB 444 required food service managers to be certified by the State within 90 days of their hiring. It also required a 15 hour State course an passing a special State exam. HB 1084 requires availability and posting of a lint of ingredients for each menu item.
Please call the Chamber office if you have any question about the bills or would like a copy of a particular bill that passed. we thank our Chamber Legislative Committee for all of the hours dedicated toward running a quality state legislative program.
Dr. J. I. Bregman, Bregman & Company, Chairman, State Legislative Committee.
© Copyright 1997. The Greater Bethesda-Chevy Chase Chamber of Commerce,
Bethesda, MD. 20814. All rights reserved. Unauthorized use prohibited.