Maryland Legislative Preview January 2010
General Assembly Budget DeficitsDominate Election Year Session … Structural budget deficits remain for the foreseeable future, including a $2 billion shortfall in the upcoming FY 2011 budget. The Joint Legislative Workgroup on State-Local Fiscal Relationships had an opportunity to make reductions in state aid to counties and municipalities, but failed to do so. Recommendations are not expected until the 2011 Session, and will likely be accompanied by major tax increases to balance the State's ongoing budget deficits.
Governor's 2010 Agenda for Business
Governor O'Malley is focused on job creation and access to credit for small business owners, and stabilizing the Unemployment Insurance Trust Fund. Maryland's unemployment rate is 7.3%. Consequently, all employers will face dramatically higher unemployment insurance tax rates, effective January 1, 2010, to finance the cost of benefit payments for the unemployed.
Job Creation and Recovery Tax Credit. Provide a $3,000 tax credit to businesses who hire an unemployed individual. $20 million has been allocated for this purpose.
Maryland Small Business Credit Recovery Program. Off a loan guaranty on small business deals through the State's current loan guaranty program (MD Industrial Development Financing Authority Program). Banks will be able to apply for up to a $50,000 MIDFA guaranty.
Unemployment Insurance Modernization Proposal. Access $126.8 million in federal dollars for the Unemployment Insurance Trust Fund in exchange for making permanent changes to Maryland' s benefit structure, including: a second method of calculating workers' eligibility for benefits; making technical adjustments to existing law allowing benefits for part-time workers; and providing additional benefits to unemployed workers in training programs. The proposal also provides a modest reduction in the new UI tax rates for one year ($83 million in temporary rate relief to employers).
- All employers will be allowed payment plants to spread out until September their UI tax rate payments due in April.
- The interest rate of 1.5% on late payments of UI taxes will be reduced to 1%.
Stormwater Fee (Impervious Surface)
A legislative priority for the environmental community is to impose an impervious surface tax on all commercial property and a flat fee for residential property to finance the cost of local stormwater management programs. The amount of the tax is left to local jurisdictions, but the commercial tax rate must be higher than the residential rate. Similar legislation was defeated on the Senate Floor in 2009 (SB 672).
Stormwater Act Modifications
Legislation to rectify certain provisions of the new stormwater regulations will be introduced to: (1) exempt infill development from the impervious surface reduction requirements (reduce impervious surface by 50%) of the stormwater regulations; and (2) allow projects with preliminary plan approval to go forward without having to comply with new stormwater requirements (environmental site design to the maximum extent possible), rather than needing final stormwater management plans and soil erosion and sediment control plans in place by May 4, 2010 to be "grandfathered."
Further Extensionfor Development Approvals
Construction Permits - Expiration Dates. During the 2009 Session, HB 921/SB 958granted some reliefto the credit-starved real estate sector by extending development and construction permit approvals obtained on or after Jan. 1, 2008 until June 30, 2010, allowing time for an economic recovery. Permit renewal fees must be paid, however. Permit extensions do not apply to State sediment control or stormwater permits,or local water appropriations, water discharge or water and sewer permits. ICSC may request a further extension beyond June 30, 2010.
Transportation Funding
Transportation Funding Task Force. Sen. Rob Garagiola (D-Mont Co) will reintroduce legislation to establish a transportation funding task force that will make recommendations in time for the 2011 Session when transportation funding may be part of a revenue package.
Transit Funding. The environmental agenda for 2010 will include legislation to steer more transportation funding to transit projects.
Transit-Oriented Development-Use of Tax Increment Revenues. MDOT has introduced SB 63authorizing counties and municipalities to directly use tax increment revenues to fund the operation and maintenance costs of improvements in or supporting TODs
Maryland General Assembly convenes on January 13, 2010 and adjourns on April 12, 2010.
For copies of any legislation, go to the Maryland General Assembly website
Barbara Wilkins, Esq. – Holland + Knight LLP – 410-263-0349 –
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