2016 Legislative Session
LEGISLATIVE INITIATIVES FOR THE 2016 SESSION
Tax and Business Climate
Seniors Tax Relief – Increased Personal Income Exemption
Working Families Tax Relief – Refundable Earned Income Tax Credit
Small Business Tax Relief – Business Filing Fee Reduction
Job Creation Tax Credit – Manufacturing Empowerment Zones
Fee Reductions for Maryland Families and Businesses
State Budget Reform – Relief from Budget Mandates
Strengthening Education Opportunity
Maryland Education Tax Credit for Public and Non-Public Schools
Education Pathways in Technology (P-Tech) Schools Act
Maryland SmartBuy – Homeownership for Buyers with Student Debt
Higher Education Scholarship – Early High School Graduates (Exec. Order)
Congressional and Legislative Redistricting Reform – Constitutional Amendment for Independent Redistricting Commission
Heroin Task Force – Helping Local Communities Attack the Heroin Crisis
Criminal Gangs – Improved Enforcement and Penalties
Prescription Drug Monitoring Program – System Enhancements
TAX RELIEF FOR RETIREES, SMALL BUSINESSES, WORKING FAMILIES
Since taking office nearly one year ago, the Hogan administration has presided over a series of tax and fee cuts across state government. The introduction of the governor’s tax relief package for the 2016 Legislative Session reflects the administration’s focus on rolling back as many of Maryland’s tax and fee increases as possible, returning dollars to families and small businesses.
Included in the package are vital statewide tax relief measures aimed at retirees, small businesses, working families, and manufacturers – four groups that have been among the hardest hit by the tax increases of the last decade.
SENIORS TAX RELIEF – PERSONAL EXEMPTION
As part of his ongoing commitment to make Maryland a state where retirees are welcome, Governor Hogan is proposing to increase the personal exemption for retiree income tax from $1,000 to $5,000. This proposal would be phased in over four years and reduce the overall tax burden for approximately 850,000 seniors, saving them $74 million each year after the exemption is fully implemented.
WORKING FAMILIES TAX RELIEF – REFUNDABLE EARNED INCOME TAX CREDIT
To help working individuals and families achieve increased economic security, Governor Hogan is proposing to increase the percentage of earned income allowable from 25% to 28% so that it is fully phased-in this year. This proposal would benefit approximately 170,000 taxpayers, saving them $27 million over two years. This is part of the Governor’s ongoing commitment to provide tax relief for all Maryland families.
SMALL BUSINESS TAX RELIEF – BUSINESS FILING FEE REDUCTION
In response to concerns raised at the hearings held by the Governor’s Regulatory Review Commission, legislation will be introduced to reduce business filing fees. During a four-year phase-in, the filing fee will be reduced from $300 to $100. This legislation will benefit approximately 300,000 business, saving them an estimated $66 million per year when fully implemented.
JOB CREATION INCENTIVE – MANUFACTURING EMPOWERMENT ZONES
In response to the decline in manufacturing in Maryland in recent years, and to boost employment in regions hardest hit by the departure of manufacturing jobs, Governor Hogan will introduce new legislation designed to make Maryland a more attractive place for manufacturers to locate new factories. The tax credit will exempt a new business that locates in designated low employment zones from all state taxes.
FEE REDUCTIONS FOR MARYLAND FAMILIES AND BUSINESSES
Since 2008, a number of licensing and certification fees have been increased costing millions of dollars to Maryland taxpayers. In September, Governor Hogan announced plans to reduce or eliminate 100 fees across state government. This action will save taxpayers approximately $10.2 million a year. Following up on the promise to continue to roll back Maryland’s high fees and put money back into the pockets of Maryland families and businesses, Governor Hogan will propose legislation to reduce statutory fees, saving Marylanders an additional $20 million a year.
STATE BUDGET REFORM – RELIEF FROM BUDGET MANDATES
The Administration’s out-year forecast of the General Fund projects the return of structural deficits beginning in fiscal 2019. The forecast prepared by the Department of Budget and Management projects that ongoing expenditures will grow by an average annual rate of 4.2% compared to the average annual rate of growth in ongoing revenues of 3.8%. The Administration is proposing this legislation to bring the rate of growth of revenues and expenditures into alignment.
This bill relieves the Governor of the obligation to provide for any increases beyond the amounts provided in the fiscal 2018 State budget for any program or item beginning with the fiscal 2019 budget proposal. The provision to limit mandatory spending increases does not apply to the following items of expenditure: mandated State aid for primary and secondary education, the State’s required retirement contributions, required appropriations to the Revenue Stabilization Account, and principal and interest payments on the State debt. This provision does not apply in any fiscal year in which revenues exceed the previous December estimate prepared by the Board of Revenue Estimates by two percent.
This legislation also prohibits the General Assembly from enacting new mandates unless they enact legislation at the same session that reduces or repeals existing mandates in an equivalent amount for the same fiscal year.
MARYLAND EDUCATION TAX CREDIT FOR PUBLIC AND NONPUBLIC SCHOOLS
A major goal of Governor Hogan’s administration is to reduce the disparity between student achievement in all geographical locations of the state. Creating an education tax credit will leverage private business support for the education of young children in both public and nonpublic schools. Current law in Maryland contains over 25 state tax credits for businesses but there is none specifically for education.
Governor Hogan’s bill establishes an education tax credit program with a priority to support public and private schools in low-income neighborhoods. The tax credit is available for donations to support basic education needs such as books, supplies, technology, academic tutoring, tuition assistance and special needs services. The credits will also be targeted to promote Pre-K programs and enrollment. The tax credits are awarded through the Department of Business and Economic Development and cannot exceed an amount specified in the state budget. The bill proposes that the total amount of credits be phased in: $5 million for FY2017, $10 million FY2018, and $15 million FY2019. Governor Hogan supports the partnership with businesses to aid local educational institutions with a focus on closing the achievement gap in K-12 education throughout Maryland.
EDUCATION PATHWAYS IN TECHNOLOGY (P-TECH) SCHOOLS ACT OF 2016
The P-TECH (Pathways in Technology Early College High School) education model, co-developed by IBM, is an innovative, nationally recognized approach that blends high school, college, and work experience in one. P-TECH schools offer students an integrated six-year education program that combines high school, college, and workplace skills required for 21st-century jobs. Graduates from Maryland’s P-TECH schools will earn their high school diploma and a two-year postsecondary degree in STEM (science, technology, engineering, and math) from an accredited community college. These students will also benefit from career experience and mentorship in the workplace and will be first in line for skilled jobs upon graduation through partnerships with private sector participants.
This bill will authorize Education Pathways in Technology (P-TECH) schools in Maryland and create a system to finance P-TECH schools through grants to local school districts. The grant shall be for a specified amount per P-TECH student within limits that may not exceed a certain amount per fiscal year. The bill will require a county board of education to pay for dual enrollment costs for P-TECH students for certain grades and prohibit a community college from charging a P-TECH student dual enrollment costs. The bill also requires the Maryland State Department of Education to reimburse the county board for a certain amount of dual enrollment costs.
MARYLAND SMARTBUY: HOMEOWNERSHIP FOR BUYERS WITH STUDENT DEBT
The Department of Housing and Community Development Maryland Mortgage Program currently provides significant support to homebuyers through Down Payment Assistance and Partner Match Programs, helping Marylanders who can sustainably afford the month-to-month costs of homeownership overcome upfront financial barriers associated with down payments and settlement expenses.
With rising educational costs and access to easy student loan credit, there are an increasing number of individuals who are overburdened by educational debt. This legislation seeks to address that problem by allowing the Department of Housing and Community Development, under its existing bond authority through the Community Development Authority, to create the Maryland SmartBuy mortgage product that finances a home and pays off a homebuyer’s student loans under certain conditions.
This legislation creates economic opportunity for young people overburdened with significant student loan debt. This bill would neither require state funds, nor would it in any way risk the creditworthiness of the State of Maryland.
GENERAL ASSEMBLY AND CONGRESSIONAL LEGISLATIVE REDISTRICTING AND APPORTIONMENT COMMISSION
Maryland’s congressional districts have been recognized by national publications to have some of the most gerrymandered districts in the country. On August 6, 2015, Governor Hogan issued Executive Order 01.01.2015.21, which created the Maryland Redistricting Reform Commission. Through the work of this commission they held five regional meetings throughout the state to hear voter’s concerns. The commission created a report outlining the process to reform redistricting and put Maryland on a new path toward transparency, fair representation, and election integrity. The commission was also tasked with developing a constitutional amendment on congressional and legislative redistricting.
This bill proposes a constitutional amendment that repeals existing constitutional provisions relating to the legislative redistricting process and requires the appointment of a General Assembly and Congressional Legislative Redistricting and Apportionment Commission in the year following each decennial census of the United States or when required by the United States or by court order. The commission must divide the State into consecutively numbered legislative districts that conform to existing constitutional provisions and must divide the State to create as many congressional districts as there are representatives in Congress apportioned to Maryland. The bill also includes implementing provisions related to the appointment of members of the commission, the process for developing redistricting plans, and funding for the commission.
PRESCRIPTION DRUG MONITORING PROGRAM – SYSTEM ENHANCEMENTS
A crucial tool to combat the State’s heroin and opioid epidemic, the Maryland Prescription Drug Monitoring Program (PDMP) was created to assist medical, pharmacy, and public health professionals in the identification and prevention of prescription drug abuse. Further, this system also supports law enforcement and regulatory agencies in the identification and investigation of prescription drug diversion.
Despite consistent increases in user registration and access since implementation, widespread adoption of PDMP use has not occurred thus far. There is no requirement on prescribers or dispensers to access PDMP data before prescribing or dispensing a controlled substance medication. Currently, 33 states have laws or regulations that require healthcare practitioners to either register with the PDMP in order to query data (mandatory registration) and/or to query PDMP data at specific times, such as when first prescribing a controlled substance to a patient (mandatory use). Although the specific requirements of mandatory use laws vary considerably across the country, states that have recently adopted broad use mandates have seen decreases in the number of patients receiving controlled substance prescriptions from multiple providers, an indicator of possible prescription drug misuse, addiction or diversion.
In order to make the PDMP a more robust tool in the fight against prescription opioid abuse, the proposed bill will make improvements to the system and will phase in mandatory registration and use. The mandatory registration will apply to all providers that have a license to prescribe or dispense controlled dangerous substances. The use mandate would apply broadly to healthcare providers when prescribing or dispensing a drug to a patient for the first time to treat a specific condition, and then at regular intervals after the initial query should the treatment for the specific condition continue to include prescribing or dispensing medication containing an opioid and/or benzodiazepine. The legislation also provides certain exceptions to the use mandate to accommodate patient safety.
CRIMINAL GANGS – IMPROVED ENFORCEMENT AND PENALTIES FOR PROSECUTION OF DRUG TRAFFICKING
In 1970, Congress passed the Racketeer Influenced and Corrupt Organizations Act in an effort to combat Mafia groups. Since that time, the law has been expanded and used to prosecute a variety of organizations including corrupt police departments to motorcycle gangs. Thirty-three states, as well as Puerto Rico and the U.S. Virgin Islands enacted similar state laws since 1970. Maryland is not one of these states that has a statute for prosecuting state criminal offenses of gangs and similar criminal enterprises.
In Maryland, such activity can only be prosecuted under the federal statute, such as the recent successful federal prosecution of the Black Guerilla Family gang members for criminal conduct arising inside of the Baltimore City Jail. To fully hold these perpetrators accountable under existing State statutes would have been impossible.
In the final report of the Lt. Governor’s Heroin and Opioid Emergency Task Force, legislation was recommended to amend the Maryland Gang Statute to aid in the prosecution of, and provide civil penalties for, drug trafficking as part of an ongoing criminal enterprise. An update to the statute will give prosecutors the tools they need to identify and take legal action against criminal organizations that fund, and benefit from, the drug trade.