Legislative Update

With just three weeks to go in the Legislative Session, the pace of work is speeding up. The House has reported the Budget to the floor and it will be the subject of debate for a couple of days. The Senate will then take up the budget next week. For the most part, the entire Session has been about the effort to legalize same sex marraige and the budget. Few initiatives that affect business have been advanced. As for revenue generation, it does not appear that any taxes will be increased this Session except maybe a modest increase in the alcohol tax.

A few issues of potential interest to business owners however. If your company receives State tax credits, listen up. Legislation that would subject many tax credits to automatic termination every five years unless reenacted by the General Assembly is gaining momentum in the House of Delegates.

A subcommittee of the House Ways & Means Committee is working on a bill (HB 620) that would require a wide range of credits under the income, franchise and premiums taxes be evaluated by a joint committee every five years and be subject to automatic termination unless reenacted by the General Assembly.

State lawmakers are also moving to limit the ability of businesses to run credit checks on job applicants. Legislation sponsored by Senator Catherine Pugh was approved by the Senate last week. It awaits action in the House of Delegates.

If it becomes law, Maryland would join a growing group of states putting the brakes on employee credit checks. Four states now have limits, and the National Conference of State Legislatures says about a dozen more are considering legislation this year.

On the federal level, The Small Business Administration last week took a step toward redefining what it means to be “small” for information technology, engineering and consulting-services companies, among others-- marking another change in a tumultuous period for federal contractors.

The contracting field has faced a more unpredictable market in recent months as federal officials have halted and reworked dozens of federal IT projects so they can be executed in smaller pieces.

The government is pushing for greater use of more cost-conscious contract structures, such as fixed-price contracts that cap the total price, and is trying to bolster its procurement workforce to better oversee projects.

The threat of a federal government shutdown also has kept contractors apprehensive.

The SBA is proposing new definitions for what qualifies as small in professional and technical services as diverse as accounting and computer programming. The rules would affect some fields more than others.