Conduit Street

This post summarizes the status of procurement related bills that MACo either considered or took a position on.

American Manufactured Goods: HB 191/ SB 47, as introduced, would have expanded the “Buy American Steel” procurement requirements to include American manufactured goods. MACo opposed the bill stating that it would add both cost and complexity to a wide range of public procurements, undermining the most efficient use of public funds. Although there were nominal exemptions to the requirement, they were unreasonably stringent. Under the bill, the price of a qualifying product would need to exceed the cost of an otherwise comparable product by 20% to 30% before being considered unreasonable.  As amended, the bill mirrors the statute for “Buy American Uniforms” and would apply more reasonable criteria to determine unreasonable amount, reasonably available, and substantially less.

Final Status:  Both bills passed the General Assembly with amendments offered by MACo. MACo dropped its opposition to the bill as amended.

Contract Retainage Amount: HB 293 / SB 140 would reduce the retainage amount a local government would be able to withhold on a construction contract to 5% for the life of the contract. Under current law, a local government can withhold no more than 10% during the first half of a contract, dropping to no more than 5% for the second half of the contract. MACo opposed this legislation stating that local governments do not have the same practical bargaining power as the State, so this “one size fits all” approach to match state requirements is inappropriate.  In addition, most local governments do not have the same overall presence in the marketplace to otherwise influence performance of private contractors, making the presence of sufficient retainage an essential protection for taxpayer investments.

Final Status:  Both bills passed the General Assembly with no amendments.

Prevailing Wage Study: As introduced, HB 1098 / SB 290 would have lowered the State funding threshold for which prevailing wage would apply to a local public work project from 50 to 25%. As amended by the House, HB 1098 would require prevailing wage rates to be paid for a local project receiving any amount of State funds. MACo opposed the bill in this posture stating that this “one size fits all” approach would significantly undermine a local government’s ability to fund and manage its capital budget, especially those smaller in size and in more rural areas of the state. As amended by the Senate, both HB 1098 and SB 290 establish a task force to examine the prevailing wage law and how it applies to various aspects of school construction projects.

Final Status:  HB 1098 passed the General Assembly with amendments worked on by MACo to change the bill to a task force to examine the applicability of the prevailing wage law. MACo dropped its opposition to the bill as amended.  SB 290 died on the Senate floor.

Legislation heard in the Senate Finance Committee this week would impose prevailing wage requirements on local public works projects, increasing projects costs and affecting the number of projects budgeted each year. As introduced, HB 1098 would have lowered the prevailing wage threshold to 25%. But as amended by the House, the bill would now require prevailing wage rates to be paid for a local project receiving any amount of State funds. From MACo’s testimony:

This “one size fits all” approach would significantly undermine a local government’s ability to fund and manage its capital budget, especially those smaller in size and in more rural areas of the state. Local governments receive State support in varying amounts for a number of public works projects, including school construction, transportation, jails, and recreation facilities. The bill’s fiscal note forecasts a project cost increase, and local comparisons of school construction project bids in Howard and Washington Counties show even more substantial cost increases. Imposing a State-mandated cost increase on primarily locally funded projects reduces their affordability, and means fewer such projects can be supported.

The General Assembly is now in its final week of the Legislative Session and bills have started moving to their ultimate end.  While it is still possible for a bill still sitting in its committee of origin to pass, it is more likely that bills still in this status are not going to move and those that have moved to the opposite chamber will continue to be worked towards final passage.

This post summarizes the status of finance and procurement bills that MACo either considered or took a position on.

Sustainable Communities: HB 613 would expand the financing options available to local governments with designated sustainable communities to include those employed in Transit Orientated Developments and the use of tax increment financing (TIF). MACo supported this bill as it provided one more tool in the tool box for local governments to carry out important projects in these designated areas.  Status:  HB 613 has passed the House and was heard in the Senate Budget and Taxation Committee on April 2.

Disparity Grant: HB 914, as introduced, would have eliminated the cap placed on the disparity grant program effective fiscal 2010 and phased in the additional funding for eligible counties over 5 years, 20% per year, beginning in fiscal 2015. As amended, the bill would keep the cap in place, but provide a minimum grant for other counties that may be eligible based on a county’s level of tax effort. MACo supported the legislation stating that it addresses inequities in the program and allows all jurisdictions meeting the eligibility criteria to fully benefit from the program. The Senate Budget and Taxation Committee took similar action through HB 102, the Budget Reconciliation and Financing Act.  Status: HB 914 was voted favorable by the House Appropriations, but it has been special ordered on the House floor.  HB 102 is in conference committee as the House and Senate took different actions on the legislation.

Foreclosure Protections: HB 1008 would require the purchaser at a foreclosure sale to close on the transaction and record a deed transferring title within 60 days after the entry of the final order of ratification. If the transaction has not closed, the purchaser must record among the land records contact information of the purchaser, who can accept legal service for the purchaser, and who is responsible for property maintenance. MACo supported this legislation as it would provide appropriate notification to the State Department of Assessments and Taxation to remove Homestead Tax Credits and assist local officials with identifying parties responsible for the maintenance of a foreclosed property.  Status:  HB 1008 has been given an unfavorable report by the House Environmental Matters Committee.

Transportation Infrastructure Banks: HB 1322 would expand the financing options available to local governments for transportation projects by establishing a Transportation Infrastructure Bank. MACo supported the bill as it would provide another effective tool for funding transportation projects.  Status:  HB 1322 has not been voted on the by the House Ways and Means Committee.

Capital Budget – Matching Funds:  SB 569 would authorize a county who is the grantee of a local capital project requiring a county match to include the salaries or wages the county pays to employees as part of its in-kind contribution. MACo supported this legislation stating that it would give counties greater flexibility in meeting project matching requirements.  Status:  No action has been taken on SB 569 by the Senate Budget and Taxation Committee.

Prepaid Phone Services – 9-1-1 Fee: SB 745 would extend Maryland’s current 9-1-1 charge to prepaid wireless services and ensure Maryland’s 9-1-1 system is appropriately supported. MACo supported the legislation stating that it provides a reasonable approach for extending this surcharge to all individuals who benefit from these important services and it would provide additional revenue to support the most important functions of our emergency call centers. Status:  SB 745 has passed the Senate and was voted favorable in the House Health and Government Operations Committee.

Maintenance of Everything: SB 1055 would require counties to maintain funding levels year to year across a wide variety of services labeled in the bill as “critical.” MACo opposed the legislation expressing concern with the precedent the legislation would set and the severe limits it would place on a county’s autonomy to manage its budget.  Status:  No Action has been taken on SB 1055 in the Senate Budget and Taxation Committee.