2016 End of Session Wrap-Up: Finance and Procurement

This post summarizes the status of finance and procurement bills that MACo took a position on or considered during the 2016 General Assembly Session.

checkRenewal Energy Project Expansion: HB 105/SB 173 would expand commercial financing options available through clean energy loan programs by removing the limitation that commercial renewable energy projects generate no more than 100 kilowatts. MACo supported the bill stating that larger scale renewable energy projects financed through Clean Energy Loan Programs could help the state meet its energy goals and removing the limitation on the electric generating capacity of renewable energy projects could serve as an incentive for more local governments to establish clean energy loan programs.

Final Status: HB 105/SB 173 passed the General Assembly and is being reviewed for the Governor’s signature.

MACo testimony on SB 173

checkStudy of Residential Clean Energy Loan Programs: HB 387/SB 912, as introduced, would have authorized local governments to collect loan payments from a homeowner for the financing of energy efficiency and renewable energy projects through a surcharge on the homeowner’s property tax. After concerns were raised with the requirements in the bill, including the financing of residential loans for clean energy projects and how these may be viewed by lenders and clean energy loan providers, the bill was amended to require a study of residential clean energy loan programs. The study will bring interested parties together to work through these issues and design a program that is workable for all parties involved. MACo supported the bill as introduced and supports the bill as amended to study the program to put a structure in place that is workable for local governments and others.

Final Status: HB 387/SB 912 passed the General Assembly and is being reviewed for the Governor’s signature.

MACo testimony on SB 912

checkPublic Works Contracts – Occupational Safety and Health Requirements: HB 977 would require a prospective bidder or offeror for a public works project over $100,000 to submit a public safety plan and an attestation that the plan meets certain requirements as part of the procurement process. The bill also requires the Department of Labor, Licensing, and Regulation (DLLR) to develop a safety and health calculation worksheet and rating system, and enforce the bills’ many new requirements. MACo opposed the bill citing it would increase costs by limiting the number of competitive bids, negatively affect small and minority contractors who may not have the staff to develop and monitor the rigorous safety plans envisioned, and place onerous requirements on procurement officials.

Final Status:  HB 977 was heard by the House Economic Matters Committee. No further was taken.

MACo testimony on HB 977

Payment in Lieu of Taxes – State Forest and Parks: HB 1409/SB 263, as introduced, would have established an Open Space Incentive Program which would provide counties an annual payment of $250,000 for each unit of open space attributed to State forests, State parks, and wildlife management areas. One unit of open space is the equivalent of 10,000 acres. The payments that counties currently receive from a portion of revenues generated from State forests and parks are eliminated. MACo supported the bill as an appropriate incentive to counties to preserve their State forests, parks, and wildlife management areas. It also provides a consistent revenue stream to offset losses in property tax revenues and fund the public services provided in these areas.

Final Status: Both bills failed. HB 1409 was amended by the House to require the Governor to fund the current payments as required by statute for state forest and park lands, $2.4 million for FY 2018 and 2019; and requires the State Department of Assessments and Taxation to update a study of the impact of real property tax exemptions on county revenue that was completed by the Department of Legislative Services in January 2014. SB 263 passed the Senate and was amended by the House in the same manner as HB 1409. The Senate refused to concur with the House amendments and a conference committee was appointed to resolve the differences, however time ran out. HB 1409 passed the House and was assigned to the Senate Budget and Taxation Committee, but no further action was taken.

MACo testimony on SB 263

checkEnterprise Zone Timely Reimbursement: SB 76 aligns the statutory requirement for the State’s reimbursement of its share of the enterprise zone property tax credit with current practice and establishes a schedule that will allow local governments to receive their reimbursement by August 31 of each year, before closing out their books for the prior fiscal year. MACo supported the bill as it ensures all enterprise zone property tax reimbursements are made in a timely manner.

Final Status: SB 76 passed the General Assembly and is being reviewed for the Governor’s signature.

MACo testimony on SB 76

checkLocal Income Tax – Overpayments and Underpayments: SB 766 as introduced would have established a process to reconcile local income tax distributions when a county or municipality receives an underpayment or overpayment of those distributions. If a jurisdiction is reimbursing the Comptroller’s Office pursuant to the Wynne Case (Maryland State Comptroller of the Treasury v. Brian Wynne) as required by Chapter 489, Acts of 2015, repayments would begin after final payments associated with this case are made. As amended by the Senate, the bill also adjusts the timetable for county repayment of the Wynne tax refunds to better allow planning and absorption into county budgets. MACo supported the bill as the process outlined would enable counties to sufficiently manage their budgets in either situation, but most importantly it protects a county from large repayments that may affect its ability to provide funds for needed programs and services.

Final Status: SB 766 has passed the General Assembly and has gone into effect without the Governor’s signature, Chapter 24.

MACo testimony on SB 766