Legislators lean to Old Economy

Few New Economy issues approved by General Assembly

Partial bay-dumping ban

A 25% set-aside for minority contractors that faces court fight

April 08, 2001|By Michael Dresser | By Michael Dresser,SUN STAFF

Maryland's Old Economy stalwarts savored triumph while its New Economy prospects mostly tasted disappointment during a 2001 General Assembly session that was notable for its paucity of burning business issues.

As usual, hundreds of bills affecting businesses poured in during the 90-day session that ends tomorrow. But this year there was no central business issue that could rank with utility deregulation two years ago or last year's legislation permitting companies to charge customers late fees.

In an otherwise somnolent session, perhaps the most interesting development was the spectacle of the General Assembly Republicans declaring the Maryland Chamber of Commerce anathema for supposedly being insufficiently pro-business. The squabble made no perceptible difference as far as legislation was concerned, but made for amusing political theater.

The state's manufacturers scored a satisfying, though hardly crucial, win when both houses approved a bill shifting much of the burden of the state's 7 percent corporate income tax to out-of-state companies.

The bill, sponsored by House Speaker Casper R. Taylor Jr., passed easily after opponents essentially conceded that they were fighting a losing battle.

Taylor billed the change as an important economic development measure, saying the current law creates a disincentive to employ workers and locate plants in Maryland.

Maryland's biotechnology companies were not so lucky, as most of their pet proposals proved too new and ambitious for the legislature to digest.

Despite strong support from Montgomery County Executive Douglas M. Duncan, bills to let biotech start-ups "sell" their tax losses to other companies and to give the industry sales-tax breaks on expensive new equipment were defeated in the House Ways and Means Committee.

The bills failed because of concerns about their cost to the state's coffers, but proponents could take some consolation in the committee's decision to study the ideas over the summer.

"I think we could have some good prospects for next year," said Del. Kumar L. Barve, a leading advocate for high-tech industries. However, the Montgomery County Democrat admitted that he was "a little disappointed."

High-tech companies could take some consolation in the likely success of bills expanding the state's business incubator program.

What had been shaping up as furious struggle over Gov. Parris N. Glendening's plan to raise the state's minority contracting goal to 25 percent turned into a love-fest after House leaders broke a logjam in a conservative committee.

After counting noses and gauging the political winds, contractors' groups largely gave up and decided to fight it out in the courts. Both Senate and House passed the bill by thumping margins.

The port of Baltimore and environmental groups could claim a "win-win" after passage of a bill ratifying a historic agreement between the Maryland Department of Transportation and the Chesapeake Bay Foundation to work together on the question of where to deposit the muck dredged from the state's shipping channels. The bill bars almost all open bay dumping immediately and ends the practice entirely by 2010.

On other issues, business interests mostly played successful defense:

Verizon flexed its muscle and easily dispatched a bill to force its breakup into separate retail and wholesale subsidiaries. For dessert, it swallowed up and spat out a bill to set up a task force to study telephone competition. Critics of the phone company could take some consolation in the publicity they received, believing that it could goad the Public Service Commission into faster action.

Constellation Energy Group, formerly BGE, and its fellow utilities had little trouble convincing the Senate Finance Committee that a small fee for energy conservation could look large to customers in a time of rising energy bills. The measure, sought by environmentalists, never made it to the Senate floor.

Health maintenance organizations again staved off legislation making their medical directors subject to regulation by medical licensing officials.

A wide variety of business groups - from corner taverns to major manufacturers - could celebrate the demise of a bill making it easier for plaintiffs to collect in personal injury cases. But the biggest share of the credit could be claimed by Peter G. Angelos, who persuaded Sen. Perry Sfikas to switch his vote and hand his fellow trial lawyers a bitter defeat.

Maryland's hospitality, entertainment and restaurant industries received a setback when a Senate committee refused to go along with Taylor's House-passed bill to create a separate Department of Tourism.

In some cases, relative "little guys" could claim victory. Independent gasoline station owners, desperate for protection against an onslaught of discount chains, were on the verge of gaining legislation giving them limited protection from below-cost pricing - a victory they would likely have to defend in court.

Several measures are unlikely to be resolved until tomorrow.

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