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The power of the state legislature

With much of the nation’s focus directed at the recent presidential election and the new president and Congress, it’s easy to overlook the Maryland State Legislature in Annapolis. However, as a technology entrepreneur you should be aware of the power that the legislature wields and how the bills passed during the 2017 legislative session can affect your business.

The legislature has a significant amount of power over the residents of the state and their businesses. You already know that the state has the power to levy taxes and construct roads. But did you realize that the state has the power to render entire industries legal or illegal? To selectively prohibit access to otherwise legal products or services?

Together with the governor, the legislature decides on the priorities of the state and crafts the policies and laws that create the framework to implement those priorities. In doing so, the state government shapes the business environment in which your business operates.

In the past, the legislature has passed bills that have direct impact on technology companies doing business in Maryland. In many cases, the legislature and the governor are united in their desire to create an environment which encourages technology companies to succeed.To that end, the legislature has created the Research and Development Tax Credit, the Cybersecurity Investment Incentive Tax Credit, and the Biotechnology Investment Incentive Tax Credit.

However, on occasion technology companies bear the brunt of tough budget years. In 2008, lawmakers passed a 6 percent “tech tax” aimed at a range of technology companies in an effort to fix the state’s deficit. Note that the controversial “tech tax” was repealed during the subsequent legislative session.

Likely legislation

Looking forward to the 2017 legislative session that begins in mid-January, there are a number of bills that are expected to affect technology entrepreneurs and their companies.

Tax credits (like the ones mentioned above) are the legislature’s way of shaping the tax code to promote certain behavior and encourage businesses to make specified investments. Last year legislators debated a bill creating tax credits for angel investors. Every year tax-credit bills are introduced to promote a healthy business environment for all businesses. Businesses generally love tax credits, but this year, because of a projected budget shortfall, it will be hard to convince the legislature to pass new tax credits.

Employment law may not make for entertaining cocktail party banter, but it does have a direct impact on your bottom line. Last year the employment law bills introduced were treated to vigorous debate but failed to pass. This year, it is expected that bills affecting the minimum wage, earned paid sick leave, and banning on-call scheduling will be introduced again.

Procurement law reform is critical to all companies that sell goods and services to the government. Over the past several months, both the legislature and officers in the governor’s administration have studied the complicated and increasingly arcane procurement laws and rules. You can expect to see multiple bills that will attempt to comprehensively overhaul the procurement system with the goal of fostering competition, streamlining the procurement process, and keeping the state current with the best available technology.

In addition, there may be bills introduced related to the regulation of technology, cybersecurity, and biotech.

We won’t know exactly what legislation the 2017 legislative session will bring until the bills are introduced throughout the legislative session, but based on previously years, it’s a fair bet that legislation introduced will affect the State’s business environment.

Make no mistake, it is worth paying attention to the issues that will be debated over the 90-day legislative session because they are sure to have a direct impact on technology entrepreneurs and their companies.

Camille Fesche is an attorney and lobbyist who regularly appears before the Maryland General Assembly.

 

 

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