I would like to share with you news about the issues and initiatives in which I have been involved during the 2012 General Assembly’s Legislative Session. I am sending this end of session letter electronically to all of you who have e-mailed me this year in an effort to keep the state’s postage costs down. If those of you receiving this by regular mail would like to receive electronic updates, please email me at nancy.king@senate.state.md.us and I will be happy to add you to the list.

The Budget
Although the 2012 Legislative Session has come to a close, our work is not yet done. I am sure you have heard by now that the while the budget was passed, the revenue bills were not, leaving us with what is being referred to as the “Doomsday Budget.” As a member of the Budget and Taxation Committee, I assure you that this is not the outcome we wanted or expected. Under the current budget, public education, public safety, Medicaid and higher education will suffer huge cuts. If no further action is taken, over $500 million of real cuts will occur, on top of the over $400 million in reductions contained in the FY2013 budget package. Given Governor O’Malley’s commitment to moving Maryland forward, I am hopeful that he will call the Legislature back to a Special Session so we can finish our work and avoid these drastic cuts.

Despite the obvious concerns of further budget cuts, we did pass a balanced budget that contains important capital investments for projects across the state:

• Public education. Public school construction continues to be a top priority for the legislature. This year, our capital budget contains the second largest investment in school construction in Maryland’s history. This $351 million investment will pay for the construction and renovations of schools across the state.
• Infrasturcture and Job Creation. This year’s capital budget includes over $1 billion in funding for higher education, public safety, the environment, and road construction. The projects created by this funding will not only improve the quality of life of Maryland residents, but will help create and sustain over 52,000 jobs.
• Montgomery County. Our county received over $119 million in capital project funding during this legislative session. These projects include: over $40 million for public school construction; $8 million to our Community Colleges; $5 million to the Universities at Shady Grove; and $2.9 million to local capital projects.

As I mentioned earlier, I received hundreds of emails this session on a variety of issues. Following are just some of the legislative initiatives that I was contacted about and co-sponsored this session:

Protecting Family Farms
To preserve as many remaining family farms as possible, the legislature passed SB 293, which exempts up to $5.0 million of qualified agricultural property from the State estate tax. In order to qualify for the exemption and better protect our agricultural lands from development, those who qualify for this program must agree to continue to use the property for farming purposes after the current owner’s death. If the property is not used as a farm within a 10 year period, the estate tax must be repaid upon the sale of the property.

Protecting Children from Identity Theft
Identity theft from minors is growing at a rapid rate. Under current law, a parent or guardian who believes their minor child’s social security number is at risk for identity theft may not put a credit freeze on the child’s credit report with a credit reporting agency. A credit reporting agency will not create a report for a child under the age of 16, but a person fraudulently calling with a child’s social security number and a false birth date would be able to create multiple fraudulent accounts. Senate Bill 295 will allow a parent or guardian to create a credit report for a minor for the purposes of freezing the report and preventing fraudulent use of a minor’s social security number.

Healthcare Legislation
This year, the legislature established a state insurance exchange program, which will make health and dental insurance policies available for purchase by individuals who are currently without coverage. House Bill 443 established a process for the state to select benchmark plans that will serve as the standard for the essential health benefits contained within health benefit plans offered in the small group and individual markets, both inside and outside the exchange.

The number of oral anti-cancer drugs is growing rapidly, accounting for 25% of cancer drugs under development.  Typically insurance companies cover intravenous or injected chemotherapy as a medical benefit, while coverage for orally administered chemotherapy drugs are provided under a prescription plan. Under most insurance plans, the cost-sharing arrangements for medical benefits and prescription benefits are often very different, leaving patient to shoulder a heavier finical burden for orally administered chemotherapies.  The session we passed SB 179 that will help level the playing field and provide parity between the two drugs.

Protecting Employees’ Privacy
With the proliferation of Facebook and other social media sites, some employers have started to require login information from potential employees. In an effort to ensure individual’s privacy, the legislature passed Senate Bill 433 which will prohibit employers, including state and local governmental entities, from requesting this personal and private information.

Passing Marriage Equality
This session, Maryland became the eighth state in the nation to pass Marriage Equality. As passed, the Civil Marriage Protection Act will extend the right to marry to Maryland’s gay and lesbian couples while ensuring religious freedom and protection for our state’s religious institutions. (HB 438)

Government Ethics Reform
The Maryland Senate has led the way on increasing transparency and reforming ethics over the last several years. In response to several county government scandals, the legislature passed House Bill 211, which, if approved by voters, will require that elected officials who are found guilty of specified crimes be removed from office. I also voted for the unanimously supported legislation (SB 920) that would increase transparency by putting conflict of interest disclosures online for the public and to create a workgroup to review the ethics process.

Protecting Animals
This year, we continued our efforts to better protect animals from abuse and neglect by passing Senate Bill 317. This legislation will further combat the issue of puppy mills by requiring retail pet stores to initiate recordkeeping, notification, and public disclosure requirements, as well as creating remedies when a dog sold at a pet store is found to have an undisclosed disease or illness.

One animal issue that I received many, many emails on was SB 465 which would restrict the sale and possession of shark fins. The shark fin trade is largely unregulated and unmonitored. The horrible act of removing fins from live sharks and throwing them back into the water often takes place on oceans beyond national jurisdictions and fins are imported into the U.S. from countries with few shark protections in place. The best way to bring an end to this practice is through legislation prohibiting the trade. SB465 passed the Senate but unfortunately did not pass the House of Delegates. I am sure we will see this legislation again in 2013.

Bills that I sponsored in this 2012 Session which have been passed by the Legislature and are headed to Governor O’Malley for his signature:

SB848 – Education - Maintenance of Effort – One of the more high profile bills of the 2012 Session was the Maintenance of Effort legislation which I sponsored. In 1984 the General Assembly established the Maintenance of Effort Requirement for K-12 funding, to ensure the cost of education is shared and to provide local Boards of Education with predictable and stable funding. Senate Bill adds to that original legislation by continuing to protect funding for our public schools while recognizing the efforts of those counties who exceed funding requirements. The Maryland State Education Association responded to the enactment of the bill by issuing the following statement: “The passage of SB 848 is a monumental step forward for Maryland's public schools, protecting local school funding from deep cuts, providing local governments with the flexibility they've long asked for, and ensuring the dependable levels of funding that our students need to thrive.”

SB 566 – Home Visiting Accountability Act of 2012 –The recipe for educational success begins long before a child enters kindergarten. As Senate Chair of the Joint Committee on Children, Youth and Families, and a member of the National Council of State Legislator’s Early Learning Fellows program, I know firsthand the effectiveness and success of Home Visiting Programs. These programs offer a variety of family-focused services to expectant parents and families with new babies and young children. They address issues such as maternal and child health, positive parenting practices, safe home environments, and access to services. Parents and children participating on a voluntary basis in quality home visiting programs exhibit better birth outcomes, enhanced parent and child interactions, more efficient use of health care services, enhanced child development including improved school readiness, and early detection of developmental delays. Senate Bill 566 will allow the state, under the Governor’s Office for Children, to track and report on the successes of home visiting programs. This legislation will strengthen Maryland’s competitiveness for Federal grants as they make funding available for states to plan and implement the expansion of evidence-based home visiting programs in high risk communities.

SB 524 – Maryland After-School and Summer Opportunity Fund Program – In 1999 the legislature established the Maryland After-School Opportunity Fund Program to provide funding to organizations with after-school programs for children. Due to budget constraints, the program has not been funded since Fiscal 2004 and the advisory board is not currently active. Senate Bill 524 lays the groundwork to revitalize this important program by moving it to the Governor’s Office for Children and reactivating the advisory board. Enactment of this legislation will allow the state, under the Governor’s Office for Children, to track and report on the successes of after school and summer programs, and with strengthen Maryland’s competitiveness for Federal grants for these much needed programs.

SB 567 – Communications Taxes – Reform Commission - Changes in technology have expanded the types of telecommunications services available to consumers. We are a long way from the days of land line telephones and antennas on our roofs. Throughout all these changes, industry taxes and fees have been dealt with in a piece meal fashion. Senate Bill 567 will create a commission that will be charged to assess the feasibility and fiscal implications of a modernized, competitively neutral tax and fee system that will encourage growth and job creation. Reform of Maryland’s telecommunications tax and fee structure is long overdue. The industry has changed and our tax structure needs to reflect those changes. Senate Bill 567 will bring together stakeholders who can look at the industry as a whole and enact reforms that will best serve the citizens of Maryland.

SB 849 – Health Insurance – Dental Preventive Care – Coverage for Dental Cleanings – Currently, health insurance companies that cover dental preventive care have restrictions on the amount of time that must lapse prior to paying for another preventive care visit. In other words, for annual coverage, if a full 365 plus one day hasn’t passed since the anniversary of your last visit, you can find yourself faced with a large out-of-pocket expense. Or in the case of bi-annual coverage, you must wait six months plus one day for your next preventive care visit or again find yourself with an out-of-pocket expense. Senate Bill 849 changes this practice by allowing annual preventive care to be performed once within a plan year, regardless of the number of days since the last visit. For providers who cover more than one preventive care visit, it will reduce the time required between visits to 120 days. Given the importance of regular dental care, this is a practical solution for the citizens in our community. Whether it is someone trying to make an appointment around their work schedule, school schedule or vacations, this legislation will give people the flexibility to schedule an appointment on their terms – not the insurance company’s. This legislation was sponsored in the House of Delegates by Delegate Charles Barkley. While my bill ran out of time for passage on the final day of session, we were able to get Delegate Barkley’s passed through the Senate, so this legislation will become law once it is signed by the Governor.

SB 852 – Alcoholic Beverages – Calculation of Tax - After the passage of last year’s legislation to increase the sales and use tax on alcoholic beverages, the Comptroller’s Office listed a series of guidelines on their website to address implementation questions from the business community. Once put into practice, the legislation and guidelines created some unintended consequences, especially for restaurants and caterers.  Under current law if a restaurant sells food and alcoholic beverages to a group of eleven or more patrons and imposes a mandatory gratuity, they must charge a sales tax on that gratuity. With the implementation of the increased alcohol tax, restaurants and caterers must apportion the tax on the gratuity between the two different rates – 6% on the food and 9% on the alcohol. This is a burdensome process and, in the case of restaurants, no current point-of-sale systems can handle this type of split tax on gratuities. Senate Bill 852 remedies this by clarifying that all mandatory gratuities are subject to a 6% sales tax regardless of the type of food or beverage served.

A second issue that arose after last year’s legislation relates to taxes on labor, service and materials. The Comptroller’s Office interpreted the law in a way that not only are alcoholic beverages taxed at 9% but any labor, service or materials related to alcoholic beverages must also be taxed at 9%. As an example in the catering business, a caterer must collect a 9% tax on the rental of those glasses used for alcoholic beverages and 6% on all other glassware. Not only is this cumbersome for caterers, it is very confusing for consumers. Senate Bill 852 changed this by taxing only the alcoholic beverages at 9%; all labor, supplies and materials is at 6%. The legislation simplifies certain aspects of last year’s alcohol tax increase in order to assist both business and consumers.

Bond Bills
Along with passing state-wide legislation, I was successful in securing $125,000 of capital funding for a District 39 project – design and construction of a concession stand and rest room facilities at South Valley Park. The lack of permanent rest room facilities at the park poses a real problem for families at sporting events and for many of our older and disabled citizens who come to watch the children play. The concession stand will provide Montgomery Village Sports Association the ability to sell refreshments which will enhance the enjoyment of the hundreds of participants and spectators of park events. South Valley Park is one of the jewels of Montgomery Village. The addition of restrooms and a concession stand will encourage more families to enjoy this great outdoor venue for sports, recreation and community events.

During the interim

I can be reached during the interim at my Annapolis office number – 301-858-3686 as well as by e-mail at nancy.king@senate.state.md.us or on my website www.friendsofnancyking.com. My staff and I are available to assist constituents with problems or questions they may have involving a state or local agency. As always, I am honored to serve you here in Annapolis, and I look forward to hearing from you on any issues or concerns you may have.