The Maryland General Assembly passed 707 bills this year.  None was more important than the Budget Reconciliation and Financing Act of 2011.  This bill is essentially a supplement to the Maryland budget that helps Maryland meet the requirements for a balanced budget.  Actions taken through this bill are typically special fund transfers to the general fund, adjusting mandated spending levels and increases special fund revenues.  The special fund directly impacting dealers is the Transportation Trust Fund. 

The need for additional Transportation Trust Fund funding is an important issue to the legislature.  During the session, a bill seeking to raise the gas tax and increase registration fees by 50% was introduced.  MADA saw this bill as a vehicle for our proposal to raise revenue through a dealer processing charge increase.  As gas prices continued to spike during the Session, the appetite for a gas tax increase waned quite a bit.  MADA did not let the demise of the transportation funding bill stop our pursuit to raise the dealer processing charge.  MADA met with key members of the Senate including Senate President, Mike Miller.  After securing the preliminary blessing from Mike Miller to push the dealer processing charge increase through the Budget Reconciliation and Financing Act of 2011, MADA unleashed the full court press.  We met with leadership in the House of Delegates, including Speaker Mike Busch.  Speaker Busch supported the MADA amendments and was very helpful in getting the members of his chamber to push the dealer processing charge increase.  While the members of the Senate and House budget committees met in private, MADA met with Chairman Frosh and Chairwoman McIntosh to explain our process for increasing the processing charge.  MADA scheduled these meetings out of courtesy as those two Chairs preside over the Senate and House committees that would hear a stand-alone dealer processing charge increase bill. 

During the last week of session, the eight members of the Senate and House Budget conference committee attached an amendment to the Budget Reconciliation and Financing Act of 2011 that increases the dealer processing charge from a cap of $100 to a cap of $200 starting July 1, 2011.  The amendment also raises the cap to $300 on July 1, 2014.  This is a major victory for MADA.  The dealer processing charge in Maryland has been painted unfavorably for decades.  MADA has made great strides educating lawmakers that the dealer processing charge is justified by the enormous amount of Federal and State compliance work dealers must handle.  Fortunately, MADA was able to amend the Budget Reconciliation and Financing Act of 2011 to include this increase during a time when additional Transportation Trust Funds are desired.  If a dealer processing charge increase was a stand alone bill going through the typical legislative process, the political pressures applied by other interest groups may have made the vote for legislators too tough to swallow.

Furthermore, MADA introduced and passed legislation that will allow dealers to issue temporary tags despite the existence of an insurance violation.  This bill resulted from inconsistency in Maryland law that halted a dealer's ability to print a paper temp tag through the electronic system when an insurance violation from a previous vehicle was identified.  The new law allows dealers to print the temp tag but not issue hard plates until the customer resolves the insurance violation on their own.

The 2011 Session was extremely successful for MADA.  More key legislative wins will follow in the subsequent OTM's.

Thanks, in part, to very vocal opposition from the small business community, a potentiallyburdensome and expensive tax paperwork mandate is one step closer to being repealed. As part of thehealthcare reform law passed last year, small businesses would have mandated to satisfy several new 1099requirements intended to pay for a portion of the healthcare reform law. Legislation, previously passed bythe House, was approved by the Senate on April 6, by a vote of 87-12. It will become law once PresidentObama signs the measure, which he has indicated that he will do.

While businesses must continue to issue a 1099 form for each unincorporated service provider itpays over $600, starting in January 2012, the new mandate would have applied to ALL vendors, significantlyincreasing dealerships tax reporting duties. The business community argued that the added burden wouldhaveunnecessarily increased tax paperwork at a time when the nation's economic growth remains fragile.  For further information on this new development, please review this attached document. 

The Department of Labor recently made a very significant change in its interpretation on service writers.  We expect this to become a "hot topic" in the coming weeks.  In order to help our dealer members prepare for these changes, MADA has provided this bulletin, courtesy of Michael Charapp, which explains the DOL notice and will inform dealers what they should do about these changes.

MADA urges it's members to register for the upcoming Employment Law workshop. Hosted by Shawe & Rosenthal LLP, topics will include the following:

• Navigating Federal and State Wage and Hour Laws
• Hiring Practices Do's and Don'ts
• Understanding the Employer's Rights and Responsibilities

DATE:   Thursday, April 21, 2011
TIME:    9:00 a.m. - 12:00 noon
LOCATION:   Turf Valley Resort
                     2700 Turf Valley Road
                     Ellicott City, Maryland 21042
                     (410) 465-1500

REGISTRATION FEE:  MADA Members  $  90.00 P/P
                                  Non-Members      $180.00 P/P

Advance registration is necessary.  To register today, please download the registration form and return to MADA's office. 

April 21, 2011 - Employment Law Workshop, Turf Valley Resort    

May 10, 2011 - Legislative and Legal Update Seminar, Turf Valley Resort

May 25, 2011 - Legislative and Legal Update Seminar, Gaithersburg Holiday Inn

May 26, 2011 - Legislative and Legal Update Seminar, White Marsh Hilton

June 26-29, 2011 - MADA/VADA Family Convention, Williamsburg, VA 

Registration materials for the Legislative and Legal Seminars and the Summer Convention will be mailed in a few days.