Wal-Mart bill passes, but doubts arise

How the law will work at heart of new questions

Friday, Jan. 13, 2006

For more, see our Annapolis coverage.

ANNAPOLIS — Even while the General Assembly was voting on Thursday to override Gov. Robert L. Ehrlich Jr.’s veto of a controversial health insurance proposal, fresh questions circulated about what would happen when the measure becomes law.

The so-called Wal-Mart bill, passed last year but vetoed by Ehrlich, seeks to force the retail giant to spend more money on health insurance for its employees in Maryland.

But state regulators said Thursday they doubt that Maryland has authority to compel the reports needed to enforce the law.

Other questions arose over the possibility that Wal-Mart could divide its Maryland operations into smaller units that would not be covered by the bill.

The Senate debated for two hours Thursday before voting 30-17 — one more vote than was necessary — to override Ehrlich’s veto of the Fair Share Health Care Act. The vote hewed largely along party lines.

Then the House of Delegates voted 88-50 — three more than the minimum needed — to override.

The House also overrode a bill that would increase the minimum wage a dollar to $6.15, on a 91-48 vote. The Senate will take up that bill possibly today.

The Fair Share law requires any company with 10,000 or more employees to spend at least 8 percent of its payroll on health care benefits. If it pays less, a fine equal to the difference must be paid and go into a new fund, to be administered by the Department of Labor, Licensing and Regulation.

The bill was nicknamed the Wal-Mart bill because it is the only company in Maryland affected by the legislation.

Nate Hurst, Wal-Mart’s government affairs manager, said the Senate vote was not about health care, but about partisan politics in the governor’s race.

‘‘This vote was never about health care,” he said. ‘‘This was about partisan politics in the Maryland gubernatorial race. In allowing a bad bill to become a bad law, the General Assembly took a giant step backward and placed the special interests of Washington, D.C., union leaders ahead of the well-being of the people they serve.”

Ehrlich (R) vetoed the act in May, saying it sent a bad message to businesses thinking about moving in Maryland.

Intense interest

In the months since, the bill has been the subject of relentless lobbying and countless news conferences.

Wal-Mart bought the services of a number of top Annapolis lobbyists. Some lobbyists said privately they were hoping Ehrlich would have been more aggressive. His predecessor, Parris N. Glendening (D), would threaten projects and budget items in exchange for votes.

Recently, opponents have been concentrating on legal and implementation problems.

‘‘Obviously, they are trying to come up with every reason why the legislature shouldn’t set state policy,” said House Speaker Michael E. Busch (D-Dist. 30) of Annapolis.

Last week, the Maryland Chamber of Commerce weighed in with an expert’s opinion that the bill violates federal Employee Retirement Income Security Act, or ERISA, which has a broad prohibition against states regulating employee benefits plans.

In a war of battling legal opinions, Attorney General J. Joseph Curran Jr. (D) ruled Tuesday that the Wal-Mart legislation would not violate ERISA.

On Thursday, DLLR officials questioned whether they had the power to seek the reports that determine whether a company spends the 8 percent minimum on health care. Plus, the officials wondered if DLLR could collect the fines and penalties in the bill.

‘‘The language is not clear. It’s more assumed and implied than spelled out,” said Alan R. Friedman, Ehrlich’s director of legislative relations.

The last-minute questions prompted one lawmaker, Del. Luiz R.S. Simmons (D-Dist. 17) of Rockville, to envision ‘‘post-veto shenanigans.”

‘‘I don’t think the administration is going to cooperate in the enforcement area,” Simmons said.

Friedman replied, ‘‘We enforce the law. The problem is, what is the law?”

Assistant Attorney General Robert A. Zarnoch, the legislature’s chief counsel, said DLLR should not have trouble drafting regulations to enforce the law.

‘‘You don’t have to write the bill to say, ‘This is how the department is going to enforce this,’” Zarnoch said.

The law takes effect Jan. 1, 2007, which gives time for regulators. Lawmakers could even step in before it takes effect, he said.

Friedman and others faulted the bill’s language because, theoretically, Wal-Mart could divide its Maryland stores into business units that have fewer than 10,000 employees.

Busch became exasperated when questioned about the hypothetical situations.

‘‘I’m a legislator, not a mathematician,” he said.

What’s next

Hurst, the Wal-Mart lobbyist, was reached before the delegates voted on the override, and said his company would wait until after the House vote to decide its next step.

Del. Anne Healey (D-Dist. 19) of Hyattsville, the chief sponsor in the House, said the bill would help hospitals trying to cope with uncompensated care.

‘‘If the biggest companies were to pay their fair share, that number would go down. Hospital rates would be kept under control,” she said.

Hospitals bear a burden of caring for uninsured Marylanders, many of whom depend on emergency rooms for primary care.

In the Senate debate, opponents hammered at the legislation. Sen. E.J. Pipkin (R-Dist. 36) of Stevensville called it a ‘‘revenge bill.” Unions that were unable to organize Wal-Mart workers decided instead to punish the company, he claimed.

The 14-member Republican caucus was joined by three Democrats: John C. Astle of Annapolis, James E. DeGrange Sr. of Glen Burnie and Philip C. Jimeno of Brooklyn Park, all of Anne Arundel County.

In the House vote, the Democrats did have at least one Republican on their side, Del. Jean B. Cryor of Potomac, a longtime supporter of the bill.

Wal-Mart could have solved the problem by increasing health benefits or hiring lobbyists and threaten to close down the distribution center, Cryor said. ‘‘They made their choice.”

Delegates have been the target of intense lobbying on both sides.

‘‘I’m squarely on the firing line,” said Del. Murray D. Levy (D-Dist. 28) of La Plata. ‘‘I think I made it pretty clear that I want to honor the vote I made last session.”

However, Levy noted that he could be convinced to switch sides if House Democrats need his support to overturn the veto. ‘‘If I want to be a member of the team, then I have to play along.”

Levy voted to sustain the veto.

Another Democrat who opposed the bill in 2005, Del. John L. Bohanan Jr. of California, supported the override.

‘‘We’re using taxpayers’ money when they could have addressed the problem and they failed to do that,” Bohanan said of Wal-Mart.

Del. Sally Y. Jameson (D-Dist. 28) of Bryantown flipped in the other direction. Del. Clarence Davis (D-Dist. 45) of Baltimore, who also planned to flip, did not vote.

Jameson is the executive director of the Charles County Chamber of Commerce. She said she worries about the bill’s effect on small businesses.

Proponents howled at Ehrlich’s misstatement on CNBC’s Street Signs show on Wednesday that Wal-Mart never hosted a fund-raiser for his campaign. Bill proponents supplied the invitation of a Dec. 15, 2004, event in Annapolis where the Ehrlich campaign raised $1,000 a person.

In its session, the Senate also voted to override vetoes of bills:

*Restructuring the Maryland Commission for Women.

*Creating a commission to study transportation in Southern Maryland.

*Revamping the elections board.

*Creating predelinquent programs in the Department of Juvenile Services.

*Allowing Baltimore city to install surveillance systems at illegal dumping sites.

*Allowing Saturday voting in municipal and county elections.

Staff Writers Alan Brody and Thomas Dennison contributed to this report.