Bills Would Strip Regulatory Power and Contributions from Franchot

ANNAPOLIS (February 28, 2019)—Two bills that would shift regulatory power of alcohol, tobacco and motor fuel from Maryland Comptroller Peter Franchot's office to a new commission—and limit those industries from donating money to Franchot—were discussed at competing press conferences and a heated committee meeting last week.

The Field Enforcement Division of the Comptroller's Office enforces state laws on alcohol, tobacco and motor fuels. Senate bill 703 and House bill 1052 would make that office part of a new Alcohol, Tobacco and Motor Fuel Commission.

Senate bill 687 would prevent the comptroller and those employees, members of licensing boards and officers appointed or elected to trusts or profits from receiving contributions greater than $100 from the alcohol industry.

The Field Enforcement Division will remain intact and in place, the difference is the division will no longer ask the comptroller questions on policy, Sen. Benjamin Kramer, D-Montgomery, lead sponsor of Senate bills 703 and 687, said at a press conference last week.

This bipartisan bill is one of many increasing accountability of alcohol in the state, Delegate Warren Miller, R-Howard and Carroll, lead sponsor of House bill 1052, said last week.

The legislation is a response to rising alcohol content and bars serving people too many drinks , Bruce Poole, chair of the Task Force to Study State Alcohol Regulation, Enforcement, Safety and Public Health said on Feb 21.

Franchot said he supports limiting donations to all elected officials, but is strongly opposed to the reassignment of regulatory powers.

Franchot called the reassignment a "political stunt," and "reckless, costly and unnecessary," at a press conference on Feb. 21. He warned a $750 million credit from tobacco industries could be put at risk if his office loses regulatory power.

Because of sensitive taxpayer information located in the comptroller's office, the Field Enforcement Division would need to move, Franchot told lawmakers on Friday.

A revenue policy analyst for the comptroller estimates a $13.4 million initial cost for the bill, with following yearly costs of around $6 million to fund duplication of resources, hardware and software, office space and potential loss of institutional knowledge.

The Department of Legislative Services, however, estimates a $4 million initial cost, with subsequent yearly costs of around $700,000 for new positions, software and hardware.

"Why are we doing this?" Jeffrey Kelly, director of the Field Enforcement Division asked at a press conference last week. There is no evidence the Field Enforcement Division has been underperforming, Kelly said.

The Field Enforcement Division has issued 20,400 alcohol citations, 1,423 tobacco violations and 1,815 motor fuel violations since 2007.

Legislators are making an act of political retribution because they are upset over the comptroller's reform efforts for craft brewers, Franchot said.

Franchot put forward legislation in 2018 that would have allowed craft brewers to to sell their manufactured beer directly to customers, instead of going through a wholesaler.

Maryland Gov. Larry Hogan at a Board of Public Works meeting on Feb 6 urged the legislature to put aside "petty partisanship."

Franchot and the legislature have had a history of discontent with each other. A 2018 campaign ad sponsoring Franchot refers to the legislature as "yes-men" in the "Annapolis Machine," where "bosses rule from the back-rooms."

Kramer used his time at the committee hearing on Friday to respond to what he called "misinformation" coming from the comptroller's office.

"His lies know no bounds when it comes to a pot of gold," said Kramer, accusing Franchot of extorting money from the industries he regulates.

Franchot's office in turn filed an ethics complaint against Kramer on Monday.

Kramer accused Franchot of "committing a crime with no burden of fact," said Len Foxwell, chief of staff for the comptroller's office.

This week, Kramer told Capital News Service, "My comments are what my comments were at the hearing."

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