Important progress for state’s wine industry, consumer protection and tax enforcement highlight Comptroller’s productive and successful session
ANNAPOLIS, MD (April 13, 2010) – Citing the passage of historic legislation that will help foster growth in the state’s burgeoning wine industry, new regulations to aid in the enforcement of tobacco tax laws, legislation to protect consumers from predatory refund anticipation loans and an innovative law to help crack down on delinquent child support payments, Comptroller Peter Franchot today thanked the members of the Maryland General Assembly for their support during the 2010 legislative session. He also expressed particular appreciation for the General Assembly’s commitment to provide his agency with the resources and budget it needs to continue to be a national leader when it comes to tax collection and providing efficient and effective services to the taxpayers of Maryland.
“At a time when the state of Maryland is facing extraordinary fiscal and economic challenges, the Comptroller’s Office must have the tools to reward those taxpayers that are dutifully paying their taxes on time, and identify and collect from those who are not. By supporting our budget request and passing legislation to ensure efficient regulation of all tobacco products, the General Assembly has once again proved to be a supportive partner in our efforts,” said Comptroller Franchot.
“I applaud the General Assembly for passing numerous bills that provide important consumer protection as well as bills that will help strengthen Maryland’s future economic development in growing industries such as our wineries and technology companies.”
As the state’s regulator of alcohol products and as the chief fiscal officer of Maryland, the Comptroller has been a strong advocate of the state’s blossoming wine industry. Senate Bill 858, sponsored by Senator Joan Carter Conway, provides a statewide framework for wineries to market and sell their products more effectively, which in turn will allow them to expand and create new jobs. For the first time, Maryland wineries will be able to host events and create a more memorable consumer experience, thus attracting more repeat customers and more tourists to Maryland.
“I salute all the members of the beverage industry that came together to craft a workable and meaningful piece of legislation that will truly make a difference for Maryland’s wineries,” said Comptroller Franchot, who commended both Senator Conway and Del. Mary Ann Love, who sponsored the cross-filed House Bill 921, for their leadership. “I am proud to have been a part of a collaborative effort that will create new jobs, economic activity and tourist destinations in our State.”
House Bill 88 is the Comptroller’s departmental bill that creates a licensure structure for Other Tobacco Products (OTP) in order to provide effective regulatory oversight and make collection of taxes even more effective and efficient. Included in the definition of OTP are tobacco products other than cigarettes, including chewing tobacco, snuff, and cigars. This new system will provide improved tobacco tax collection and efficiencies by making wholesalers the focal point of taxation. The state’s wholesalers will pay the tax on the product and proving monthly tax returns as they currently do for cigarettes. This streamlined process will allow for more focused oversight and is expected to help increase the revenue from OTP tax collections.
“We are always looking for ways to improve our tax compliance efforts and ensure everyone is paying their fair share,” said Comptroller Franchot. “We have a strong partnership with the state’s tobacco wholesalers and we are confident this will continue in the area of OTP. This legislation also frees nearly all of the state’s retailers from having to file quarterly OTP reports and will help make there lives easier as they work to keep their businesses afloat during this recession.”
The Comptroller was very pleased with the overwhelming support for House Bill 963, sponsored by Delegate Galen Clagett. The bill allows the Comptroller’s Office to regularly cross check its Unclaimed Property accounts with the Department of Human Resources (DHR) file of delinquent child support payers. If matches are found, the Comptroller’s Office will direct those funds directly to DHR, who will then make sure they get to the children and the families who are owed the money. Last year, spurred by Delegate Clagett’s bill, the Comptroller’s Office ran a test match through its system and uncovered 1,700 delinquent parents who, in total, owed their families more than $670,000. This mini-pilot program illustrated both the potential of this idea and the need for enabling legislation.
“This is a bill that will provide critical and overdue financial support for families throughout our State, many of whom are struggling to make ends meet in these difficult times, and I am personally grateful to Delegate Clagett for his leadership and persistence in fighting for its passage,” said Comptroller Franchot. “As we demonstrated last year, we have the technology to run these matches. My agency runs delinquent taxpayers through multiple databases on a regular basis and it only makes sense that we do the same with delinquent child support payments.
This is a perfect example of how our new, state-of-the-art technology, coupled with our investments in human capital, will help improve the daily lives for many Maryland families.”
The Comptroller also strongly supports the consumer protection provided by House Bill 1206, which was sponsored by Delegate Bill Frick. HB 1206 will reinforce the efforts of the Comptroller’s Office to educate Marylanders on the financial perils of participation in a Refund Anticipation Loan (RAL) program. While promising to get consumers their money quickly, these loans come with hidden fees, incredibly high interest rates and potentially devastating penalties.
This new legislation is a major step forward by requiring those who sell these products to prominently disclose the terms, conditions, fees and attendant risks of the RALs. Furthermore, the legislation requires the sellers to inform potential borrowers of sensible alternatives – such as direct deposit of tax refunds – while reminding them that their anticipated tax refund will typically arrive in just a matter of days.
“We must do all we can to prevent Marylanders from entering into short-sighted commitments that could have devastating effects on their long-term financial well-being,” said Comptroller Franchot. “Particularly in these trying times, people are more apt to gravitate towards programs that offer them quick cash. The truth is, not only are these RALs not that much faster, if not slower, than getting your state refund, the costs are so high that they end up costing the consumer in the long run. This was an important piece of consumer protection and I applaud Delegate Frick and the co-sponsors of House Bill 1206 for their leadership, and the entire General Assembly for passing this legislation.”
One area where there is still room for improvement next session is the movement to ensure that financial literacy is taught and tested in Maryland high schools. Despite encouraging signs of support among lawmakers from both parties, the effort to pass statewide financial literacy legislation ultimately fell short this year. An amended version of Senate Bill 264 – which was co-sponsored by Senators Anthony Muse, Kathy Klausmeier, Rich Colburn, David Harrington and Mike Lenett – passed the Senate but was not voted upon by the House Ways and Means Committee prior to the end of session. Similarly, two House bills that were identical to SB 264 received hearings but were not voted upon in the Ways and Means Committee.
Comptroller Franchot expressed disappointment over the bill’s fate but lauded the statewide coalition of students, teachers, parents and civic leaders that came together in support of this vital effort. He also thanked the Senate for its support of SB 264 and voiced optimism over the bill’s prospects next year. “The ongoing effects of our nation’s economic crisis, which has devastated so many Maryland families in recent years, is yet another reminder of the urgent need for mandatory financial literacy training in Maryland’s public schools,” said Comptroller Franchot.
“The fact remains that far too many Marylanders lack an understanding of the fundamental principles of personal finance, which in too many cases has led to a loss of homes, credit ratings and financial security. Since the stakes are so high, I am grateful to the statewide coalition of supporters that gave their time and voice to this vital education reform initiative, the sponsors of financial literacy bills in the House, and to Senate for recognizing that something must be done now.
“Given that Maryland is falling further behind many other states that have already adopted graduation requirements in financial literacy, I look forward to joining our bipartisan coalition of supporters and lawmakers in support of a statewide graduation requirement in 2011.”Overall, the Comptroller felt this was a successful session that saw many important issues addressed. He looked forward to continuing his work with the Governor and the General Assembly to keep Maryland moving forward on a sound financial footing as the year moves forward.
“The nation’s economic crisis has obviously taken its toll on our state’s finances, just as it has affected households and businesses throughout Maryland,” he said. “I look forward to working in partnership with our state’s leaders to address our long-term budget deficit in a fiscally responsible manner, one which will maintain a strong business climate without placing an undue burden on Maryland families.”
Additional bills the Comptroller supported this session are listed below. For more information, please visit the Comptroller’s Web site at www.marylandtaxes.com.
- Senate Bill 1 – Military retirement Income
- Senate Bill 2 – Task Force on Minority Business Enterprise Program and Equity Investment Capital
- Senate Bill 64- Maryland Research and Development Tax Credit Sunset Extension
- Senate Bill 65- Maryland Veterans Trust Fund- Income Tax Checkoff
- Senate Bill 636 – Mental Hygiene Administration – Upper Shore Community Mental Health Center – Continued Operation
- Senate Bill 1081- Rebate Programs for Retail Sales- Collection of Sales and Use Tax
- House Bill 241 – Income Tax – Net Operating Loss Deductions – Loss from Criminal Fraud or Embezzlement
- House Bill 464- Maryland Clean Energy Incentive Act
- House Bill 1025- Baltimore City- Sale of Motor Fuel for Dirt Bikes Prohibition
- House Bill 1325- State and Local Government Procurement- Banking and Financial Services
- House Bill 1558- Commercial Law – Sales of Unpackaged Cigarettes Prohibition
Contact: Joe Shapiro, 410-260-7305 (office), 443-871-2244 (cell)