Update On Local Legislation Of Significance

ANNAPOLIS – With the Maryland General Assembly 2008 session suddenly getting long in the tooth, several bills of local importance have been passed or voted down by one or both sides of the aisle in Annapolis in the last week.

Cross-over day, or the point in the session at which a bill introduced in either the House or the Senate must survive in order to be sent over to the other chamber for approval, passed this week, starting off a chain reaction of sorts on votes on a wide variety of bills. As a result, many of the bills introduced by the local delegation in Annapolis either survived or failed this week.

Some, including a bill that would extend a funding mechanism for the future expansion of the Ocean City convention center, sailed through both chambers and now await approval from the governor. Others, including a bill that would allow Worcester County’s Liquor Control Board to purchase directly from manufacturers and bypass the cost tacked on by distributors, will not see the light of day.

The fate of hundreds of other bills will be decided in the last week of the session, which concludes with Sine Die on April 7. The following is a brief look at some of the pieces of legislation with particular interest to Ocean City and Worcester County as they wind there way through the last days of the session:

Convention Center Bond Bill Passes Both Chambers

House Bill 1064, introduced by local Delegates James Mathias and Norm Conway, would enable the local governing body of the code county, in this case Worcester, to impose a tax on food and beverages and a resort community if all or a portion of the increase was dedicated to the expansion of a convention center in the community.

For years, there has been an additional one cent per $1 tacked on the sales tax in Ocean City to help pay for the most recent expansion of the Roland E. Powell Convention Center. The supplementary sales tax is set to expire in 2015, but with Ocean City’s convention center possibly slated for another major expansion in the next few years, the bill introduced by Mathias and Conway would provide the mechanism for extending it through the life of the new expansion project.

The legislation enabling the extension of the one-cent per $1 tax sailed through the House last week with a unanimous 138-0 vote and gained the approval of the Senate Budget and Taxation Committee, although it has not been voted on by the entire Senate.

Mathias said this week he is confident the Senate will follow the House lead and approve the extension of the special tax rate.

“This doesn’t cost the state a cent,” he said. “It’s actually a benefit for the state because expanding the convention center will expand the tax base, create jobs and help stimulate the economy.”

While no firm plans are in place, an expansion of Ocean City’s convention center is currently under study and another major addition is anticipated.

LCB Purchasing Bill To Be Withdrawn

Worcester is somewhat unique among Maryland counties in that it has a Liquor Control Board that oversees the distribution and sale of distilled spirits in the county. The LCB purchases distilled spirits from wholesalers and distributes it to the county’s licensees – restaurants, bars and taverns – essentially adding another middle man between the manufacturers and the consumers.

Most counties in Maryland have a three-tier system in place where the manufacturers sell liquor to the wholesalers who then sell directly to the retailers. However, Worcester operates in a four-tier system with the LCB inserted between the wholesalers and the retailers, or licensees.

House Bill 1373, introduced by Mathias and Conway, would allow Worcester County’s LCB to purchase liquor directly from the suppliers, or manufacturers, thus bypassing a layer of wholesalers who often tack on price increases as high as 40 percent. By allowing the LCB to bypass the wholesalers, the cost of liquor for first the LCB, then the licensees and ultimately the consumer could be significantly reduced.

In a letter to Mathias last week, LCB Executive Director Brian Sturgeon said the intent of the bill is to reduce the cost of goods sold to the county by the manufacturers and that the bill’s passage would allow the LCB to purchase products in the same manner as all of the other wholesalers and dispensaries in the state.

“The impact of passing this bill would be widespread,” the letter reads. “The hospitality industry, promotion and tourism, bar and restaurant owners, and retail consumers would all benefit from the lower prices of spirits in this county.”

However, Mathias said this week the legislation would soon be withdrawn due to the complex legal issues, but said it would not disappear and would likely be re-introduced next year.

“It’s not coming out of committee,” he said. “It’s very complicated legally, and the committee understands that. The whole thing turns on the 21st Amendment, which repealed prohibition and gave the states rights to regulate alcohol. We have to be very careful with it. It will be held for further study.”

Meanwhile, a bill introduced by a Baltimore delegate at the request of some wholesalers to disband Worcester County’s LCB and allow the retailers to purchase directly from the wholesalers was also withdrawn.

Commercial Waterfront Tax Assessment Bill OK’d

Another bill of local importance approved by both the House and the Senate last week would establish commercial waterfront property as a subclass for property tax assessment purposes. Sister bills were filed in both the House and the Senate with Senator Lowell Stoltzfus signed on as a co-sponsor on the Senate bill and Mathias signed on as a co-sponsor for the House bill.

The intent of the bills, which were borne out of the working waterfront commission, is to protect working commercial waterfront areas and the indigenous seafood industry from soaring tax assessment increases by assessing waterfront property based on its use rather than its market value. Essentially, it would allow commercial waterfront areas to be assessed based on what is actually going on at them rather than what they could be in the future if they were redeveloped.

Stoltzfus said the bill simply boils down to a current use versus potential use issue and it would apply to working waterfront areas all over Maryland and the Eastern Shore including the commercial harbor in West Ocean City, for example.

“We can’t assess a seafood business at the same rate as a condominium,” he said. “That use is not generating the same income as a different use would.”

House Bill 612 passed by a vote of 139-0 while the Senate passed its version by a 47-0 vote. Stoltzfus said this week there is little or no reconciliation needed between the two versions.

“It’s a done deal,” he said. “The wording in the two bills is virtually the same. All it needs now is to be signed by the governor.”

No Compensation For Clammers

In yet another bill introduced this session related to watermen and the seafood industry, three Eastern Shore Senators including Stoltzfus filed legislation that would compensate eligible clammers for fair market value of equipment and diminished earning capacity due to the prohibition of hydraulic dredging in the coastal bays behind Ocean City.

The General Assembly last year passed legislation banning the use of hydraulic dredging to harvest clams in the coastal bays and the bill introduced early in the session would have provided a mechanism for compensating the roughly 10 commercial clammers put out of work by the new law. However, the bill died when it got an unfavorable report from the Senate’s Education, Health and Environmental Affairs Committee.

Soft Shoreline Bill Passes House

Although this bill would apply to all waterfront areas of the state, it could have significant implication in Ocean City and Worcester County where development along the shoreline continues despite the recent real estate slowdown. House Bill 973, which the entire House approved last week by a vote of 115-21 would allow the Maryland Department of the Environment (MDE) to require waterfront property owners to install soft, or “living,” shorelines as opposed to bulkheads or rip-rapped stone revetments.

Under the bill, soft, sloping shorelines made up of sand, indigenous plants and some rock would be required on new projects or the reconstruction of existing waterfront areas where practical. With the passage by the House, the bill crossed over to the Senate for approval although no action has been taken.