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ATCC urges end to statutory MOU requirement with comptroller; comptroller opposes removal
Summary
The Alcohol, Tobacco and Cannabis Commission told the House Economic Matters Committee that House Bill 112 would remove a statutory requirement to execute a memorandum of understanding with the Comptroller’s Office; the Comptroller’s Office urged the committee to keep the requirement, saying it ‘‘future-proofs’’ interagency duties.
The Alcohol, Tobacco and Cannabis Commission asked the House Economic Matters Committee for a favorable report on House Bill 112, which would remove a legislative requirement that the commission enter a memorandum of understanding with the Comptroller of Maryland.
The bill’s change, the ATCC said, would eliminate a statutory “shall” that requires an annual MOU between the two agencies. "House Bill 112 does a very simple thing. It removes the legislative mandate for an MOU between the comptroller of Maryland and the ATCC," said Jeff Kelly, executive director of the Alcohol, Tobacco and Cannabis Commission. Kelly told the committee the ATCC no longer relies on the comptroller for core administrative services and has built out human resources, budgeting, procurement and an independent licensing system.
The comptroller’s deputies urged the committee to retain the statutory mandate. Rachel Sessa, deputy comptroller for law and oversight, said the 2021 legislative requirement that the agencies enter an MOU was intended to ensure details about recordkeeping, bonds and related functions are memorialized. "Shall is a great way to future proof," Sessa said, adding that the MOU specifies how records are maintained, how bonds are processed and how claims are handled.
Why it matters: The agencies split responsibilities when the ATCC was created. Supporters of HB 112 say the ATCC has matured into an independent agency able to operate without a mandatory MOU; opponents say codifying the requirement prevents disputes and preserves institutional memory if leadership or priorities change.
What the ATCC told the committee: Kelly and Thomas Akris, director of the ATCC’s legal and legislative division, described three narrow functions currently referenced in the MOU: access to a parking lot in Jessup used for seized contraband vehicles, assistance with tax "breakage" claims when wholesalers claim excise tax credits for damaged product, and handling surety bonds used to secure tax obligations. "The MOU that's in place now covers 3 things," Akris said, and he told lawmakers that breakage inquiries occur about "1 to 2 times a year." Akris also said that some information — for example state and federal taxpayer information — cannot be shared under existing legal restrictions even if an MOU exists.
What the Comptroller told the committee: Deputy Comptroller Sessa and Van Howarth, director of the Comptroller’s Field Enforcement Bureau, said the annual, statutory MOU provides clarity about who is responsible for which tasks and how sensitive tax-related records are handled. Howarth told members that the relationship is ‘‘unique’’ because the ATCC was previously part of the comptroller’s office and that codifying an MOU helps ensure consistent procedures if leadership or priorities change.
Committee discussion: Members asked about timeliness of MOU signatures, staff impacts, and whether removing the statutory "shall" would materially change how the parties cooperate. ATCC witnesses said negotiations sometimes ran late; Akris told the committee that in at least one year a draft MOU that began negotiations in April was not signed until August or October, raising audit concerns. Comptroller witnesses said a statutory obligation creates a fallback if future administrations choose not to cooperate.
What the bill would not do, per testimony: Akris and Kelly said the ATCC currently has its own HR, finance and IT support (IT provided through DoIT) and an independent licensing system, and they stressed the agency will enter MOUs voluntarily when appropriate — but they argued the statute’s annual mandate is no longer necessary.
Next steps: The committee heard the testimony and took no recorded vote during the hearing. Several members asked clerks to follow up with additional information and representatives of both agencies said they had met informally before the hearing and would continue discussions.
Ending: The committee concluded the HB 112 hearing after questioning; no formal committee action was recorded in the transcript.
