With about two weeks remaining before the 2011 Maryland General Assembly legislative session adjourns on April 11th, the pace in Annapolis has picked up considerably. RAM maintains a daily presence at the State House to protect the interests of our members and provide a united industry voice against legislation that would further burden restaurants and foodservice operators during this period of economic recovery. The following update summarizes a few of the key bills that we are tracking on behalf of the industry. If you have questions regarding these issues, call Melvin Thompson in the RAM office at 410-290-6800. To get more detailed information about these bills or the Maryland General Assembly legislative session, visit http://mlis.state.md.us.
ALCOHOL TAX INCREASE – HOUSE BILL 121/SENATE BILL 168 & SENATE BILL 994:
When the legislative session began in January, it seemed likely that lawmakers would approve a significant increase in the alcohol excise tax. This tax is paid by alcohol distributors and is reflected in the wholesale price paid by restaurants and retailers. Pending legislation, sponsored by Delegate James Hubbard (D-23A, Prince George’s) and Senator Verna Jones-Rodwell (D-44, Baltimore City), would increase this excise tax by an average of 800 percent, which would force restaurants and retailers to increase their sale prices to maintain acceptable profit margins. RAM strongly opposes this legislation. Thanks to the feverish backlash from restaurants, retailers and our customers, the proposed excise tax increase is unlikely. Instead, legislators are now considering an alternative revenue-generating proposal that would establish a new 9 percent sales tax rate for alcohol only. The sales tax rate for food would remain at 6 percent. Under the alternative proposal, the sales tax rate on alcohol would increase by one percent each year (beginning July 1, 2011) to reach the maximum sales tax rate of 9 percent by July 1, 2013. This new sales tax would be in lieu of increasing the alcohol excise tax. Obviously, such a difference in sales tax rates will require point-of-sale (POS) systems to be reprogrammed. As lawmakers consider this alternative bill, RAM will continue to monitor the debate and lobby legislators in an effort to mitigate the impact on our industry.
Hearings have been held for both HB 121 and SB 168 but there has been no further action on these bills. SB 994 passed the Senate Budget & Taxation Committee on 3/24/11 by a vote of 9 to 4. For more information about bill status, visit http://mlis.state.md.us/2011rs/billfile/sb0994.htm
WINE CORKAGE (BYOB) – HOUSE BILL 114/SENATE BILL 614, SENATE BILL 276, HOUSE BILL 1098, HOUSE BILL 544 AND HOUSE BILL 150/SENATE BILL 166:
Legislators from Baltimore City (Delegate Shawn Tarrant, D-40 & Senator Verna Jones-Rodwell, D-44), Baltimore County (Senator Bobby Zirkin, D-11), Prince George’s (Delegate Jolene Ivey, D-47), Montgomery (Delegate Brian Feldman, D-15) and the entire Frederick County Delegation introduced legislation this year to allow restaurants in their respective jurisdictions to permit customers to bring their own bottles of wine into licensed restaurants and clubs. This legislation gives restaurants the option to establish their own wine corkage policy and to charge associated corkage fees. After soliciting feedback from our members with liquor licenses, RAM strongly opposes this legislation.
All of these bills were soundly rejected by the House Alcoholic Beverages Subcommittee (Economic Matters Committee) on 3/7/11.
EMPLOYEE CREDIT REPORTS – HOUSE BILL 87/SENATE BILL 132:
This legislation, sponsored by Delegate Kirill Reznik (D-39, Montgomery) and Senator Catherine Pugh (D-40, Baltimore City), prohibits employers from using credit reports in hiring decisions, even when doing so in a manner consistent with existing federal law. RAM strongly opposed this legislation during the bill hearing because many restaurant operators use credit reports to help make hiring decisions for employees in supervisory, managerial or financial positions. We have since worked very closely with the sponsors and proponents of this legislation to amend the bill to allow credit reports to be used in hiring decisions for these specific types of positions. In this compromise, we were also successful in removing language from the bill that would have allowed potential employees to sue employers who violate the law. Instead, the amended version of the bill allows employees to file a complaint with the Maryland Labor Commissioner against employers who violate the law.
HB 87 passed the House on 3/25/11 by a vote of 92 to 46. SB 132 passed the Senate on 3/18/11 by a vote of 32 to 14. For more information about bill status, visit http://mlis.state.md.us/2011rs/billfile/hb0087.htm
BEVERAGE CONTAINER RECYCLING FOR RESTAURANTS & BARS – HOUSE BILL 389:
This bill, sponsored by Delegate Doyle Niemann (D-47, Prince George’s), requires restaurants and bars located in counties with a population greater than 150,000 to separate and recycle beverage containers (glass, aluminum and plastic). RAM strongly opposes this bill because such a mandate places an unfair and expensive burden on restaurants, bars and our suppliers. This bill requires restaurants and bars to work with beverage distributors to facilitate the collection of used beverage containers, or arrange for collection and recycling through contract haulers. In addition to the costly mandate created by this legislation, it seems senseless to require additional separation of beverage containers at establishments that may already utilize single-stream recycling collection. If local municipalities and counties were required to incorporate bar and restaurant recycling into their existing residential collection programs (underwritten by the property taxes that businesses already pay), we would reconsider our position on this issue.
HB 389 was withdrawn by the sponsor on 3/24/11.
PAYMENT CARD NUMBERS ON MERCHANT COPY OF TRANSACTION RECEIPTS – HOUSE BILL 482
This legislation, sponsored by Delegate Bill Frick (D-16, Montgomery), prohibits merchants from displaying the expiration date or more than 5 digits of a customer’s account number on the merchant’s copy of payment card receipts. Federal law already prohibits more than 5 digits from appearing on the customer’s copy of payment card receipts. Because credit card companies are now requiring merchants to comply with strict Payment Card Industry Data Security Standards (PCIDSS) that will ultimately prohibit the display of expiration dates and restrict all but 4 digits from appearing on both copies of payment card receipts, we view this legislation as largely unnecessary. However, we supported this bill only after the sponsor agreed to amend the legislation to change the compliance date to January 1, 2013. By this date, most merchants will have already made the necessary hardware/software upgrades to come into compliance with both PCIDSS and this legislation.
HB 482 passed the House on 3/18/11 by a vote of 139 to 0. The legislation is currently awaiting a hearing in the Senate. For more information about bill status, visit http://mlis.state.md.us/2011rs/billfile/hb0482.htm
MINIMUM WAGE INCREASE – HOUSE BILL 988/SENATE BILL 716:
This legislation, sponsored by Delegate Aisha Braveboy (D-25, Prince George’s) and Senator Rob Garagiola (D-15, Montgomery), would increase Maryland’s minimum wage to $9.75 by 2013, tie future increases to the Consumer Price Index and require that the cash wage for tipped employees be at least 75 percent of minimum wage. RAM strongly opposes this bill because of the significant increase in labor costs such legislation would cause for our industry.
Hearings have been held for both HB 988 and SB 716 but there has been no further action on these bills. For more information about bill status, visit http://mlis.state.md.us/2011rs/billfile/hb0988.htm
