When "Madame Bessie" Frank and her family of fortune tellers decided to move their practice to Forest Heights two years ago, the town council quickly passed an emergency ordinance outlawing palm readers in the small Prince George's County town.

The Franks, who were already licensed by the county, went to court to prove that their license gave them the right to tell fortunes anywhere in the county, even Forest Heights. The local court, and then the Maryland Court of Appeals, agreed.

Madame Bessie, who now quietly practices her craft from her home on the outskirts of town, could not foretell that her case would trigger a state-wide debate over whether counties or municipalities have superior law-making powers.

Bills have been introduced in both the House and the Senate of the Maryland General Assembly this session to restore the power of municipalities across the state to pass ordinances contrary to those of chartered counties.

Traditionally, counties, which were granted home rule by the state in 1914, and municipalities, granted home rule in 1954, have assumed they had equal law-making powers in areas concerning citizen health and welfare. But the state constitution makes no provisions for instances in which county and municipal laws are in conflict.

The Maryland Court of Appeals ruled last Oct. 7 in the case of Tillie Frank, Bessie's daughter, versus the mayor and town council of Forest Heights, that because the county and the town's ordinances governing fortune tellers were in conflict, the county ordinance prevails.

The ruling implied that county laws are superior to those of incorporated municipalities. That implication has touched a sensitive chord among town and city fathers, who thought their home rule problems were a part of history.

"We are very concerned about the court's decision and have asked the state legislature to develop a bill that would return the state to the status quo before the Frank case," said John Burrell, executive director of the Maryland Municipal League, which represents 132 cities and towns.

Althea (Tee) O'Connor, executive director of the Maryland Association of Counties, said the ruling poses no new problems for the counties. "But the decision left the municipalities wondering whether or not they still have their police powers," she said.

"Generally most counties have not assumed that county ordinances passed under their police powers would automatically take effect in the county's municipalities," O'Connor said. "But in Prince George's, the relation has been different. P.G. is the only county in the state where laws passed by the county are assumed to prevail in the municipalities."

"In a sense, the court's decision overturned the understanding of most counties that municipalities can have their own laws," said Del. Helen L. Koss (D-Montgomery), a sponsor of the House bill. "Our bill would give the municipalities the option of being included or not included in county laws."

The relationship between Prince George's County and its 28 municipalities has so far been left intact by the court decision. But County Attorney Robert B. Ostrum believes the proposed legislation, giving cities and towns broader law-making authority, could cause serious problems.

"What the court did was to confirm our view and to put in place as law what this county had practiced all the time," Ostrum said. "I think the legislation as it is being proposed would sweep with too broad a brush. Municipalities could end up with authority that they shouldn't have.

"What if the municipality hasn't passed a law to address a certain problem, would the county law apply under the new legislation?" Ostrum said. "In the past, there has been a tacit understanding in Prince George's that the county law applied."

The citizens are caught in the middle, Ostrom added. "It could be embarrassing if a citizen goes to a small town expecting the protection of a consumer protection law, for example, but finds out that they haven't passed one."

While laws passed in Prince George's County traditionally take effect automatically in its municipalities, the story is different in Montgomery County, where Rockville and Gaithersburg have a history of passing their own ordinances.

Gaithersburg city attorney Stanley D. Abrams said that Gaithersburg, Rockville and the county each have separate regulations that cover building and housing codes, fire codes, animal control and consumer protection. "Under the court's decision the citizens may be put under the burden of obeying two sets of laws," Abrams said. "For the cities, there's the question of which set of laws applies and if both sets apply, there is the additional expense and confusion of enforcement."

In Rockville, which has issued permits under its own building code over the last five years for $245 million worth of construction, the city expects problems in areas such as its historic district, where dozens of old houses have been converted to office use, according to Paul Radauskas, superintendent of licenses and inspections for Rockville.

The city's building code did not require that automatic sprinklers be installed when the buildings were renovated. But the county code would require that at least 25 of the already-converted buildings be equipped with automatic fire sprinklers, which would be an enormous and probably unfeasible expense, Radauskas said.

The case that prompted this jurisdictional soul-searching no longer seems a problem. Forest Heights Mayor Warren F. Adams said the fear that prompted the fortune-telling ban in 1979 was largely unfounded.

"They're really nice people," Adams said of the Frank family recently. "They mind their own business. You hardly know they're there."