SPIRO T. AGNEW, Governor                        1753

Senate Bill No. 482. State Debt—Hospitals

AN ACT to authorize the creation of a State debt in the aggre-
gate amount of Twenty Million Dollars ($20,000,000.00) for the
purpose of aiding in the financing of certain loans to be made to
voluntary nonprofit hospitals upon completion of the construction,
expansion, relocation, replacement or modernization of their hospital
buildings, facilities, and equipment; providing generally for the terms
and conditions of creating this debt and for expending funds there-
under; providing generally for the issue and sale of certificates
evidencing this loan; and to repeal and re-enact, with amendments,
Section 568F (a) and (b) of Article 43 of the Annotated Code of
Maryland (1965 Replacement Volume), title "Health," subtitle
"Maryland Hospital Commission," to change the conditions and
procedures for repayment of State loans made to nonprofit hospitals,
to change the basis for determination of the rate of interest to be
charged upon the repayment of a hospital loan, and to provide for the
effect of these changed conditions on loans approved prior to the
effective date of this Act.

May 4, 1967.

Honorable William S. James
President of the Senate
State House
Annapolis, Maryland 21404

Dear Mr. President:

In accordance with Section 17, Article II, of the Maryland Con-
stitution, I have vetoed today Senate Bill 482 and am returning it
to you.

This bill would authorize additional State debt in the amount
of $20 million to aid in the construction and modernization of
voluntary non-profit hospitals. The bill supplements a previous
authorization of $50 million passed in 1964.

Although there is no question about the desirability of better
hospital facilities and services for Maryland citizens, there must be a
recognition that the implementation of such needs must be fiscally
sound. Bond authorizations approved by the 1967 General Assembly
totaled $284,046,700. Most of them were essential to provide neces-
sary State services. Although this bill involves a comparatively small
part of the total amount, it has some characteristics that distinguish
it from most of the other authorizations.

First, it would supplement a prior very substantial authorization
of $50 million, certainly a heavy present investment in hospital
expansion.

Next, even though the hospitals affected would eventually repay
loans under the program, initial debt service would involve the State
property tax which our fiscal reform and pay-as-you-go programs are
attempting to reduce.

Finally, the bill and its predecessor give more favorable treat-
ment to private hospital loans than to similar grants for public school
construction. Counties are required to repay school loans within the
bond term, whereas the hospitals are given a much greater length of
time, 25 years, to amortize the indebtedness.