3338

VETOES

Senate Bill No. 136

AN ACT concerning

Passenger Rental Cars - Sales and Excise Taxes

FOR the purpose of exempting passenger rental cars from the
vehicle excise tax after a certain period; providing
that the excise tax not be collected under certain
circumstances; increasing the retail sales tax and use
taxes imposed on the rental of these vehicles; pledging
this increased revenue to the Transportation Trust
Fund; requiring the Comptroller to take certain actions
under certain circumstances; and providing a change in
the taxes pledged to consolidated transportation bonds
issued after a certain date; and providing that the
provisions of this Act shall terminate automatically
after a certain date.

May 27, 1980
Honorable James Clark, Jr.
President of the Senate
State House
Annapolis, Maryland 21404

Dear Mr. President:

In accordance with Article II, Section 17 of the
Maryland Constitution, I have today vetoed Senate Bill 136.

Senate Bill 136 exempts passenger rental cars from the
vehicle excise tax and imposes an eight cent sales tax on
car rentals. I am informed that the purpose of the bill is
to eliminate a "competitive disadvantage" faced by Maryland
rental car companies. I share the desire to eliminate that
disadvantage.

Revenues derived from the vehicle excise tax are
pledged as security for the repayment of the Department of
Transportation Consolidated Transportation Bonds. Senate
Bill 136 attempts to preclude the impairment of this
obligation by providing: (1) for the continued imposition,
but not collection, of the excise tax; and (2) if sales tax
revenues are not sufficient to replace the lost revenues
associated with the noncollection of the excise tax, for the
replacement of the lost revenues from the General Fund.

The Attorney General has expressed the view that some
provisions of the bill may conflict with the Constitution of
Maryland. Bond Counsel to the Department of Transportation
strongly shares that view.