5118

VETOES

This is to advise you that we have reviewed for
constitutionality and legal sufficiency Senate Bill 624, a
bill which amends Art. 56, Sec. 136 to temporarily reduce
the motor fuel tax on gasohol which is produced in Maryland.
As the reduction of this tax violates the prohibition in the
Federal Constitution on the states' discriminating against
interstate commerce, we are unable to approve the bill.

Article I, Sec. 8, Cl. 3 of the Federal Constitution
authorizes Congress "to regulate commerce ... among the
several states." It is well understood that this clause is
also a limitation on the powers of the states. In this
regard, the Supreme Court recently declared:

"One of the fundamental principles of Commerce
Clause jurisprudence is that no State, consistent with
the Commerce Clause, may 'impose a tax which
discriminates against interstate commerce ... by
providing a direct commercial advantage to local
business.' Northwestern States Portland Cement Co. v.
Minnesota, 358 U.S. 450, 458, 79 S.Ct. 357, 362, 3
L.Ed. 2d 421 (1959). See Boston Stock Exchange v.
State Tax Commission, 429 U.S. 318, 329, 97 S.Ct. 599,
606, 50 L.Ed.2d 514 (1977). This antidiscrimination
principle 'follows inexorably from the basic purpose of
the Clause' to prohibit the multiplication of
preferential trade areas destructive of the free
commerce anticipated by the Constitution. Boston Stock
Exchange, supra, 429 U.S. at 329, 97 S.Ct. at 606. See
Dean Milk Co. v. Madison, 340 U.S. 349, 356, 71 S.Ct.
295, 298, 95 L.Ed. 329 (1951)."

Maryland v. Louisiana, ____U.S. ____, 101 S.Ct. 2114, 2133

(1981). Taxing the sale of gasohol at a lesser rate simply
because it is produced in Maryland, is clearly
"discriminatory against interstate commerce ... by
providing a direct commercial advantage to local business."
Just recently, the Minnesota Supreme Court struck down a
similarly preferential tax on gasohol produced in that
State. Archer Daniels Midland Co. v. State of Minnesota,
315 N.W. 2d 597, 598-600 (Minn. 1982).

As the motor fuel tax is pledged to the redemption of
the consolidated transportation bonds, Transportation
Article, Sec. 3-215, and as the bill makes no provision to
insure that there is adequate revenue to redeem these bonds,
there are also issues of whether the bill violates the
prohibition in the Federal Constitution on the states
impairing contracts, Art. I, Sec. 10, Cl. 1, and the ban in
the State Constitution on the repeal of taxes pledged to
redeem the State's debt, Art. III, Sec. 34. Because the
bill is so clearly unconstitutional as a violation of the
Commerce Clause, we find it unnecessary to address these
other issues.