3838

VETOES

House Bill 1733, which was passed by the General Assembly
and signed by me on May 13, 1986, accomplishes the same purpose.
Therefore, it is not necessary for me to sign Senate Bill 935.

Sincerely,
Harry Hughes
Governor

Senate Bill No. 935

AN ACT concerning

Baltimore City - Enterprise Development Program

FOR the purpose of providing that any loan made by the City out
of the enterprise development fund, if made from the
proceeds of a bond issue, may not bear interest at a rate
that would cause the bonds to be arbitrage bonds for federal
income tax purposes.

BY repealing and reenacting, with amendments,

The Public Local Laws of Baltimore City
Section 27-6(b)

Article 4 - Public Local Laws of Maryland
(1979 Edition and 1983 Supplement, as amended)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 4 - Baltimore City

27-6.

(b) Any equity investment or loan made pursuant to
paragraph (a):

(1)  Shall be made only to and for the benefit of an
enterprise; and

(2)  Shall be upon the terms and conditions as the
City in its sole and absolute discretion may prescribe, provided
that:

(i) IF A LOAN IS MADE FROM THE PROCEEDS OF A
BOND ISSUE, THE [a] loan may not bear interest at a rate THAT
WOULD CAUSE THE BONDS TO BE "ARBITRAGE BONDS" WITHIN THE MEANING
OF SECTION 103(C) OF THE INTERNAL REVENUE CODE OF 1954, AS
AMENDED, OR ANY SUCCESSOR PROVISION [exceeding 1/8 of 1 percent
plus the interest cost of the: