WILLIAM DONALD SCHAEFER, Governor

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall
take effect June 1, 1987.

June 2, 1987
The Honorable R. Clayton Mitchell, Jr.
Speaker of the House of Delegates
State House
Annapolis, Maryland 21404

Dear Mr. Speaker:

In accordance with Article II, Section 17 of the Maryland
Constitution, I have today vetoed House Bill 1516.

This bill would amend Section 7-310 of the State Finance and
Procurement Article, which was enacted by the General Assembly in
1986 as Chapter 655 of the Acts of 1986. Chapter 655 creates the
Dedicated Purpose Account of the State Reserve Fund. The
Governor is authorized to include appropriations to the Dedicated
Reserve Fund in his budget either for a specific purpose,
described as appropriations "for major, multi-year expenditures
where the magnitude and timing of cash needs are uncertain", or
for a general purpose, described as appropriations to meet
"expenditure requirements which may be impacted by changes in
federal law or fiscal policies, or other similar contingency
situations." Chapter 655 requires that the Governor provide
prior notice to the Legislative Policy Committee of any budget
amendment that would transfer funds from the Dedicated Purpose
Account to any agency account where the funds had been
appropriated for a specific purpose, and that the Governor
provide prior notice to the Budget Committees of any budget
amendment transferring funds that had been placed in the
Dedicated Purpose Account for a general purpose.

It is my understanding that Chapter 655 was enacted after
extensive discussions between the Governor's Budget Secretary and
members of the General Assembly concerning the demands created by
the savings and loan crisis and the then uncertain shape of both
the federal tax reform, which could have resulted in reduced
state revenues, and the federal deficit reduction movement, which
could have resulted in major reductions in federal dollars for
State programs. The 1986 General Assembly approved
appropriations of $15 million to the Dedicated Reserve Account
for the savings and loan crisis, and another $4 million of
appropriations, contingent on receipts from the Environmental
Trust Fund, which were used for low income weatherization
programs.

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