WILLIAM DONALD SCHAEFER, Governor

In accordance with Article II, Section 17 of the Maryland
Constitution, I have today vetoed Senate Bill 460.

Senate Bill 460 establishes a new procedure for approving capital
lease financing for the construction or substantial
rehabilitation of all State buildings, except for certain higher
education facilities. In general, the bill would apply to
sale-leaseback arrangements and to long-term leases with a
purchase option that the State might enter into with a private
developer who undertakes to construct or rehabilitate the
facility.

Under the new procedures established by the bill, approvals would
have to be secured from the Senate Budget and Taxation Committee
and the House Appropriations Committee on two separate occasions:
once, at the time the initial proposal is first being sent to the
Board of Public Works for approval, and again following the
completion of the procurement process immediately prior to the
consideration of the final proposal by the Board of Public Works.
In this latter instance, the failure by the two Budget Committees
to take action within 60 days is deemed the equivalent of
approval. In effect, the Budget Committees would be reviewing
and approving each separate capital lease project and would be
reviewing and approving the Executive Branch's decision of which
from among the competing bidders should be awarded the project.

The Attorney General of Maryland has advised me in the attached
opinion that these approvals constitute legislative vetoes of
"doubtful constitutionality" under the Maryland Constitution and
may not be severable from the bill, thereby rendering the entire
bill of doubtful constitutionality.

In addition, I must note that the General Assembly already has
ample opportunity to consider the desirability of entering into
capital leasing financing under current law and procedures
without the additional procedures proposed by Senate Bill 460.
All capital lease projects will be included either in the annual
State capital budget or in the annual State operating budget. In
either case, the General Assembly will have the opportunity to
evaluate and make a decision on the desirability of the project
and on the general parameters of its financing terms.

Sincerely,

William Donald Schaefer

Governor

May 24, 1988

The Honorable William Donald Schaefer
Governor of Maryland
State House

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