WILLIAM DONALD SCHAEFER, Governor

I recognize the concern of the General Assembly that the State of
Maryland maintain its established reputation for fiscal
responsibility which has served the State so well for over 40
years. Nevertheless, the provisions of Senate Bill 306 create an
administrative complexity in the bond approval process that could
work against the interests of the State. Most significantly, the
mandatory 45-day review period could cause significant delays in
bringing State bonds to market and might hinder the State's
ability to take advantage of favorable market conditions.

I am confident that the Board of Public Works and the Secretary
of Transportation have managed their respective duties for
issuing State debt quite responsibly, and I see no justification
for imposing additional restrictions. I would also point out
that in this past Session the General Assembly approved House
Bill 1224, which I signed into law. The bill specifically
authorizes the Board of Public Works to approve capital
appreciation bonds which, by delaying interest payments until the
maturity of the bonds, deviates from the norms established by
Senate Bill 306.

For a number of years, it has been the practice for the Board of
Public Works to provide information to the Department of Fiscal
Services on all bond issues scheduled for consideration by the
Board. The Department of Fiscal Services has an opportunity to
advise interested members of the General Assembly about these
bond issues, and there is an opportunity for informal
communication between members of the General Assembly and the
members of the Board of Public Works. I will ask the other
members of the Board of Public Works to consider suggestions from
the Department of Fiscal Services on ways to improve these
practices if thought to be necessary to better inform interested
members of the General Assembly of significant changes in bond
issue provisions. In addition, I have requested that the
Secretary of Transportation follow the same practices that are
observed by the Board of Public Works in these respects.

For the reasons cited above, I have vetoed Senate Bill 306.

Sincerely,

William Donald Schaefer

Governor

Senate Bill No. 306

AN ACT concerning

State Bonds - Repayment Requirements

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