H.B. 947                                                 VETOES

May 26, 1994                                        

The Honorable Casper R. Taylor, Jr.
Speaker of the House of Delegates
State House
Annapolis, Maryland 21401

Dear Speaker Taylor:

In accordance with Article II, Section 17 of the Maryland Constitution, I have today
vetoed House Bill 947.

House Bill 947 would require that, beginning with the 1995 Regular Session of the
General Assembly, executive branch agencies prepare an economic impact rating and an
economic impact analysis for all legislation to be introduced by the Administration, or by
the agency, that would have an impact upon small business. Beginning with the 1996
regular session, the Department of Fiscal Services (DFS) would be required to prepare an
economic impact rating and economic impact analysis for all bills introduced by a member
of the General Assembly, that would have an impact upon small business.

I applaud the contribution that small business makes to the economy of the State and
would embrace any reasonable effort to enhance the ability of small business to avoid
unreasonable and unwarranted economic burdens created by the State. However, I do not
believe that the provisions contained in House Bill 947 are a feasible or cost effective way
to achieve that goal. The Department of Fiscal Services estimates that performing these
analyses will cost the Department of Economic and Employment Development $89,000
beginning in Fiscal Year 1995. Further, when the Department of Fiscal Services begins
conducting these analyses for the 1996 session, the annual cost for the first year will be
approximately $175,000.

I believe that House Bill 947 represents a significant departure from the existing process
of determining the fiscal impact of legislation, and would impose an unnecessary and
unreasonable burden on the legislative process. The bill presumes that small business
speaks with one voice. Small business in Maryland is so diverse that it would be difficult,
at best, to quantify the costs and benefits of any given legislative proposal, without the
benefit of detailed and specific input from individual businesses. The requirement that
executive branch agencies collaborate with DFS to develop a single statement that must
provide a detailed evaluation of issues such as: (1) the cost of providing good and services;
(2) the effect on the work force or cost of housing; (3) efficiency in production and
marketing; and (4) capital investment, taxation competition, economic development, or
consumer choice, is an enormous expectation. Many people would have to be consulted in
the preparation of that statement, including units of State and local government and
business, trade, consumer, labor and other groups. In the framework of the legislative
process, it is unlikely that such an extensive evaluation could be completed in the very
short period of time available. This could have the unintended effect of increasing the
likelihood of enactment of legislation that may result in unforeseen or unanticipated costs
to small businesses.

I believe that the existing legislative process invites participation from all affected parties,
and gives business organizations full opportunity to bring information relating to potential

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