H.B. 753                                                 VETOES

(iii) in accordance with § 2-1246 of the State Government Article,
report to the General Assembly and the Governor by December 1, 2003, including all
available information from the EPA study of this issue.

SECTION 3. AND BE IT FURTHER ENACTED, That if, by action of the
General Assembly, the Maryland Energy Administration is unable to carry out its
responsibilities under this Act, the Governor shall reassign the obligation to carry out
these responsibilities to the Department of the Environment or any other appropriate
State agency.

SECTION 2. 4. AND BE IT FURTHER ENACTED, That this Act shall take
effect July 1, 2003. Section 2 of this Act shall remain effective for a period of 6 months
and, at the end of December 31, 2003, with no further action required by the General
Assembly, Section 2 of this Act shall be abrogated and of no further force and effect.

May 21, 2003

The Honorable Michael E. Busch
Speaker of the House of Delegates
State House
Annapolis, MD 21401

Dear Mr. Speaker:

In accordance with Article II, Section 17 of the Maryland Constitution, today I have
vetoed House Bill 753 - Taxes and Revenues.

House Bill 753 imposes a two percent insurance premium tax on health maintenance
organizations and managed care organizations, and changes corporate income tax
law, levies a 10% corporate income tax surcharge during tax years 2003, 2004 and
2005.

The proposed two percent increase on insurance premiums will further accelerate the
increase in health insurance costs for the nearly one million individuals that are
privately insured under an HMO plan in Maryland. In 2001 alone, Marylanders
experienced a 12% increase in out-of-pocket expenditures for health care. Employer
health costs have also grown by double-digit rates, and the two percent tax would
only worsen this situation. Maryland families are already stretched in their ability to
meet these higher premiums and this tax would force some families to forfeit their
insurance coverage.

At a time when the national and State economies are struggling, we need to do all we
can to save Maryland jobs. The proposed increase in corporate taxes will only
discourage companies from creating new employment opportunities or maintaining
their businesses in the State. I believe that a corporate tax increase would be
counter-productive as we seek to preserve private sector jobs in Maryland.

The changes to corporate income taxation include restrictions on Delaware Holding
Company transactions. Some of these provisions will place Maryland at a competitive
disadvantage with other mid-Atlantic states, thereby reducing employment
opportunities for our citizens. Currently, the Comptroller is involved in litigation

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