May 15, 2002

The Honorable Thomas V. Mike Miller, Jr.
President of the Senate
State House
Annapolis MD 21401

Dear Mr. President:

In accordance with Article II, Section 17 of the Maryland Constitution, I have today vetoed Senate Bill 582 - Cigarette Business Licensing Law - Cigarette Nonresident Dealers.

Senate Bill 582 repeals the existing State cigarette manufacturer's license and creates a new cigarette nonresident dealer's license. The bill also provides that a person does not need to get a cigarette nonresident dealer license to make direct sales and shipments of cigarettes to a licensed wholesaler within the State from a location outside the continental limits and possessions of the United States.

Under current law, in order to sell unstamped tobacco products to a wholesaler, a person must have a cigarette manufacturer's license. A person who acts as a manufacturer must own or operate a manufacturing plant in the United States. I have several objections to Senate Bill 582 as enacted. First, I am concerned with the provision of the bill that permits a wholesaler to buy unstamped tobacco products directly from a person "located outside the continental limits of the United States" without that entity having to acquire a Maryland non-resident dealer license. This is a departure from the State's current licensure policy. If foreign manufacturers and distributors do not need a license to deliver or directly sell unstamped tobacco products to Maryland wholesalers, I am concerned that these entities cannot be held accountable under this new regulatory framework.

My second concern is that it is unclear what impact Senate Bill 582 will have on the retail price of imported cigarettes in Maryland. This legislation could have the undesirable effect of lowering the cost of cigarettes at the retail level, a result that is entirely inconsistent with Maryland's effort to reduce the consumption of cigarettes, particularly by teenagers. For the past several years, through our tax policy and our nationally recognized use of our share of the national tobacco settlement, Maryland has taken steps to reduce tobacco consumption through increased prices, education, enforcement and treatment. Reversing this policy by potentially reducing the price of cigarettes would be unwise and unwarranted.

For the above reasons, I have vetoed Senate Bill 582.

Parris N. Glendening