The chairman of Prince George's County Board of Election Supervisers ruled this week that school board member Sue V. Mills of Oxon Hill apparently forfeited her seat on the board Tuesday when she filed as a candidate for the County Council.

In a letter to County Executive Winfield M. Kelly Jr., board chairman Thomas G. Dugan said that it "appeared" to the board that Mills had forfeited her seat under a state law that prohibits school board members from running for public office while serving on the board.

Mills said yesterday that she was aware of the law when she filed but felt that her seat on the board was protected by a 1973 court decision by Circuit Court Judge Ralph W. Powers, who ruled that a person can be considered a candidate only when they win a party primary.

School board attorney Paul M. Nussbaum said yesterday that in 1974, when Mills was a briefly candidate for state comptroller, he had advised her that Powers' oral decision protected her rights to stay on the board.

The Democratic primary election Mills is competing in is scheduled for Sept. 12.

"As far as I am concerned Mrs. Mills is a sitting member of the board and she will remain so until there is either a court decision removing her or the attorney general of Maryland gives formal notice that there is a legal reason to remove her," Nussbaum said. "But I have no question in my mind legally that she is still a member of the board."

Board chairman Norman M. Saunders concurred. "It has always been my understanding that one isn't considered a candidate until they win a primary," he said. "I certainly don't plan to take any action until a higher authority says I have to."

Kelly said he had no plans to take any action and added that he thought it would be unfair to ask anyone to resign from office before winning a primary.

If a board vacancy were to occur Kelly would have to appoint a replacement. However, he said yesterday that he did not intend to appoint a replacement for Mills based on the election board's letter.

"I don't know who is behind this but I think perhaps the powers that be (the Kelly administration) are trying to damage my candidacy," Mills said.

John Lally, chief aide to Kelly denied the charge. "We're not going to do anything," he said. "If someone from the board formally tells us there's a vacancy, we'll appoint someone. But until then, we won't do anything."

Robert J. Antonetti Sr., elections board administrator, said the letter was sent "to supply Kelly with the information that it appeared a vacancy had been created."

Antonetti cited the section of the Maryland Registration Election Laws which defines a candidate as: "Any person who files a certificate of candidacy for any public office."

"We based our letter on that and on the state law which says any school board member who becomes a candidate for public office immediately forfeits his seat," Antonetti said. "We thought Mr. Kelly should know this."

However, election board lawyer Ronald Wilner said the board did not intend to take legal action against Mills.

"I will not resign from my seat until a court rules that I must do so," Mills said yesterday. "I am a sitting member of the school board no matter what this letter says."