Montgomery County's business community, led by the county's Chamber of Commerce, yesterday launched a referendum drive seeking to overturn a council-approved law establishing civil fines for county code violations.

Business leaders, who opposed the law throughout the lengthy hearing process, say that allowing county inspectors to issue fines and write citations for code violations gives too much authority and discretion to county government employes with insufficient guidelines from the council.

If successful, the referendum would be the first time a council-passed law was overturned by the voters. The announcement of the drive for the 17,000 signatures needed to place the question on the ballot also marked a rare confrontation between the county's business community and the all-Democratic council, which have enjoyed relatively harmonious relations since the acrimonious clashes between developers and county councils of the early 1970s.

The subject of the conflict is relatively innocuous. The law, proposed by council member David L. Scull and signed Nov. 1 by County Executive Charles W. Gilchrist, establishes civil, rather than criminal penalties, for hundreds of violations of the county code, health regulations and zoning ordinances, ranging from unkempt lawns to dirty restaurant kitchens. The fines range from $25 to $250.

Before the law was passed, code violations were always criminal acts, and seldom, if ever, prosecuted.

Scull said the law was needed to increase compliance with the county code. "The criminal violations were just too big a club," he said. "We needed a littler club."

Opposition to the new law is being spearheaded by a business group called "Coalition of Concerned Citizenry," headed by Chamber of Commerce president Ronald E. Resh, a Rockville lawyer. Members of the group include the Apartment Owners and Builders Association, the Montgomery County Board of Realtors, the Suburban Maryland Homebuilders Association, and several local chambers of commerce.

Resh also said the group has support of some civic groups.

"The absolute discretion vested in enforcement officials is an open invitation to discriminatory application of the law," Resh said. "How are we to be sure a certain action by an inspector or investigator is not politically or socially motivated?"