Sales of everything from fruit and vegetables to handcrafted toys and household decorations would be outlawed on publicly owned roads in Prince George's County if a proposed bill becomes law.

The legislation, introduced recently by County Council member Sue V. Mills, would bar sales by vendors who operate along the roads.

The county last year issued 800 licenses, mostly to seasonal vendors who operate in the summer.

Mills said vendors pose a hazard to motorists, and "unfairly" undercut owners of small businesses who pay sales taxes.

She said her bill would not restrict sales by farmers and others on private property or by door-to-door vendors, who are required to obtain separate licenses.

Mills said she had received "a large number of complaints about the safety factor -- cars pulling off the side of the road to make purchases in the past year. " . . . I've noticed a proliferation of vendors."

However, Daniel Yeeles Jr., chief of licensing for the county department of environmental resources, said there has been no increase in licensed vendors since 1982 and had no estimate of how many vendors are operating without licenses.

"There may be fewer people registering," he said, "but there's just no way of knowing that."

A 1978 law requires vendors who sell in the county to obtain $50 licenses, which must be renewed annually.

The law prohibits vendors from selling on any state road, within 100 yards of an intersection or shopping center, or within 50 yards of exits or entrances to public schools. Vendors selling without licenses can be fined upwards of $500.

Annual vendor fees elsewhere in the area range from $78 in Montgomery to $500 in Alexandria and $600 in the District.

Gary L. Maddox of Fort Washington, a vendor who has sold an assortment of socks in the Hampton Mall area for much of the past two years, said the proposed measure discriminates against people who are self-employed, like himself.

"There have always been people in the world trying to stop free enterprise from flourishing," Maddox said. "This is a case of those who have, restricting those who don't."

Peggy Arnold, a Hyattsville resident who sells dried flowers on Riverdale Road in Hyattsville about four days a week, said she sympathizes with motorists who are occasionally badgered by tenacious vendors at stop signs and traffic lights, but said the bill would put her in a precarious financial situation.

Arnold would not disclose her weekly income from vending, saying, "some weeks I can make a lot of money, but I don't have the capital to open my own store."

Arnold suggested that the county implement tougher regulations, such as limiting the types of items for sale and levying more fines, rather than banning vendors entirely.

Frank Swain, director of Small Business Advocacy for the District, agreed: "It seems to me that if you've got some problems, tighter regulations may be in order."

"When you try to ban something you often invite exception to the rule."

Tim Ayers, assistant to County Executive Parris N. Glendening, said the current law is frustrated by enforcement efforts.

"We don't have jurisdiction over state roads, so if vendors are selling there, we're stuck," he said.

Ayers said Glendening may request the council to permit produce vendors to continue to operate. "We don't particularly see anything wrong with selling fruit and vegetables under current regulations," he said.

Council member Frank Casula, who introduced the current regulations, was one of three council members who cosponsored Mills' bill.

"Originally, I thought the regulations we implemented were tough enough. Now, I see people selling all over the place. More and more people seem to be coming from outside the county," he said.

"I think that's the story of civilization," Swain noted.

"People come from the country to work in the city. People who sell at the farmer's market in Washington don't grow their produce there."

The bill will be examined by the fiscal planning committee before it heads for a public hearing.