Blumenthal v. Clerk of the Circuit Court

Levine, J., delivered the opinion of the Court. The primary question presented by this appeal is whether the General Assembly has granted statutory authority to certain counties and the City of Baltimore to fix by local resolution or ordinance the rate of tax to be charged in their respective jurisdictions for the recordation of instruments conveying title and securing debts. In the mandamus and declaratory judgment action from which this appeal arises, the Circuit Court for Anne Arundel County (Evans, J.) held that such authority had been granted. We issued a writ of certiorari prior to consideration of the case by the Court of Special Appeals and, for reasons that follow, we affirm.

At the heart of this case is the effect of Chapter 452, Laws of 1968 upon Maryland Code (1957, 1975 Repl. Vol.) Art. 81, § 277, dealing with the recordation tax, and the impact upon those statutory provisions of a recent decision of this Court. 1 ⁴⁰¹ Chapter 452, in relevant part, added to § 277 a new subsection q which provided: “Every county and Baltimore City may, by resolution or ordinance duly enacted by its governing body, fix the rate of tax imposed by this subtitle. In the absence of such resolution or ordinance, the rates specified in this subtitle shall continue to apply.” Prior to 1957, § 277 (b), which provided that the recordation tax rate generally “shall be at the rate of 55$ for each $500.00 or fractional part thereof,” applied to the 23 counties and the City of Baltimore. Subsection m was initially enacted by Chapter 778 of the Laws of 1957 so as to provide that the rate in Montgomery County “shall be at the rate of $1.10 for each $500 or fractional part thereof.” By the close of the 1968 legislative session, seven other counties had been added to (m) by a series of amendments.

Subsection n, added in 1961, applied to the City of Baltimore and three counties at the conclusion of the 1968 session. The City of Baltimore and six of the eleven counties named in (m) and (n) are among the appellees here. Pursuant to the enactment of Chapter 452 in 1968, each of ⁴⁰² the political subdivisions appearing here as an appellee, the City of Baltimore and the counties of Anne Arundel, Baltimore, Charles, Dorchester, Montgomery and St. Mary’s, enacted local measures establishing the rate of the recordation tax in their respective jurisdictions. The rates thus established ranged from $1.65 to $3.50, thereby exceeding in each instance the amounts fixed by either (m) or (n) of § 277 for those six counties and the City of Baltimore.

A challenge to the recording tax rate set by Anne Arundel County precipitated the litigation which culminates in this appeal. When the Clerk of the Circuit Court for Anne Arundel County refused to accept a deed offered for recordation by appellants, who were the grantors therein, because they had tendered a recording tax computed at the $1.10 rate specified in § 277 (m) rather than the $3.50 rate enacted by the county council, appellants filed a suit in the circuit court which was ultimately amended to include as defendants the Comptroller, the City of Baltimore and the Clerk of the Superior Court of Baltimore City, as well as Baltimore, Charles, Dorchester, Montgomery and St. Mary’s Counties and the clerks of their respective circuit courts. After the defendants moved for summary judgment, Judge Evans filed a thoroughly considered opinion and an order granting the motion, in which he ruled that § 277 (q) was applicable to the six counties and Baltimore City, and that the local enactments in each of those political subdivisions “setting the rate for the recordation tax in excess of that provided for in Article 81 Section 277 (m) and (n) are valid and have been valid since their enactment.” The appeal followed. (1) Appellants advance several grounds for their contention that § 277 (q) does not authorize the political subdivisions enumerated in § 277 (m) and (n) to increase the recordation tax rate by local ordinance or resolution.

We shall address these arguments, not all of which need be treated separately, in the course of dealing with the issues as we perceive them in this appeal. ⁴⁰³ Since all the subsections of § 277, constituting with § 278 the subtitle “Recordation Tax.” represent a general statutory scheme or system, they must be read and considered together to ascertain the true intention of the Legislature. Thomas v. State, 277 Md. 314, 317 , 353 A. 2d 256 (1976); County Council v. Supervisor, 274 Md. 116, 120 , 332 A. 2d 897 (1975); Parker v. Junior Press Printing, 266 Md., 721, 725 , 296 A. 2d 377 (1972). It is this rule, which we are bound to apply, that contributes to the dilemma in this case. Confronted by the apparent contradiction between subsections m and n, on the one hand, each of which purports to mandate fixed rates for the political subdivisions enumerated therein, and (q), on the other, permitting “[e]very county and Baltimore City” to fix the tax rate, the circuit court concluded, correctly in our view, that an ambiguity existed requiring for its resolution a resort to the available legislative history of Chapter 452.

Appellants do not attack this conclusion, but challenge instead both the rules of statutory construction and the particular legislative history relied upon in the court below. That resort may be had to the legislative history of a statute when an ambiguity exists is a cardinal rule of construction. Mackie v. Town of Elkton, 265 Md. 410, 415 , 290 A. 2d 500 (1972); Pressman v. Barnes, 209 Md. 544, 558-59 , 121 A. 2d 816 (1956); see Crim. Inj.

Comp. Bd. v. Gould, 273 Md. 486, 495 , 331 A. 2d 55 (1975). As the record in this case reveals, House Joint Resolution 24 of the 1967 session of the General Assembly provided for creation of a commission to conduct studies and prepare corrective legislation for various state and local taxation and fiscal problems. This action led to formation of the Joint Legislative-Executive Committee to Study Taxation and Fiscal Problems which submitted its report to the General Assembly on January 1, 1968. 2 Noting that the federal recordation tax, which theretofore had been imposed at the rate of 55<f per $500, was to be discontinued as of January 1, 1968, as part of an overall federal program of excise tax ⁴⁰⁴ reduction, the joint committee recommended “that the counties and Baltimore City be authorized to impose a recordation tax, upon ‘instruments of writing1 presently taxed in Maryland, at such rate as each shall elect.” (emphasis added).

A footnote to one of the exhibits attached to the report, summarizing the fiscal effects of the various recommendations, stated: “Although local governments would be authorized to elect any level of increase, this estimate assumes a 55<£ for $500 increase for all — the level of the Federal tax being removed.” (emphasis added). House Bill 410 of the 1968 session, implementing the committee recommendations, was introduced by the house members of the joint committee, and Senate Bill 209, ultimately enacted as Chapter 452, was introduced by the senate members of the joint committee. A comparison of the various recommendations of the joint committee with Chapter 452, which dealt with a number of tax matters in addition to the recordation tax, erases any doubt that the enactment is the very embodiment of those recommendations. While conceding that the report and recommendations accurately reflect the intention of the joint committee that every county and Baltimore City be authorized to impose a recordation tax at such rate as each should elect, appellants maintain that this was nevertheless not the intention of the General Assembly itself.

Unquestionably, the report of the joint committee may be considered in ascertaining the legislative intent: “The history of the legislation, committee reports, other statutes in pari materia, and all related provisions of the same act must be considered in the construction of revenue laws.” 3 Sutherland, Statutory Construction, § 66.03 (4th ed. Sands 1974) (emphasis added, footnotes omitted). In short, as we have said, “the courts are not shut off from ⁴⁰⁵ any discussion or sources of information available to the Legislature in order to ascertain the legislative intent.” Public Service Comm. v. Sun Cab Co., 160 Md. 476, 481 , [West v. Sun Cab Co.] 154 A. 100 (1931). Accord, Allers v. Tittsworth, 269 Md. 677, 683 , 309 A. 2d 476 (1973) (revision commission reports considered by court).

Appellants urge, however, that there is a more accurate means of ascertaining the intention of the General Assembly. They point to the plethora of bills introduced and enacted at the 1968 session — no less than eight in number — effecting changes in § 277. 3 They argue that the unanimity displayed in regard to the eight bills by the committee in each house to which they were referred, and by the General Assembly itself, reflects an intention that (q) should not be operative with respect to the political subdivisions enumerated in (m) and (n). They reason that had the Legislature intended by its enactment of (q) to permit literally “every” county in the state and Baltimore City to fix its own rate, the six bills simultaneously amending (m), (n), (o) and (p), which set specific rates for many of the state’s political subdivisions, would have been unnecessary, that is, mere surplusage. The argument advanced by appellants overlooks the very nature of subsection q.

It is, in effect, enabling legislation, which merely permits the governing body of “[e]very county and Baltimore City” to fix the recordation tax rate. Neither the committees of each house nor the General Assembly itself, while considering the eight bills, could have prophesied what might subsequently occur in some, let alone all, of those political subdivisions. The Legislature clearly recognized that the governing bodies of the political subdivisions enumerated in (m) and (n) might delay local implementation of (q) or, indeed, might not opt at all for different rates under authority of the enabling legislation reflected in (q). The purpose of the amendments to (m) and (n), therefore, was to ensure that absent a local resolution or ordinance fixing the tax rates in any of the political ⁴⁰⁶ subdivisions covered by (m) and (n), provision would have been made by the General Assembly for specific rates to be charged in those subdivisions.

That the Legislature was cognizant of these various possibilities while enacting Chapter 452 is evident from the second sentence of (q): “. .. In the absence of such resolution or ordinance, the rates specified in this subtitle shall continue to apply.” An additional reason for the precaution taken by the General Assembly could have been its recognition that Chapter 452 might ultimately fail of passage at the 1968 session. In sum, then, the General Assembly clearly intended that subsection q should apply to Baltimore City and to the counties enumerated in (m) and (n). 4 Stripped of its rhetoric, the thrust of appellants’ argument is that our recent decision in Prince George’s Co. v. White, 275 Md. 314 , 340 A. 2d 236 (1975), fully supports their contention that (q) does not apply to Baltimore City and the counties enumerated in (m) and (n). That case is distinguishable.

There, we were confronted by the interaction between (q) and subsection r, which was enacted by Chapter 301 of the Laws of 1968. Chapter 301, the title of which states that (r) is “to follow immediately after Section 277 (q),” provides: “Notwithstanding the other provisions of this section the County Commissioners of Prince ⁴⁰⁷ George’s County in lieu of the rate of tax provided in subsection (b) above, are authorized by resolution to adopt a rate of tax as follows: In the case of instruments conveying title to property, the tax shall be at the rate of $1.10 for each $500.00 or fractional part thereof of the actual consideration paid or to be paid; and in the case of instruments securing a debt, the tax shall be at the rate of $1.10 for each $500.00 of the principal amount of the debt secured....” (emphasis added). Subsequent to the enactment of Chapters 301 and 452 at the 1968 session, the County Commissioners for Prince George’s County adopted a resolution pursuant to (r) setting the tax rate at $1.10, but then, acting under the authority of (q) , replaced it with a second resolution fixing the rate at $1.65. In the face of conflicting claims regarding the interplay between (q) and (r), we said in White that those subsections could be harmonized so as to render (r) neither superfluous nor repealed by implication.

We found additional support for this result in the Legislature’s express anticipation of Chapter 452 in Chapter 301, evidenced not only by the provision that (r) should