Maryland Attorney General Opinion 99OAG225

Gen. 225 ]                                                    225

                          TAXATION
PROPERTY TAX – APPLICABILITY OF HOMESTEAD TAX CREDIT
    TO SPECIAL BENEFIT DISTRICT TAXES

                       December 19, 2014

The Honorable Steven R. Schuh
County Executive

      Your predecessor asked our opinion on the applicability of
the Homestead Tax Credit to certain types of “special taxing
districts” in Anne Arundel County. The Homestead Tax Credit is
provided by State law, and it operates to cap the amount by which
a homeowner’s property taxes rise from year to year. See Md.
Code Ann., Tax-Property (“TP”) § 9-105 (2012 Repl. Vol., 2014
Supp.); see also 1977 Md. Laws, ch. 959 (preamble).
Homeowners may take advantage of this credit when paying their
“State, county, and municipal . . . property tax[es].” TP § 9-
105(b)(1); see also TP § 9-105(b)(2), (g).
     Former Executive Neuman asked whether the taxes imposed
in three particular categories of special taxing districts within
Anne Arundel County—Special Community Benefits Districts,
Shore Erosion Control Districts, and Waterways Improvement
Districts—qualify as county or municipal property taxes such that
homeowners within those districts would be eligible for the
Homestead Tax Credit against those taxes. According to the
request, this issue arose when Anne Arundel County officials
asked the County Attorney whether they should grant the
Homestead Tax Credit to otherwise eligible homeowners on their
special district tax bills. The County Attorney advised that they
should not. Memorandum from Lori L. Blair, Senior Assistant
County Attorney, to Richard Drain, Controller (March 21, 2013)
(“County Attorney Opinion”).
      For the reasons discussed below, we agree with the County
Attorney.     The statutory definitions of “county tax” and
“municipal tax” and the legislative history of the Homestead Tax
Credit indicate that the General Assembly never intended the
credit to apply to special taxes imposed to fund local
infrastructure improvements or special services that provide
special benefits to the property owners within the district. As we
understand them, the special taxing districts about which your
predecessor asked were created to fund local improvements or
226                                                     [99 Op. Att’y

services that specially benefit the property owners who pay taxes
to the district. Therefore, the taxes imposed on behalf of those
districts do not fall within the scope of the credit.
                                 I
                            Background
A.       The Homestead Tax Credit
      In the 1970s, property values were skyrocketing, and the
property tax assessments on Marylanders’ homes were increasing
accordingly. As a result, many homeowners had difficulty paying
their property taxes. The General Assembly responded to the
problem in 1977 by establishing the Homestead Tax Credit,
which essentially caps the amount by which the taxable value of
an eligible homeowner’s principal residence can increase from the
previous year. 1977 Md. Laws, ch. 959 (now codified at TP § 9-
105). The Legislature first enacted the credit for only a two-year
period, 1977 Md. Laws, ch. 959, but then extended it numerous
times until 1988, when it was made permanent. See 1988 Md.
Laws, ch. 776; see also, e.g., 1978 Md. Laws, ch. 177, 1982 Md.
Laws, ch. 597, 1986 Md. Laws, ch. 854. The express purpose of
the credit was to save Marylanders from “the financial hardships
of [property tax] assessments which are increasing in a proportion
far greater than their incomes.”1 1977 Md. Laws, ch. 959
(preamble).
    The State Department of Assessments & Taxation (“SDAT”)
administers the program and determines whether individual
     1
       We advised in 1977 that the percentage cap on taxable assessment
increases created by the Homestead Tax Credit could violate the
requirement in Article 15 of the Maryland Declaration of Rights that
property taxes be uniformly assessed within a class. 62 Opinions of the
Attorney General 859 (1977) (citing 62 Opinions of the Attorney
General 54 (1977)). Although we found that the 1977 law was
constitutional because it created only a “temporary lack of uniformity,”
id. at 860, we determined in 1987 that the tax credit—after numerous
extensions—had effectively become permanent and, hence, unconsti-
tutional. 72 Opinions of the Attorney General 350, 354-55 (1987)
(referring to the Homestead Tax Credit as the “Homeowner’s Tax
Credit”). Since that time, we have continued to advise that there are
constitutional problems with the Homestead Tax Credit. See, e.g.,
Letter from Assistant Attorney General Bonnie Kirkland to Del. Galen
Clagett (May 20, 2010). There is no need to analyze the constitu-
tionality of the Act to answer the question posed to us.
Gen. 225 ]                                                          227

homeowners are eligible to receive the credit. TP § 9-105(d)(6).
Subject to several exceptions, a taxpayer is eligible if she uses the
property as her dwelling or principal residence and has lived there
for at least six months of the year. See TP § 9-105(d) (setting
conditions for eligibility); see also TP § 9-105(a)(5)-(8) (defining
“dwelling,” “homeowner,” and other relevant terms).
      Maryland’s standard property tax regime is relatively
straightforward. Normally, property taxes are calculated by
multiplying the taxable value of a property by the relevant tax
rates. When the taxable value of the property goes up, the
property owner’s tax liability also increases. In Maryland, SDAT
appraises the value of a homeowner’s property every three years,
and any increase in the taxable value is typically phased in over
the next three-year period. See TP § 8-103. For example, a
property that has increased in value from $100,000 to $160,000
since its last appraisal would be assessed at $120,000 in the first
year after the new appraisal, $140,000 in the second year, and
$160,000 in the third year. The taxpayer would then pay property
taxes based on that “phased-in” assessed value. At a hypothetical
tax rate of one percent, therefore, the taxpayer would pay $1,200
in year one, $1,400 in year two, and $1,600 in year three.
      The Homestead Tax Credit places an additional cap on the
amount by which the taxable value of a homeowner’s principal
residence can increase in any given year when determining an
eligible homeowner’s “State, county, [or] municipal corporation”
real property taxes, as well as “any property tax imposed for a
bicounty commission.” TP § 9-105(b). The credit works as
follows. First, each government unit—the State, a county, or a
municipal corporation—establishes its own “homestead cap” for
purposes of calculating the taxes owed to that unit.2 Then, when
calculating an eligible homeowner’s property taxes, each
government unit essentially forgives any taxes that the
homeowner would have had to pay on the increased value of the
property above the percentage limit established by the unit. See
SDAT, Maryland Homestead Tax Credit, http://www.dat.state.
md.us/sdatweb/homestead.html (last visited Dec. 2, 2014).

  2
      The General Assembly has set the State’s homestead cap as a ten
percent increase over the previous year, but has authorized counties and
municipalities to set a lower cap and thereby give eligible homeowners
greater tax relief. TP § 9-105(e)(2), (5).
228                                                     [99 Op. Att’y

     An example is probably the easiest way to understand how
this works in practice. We will use the same example discussed
above, but will assume also that the relevant county has set its
homestead cap at 10 percent and its county property tax rate at 1
percent. In this scenario, the normal phased-in assessment of
$120,000 in the first year would represent an increase in taxable
value of 20 percent, which exceeds the county’s 10 percent
homestead cap. As a result, the cap would operate to limit the
taxpayer’s liability such that she would only pay county property
tax on the first $110,000 of her home’s assessed value, i.e., only a
10-percent increase over $100,000. She would thus pay only
$1,100 in county property taxes in the first year of the phase-in
process instead of the $1,200 she would normally have had to
pay. In tax parlance, she would receive a credit of $100 from the
county.3
B.       Special Taxing Districts in Anne Arundel County
     As we have previously observed, terms like “special taxing
area,” “special taxing district,” and “assessment district” are often
used interchangeably to describe a variety of different entities.
See 89 Opinions of the Attorney General 107, 109 n.4 (2004). As
we see it, these entities fall into two broad categories. The first
category—which we will refer to as “general taxing districts”—
consists of districts that provide the “general benefits” of
government and “promise[] nothing to the persons taxed, beyond
what may be anticipated from an administration of the laws for . .

     3
      Continuing this hypothetical, the homeowner would then pay tax
on $121,000 of the home’s value in the second year of the phase-in
process (i.e., an increase of ten percent over $110,000) and on
$133,100 in year three (an increase of ten percent over $121,000). At a
tax rate of one percent, this means the homeowner would pay $1,210 in
year two—compared to $1,400 without the credit—and $1,331 in year
three—compared to $1,600 without the credit. She would thus receive
a credit from the county of $190 in year two and $269 in year three. A
similar process would be used to determine the State portion and, if
applicable, the municipal corporation portion of homeowner’s property
tax bill. The precise amount of the credit, however, would likely be
different for each jurisdiction depending on its homestead cap and tax
rate. Indeed, some local jurisdictions have set their homestead caps at
zero percent or close to it. See SDAT, County and Municipal
Homestead Credit Percentages, http://www.dat.state.md.us/sdatweb/
homestead_percent.html (last visited Aug. 18, 2014). Homeowners in
these jurisdictions thus receive a comparatively large credit when their
property values increase.
Gen. 225 ]                                                      229

. the general public good.” Brooks v. Baltimore, 

(1878) (quoting Cooley on Taxation at 416); see also 63 Opinions
of the Attorney General 16, 20 (1978) (quoting Brooks). One type
of district that might fall into this category is a quasi-municipal,
limited-purpose governmental entity that provides many of the
same services that a municipality provides and has substantial
fiscal independence from other local governments. See 89
Opinions of the Attorney General at 109 n.4; Maryland Legis-
lative Handbook Vol. 6, at 59-64 (2006), available at
http://dlslibrary.state.md.us/publications/OPA/H/2006_6.pdf
(describing a number of such “quasi-municipal” taxing districts).
     The second category of special taxing districts—which we
will refer to as “special benefit taxing districts”—consists of
designated territories within which special assessments are
imposed to fund infrastructure improvements or services that
specifically benefit the residents of the district. 89 Opinions of
the Attorney General at 109 n.4; Maryland Legislative Handbook
Vol. 6 at 64; see also Leonardo v. Board of County Comm’rs of
St. Mary’s County, 

 (1957). Unlike in the
general taxing districts described above, the property owner in a
special benefit district receives a “special benefit” because “the
improvement for which the assessment is levied causes an
enhancement of the property’s value, with no pecuniary loss
suffered by the property owner.” Montgomery County v. Schultze,

 (1985); see also Williams v. Anne Arundel
County, 

 (1994) (stating that a special
assessment is a charge levied “upon a limited class of persons . . .
who are presumed to be benefited by the improvement over and
above the ordinary benefit which the community in general
derive[s] from the expenditure of the money”) (quoting Gould v.
Mayor & City Council of Baltimore, 

 (1883)).
      “Although special benefit assessments were first utilized to
finance certain capital improvements” like roads and sidewalks,
they “may also be used to finance the operating expenses . . . for
services beneficial to property in an area,” such as garbage
collection, street cleaning, and security. Williams, 

; see also 84 Opinions of the Attorney General 177, 179
(1999). Courts appear to distinguish these special benefit taxing
districts that provide services from the “general taxing districts”
described above by focusing on whether the services specifically
benefit the property owners within the district “over and above
the ordinary benefit which the community in general derive[s].”
Williams, 

; see also 63 Opinions of the Attorney
230                                                  [99 Op. Att’y

General at 19-23. Although other factors may enter into the
analysis, the existence of such a special benefit is the touchstone
for determining whether a district has imposed a valid special
assessment to fund local services.
     Most Maryland counties and municipalities are authorized to
levy special assessments by creating special taxing districts that
cover a defined geographic area in which all the property owners
will benefit from the infrastructure improvements or services
funded by the assessments. See Md. Code Ann., Local Gov’t
(“LG”) § 10-314(a) (2013 Repl. Vol.) (authorizing charter and
code counties to create special taxing districts); id. §§ 21-502
through 21-504 (providing additional authority for Anne Arundel
County and 11 other counties to create special taxing districts for
costs associated with infrastructure improvements); see generally
Victoria Falls Comm. for Truth in Taxation, LLC v. Prince
George’s County, 

 (2014), reconsideration
denied (May 16, 2014). Anne Arundel County, in particular, has
a long history of using this type of special taxing district to
finance local improvements and services. See Williams, 

. Your predecessor asked specifically about three types
of special taxing districts within the County: (1) Special
Community Benefit Districts; (2) Shore Erosion Control Districts;
and (3) Waterways Improvement Districts. See Anne Arundel
County Code (“County Code”) §§ 4-7-201 to 4-7-406.
     The County has approximately 18 Shore Erosion Control
Districts and 12 Waterways Improvement Districts, all of which
fund infrastructure improvements. See County Code §§ 4-7-303,
4-7-406; see also LG §§ 21-201 through 21-306 (regarding
erosion prevention projects and erosion control districts); 

(c)(ii) (2012 Repl. Vol., 2014 Supp.)
(providing authority for special assessment or tax on property
within waterways improvement districts). Shore Erosion Control
Districts use special assessments to finance the construction and
maintenance of bulkheads, revetments, and other erosion control
projects, while Waterways Improvement Districts levy special
assessments to finance projects like the construction of jetties and
the dredging of channels. The County Council may establish one
of these districts if 75 percent of the property owners proposed to
be included in the district sign a petition in support. County Code
§§ 4-7-302(b), 4-7-401(b).
     The County’s Special Community Benefit Districts are more
diverse; some of them fund infrastructure improvements, some
fund special services, and some fund a combination of the two.
Gen. 225 ]                                                       231

See generally County Code § 4-7-204. The County has approx-
imately 75 such districts, ranging from districts authorized to
acquire property for a park, to districts that maintain and improve
certain community property and provide special police protection,
to a district authorized solely to provide mosquito control. See,
e.g., County Code § 4-7-204(b), (f), (pp). The County Code
specifically provides that it may create one of these districts only
if a majority of property owners in a proposed district agree and,
even then, only to “furnish and provide special privileges or
benefits to persons or property in the district[], and levy special
taxes on property in the district[] receiving the special benefit to
pay the costs of . . . the special privileges or benefits.” County
Code § 4-7-202.
      As we see it, all three of these districts qualify as special
benefit taxing districts, as opposed to general taxing districts, and
all three operate in a largely similar fashion. A district typically
pays for the local infrastructure improvement or special services
(often using bonds), and then a city or county assesses the
property owners within that district for their proportionate share
of the cost of the improvement (or bond obligations). The district
submits to the County Budget Office an annual budget request
that includes “a detailed listing of the purposes to which the funds
are to be applied” and the rate of the special assessment that will
be used to recoup the necessary funds. Id. § 4-7-103(a), (b). If
the request is approved by the County Executive and County
Council, the County Executive includes the appropriation in the
budget, and the County Council includes the district’s annual tax
in an “ordinance of levy for special tax districts.” See Williams,

 (explaining budget process). The special benefit
taxes are then collected by the County along with other County
property taxes, and the County Controller deposits those funds in
a special account. County Code § 4-7-101(g), (h). The funds
may only “be spent in the district from which the taxes were
collected for the purposes of the district and for the purposes for
which appropriations have been made in the budget adopted by
the County Council.” Id. § 4-7-102.
     Despite their many similarities, the districts use different
methods to calculate the special benefit taxes assessed to each
property owner. Some districts assess the special benefit taxes
based on the value of their residents’ property, the same way that
most property taxes are assessed. E.g., County Code §§ 4-7-205,
4-7-304. Other districts assess each property owner the same
fixed amount regardless of the value of his or her property. Id.
232                                                  [99 Op. Att’y

This difference is relevant here because the Homestead Tax
Credit—even assuming it applied to taxes imposed by special
benefit taxing districts—would have no effect on the tax liability
of a homeowner who pays a fixed amount. If the special
assessment were set at $100 per year, for instance, homeowners
would pay $100 every year even if their property values increase
dramatically. The homestead credit’s cap would limit the increase
in the homeowner’s State, county, and municipal taxes, but it
would have no effect on the amount of the fixed special
assessment. In answering the question put to us, therefore, we
need consider only whether the Homestead Tax Credit applies to
special district taxes that are levied based on property value.
                               II
                             Analysis
      Your predecessor in office asked whether the Homestead
Tax Credit applies to special taxes imposed by three types of
special taxing districts in Anne Arundel County. Fundamentally,
the question involves the interpretation of a State statute, § 9-105
of the Tax-Property Article. The “ultimate objective of statutory
interpretation is to ascertain and effectuate the real and actual
intent of the Legislature.” Maryland Econ. Dev. Corp. v.
Montgomery County, 

 (2013) (citation and
internal quotation marks omitted). In doing so here, we “begin
with the plain language of the statute,” 

 but we must “keep in
mind the statutory context,” see TransCare Maryland, Inc. v.
Murray, 

 (2013), including how the Homestead
Tax Credit relates to other provisions of the Tax-Property Article.
We must also keep in mind that tax credits and other exemptions
from taxation must be “strictly construed in favor of the State.”
State Dep’t of Assessments & Taxation v. Belcher, 

 (1989). “It is only where the deliberate purpose of the
Legislature to grant an exemption is expressed in clear and
unequivocal terms that a claim to an exemption can be
maintained.” 

 at 118 (quoting Pittman v. Housing Auth., 

 (1942)). This rule of strict construction is
“equally applicable when tax credits are implicated.” Id. at 119.
A.    The Scope of the Homestead Tax Credit
     The General Assembly has provided that the Homestead Tax
Credit “shall be applicable to any State, county, or municipal
corporation property tax and any property tax imposed for a
bicounty commission.” TP § 9-105(b)(2). At first glance, this
language could be read either to exclude special benefit
Gen. 225 ]                                                      233

assessments because they are not specifically mentioned or to
include them as “county property taxes” because they are
effectively imposed and collected by the county, albeit on behalf
of the district.
     The Tax-Property Article defines “county property tax,”
however, in a way that would seem not to encompass these
special benefit district taxes:
          (h) (1) “County property tax” means the tax
          on property that is authorized under §§ 6-202
          and 10-102 through 10-105 of this article.
              (2) “County property tax” does not
          include a tax imposed on property
          specifically benefited by local improvements.
TP § 1-101(h); see also id. § 1-101(t) (defining “municipal
property tax” in much the same way).
      Looking first at paragraph (h)(1), the special taxes in
question here were authorized under the Local Government and
Natural Resources Article, rather than the Tax-Property Article,
and thus would not seem to be included within the definition of
“county property tax.” Nor do the provisions of the Tax-Property
Article specified in paragraph (h)(1) clearly encompass special
benefit district taxes. Although the term “property tax” is defined
to include “a taxing district tax” for purposes of TP §§ 10-102
through 10-105, see TP § 10-101(a), those provisions simply
provide for when taxes are due. Given that special district taxes
are generally collected at the same time and in the same way as
regular county taxes, see, e.g., County Code § 4-7-101(h), it is not
surprising that they would be included within §§ 10-102 through
10-105. Section 6-202, however, is the provision that authorizes
counties to impose general property taxes in the first place and it
is controlled by the definition at § 1-101(h), not § 10-101(a). In
fact, the Revisor’s Note for § 10-101 distinguishes the definition
of “property tax” in that section from the “more limited”
definition in TP § 1-101. See 1985 Md. Laws, ch. 8 at 404
(Revisor’s Note). The “more limited” definition of property taxes
in § 1-101(h)(1) thus suggests that special benefit taxes are not
included in the definition of “county property tax” applicable to
the Homestead Tax Credit.
     We recognize that this reading of the statute, taken to its
logical extreme, might mean that all special taxing districts of any
234                                                     [99 Op. Att’y

kind would be excluded from the Homestead Tax Credit. For a
number of reasons, we do not believe that to be the case. So-
called special taxes imposed by a county that are actually “general
taxes” and do not specifically benefit local residents, see 63
Opinions of the Attorney General at 19-23, may be the functional
equivalent of county taxes imposed under TP § 6-202. Similarly,
quasi-municipal general taxing districts might well be treated like
municipalities, and their taxes might fall under the definition of
“municipal corporation property tax” in TP § 1-101(t)(1). We
need not resolve those issues here because we have been asked
only about the special benefit taxes imposed in three particular
types of special taxing districts.
      The legislative history of the Homestead Tax Credit
provides further support for our conclusion that the credit was not
intended to apply to special benefit taxes. When the credit was
enacted in 1977 it applied only to “county, Baltimore City or
municipal property taxes” and, like today, made no reference to
special benefit taxes. Md. Ann. Code art. 81, § 12F-7 (Vol. 7B,
1977 Supp.); 1977 Md. Laws, ch. 959, § 2. At the time, the
definitions section in Article 81 specifically addressed the extent
to which the terms “city” and “county and/or city taxes” were
intended to include taxing districts, but the General Assembly did
not use either term in defining the scope of the credit. 4 Instead, it
used an undefined term that did not mention special benefit
districts. Given the canon of statutory construction that exemp-
tions from taxation are construed narrowly, see Belcher, 

, we tend to believe that the General Assembly, by omitting
any reference to special benefit taxes, did not envision that the
credit would apply to them.
     Other aspects of the legislative history seem to confirm this
belief. The fiscal note for the 1977 legislation, for example,
analyzed the impact of the credit on counties and municipalities
but did not mention any impact on special benefit taxing districts.
See H.B. 1281, 1977 Leg., Reg. Sess., Fiscal Note at 2. And the

   4
       See Md. Ann. Code art. 81, § 2(10) (1975 Repl. Vol.) (defining
“city” to “include an incorporated city, incorporated town or incor-
porated village; and, where special rates of taxation apply in any
assessment district or part of a county or city, shall include such
assessment district or part of a county or city”); id. § 2(14) (defining
“county and/or city taxes” to “include taxes levied in or for any taxing
district, or part of any county or city, but not taxes levied in
consideration of local improvements specially benefited thereby”).
Gen. 225 ]                                                      235

bill’s sponsor offered an unsuccessful amendment, on a topic
unrelated to any issue that we are considering in this opinion, that
explicitly applied to “special taxing districts.” See H.B. 1281,
1977 Leg., Reg. Sess., Proposed Amendments by Delegate Athey.
Although we hesitate to read too much into the failure of an
amendment on a separate topic, we note that the bill’s sponsor
knew how to craft legislation that applied to special taxing
districts when he wanted to do so. Similarly, although we
recognize that the term “special taxing district” is often
ambiguous, we also note that in 1977 the Homeowner’s Tax
Credit (a different property tax credit scheme) explicitly applied
to taxes in “special district[s],” while the General Assembly made
no reference to such taxes in crafting the Homestead credit. See
Md. Ann. Code art. 81, § 12F-1 (1975 Repl. Vol.); see also TP
§ 9-104(a)(13) (current provision).
      Most importantly, in 2010, the General Assembly
specifically considered whether to add taxes imposed by all
“special taxing districts” to the list of taxes covered by the
Homestead Tax Credit and specifically declined to do so. See
2010 Md. Laws, ch. 336. This bill, which extended the
Homestead Tax Credit to “property tax[es] imposed for a
bicounty commission,” originally proposed to extend the credit to
taxes imposed for any “special taxing district” as well. S.B. 683,
2010 Leg., Reg. Sess. (First Reader) (proposed § 9-105(b)(2)(ii)).
The Maryland Association of Counties and Prince George’s
County expressed concern that indiscriminately adding all special
district taxes to the scope of the credit could “inadvertently”
extend the credit more broadly than intended. See Hearing on
S.B. 683 Before the Senate Budget & Taxation Committee, 2010
Leg., Reg. Sess. (March 9, 2010) (written testimony of the
Maryland Association of Counties); id. (written testimony of
Prince George’s County on cross-filed H.B. 892). In particular,
Prince George’s County warned that expanding the credit to taxes
that fund special amenities “that directly benefit those living in”
the district could generate budget shortfalls and require other
taxpayers—who were not directly benefited by the amenities—to
subsidize the cost. Id. (written testimony of Prince George’s
County). The committee subsequently amended the bill to
remove any reference to special taxing districts, and, as enacted,
the legislation only extended the Homestead Tax Credit to
bicounty commissions. See 2010 Md. Laws, ch. 336. This
history further supports our conclusion that the General Assembly
did not intend the Homestead Tax Credit to apply to special
benefit taxes.
236                                                  [99 Op. Att’y

     For the reasons emphasized by Prince George’s County in
2010, the exclusion of special benefit taxes from the Homestead
Tax Credit also makes sense from a policy perspective. At least
in Anne Arundel County, a special benefit district of this type
must usually collect a set amount of money every year in order to
pay for its improvement(s) and services or to make payments on
its bond obligations. See County Attorney Opinion at 3-4. If
some homeowners receive a tax break under the Homestead Tax
Credit but not others, the amount of that break would have to be
made up from somewhere else. It might come from the other
homeowners in the district, whose properties did not increase in
value enough to trigger the credit. That would seem an odd result
when the improvements or services are, at least in theory,
supposed to increase the property values of all homeowners. Or
the balance would have to come from the county’s general funds,
even though the benefits flow to district residents rather than to
the county as a whole. Granting the Homestead Tax Credit to
homeowners in this context, therefore, would seem to allocate the
special assessment burden unfairly.
     All things considered, we conclude that the General
Assembly intended to exclude these types of special benefit taxes
from the Homestead Tax Credit. This analysis is consistent with
our office’s longstanding advice that special benefit taxes are not
subject to the Homestead Tax Credit. See Letter from David
Lyon, Assistant Attorney General, to Robert E. Young, Associate
Director, SDAT (Nov. 26, 1997).
      Finally, as mentioned briefly above, the Tax-Property
Article also explicitly excludes “tax[es] imposed on property
specifically benefited by local improvements” from the definition
of “county property tax.” TP § 1-101(h)(2). To a large extent,
this explicit exclusion reinforces our conclusion that the General
Assembly did not intend to include special benefit assessments,
which are used to “specifically benefit[]” residents of the district
in which they are imposed. But we also recognize that if this
were the only ground on which to rest our conclusion, the
exclusion for special benefit districts might be limited only to
those that provide physical infrastructure improvements, rather
than special services. This is because the term “improvement” is
used throughout the Tax-Property Article to refer to physical
changes to real property. See, e.g., TP §§ 8-104, 9-204.1, 9-229,
9-304, 9-315, 13-304; but see LG § 21-504 (making specific
reference to an “infrastructure improvements” as opposed to just
“improvements”)
Gen. 225 ]                                                        237

      It is possible that the General Assembly did not intend for
the term “improvement” to be read so narrowly in this context
and, instead, meant to use it as shorthand for all special benefit
districts, whether they fund physical improvements, special
services, or both. Although some states distinguish special taxes
levied for infrastructure improvements from those levied for
special services, it does not appear that Maryland has done so.
Compare 14 McQuillin, The Law of Municipal Corporations
§ 38:4 (3d ed. 2008) (summarizing other states’ law), with
Pumphrey v. County Comm’rs of Anne Arundel County, 

 (1957) (rejecting landowner’s argument that fee for
garbage services was an invalid special assessment); see also
Floyd v. Mayor & City Council of Baltimore, 

(2009) (noting “special benefit assessments” may be imposed to
fund both infrastructure improvements and special services);
Williams, 

 (explaining that, as with other
improvements, “the properties in the District are presumed to
enjoy an increase in value as a result of the special benefits
conferred”). Indeed, when the Homestead Tax Credit was
originally enacted in 1977, the Court of Appeals had already
determined that a fee for garbage collection services could be a
valid special assessment akin to a more traditional infrastructure
improvement. See Pumphrey, 

. And at least
two other state courts have concluded that the language of
constitutional provisions permitting special assessments only for
“local improvements” was broad enough to encompass special
districts that fund special services. See City of Seattle v. Rogers
Clothing for Men, Inc., 

 (1990); State v.
Reis, 

 (1888).
      Even if the General Assembly did mean to limit the phrase
“local improvements” to physical improvements, however, we do
not think the phrase creates a negative implication that special
benefit taxes used to fund special services must be included
within the scope of the Homestead Tax Credit. The language in
paragraph TP § 1-101(h)(2) dates back to an exclusion from the
definition of “county and/or city taxes” as it existed in 1977. At
that time, the phrase was defined to include taxes levied for “any
taxing district, or part of a city or county” but to exclude “taxes
levied in consideration of local improvements specially benefited
thereby.” Md. Ann. Code art. 81, § 2(14) (1975 Repl. Vol.). But,
as mentioned above, the original Homestead Tax Credit did not
use the phrase “county and/or city taxes,” so it is not clear that the
language was ever intended to govern the scope of the credit.
238                                                  [99 Op. Att’y

     Moreover, the language in (h)(2) was left out when the Tax-
Property Article was first codified in 1985, see 1985 Md. Laws,
ch. 8 § 2, and the current exclusion of “improvements” from the
definitions of “county property tax” and “municipal property tax”
was added the next year merely as part of a corrective bill
intended to fix errors and omissions in the code. See 1986 Md.
Laws, ch. 171. Given this history, we think that the explicit
exclusion for “improvements” was likely added out of an
abundance of caution to make clear that the Homestead credit did
not apply to such assessments. We see no evidence that the
General Assembly intended the phrase to extend—by
implication—the scope of the Homestead credit to special
assessments for special services. We therefore conclude that the
Homestead Tax Credit in TP § 9-105 does not cover valid special
benefit taxes used to fund either infrastructure improvements or
special services. See Letter from David Lyon to Robert E. Young,
supra (reaching the same conclusion).
B.    The Special Benefit Taxes Imposed in Waterways
      Improvement Districts, Shore Erosion Control Districts,
      and Special Community Benefit Districts Are Not Covered
      By the Homestead Tax Credit.
      Applying this interpretation here, we conclude that none of
the three types of special district taxes in question is covered by
the Homestead Tax Credit. We have not analyzed every special
taxing district in Anne Arundel County individually but, as
explained in the background section, it appears under County law
that all of these districts impose special benefit taxes for which
the credit is unavailable.
      1.   Waterways Improvement Districts
      The assessments in Waterways Improvement Districts seem
clearly to be imposed for the purpose of funding the construction
of local improvements that would benefit the residents of the
district. All of the districts identified in § 4-7-406 of the County
Code are described as having been formed for the purpose of
funding the dredging of nearby waters or the maintenance of
nearby jetties or breakwaters. County Code § 4-7-406; see also
NR § 8-708 (authorizing use of Waterway Improvement Fund to
finance waterway improvements, including dredging and
construction of jetties and breakwaters).
Gen. 225 ]                                                          239

     2.    Shore Erosion Control Districts
      Although we reach the same conclusion with respect to
Shore Erosion Control Districts, the analysis is more complicated.
Like Waterway Improvement Districts, Shore Erosion Control
Districts exist specifically to fund local infrastructure
improvements. County Code §§ 4-7-303 (establishing districts
“for the purpose of the construction, maintenance, and repair of
facilities for shore erosion control”). But the State law authorizing
the County to impose a special tax for its Shore Erosion Control
Districts seems, at first blush, to require that the tax be treated like
other county taxes: “[A] tax under this section shall: (1) be
imposed and collected as county taxes are imposed and collected;
and (2) have the same priority rights, bear the same interest and
penalties, and in every respect be treated the same as county
taxes.” LG § 21-306(b) (emphasis added); see also Md. Ann.
Code art. 25, § 167F (2005 Repl. Vol.) (predecessor provision).
This language arguably indicates that these erosion control district
taxes should be eligible for the same credits as county taxes,
including the Homestead Tax Credit. As the Land Use Article
Review Committee noted when considering revisions to a
similarly-worded provision governing Maryland-National Capital
Park and Planning Commission taxes, this language is “unclear”
as to “whether exemptions and credits that apply to property
assessed for taxation by a county” should also “apply to the taxes
imposed under this subtitle.” 

-
304(e) (2012 Repl. Vol.) (Revisor’s Note).
     We do not believe, however, that the General Assembly
intended this language in the Local Government Article to control
the scope of the Homestead Tax Credit in the Tax-Property
Article. As an initial matter, the Legislature borrowed the
language verbatim from an earlier provision governing the
imposition of shore erosion control taxes in all counties. See LG
§ 21-213(b); see also Art. 25 § 166(b) (predecessor provision).
Because the General Assembly drafted this earlier provision in
1953, see 1953 Md. Laws, ch. 277, well before the Homestead
Tax Credit was enacted, it presumably did not have that particular
credit in mind.
     More importantly, the relevant provision in the Local
Government Article focuses on how the taxes are “imposed and
collected,” rather than more broadly on the calculation of taxes or
the scope of tax credits and exemptions. Pumphrey, 

 (“The fact that the charge is levied and collected as county
240                                                  [99 Op. Att’y

taxes . . . merely provides for the manner of collection.”). When,
as here, “a general word or phrase follows a list of specifics, the
general word or phrase will be interpreted to include only items”
that are similar to those listed. See Haile v. State, 

 (2013) (quoting Black’s Law Dictionary 594 (9th ed.
2009) on the meaning of “ejusdem generis”); see also 2A
Sutherland, Statutes and Statutory Construction § 47:17, at 364-
68 (7th ed. 2014). The phrase “in every respect be treated the
same as county property taxes” should therefore be viewed in
context as focused on the collection and enforcement of taxes
instead of the manner of assessing the amount of tax in the first
instance.
      Moreover, with respect to the calculation of taxes and in
particular the scope of tax credits, the Tax-Property Article is far
more specific than the Local Government Article and should
govern in the event of any conflict between the two. See, e.g.,
Government Employees Ins. Co. v. Insurance Comm’r, 

 (1993) (explaining that “[w]here provisions of one
[statute] deal with the common subject generally and those of the
other do so more specifically,” one should reconcile the two by
“viewing the more specific statute as an exception to the more
general one”). We thus conclude that the exclusion for special
benefit taxes in the Tax-Property Article governs and that such
taxes imposed on behalf of the County’s Shore Erosion Control
Districts are excluded from the scope of the Homestead Tax
Credit.
      3.   Special Community Benefit Districts
     As for Special Community Districts, it seems clear that the
taxes imposed in them are for improvements and services that
provide a special benefit to local residents. The County Code
explicitly provides that Special Community Benefit Districts must
be formed to “furnish and provide special privileges or benefits to
persons or property in the district[].” County Code § 4-7-202
(emphasis added). Indeed, we have previously concluded that the
County’s Special Community Benefit Districts levy valid special
benefit taxes because the “taxes are levied . . . according to the
special privileges or benefits conferred upon the property and . . .
the tax revenues resulting from that levy are to be used
exclusively to pay the costs of furnishing, providing, and
maintaining such special privileges or benefits.” 63 Opinions of
the Attorney General at 23.
Gen. 225 ]                                                      241

      Before concluding our opinion, we wish to make clear its
limitations. Our conclusion as to special benefit taxes may not
apply with equal force to all special taxing districts. Some special
taxing districts, for example, might impose “general taxes” rather
than the type of special benefit assessments discussed in this
opinion, see 63 Opinions of the Attorney General at 20, and quasi-
municipal taxing districts might be governed by a different rule.
As we have explained previously, whether a tax qualifies as a
special benefit tax depends in part on “the local laws defining the
nature of that tax” and the purposes for which the funds may be
used under those local laws. See id. at 22-23. We have not
conducted a general survey of other special taxing districts in
Anne Arundel County and elsewhere to see how the taxes they
impose might affect the conclusion we reach here. We did not do
so because it appears that, under Anne Arundel County law, the
three special taxing districts that were the subject of this request
all impose the kind of special benefit taxes that lie beyond the
scope of the Homestead credit in TP § 9-105. If the County is
concerned that any particular district might not fall within the
statutory exemption for special benefit districts, it should ask
SDAT for guidance in the first instance.
                              III
                           Conclusion
      The Homestead Tax Credit does not apply to special district
taxes that, like those at issue here, fund special improvements and
services that specially benefit the property owners within the
district. We therefore agree with the opinion of the Anne Arundel
County Attorney that the credit in TP § 9-105 does not apply to
the three categories of districts in question.
                                   Douglas F. Gansler
                                   Attorney General of Maryland
                                   Patrick B. Hughes
                                   Assistant Attorney General

Adam D. Snyder
Chief Counsel, Opinions & Advice