Washington Nat. Arena Ltd. Partnership v. Treasurer, Prince George's County

• Decision Date: 07 February 1980
• Docket Number: No. 124,124
• Citation: 287 Md. 38,410 A.2d 1060
• Parties: WASHINGTON NATIONAL ARENA LIMITED PARTNERSHIP et al. v. TREASURER, PRINCE GEORGE'S COUNTY, Maryland.
• Court: Maryland Court of Appeals

Page 38

287 Md. 38

410 A.2d 1060

WASHINGTON NATIONAL ARENA LIMITED PARTNERSHIP et al. v. TREASURER, PRINCE GEORGE'S COUNTY, Maryland.

No. 124.

Court of Appeals of Maryland.

Feb. 7, 1980.

John J. Sellinger, Rockville (Fossett & Brugger, Seabrook, on the brief), for Alan I. Kay et al.

Glenn T. Harrell, Jr., Upper Marlboro (O'Malley, Miles, Farrington & McCarthy, Upper Marlboro, on the brief), for Washington National Arena Limited Partnership et al.

David S. Bliden, Associate County Atty., Upper Marlboro (Robert B. Ostrom, County Atty., and Michael O. Connaughton, Deputy County Atty., Upper Marlboro, on the brief), for appellee.

Argued before MURPHY, C. J., and SMITH, DIGGES, ELDRIDGE, ORTH, ^* COLE and DAVIDSON, JJ.

ELDRIDGE, Judge.

This case represents the final chapter, we trust, in a long controversy between the government of Prince George's County and certain taxpayers over the proper rate of recordation taxes in Prince George's County. The specific issue before us is whether the retroactive application of a 1976 recordation tax statute would impair constitutionally protected rights.

I.

The dispute had its origins in 1968 when the General Assembly amended Maryland Code (1957, 1975 Repl. Vol.), Art. 81, § 277, relating to the tax imposed upon the recordation of certain written instruments. Subsection (b) of § 277 provided in 1968, and continues to provide, that the basic rate of recordation taxes throughout the State would be $0.55 for each $500.00 of the consideration paid or, in the case of an instrument securing a debt, $0.55 for each $500.00 of the principal amount of the debt secured. The Legislature in 1968 enacted a new subsection (q) of § 277 which in substance stated that the counties and Baltimore City could, by resolution or ordinance, fix a recordation tax rate in lieu of the basic rate, but that in the absence of such resolution or ordinance, the rate specified in § 277 would continue to apply. Also in 1968, the Legislature added a new subsection (r) to § 277. Subsection (r), applicable only to Prince George's County, provided that "(n)otwithstanding the other provisions of this section," Prince George's County could by resolution adopt, in lieu of the basic recordation tax rate specified in subsection (b), a rate of $1.10 for each $500.00 of consideration or secured debt.

In 1968, soon after subsection (r) was enacted into law, the County Commissioners of Prince George's County by resolution set the recordation tax rate at $1.10. A few months later, however, in September 1968, the Prince George's County Commissioners adopted a new resolution increasing the recordation tax rate to $1.65.

The question of the proper recordation tax rate in Prince George's County first came before us in Prince George's Co. v. White, 275 Md. 314, 340 A.2d 236 (1975) (hereinafter referred to as White I ). The taxpayers in that case had recorded deeds of trust among the Prince George's County land records in 1971 and 1972, and they were required to pay recordation taxes computed at a rate of $1.65 for each $500.00 of debt secured. The taxpayers then filed a claim for a partial refund of the recordation taxes pursuant to Art. 81, §§ 214-217. The Maryland Tax Court, the administrative agency empowered to render a final administrative decision in the matter, held that the legal rate for recordation taxes in Prince George's County was $1.10 for each $500.00 of debt secured and that, therefore, the taxpayers were entitled to a partial refund representing the difference between the taxes actually paid at the $1.65 rate and the amount of taxes which should have been paid based upon the proper rate of $1.10. This Court in White I affirmed the Tax Court, holding that the Legislature intended the $1.10 rate, specified in subsection (r), to be the applicable rate in Prince George's County.

The subject of recordation taxes under Art. 81, § 277, next came before us in Blumenthal v. Clerk of Cir. Ct., 278 Md. 398, 365 A.2d 279 (1976). There this Court held that Baltimore City and certain counties, not including Prince George's County, were authorized by subsection (q) of § 277 to set whatever recordation tax rates those subdivisions deemed appropriate. We pointed out that subsection (r), limiting the rate to $1.10, was applicable just to Prince George's County, and we reiterated our holding in White I that the Legislature intended for subsection (r) to take precedence over the general authority granted counties by subsection (q). Blumenthal v. Clerk of Cir. Ct., supra, 278 Md. at 407, 365 A.2d 279.

The year following this Court's decision in White I, two statutes amending Art. 81, § 277, were enacted. Chapter 142 of the Acts of 1976, Inter alia, amended subsections (q) and (r) to provide that All of the counties could by resolution or ordinance fix whatever recordation tax rate they desired, and that, in the absence of such resolution or ordinance, the recordation tax rate in Prince George's County should be $1.65 for each $500.00 of consideration or secured debt. Chapter 142, enacted as an emergency law and taking effect on April 13, 1976, was entirely prospective in its operation.

The other 1976 statute which amended Art. 81, § 277, was Ch. 129 of the Acts of 1976. It is Ch. 129 which gives rise to the retroactivity issue presented in the instant case. Section 1 of Ch. 129 stated the "legislative intent" that, from and after July 1, 1968, the recordation tax rate prescribed by a county resolution or ordinance superseded the tax rates set forth in Any subsection of § 277. Section 2, in the first paragraph, purportedly "ratified, confirmed, and validated" the "authority to collect recordation taxes pursuant to a tax rate fixed" by resolution or ordinance of a subdivision on or after July 1, 1968. The second paragraph of § 2 provided that the statute did not apply to "actions which are res judicata, nor whenever constitutionally protected rights would be impaired." ¹

The matter of the Prince George's County recordation tax rate, in light of the provisions of Ch. 129 of the Acts of 1976, was before us in White v. Prince George's County, 282 Md. 641, 387 A.2d 260 (1978) (hereinafter cited as White II ). White II involved two categories of recordation tax refund claims. One category consisted of claims which had never been presented to the Maryland Tax Court, and we refused to consider the merits of those claims because of the taxpayers' failure to exhaust their administrative remedies. The other category of recordation tax refund claims before us in White II consisted of the identical claims involved in White I, as to which the taxpayers had, of course, exhausted administrative remedies. In spite of our decision in White I that the taxpayers in that case were entitled to refunds, Prince George's County had refused to refund the money. The County initially argued that we should reconsider our prior interpretation of the recordation tax provisions. Alternatively, the County argued that Ch. 129 of the Acts of 1976 had the effect of retroactively increasing the recordation tax rate in Prince George's County to $1.65, so that the $1.65 rate was applicable to the White I claims involving 1971 and 1972 taxes. It was the County's contention that the White I claims were not excepted from the operation of Ch. 129 by the second paragraph of § 2, because the White I litigation was not res judicata and because constitutionally protected rights were not impaired. In White II, we rejected both arguments by Prince George's County. First (282 Md. at 657), we refused to depart from the interpretation of Art. 81, § 277(q) and (r), which we rendered in White I And reaffirmed in Blumenthal v. Clerk of Cir. Ct., supra. Second (Id. at 658-659, 365 A.2d 279), we held that the White I proceedings were res judicata and that, therefore, the White I Claims were excepted from the operation of Ch. 129. Because of our ruling with regard to res judicata, it was unnecessary for us in White II to decide whether constitutionally protected rights would also have been impaired. That issue must now be resolved in the case at bar.

II.

The relevant facts of this case are undisputed and may be briefly stated. The petitioners are several corporations and partnerships which, at various times prior to 1976, recorded written instruments among the Prince George's County land records and were required to pay recordation taxes based upon the $1.65 rate. They all filed timely claims for partial refunds which, because of the County's failure to act upon them within six months, were disallowed by operation of law. ²

Petitioners all took timely appeals to the Maryland Tax Court, and, by that time, Ch. 129 of the Acts of 1976 had been enacted into law. The Maryland Tax Court viewed Ch. 129 as "a curative act" which "resurrected the (1968) resolution adopted by the County Commissioners of Prince George's County fixing the recordation tax rate at $1.65 per $500.00." The Tax Court held that, as a "curative act," Ch. 129 could be retroactively applied to petitioners without impairing constitutional rights.

Upon judicial review of the Tax Court's decision, the Circuit Court for Prince George's County affirmed on the ground that Ch. 129 of the Acts of 1976 was "curative" legislation, curing a prior defect in Prince George's County's authority to collect recordation taxes at the rate of $1.65, and, as such, its retroactive application to the taxpayers in this case did not impair constitutionally protected rights. The taxpayers took an appeal to the Court of Special Appeals. Before any further proceedings in that intermediate appellate court, the taxpayers filed a petition for a writ of certiorari which we granted.

III.

The issue in this case could be viewed either as one of statutory interpretation or as a matter of constitutionality. It makes no practical difference whichever way it is viewed. The Legislature, in Ch. 129 of the Acts of 1976, expressly stated its...