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Session Laws, 1971
Volume 707, Page 1926   View pdf image
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1926                                      Vetoes

As a matter of public policy and as a fundamental principle of
government, tax exempt property is entitled to the benefits of normal
governmental services, such as police and fire protection which are
traditionally the responsibilities of local units of government, despite
the tax exempt status of the property. House Bill 1090, by imposing
on the Maryland Port Authority the duty to provide fire service, would
be contrary to this principle and create an undesirable precedent. At
present, the tax exempt port facilities of the Maryland Port Authority
are presently located in the Port of Baltimore and owned by the State
of Maryland. If these State properties are to be assessed a special
levy in the form of the cost of providing fire fighting services, then
this procedure could logically extend to other State properties, not
only in Baltimore City but throughout the State.

The Governor's Council of Economic Advisers has written me
concerning the potential economic consequences of House Bill 1090.
The relevant part of the Council's letter is as follows:

"The requirement of House Bill 1090 that the Maryland Port
Authority now pay for a governmental service formerly provided
without charge is the fiscal equivalent of the imposition of a
tax on the property of the Maryland Port Authority. * * * Wide-
spread local taxation of state property would increase the cost
of state government and increase local revenue or reduce local
tax rates. In particular,

—if in fy 1969 the state paid for local government public safety
services (fire, police, etc.) in proportion to the value of state
property (to the value of all property in the subdivision.), the
state expenditure would have been $3.25 million.

—if in fy 1970 the county governments (1) taxed state owned
and all privately owned property and (2) reduced local prop-
erty tax rates so as to yield the same total property tax rev-
enue, the state expenditure would have been $12.3 million."

It is difficult to assess the chaotic situation that could result from
the precedent that would be established by House Bill 1090.

Moreover, the Attorney General has advised me that certain
difficult legal questions are presented by this bill. On February 13,
1963, the Maryland Port Authority and Baltimore City entered into
a lease agreement for a term of 40 years. Under the agreement the
Authority, for a rent of one dollar per year, leased to the City a
portion of a marine fire station. The City further agreed in this lease
to furnish marine fire prevention service to the Port Authority with-
out cost. The Attorney General, in his opinion on House Bill 1090,
has commented that this set of circumstances gave rise to several
legal questions. The pertinent portion of the Attorney General's
opinion is as follows:

"First, as to marine fire protection at least, it could be
argued that the bill is of no effect. The bill provides that the
Port Administration, by agreement with political subdivisions,
may obtain the fire protection which is the subject of the bill.
By virtue of the aforementioned lease, the City of Baltimore
is already obliged by agreement to furnish marine fire protection
without cost to the Port Administration."

"If the City argues that the bill requires the Port Adminis-
tration to pay for marine fire protection, another question arises.


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Session Laws, 1971
Volume 707, Page 1926   View pdf image
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