Sources of Municipal Powers

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1 Sources of Municipal Powers Municipal Authority and the Annotated Code of Maryland. The general authority for Article 23A of the Annotated Code of Maryland is found in Article XI-E of the Maryland State Constitution. However, it is Article 23A, summarized in Table 1, that sets forth various municipal powers; provides for home rule; establishes methods for annexation, incorporation, disincorporation, and merger; delineates rules for adopting and amending charters; and provides for limitations of municipal powers and the creation of debt. Article 23A provides most, although not all, of the powers and limitations for municipalities in Maryland. Other sections of the Code contain valuable information, rules, requirements, procedures, and authority affecting municipalities and Article 66B serves as the planning and zoning enabling act for most municipalities. For example, the Health and Transportation articles of the Code limit and empower municipalities. The State Government title contains a section on public records and public information applicable to all political subdivisions of the state as well as to state government. Table 1 Summary of Article 23A of the Annotated Code of Maryland In General Section 1: Proclaims every municipality as a perpetual entity with the right to sue or be sued and pass laws. Section 1A: Describes powers and limitations in the use of sovereign immunity as a defense in contract suits. Section 1B: Establishes that municipal officials are immune from civil liability while they are acting within the scope of their office, and without malice. Section 2: Grants general power to all municipalities to pass ordinances for the general welfare and expressly lists 36 specific powers. Section 2A: Provides power to displace or limit competition and grant franchises in public transportation, water and sewer systems, port regulation, and publicly owned or leased land. Section 2B: Establishes categories of county legislation applicable and inapplicable to municipalities. Section 2C: Amends other sections of Articles 23A, 25, 25A, and 25B in light of Sec. 2B. Section 3: Provides that municipalities may impose penalties for violations of ordinances and allows the establishment of minor violations called municipal infractions. Section 4: Repealed. Section 5: Provides for severability of portions of code ruled invalid by the courts. Section 6: Provides for the adoption of a fire prevention code by reference or outright. Section 7: Authorizes the establishment of blighted conservation areas and to delegate legislative power to an oversight body.

2 Section 7A: Provides authority to exercise powers over public recreation and parks as found in Article 25, 222 et. siq. Section 8: Requires public meetings of the municipal legislative body. Facilities Outside Corporate Limits Section 8A: Requires permission of the county to establish penal institutions (jails) outside corporate limits. Section 8B: Repealed. Assistance to Other Political Subdivisions Section 8C: (a) Authorizes intergovernmental agreements for services, equipment, and other assistance. (b) Requires municipalities to assist counties in collection of development impact fees. Home Rule Section 9: (a) Defines municipal corporations, excluding Baltimore City, and describes their powers relative to their entities. (b) Excludes Washington Suburban Sanitary Commission (WSSC) and the Maryland-National Capital Park and Planning Commission (M-NCPPC) from that definition. (c) Limits municipalities from amending or repealing charters or approving annexations if such actions adversely affect the powers of WSSC and M-NCPPC regarding sanitation or zoning. Places other limits on municipal planning and zoning in the WSSC and M-NCPPC area, and prevents the change of zoning classification without county approval of annexed land for five years. (d) Defines qualified voter. (e) Defines municipal charter. Section 9A: Requires that certain municipal documents (charter amendments and annexation) be deposited with the Department of Legislative Services. Section 10: Establishes a single class of municipalities with each subject equally to the law. Charter Amendments Section 11: Directs all municipalities to make charter amendments as described in Sections 12 through 18. Section 12: Authorizes the legislative body or voters of a municipality to initiate charter amendments. Section 13: Describes the process of charter amendment by resolution. Section 14: Describes the process of charter amendment by petition. (a) Sets requirements for petition and date of elections. (b) Authorizes the legislative body to adopt a charter amendment by resolution subject to referendum as in 13.

3 Section 15: Describes posting and publication requirements for proposed charter amendments. Section 16: Prescribes the procedure for referendum election on amendments. Section 17: Prescribes the form and registration of proposed amendments. Section 17A: Requires that charter amendments be compiled annually, available to the public, and submitted to the Department of Legislative Services. Section 17B: Requires the Department of Legislative Services to compile all municipal charters into a single publication to be updated on a regular basis. Section 17C: Requires the Department of Legislative Services to forward all documents to the State archives for permanent retention and storage. Section 17D: Requires the mayor and city council to provide an annual update of ordinances; explains contents of supplement, new edition, and meaning of ordinance ; allows for appropriation of expenditures necessary under this section. Section 18: Requires amendments to be included in subsequent codifications of the charter. Annexation Section 19: Annexation. For a discussion of this subject, see subsection entitled Annexation in this chapter. Merger of Municipal Corporations Section 19A: Provides for the merging of two or more municipal corporations in the same county but requires prior approval of the county governing body. Incorporation of Municipalities Section 20: Provides that an area with 300 residents may be incorporated as a municipality under the following provisions. Section 21: Requires a petition (20% or more of the county voters in the area and the owners of 25% or more of the assessed valuation of property in the area) to initiate incorporation or 25% or more of the county voters in the area. The specific approval of the county governing body is required for incorporation; however, the county is not required to give approval. Section 22: Within 90 days of a valid petition, the incorporating community s organizing committee is required to hold a public meeting and report its findings to the county. Section 23: Requires the organizing committee to submit to the county governing body a proposed charter after the county comments on the report provided in Section 22. Section 24: After receiving the proposed charter, the county governing body may set a date for a special referendum election on the proposed incorporation or if the county governing body rejects the proposed incorporation it must provide procedures for reconsideration.

4 Section 25: Requires the county governing body to post and publish the petition and a fair summary of the proposed charter. Section 26: Provides the procedure for the conduct of the election, certifying results and proclaiming the results of the election. Section 27: Provides for the newly incorporated municipality to repay the county for the cost of the referendum if successful. Section 28: Requires the registration of the new charter with the state government. Section 29: Provides for a gradual distribution of the municipal share of the county income tax to the new municipality and the development of a comprehensive plan. Section 30: Requires that town officers be elected at the same time as the referendum. Creation of Municipal Public Debt Section 31: Authorizes municipalities to borrow for any proper public purpose, to issue general obligation bonds, and to make charter amendments to this effect. Authorizes municipalities to borrow on tax anticipation notes. Section 32: Requires all bonds to be authorized by resolution or ordinance. Prescribes the contents of such and the method of adoption. Section 33: Provides for additional optional provisions of bond resolution. Section 34: Establishes the following limitations on these powers: (1) no tax anticipation notes to mature later than 18 months from issue nor bonds longer than 40 years. (2) bonds or tax anticipation notes issued only for cash and sold at no less than par. (3) if charter requires referendum, a majority of voters must approve. (4) bonds to be sold only by competitive bids after publication of notice of sale. Section 35: Provides that all bonds and tax anticipation notes are negotiable and not subject to taxation. Section 36: Provides that the municipal fiscal officer shall invest any sinking fund only in accordance with law. Authorizes the officer to do so. Section 37: Requires municipalities to issue bonds and tax anticipation notes on full faith and credit (general obligation bonds). Bonds constitute covenant to levy taxes. Provides other limitations and powers regarding bonded indebtedness. Section 38: Authorizes municipalities to issue bonds (revenue bonds) payable solely from revenues of revenue producing projects. Section 39: Prescribes that nothing in the Code will affect obligations incurred prior to home rule. Tax Rates and Debt Referenda

5 Section 40: Empowers municipalities to submit to voters any local law that establishes a maximum limit on property taxes or regulates maximum debt limit (enacted in accordance with Article M-E, Sec. 5 of the Maryland State Constitution). Repeal of Charter Section 41: Provides that a municipality may repeal its charter by essentially the same procedures as those for amendment. Section 42: Authorizes the resolution for the repeal of a municipal charter to dispose of the municipality s debts and property. If this is not done, the county assumes the assets and debts. Requires the municipality to establish a special taxing district to provide revenues to retire debts. Section 43: Prescribes conditions under which the municipal charter may be declared repealed if a municipality fails for three successive years to file the required financial statement with the Department of Legislative Services. Provides for disposal of debts and assets in the event a charter is declared repealed. Special Taxing Districts Section 44: Authorizes municipalities to establish special taxing districts for drainage, public parking facilities, pedestrian malls, street and area lighting, ride sharing or bus service, and commercial district management. Authorizes the levying of taxes on real and personal property in such districts to retire bonds or pay other obligations and provide funds for operation and maintenance of facilities. Section 44A: Authorizes special taxing districts and financing for storm drainage, sewers, water systems, roads, sidewalks, recreation facilities and other infrastructure. Provides for issuance of bonds for improvements, and alternate special property tax methods. Discrimination by Sex Section 45: Repealed. Property Qualifications Section 46: Specifies that property ownership may not be a requirement for voting or holding office. Elections - Absentee Ballot Section 47: Prescribes that any registered voter be entitled to vote in municipal elections by absentee ballot and that the municipality provide the procedure. Licenses and Permits Section 48: Provides that any employer to be issued a license or permit by a municipal agency must

6 present a certificate of compliance with state Workmen s Compensation Laws. Privately Owned Residential Communities Section 49: A privately owned residential community is a homeowners association, condominium or cooperative housing association. Section 50: A municipality may contract with a private residential community for the delivery of certain municipal services. Section 51: Privately owned residential communities having roadways to be serviced under agreement with a municipality must be dedicated to public use and properly maintained in order to receive certain services from the municipality or reimbursement for self-provided services. Note: This Table is a very brief summary. Readers are urged to consult the Code for more detailed information. Court Decisions. Municipalities are also governed by federal and state court opinions and by their own charters. Court opinions are definitive. That is, the courts interpret state and federal law as it applies to municipalities, and until the courts change their rulings or the rulings are overturned by higher courts or legislative action, court decisions are binding. This is especially true of decisions of the federal Supreme Court and the Maryland Court of Appeals, which are the final arbiters of federal and state law. Opinions issued by the Maryland Attorney General also provide guidance to municipalities but lack the force of law. To give but one example, in 1987 the Maryland Court of Appeals in Northeast Plaza Associates v. Town of Northeast interpreted the state s annexation law to limit severely the ability of municipalities to rezone land in newly annexed areas. The court s decision had a great impact on the state s municipalities because the decision altered a long-standing view of state law that the zoning of annexed land is to be treated as original zoning and therefore not subject to Article 66B, Sec which regulates the zoning reclassification of property by local governments. Through the Maryland Municipal League, the municipalities introduced a bill in the 1988 session of the General Assembly to overturn the court s decision. The General Assembly adopted the new legislation. Court rulings on the authority of municipalities are often based on a widely accepted interpretation known as the Dillon Rule. Dillon s Rule states: A municipal corporation can exercise the following powers, and no others: first, those granted in express words; second, those necessarily or fairly implied in or incident to the pow ers expressly granted; third, those essential to the accomplishment of the declared objects and purposes of the corporation. In effect, Dillon s Rule says that if a power is not expressly provided by the legislature or contained in the city charter, if it cannot be reasonably implied from such a power, or if it is not essential (not just convenient) to the exercise of an express power, then a municipality does not have that power. As will be seen later, however, court interpretation and the intent of the legislature seem to be in conflict raising the question of whether Dillon s Rule really prevails in Maryland. Opinions of the Attorney General, unlike rulings of the Court of Appeals on state issues and rulings of the U.S. Supreme Court on federal matters, are not binding. They are advisory but, in the absence of Courts of Appeal rulings, they provide sound guidance. Moreover, municipalities may contact the Office of the Attorney General to secure advisory opinions on matters about which definitive court rulings have not been issued. Under current procedures, the mayor and council must take formal action and instruct the municipality s attorney to request an opinion from the Attorney General s office.

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