Could a Maryland county spend its share of the farmland transfer tax on staff salaries, not just on buying preservation easements?

Plain-English summary

Queen Anne's County asked the Attorney General whether it could use its share of Maryland's agricultural transfer tax, a tax on deeds conveying farmland that is later sold for development, for two specific purposes: covering 40% of the cost of easements purchased through the state's matching-funds program, and paying half the salary of a county employee who split time administering the county's own farmland preservation program. The opinion concluded that the county could do both. Article 81, §278F(i) required the county's share to be used for an "approved agricultural land preservation program," and the Attorney General found nothing in the statute or its regulations limiting that phrase to easement purchases alone, so paying for the staff needed to run the program fell within the county's authority.

Currency note

This opinion was issued in 1984. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could a Maryland county use farmland transfer tax money to pay staff salaries instead of just buying easements?
Under this 1984 opinion, yes: the Attorney General found nothing in Article 81, §278F(i) limiting a county's one-third share of the tax to easement purchases, so paying for administrative staff to run the local preservation program was a permissible use of that money.

Did the county have to spend its transfer tax revenue only on matching state farmland-easement purchases?
No. The opinion read the statute's reference to an "approved agricultural land preservation program" broadly enough to cover the administrative costs of running that program, not just the cost of buying easements.

Was there a specific list of allowed expenses for a county's share of the tax?
No. The opinion noted that neither the statute nor the implementing regulations enumerated permitted uses beyond the general "approved agricultural land preservation program" language, leaving counties with latitude in this area at the time.

Background and statutory framework

Article 81, §278F imposed the agricultural transfer tax on deeds conveying agricultural land sold for development, splitting the revenue two-thirds to the state's Maryland Agricultural Land Preservation Foundation (MALPF) and one-third to the county that collected it. The Agriculture Article specified how the MALPF's two-thirds share could be spent, including its own staffing and administrative costs, but the statute's language governing the county's one-third share was, in the opinion's words, far less specific. The opinion reasoned that this lack of detailed restriction reflected a legislative choice to leave decisions about the local share to county authorities, consistent with the broader structure of the agricultural land preservation program, which paired statewide coordination with local control over how individual county programs operated.

Citations

Statutes:

• Article 81, §278F of the Maryland Code (agricultural transfer tax; two-thirds/one-third split between MALPF and county)
• AG §2-505(c) (permitted uses of MALPF's share, including staffing and administrative costs)
• AG §2-508(b) (allotment of MALPF funds for general and matching easement purchases)
• AG §2-512(b) (conditions for MALPF approval of a local preservation program)
• AG §2-509 (MALPF designation of agricultural preservation districts)

Cases:

• Harbor Island Marina v. Calvert Co., 286 Md. 303, 311 (1979) (polestar of statutory construction is legislative intent)
• Greenbelt Consumer Services, Inc. v. Acme Markets, Inc., 272 Md. 222, 227 (1974) (examining legislative enactments to determine true purpose)
• Montgomery County v. Maryland-Washington Metropolitan District, 202 Md. 293, 304 (1953) (county powers include those incidental to express grants)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1984/Volume69_1984.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

AGRICULTURE

Agricultural Land Preservation Program-Agricultural Transfer Tax-Local Government-Counties May Use Their Shares of Transfer Tax for Matching Purchases of Easements and for Administrative Expenses of County Agricultural Land Preservation Program.

November 29, 1984

Mr. Oscar A. Schulz, President
Mr. Thomas E. Pierson
Mr. Vernon B. Sultenfuss
The County Commissioners of Queen Anne's County

You have requested our opinion on whether Queen Anne's County may properly use its share of the revenue generated by the agricultural transfer tax ("transfer tax"), imposed by Article 81, §278F of the Maryland Code, to make matching funds available to the Maryland Agricultural Land Preservation Foundation (the "MALPF") and to pay the administrative expenses of a county agricultural land preservation program. Specifically, you asked whether the county may use this transfer tax revenue (i) to pay its 40%-share of the cost of easements purchased under the MALPF's matching funds allotment; and (ii) to pay half the salary of a county employee, who would spend half of his or her time in establishing and administering a local agricultural preservation program.

For the reasons given below, we conclude that the county has the authority to use its transfer tax revenue in the way you have indicated.

I
Introduction

Article 81, §278F imposes an agricultural transfer tax on deeds conveying title to certain agricultural land, when that land is sold for development.1 Subsection (g) requires each county to collect the tax, while subsections (h) and (i) specify that the revenue may be used by the MALPF and by the county for agricultural preservation purposes only. These subsections provide in relevant part:

"(g) The tax imposed by this section shall be paid to and collected by the tax collecting authorities of the various subdivisions before the written instruments conveying title are recorded among the land records.
(h) Two-thirds of the money collected by the tax collecting authorities of the various subdivisions... shall be held in a special account and paid over to the Comptroller of the Treasury as the Comptroller specifies. The Comptroller shall place all proceeds in the Maryland Agricultural Preservation Fund to be used for the purposes stated in §2-505 of the Agriculture Article.
(i) One-third of the money collected by the tax collecting authorities . . . shall be held in a special account by the subdivision and shall be used for an approved agricultural land preservation program, including bond annuity funds or matching funds."

Agriculture ("AG") Article, §2-505(c), to which Article 81, §278F(h) refers, specifies how the MALPF may spend its 2/3 share of the tax:

"(1) For costs associated with the staffing and administration of the Maryland Agricultural Land Preservation Foundation;
(2) For reasonable expenses incurred by the members of the Board of Trustees of the Maryland Agricultural Land Preservation Foundation in the performance of official duties; and
(3) For consideration in the purchase of agricultural land preservation easements beginning with fiscal year 1979 and each fiscal year thereafter."

There are no equally specific statutory provisions regarding permissible uses for a county's 1/3 share. Section 278F(i) simply provides that the county must use its share for an "approved agricultural preservation program, including bond annuity funds or matching funds".2 Nor do the administrative regulations governing either the transfer tax or the agricultural land preservation program further enumerate the uses to which a county's share of the tax may be put.3

Given the specific, express reference in Article 81, §278F(i) to use of a county's share for "matching funds", it is clear that the statute authorizes a county to use its share of the transfer tax revenue as a source of matching funds for purchases of agricultural land preservation easements.4 The statute and regulations are far less specific, however, about whether that revenue also may be used to pay for the administrative costs of a local agricultural preservation program.

II
Use of Revenue for Administrative Expenses

"The polestar of statutory construction is to ascertain and carry out the real intent of the legislature when it enacts a statute". Harbor Island Marina v. Calvert Co., 286 Md. 303, 311 (1979). This intent must ordinarily be determined from the words used. However, when a statute is ambiguous or vague, it should be interpreted to carry out the legislative object or purpose, considering "the effect of the proposed construction in light of the subject matter and purposes sought to be accomplished". Id. To that end, all relevant legislative enactments will be examined to determine the true legislative purpose. Greenbelt Consumer Services, Inc. v. Acme Markets, Inc., 272 Md. 222, 227 (1974).

The agricultural transfer tax, like the development tax it replaced, was enacted both as a disincentive to removing agricultural land from productive use and as a means of funding the State's agricultural land preservation program.5 The purposes of the agricultural land preservation program, as described in AG §2-501, are to provide sources of agricultural products within the State; to prevent the loss of agricultural land to suburban expansion; to control urban sprawl; and to preserve agricultural land as open space.

To accomplish those purposes, the MALPF purchases easements on agriculturally productive land in each county, to restrict that land perpetually to agricultural use. At the beginning of each fiscal year, the MALPF allots 1/3 of its available funds, to be distributed in equal shares among all of the counties, for "general purchases" of easements. The remainder is allotted among "eligible counties" that agree to provide funds for "matching purchases" of easements. AG §2-508(b).6

Under AG §2-512, the MALPF must approve a local program of agricultural land preservation before it may allot any of its available funds to a particular county for matching purchases of easements. However, the statute permits approval of any local program that (1) has been submitted to the MALPF for approval within the statutory time limit; (2) includes the county's agreement to contribute 40% of the cost of any easement purchased by means of the matching funds allotment; and (3) will not lead to preservation of nonagricultural land. AG §2-512(b). Moreover, the MALPF must consider the recommendations of the local governing body in deciding whether to purchase easements on particular land. AG §2-510(e)(2)(ii). Indeed, the MALPF may designate the districts within which it will purchase easements only if the local governing body approves the designation. AG §2-509(b)(5). Thus, the agricultural land preservation program, on its face, was designed and intended to promote Statewide coordination of agricultural preservation without sacrificing local control.7

In line with this intent, the General Assembly made no attempt to restrict the local use of transfer tax revenue to any specific elements of a local agricultural land preservation program. In our view, this lack of statutory restrictions reflects a legislative determination that decisions as to the most effective use of the local share of that revenue should be left to local authorities. And, we note, such an intent comports well with a desire to allay fears of excessive State control of land use, fears that plagued early efforts to establish a Statewide program of agricultural land preservation. See Nielsen, Preservation of Maryland Farmland: A Current Assessment, 8 U. Balt. L. Rev. 429, 434-38 (1979).

In our view, the county's broad general authority to spend transfer tax revenue in support of a farmland preservation program necessarily implies and encompasses the authority to spend this revenue to implement and administer that program effectively. Although the powers of county commissioners are limited, they nonetheless encompass powers incidental to those expressly granted by the General Assembly, as well as powers essential to the accomplishment of the county's declared purposes. Montgomery County v. Maryland-Washington Metropolitan District, 202 Md. 293, 304 (1953) (quoting 2 Dillon, Municipal Corporations, §237). We believe that providing for the services of an administrative staff necessary to effectuate a local preservation program falls within these incidental and essential powers.

We conclude, therefore, that the county has the authority to use its share of agricultural transfer tax revenue for expenses reasonably necessary to carry out the purposes of its local agricultural land preservation program, including compensating an employee for work done in administering the program.8

III
Conclusion

In summary, it is our opinion that Article 81, §278F(i) authorizes Queen Anne's County to use its share of the agricultural transfer tax to provide matching funds for easement purchases and to pay for employee services necessary to effectuate the county's agricultural land preservation program.

Stephen H. Sachs, Attorney General

Craig A. Nielsen,
Assistant Attorney General

Avery Aisenstark
Chief Counsel
Opinions and Advice

Editor's Note: The agricultural land transfer tax is now codified in Subtitle 3 of Title 13 of the Tax-Property Article. See Chapter 8, Laws of Maryland 1985.

1 The agricultural transfer tax was enacted, and the former agricultural development tax repealed, by Chapter 808, Laws of Maryland 1981.

2 Under §278F(i), the county may retain its share for three years. Thereafter, any unused money shifts automatically to the MALPF's farmland preservation fund and, for the next five years, must be used by the MALPF for easement purchases in the county that collected it. After that time, the transfer tax revenue presumably may be used for any of the purposes specified in AG §2-505(c), including MALPF staff and easement costs.

3 Article 81, §278F(1) requires the Department of Assessments and Taxation to adopt regulations "to implement the provisions of this section"; those regulations are codified at COMAR 18.05.01.01. The MALPF, pursuant to AG §§2-504(4) and 2-509(a), has adopted regulations concerning the establishment of agricultural preservation districts and the administration of the State agricultural land preservation program; those regulations are codified at COMAR 15.15.01.01 through 15.15.01.06.

4 See AG §§2-508 and 2-512, discussed below in the text accompanying notes 6 and 7.

5 The MALPF was created and authorized to acquire preservation easements by Chapter 642, Laws of Maryland 1974. However, it was given no funding. In 1977, the Maryland Agricultural Land Preservation Fund was created and given power to receive grants from private or governmental donors for purchases of easements. Chapter 883, Laws of Maryland 1977. Even this program, however, had no regular source of funding until 1979, when provisions were enacted for distributing the development tax revenue to the Fund and to local agricultural preservation programs. Chapter 702, Laws of Maryland 1979. See generally, Nielsen, Preservation of Maryland Farmland: A Current Assessment, 8 U. Balt. L. Rev. 429, 434-38 (1979) (outlining legislative history of agricultural land preservation program).

6 These allotments are made from the money remaining in the Maryland Agricultural Land Preservation Fund after payment of the MALPF's administrative costs and the expenses of its board of trustees and after subtracting from the Fund any amounts previously committed for acquisition of land or easements.

7 Such local control has led to a variety of programs, tailored to the varying needs of individual counties. In Calvert County, for example, a system permitting transfers of development rights authorizes owners of land in agricultural preservation districts to sell the development rights pertaining to their land to owners of land in designated "transfer zones". When all the development rights on a parcel of land in an agricultural preservation zone have been sold, that land is permanently withdrawn from development. The purchaser of the development rights may use those rights to increase the density of residential development on the "transfer zone" land. Code of Public Local Laws of Calvert County, §§17-101 through 17-109.

Howard County plans to preserve its farmland by purchasing easements on at least 20,000 acres of agricultural land from local landowners. Howard County Code, §15-501. Once such an easement is purchased on a farm, it may not be developed for any nonagricultural use.

Other counties appear to rely principally on zoning to preserve local agricultural land. See, e.g., Public Local Laws of Frederick County, §1-19-239 (the purpose of agricultural zoning is "to preserve productive land and the character and quality of the rural environment and to prevent urbanization where roads and other public facilities are scaled to meet only rural needs").

8 We also note that such use of transfer tax revenue is not without precedent. Howard County, for example, currently uses its 1/3 share of the transfer tax to compensate the staff of its agricultural preservation program, as well as to fund easement purchases and to match funds with the MALPF. Conversation with Gerald Talbert, Executive Director of MALPF, and Dennis White, Program Administrator of Howard County Agricultural Preservation Program (August 31, 1984).