Can the Maryland General Assembly direct state income tax money to specific counties without a formal budget appropriation?

Plain-English summary

Governor Schaefer asked the Attorney General in 1990 to review House Bill 134, which told the Comptroller to pay fixed amounts of state income tax revenue to Baltimore City and to Allegany, Garrett, and Somerset Counties, to be used for education and fighting drug abuse. The catch was that the bill was not itself a budget or appropriation bill; it simply directed the money out to those four jurisdictions.

The Attorney General reached a careful, two-part answer. First, on the money: the bill was not unconstitutional, but it could not work on its own. Maryland runs on a strong executive budget system created by the 1916 Budget Amendment, under which the Governor prepares a single balanced plan of spending and revenue, and the legislature can appropriate money only through the Budget Bill or a supplementary appropriation bill (which must raise a tax to pay for itself). House Bill 134 tried to redirect revenue that had already been estimated and appropriated in the state budget, so the opinion concluded it had to be read as an authorization that still needed a genuine appropriation, most likely a deficiency appropriation in a later Budget Bill, before any dollars could flow. Second, on home rule: the opinion concluded that conditioning the payments on each recipient keeping its property tax rate at least at the prior year's level did not intrude on the home rule powers of Baltimore City or Allegany County. The bill was a public general law about statewide tax revenue that affected four subdivisions at once, and attaching a "tax effort" string was comparable to Congress attaching conditions to federal grants.

Currency note

This opinion was issued in 1990. 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.

The opinion interpreted a specific 1990 bill against the Budget Amendment and the home rule provisions of the Maryland Constitution as they stood at the time, and it drew on a line of authority stretching back to a 1921 Attorney General opinion and the 1925 O'Conor decision. Statutory section numbers (the Tax-General Article's income tax distribution provisions, the State Finance and Procurement Article's budget amendment process) and the surrounding constitutional case law may have changed. Do not rely on the specific sections or figures here as current law without checking today's statutes and decisions.

Common questions

Could the Maryland legislature give state tax money directly to certain counties without a budget appropriation?
Under this 1990 opinion, not on its own. The bill was valid as an authorization, but the Attorney General concluded no money could actually be paid until the funds were appropriated through the constitutional budget process.

Why did House Bill 134 need a separate appropriation?
Because it redirected revenue that had already been estimated and appropriated in the state budget, which would undercut the executive budget system created by the 1916 Budget Amendment. The opinion explained that in a regular session, the General Assembly can appropriate money only through the Budget Bill or a supplementary appropriation bill, and a supplementary bill must levy a tax to fund itself. House Bill 134 did neither; it just distributed existing appropriated revenues.

How was this different from the "piggyback" county income tax that counties already receive?
The opinion drew a line between permanently marking a category of revenue as local and reaching into statewide revenue for a one-time payment. The piggyback tax (and the distribution in TG §2-607) is a category the legislature has designated as local, so the Comptroller remits it straight to the county where it was collected, and it never becomes ordinary state revenue. House Bill 134 instead allocated specific dollar amounts of statewide income tax for a single fiscal year, which the opinion said could not be treated the same way.

Did requiring the counties to keep their property tax rates up violate home rule?
No. The opinion concluded House Bill 134 was a public general law on a subject of statewide concern (the distribution of state tax revenue), and that its "tax effort" condition affected four subdivisions rather than singling one out, so it did not violate the charter home rule of Baltimore City or the code home rule of Allegany County. The opinion likened the condition to Congress attaching strings to the receipt of federal funds, citing South Dakota v. Dole.

Background and statutory framework

The heart of the opinion is Maryland's executive budget system. Before 1916, the opinion recounts, appropriations were made piecemeal by the General Assembly, and deficits were common; the Goodnow Commission studied the problem and recommended a system that put "the sole responsibility" on the Governor to present a complete, balanced plan of proposed spending and estimated revenue. The result was the Budget Amendment. Under Article III, §52, every appropriation bill must be either a Budget Bill or a supplementary appropriation bill; the Governor's budget must be balanced; the legislature generally may not increase the Governor's proposed appropriations; and if it wants to spend more, it must pass a supplementary appropriation bill that levies a tax to cover the new spending. The Court of Appeals had repeatedly described this structure as the foundation of the state's fiscal integrity (Kelly v. Marylanders For Sports Sanity; McKeldin v. Steedman; Maryland Action for Foster Children v. State).

Against that backdrop, the opinion said that if the question were entirely new, diverting general tax revenue outside the budget would be clearly unconstitutional. But it was not writing on a clean slate. A 1921 opinion of Attorney General Armstrong had read the Budget Amendment to reach only appropriations out of the Treasury, not the legislature's direction of monies before they reach the Treasury. And in Baltimore v. O'Conor, 147 Md. 639 (1925), the Court of Appeals struck down a diversion of funds the Constitution required to be deposited in the Treasury, yet in dicta approved a statute crediting local motor-vehicle fines to the county where they arose. Reading O'Conor narrowly, the opinion concluded the legislature may designate a category of funds tied to a subdivision (its residents or events there) to be remitted directly to that subdivision rather than entering the ordinary flow of state revenue. That is exactly what the county "piggyback" income tax under TG §2-608(a), and the distribution under TG §2-607, already do.

House Bill 134 was different in kind. It did not mark off an ongoing category of locally sourced revenue; it pulled specific dollar amounts of already-estimated, already-appropriated statewide income tax, attached conditions, and limited the whole thing to one fiscal year. The opinion therefore concluded it could not be treated as a permissible return of local funds and could take effect only through a lawful appropriation. Since the fiscal year 1991 Budget Bill contained no such appropriation and House Bill 134 was not a supplementary appropriation bill (it levied no tax, as Article III, §52(8)(b) requires), the money could not be paid without further action, such as a deficiency appropriation in a later Budget Bill at the Governor's discretion.

On the home rule question, the opinion started from the settled premise that the General Assembly holds full legislative power except as the Constitution limits it, while subdivisions have only the authority granted to them. Baltimore City has charter home rule (Article XI-A) and Allegany County has code home rule (Article XI-F); Garrett and Somerset have neither. Home rule bars the General Assembly from enacting a public local law on charter or code-county subjects, but not a public general law. Applying the general-versus-local distinction from Cole v. Secretary of State, the opinion held House Bill 134 was a public general law on a matter of statewide concern, the distribution of state tax revenue. Although setting a property tax rate is a home rule power, the "tax effort" contingency was an integral part of a statewide revenue-distribution measure and, importantly, affected four subdivisions rather than one; laws affecting more than one county are, by definition, not public local laws. Finally, the opinion analogized to the federal spending power: just as Congress may condition federal funds (South Dakota v. Dole; Oklahoma v. Civil Service Commission), the General Assembly may condition distributions to the counties and Baltimore City. So the condition did not violate home rule.

Citations and references

Statutes and constitutional provisions:

• §2-608 of the Tax-General Article, and TG §2-608(a), (c), (d), and (d)(2), the income tax distribution provisions House Bill 134 amended
• TG §2-607, another local income tax distribution provision
• Article III, §52 of the Maryland Constitution (the Budget Amendment), including §52(3) (appropriation bills must be a Budget Bill or Supplementary Appropriation Bill) and §52(8)(b) (a supplementary appropriation bill must levy a tax)
• Article XV, §1 of the Constitution, the deposit requirement at issue in O'Conor
• Article XI-A, §4 (charter home rule) and Article XI-F, §4 (code home rule), the public-local-law limits
• §7-209 of the State Finance and Procurement Article, the statutory budget amendment process

Cases:

• Kelly v. Marylanders For Sports Sanity, 310 Md. 437, 453, 530 A.2d 245 (1987); McKeldin v. Steedman, 203 Md. 89, 96, 98 A.2d 561 (1953); and Maryland Action for Foster Children v. State, 279 Md. 133, 142, 367 A.2d 491 (1977), on the Budget Amendment and the executive budget system
• Baltimore v. O'Conor, 147 Md. 639, 128 A. 759 (1925), on when the legislature may direct funds outside the Treasury
• Panitz v. Comptroller, 247 Md. 501, 503, 232 A.2d 891 (1967), on special-session appropriations
• Cole v. Secretary of State, 249 Md. 425, 433 (1968), on distinguishing public general from public local laws
• Board of Public Works v. Baltimore County, 288 Md. 678, 682, 421 A.2d 588 (1980), cited on the home rule analysis
• South Dakota v. Dole, 483 U.S. 203 (1987), and Oklahoma v. Civil Service Commission, 330 U.S. 127 (1947), on conditioning the receipt of government funds

The opinion also relied on several prior Attorney General opinions, including 6 Opinions of the Attorney General 345 (1921), 62 Opinions of the Attorney General 275 (1977), and 71 Opinions of the Attorney General 226 (1986).

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/1990/Volume75_1990.pdf (this opinion appears at printed pages 124-136 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

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

CONSTITUTIONAL LAW

Budgetary Administration — Budget Amendment — Appropriations — Home Rule Powers — Authority of General Assembly to Allocate Income Tax Revenues — Authority of General Assembly to Condition Distribution of Funds to Home Rule Subdivisions

May 4, 1990

The Honorable William Donald Schaefer
Governor

 You have asked us to address in detail the constitutionality and legal sufficiency of House Bill 134, which provides for the distribution of specified amounts of income tax funds to Baltimore City and Allegany, Garrett, and Somerset Counties.

 For the reasons stated below, we conclude as follows: Although House Bill 134 is not itself unconstitutional, the bill must be construed as simply an authorization that cannot be given effect without an appropriation of the funds specified in the bill. In our review, we have also considered whether a requirement that the subdivisions maintain at least their current property tax rates as a condition of receiving the distributions violates the home rule powers of two of the subdivisions. We conclude that it does not.1

I

Appropriations Issue

A. Description of House Bill 134

 House Bill 134 amends §2-608 of the Tax-General Article ("TG" Article). TG §2-608 is part of a subtitle on the distribution of individual income tax revenue. Subsection (a) of §2-608 provides that after various distributions, including a distribution to municipal corporations and special tax districts pursuant to TG §2-607, the Comptroller is to distribute to the counties the remainder of the county income tax revenue (commonly called the "piggyback" tax) for each county. In addition to this distribution, the Comptroller is required in fiscal year 1990 to pay certain specified sums to 16 counties and Baltimore City. TG §2-608(c). These sums are to be paid on June 1.2 See TG §2-610.

 The bill adds a new subsection (d) to TG §2-608, providing that certain specified sums are to be paid to three counties and Baltimore City, to be used as additional resources for education and combatting drug abuse.3 Although the bill provides that the payments are to be made in fiscal year 1991, neither the bill nor existing law provides when this payment is to be made.4 As a condition on the receipt of these payments, the City and the three counties must at least maintain their current property tax rates.

 Because TG §2-608(a) refers to the distribution of the remaining piggyback tax revenues to each county, the payments to the City and the 16 counties under TG §2-608(c) are from proceeds of the State income tax. The same is true of the new TG §2-608(d). In this regard, subsection (d) is like previous amendments to §2-608 and its predecessor, which provided for the payment of certain specified sums to particular counties and Baltimore City. See Chapter 13, Laws of Maryland 1987 and Chapter 423, Laws of Maryland 1988.5 Moreover, the new subsection (d) is similar to a distribution of State income tax proceeds to the State's municipal corporations and special tax districts for fiscal year 1990. See TG §2-608.1. Although these various distributions are made from State income tax revenues, the legislative intent is that these distributions are to be made before the remaining revenue is deposited in the General Fund of the State Treasury. TG §2-609.

B. Allocation of Revenues — Constitutional Principles

 House Bill 134 presents an extraordinarily significant and difficult constitutional question regarding the ability of the General Assembly to allocate State revenues outside the budget: May the General Assembly, by the passage of a bill that is not an appropriation bill, divert State general tax revenues to one or more of the political subdivisions?

 Maryland is now a model of fiscal integrity among the states. That was not always the case. Indeed, although there are many reasons for Maryland's fiscal preeminence, not the least of which is the fiscal prudence of the Executive and Legislative Branches, the single most consistently acknowledged factor — the heart and foundation of the State's fiscal integrity — is the strong executive budget system that was put into place by a 1916 amendment of the Constitution known as the Budget Amendment.

 "Maryland had no orderly system of planned public expenditures in the years before the Budget Amendment." Kelly v. Marylanders For Sports Sanity, 310 Md. 437, 453, 530 A.2d 245 (1987). As the Court of Appeals in another case described the situation:

    Appropriations for various purposes were made piece-meal by the General Assembly, each project receiving independent consideration without relation to other claims upon the public purse. In earlier times, when the range and scope of state activities were limited, this [planless] procedure was not seriously objectionable, for it was nevertheless not impossible for members of the legislature to have a fairly clear grasp of the state's fiscal operations. Eventually, however, with the growth in the size and complexity of governmental programs and machinery, embarrassing deficits occurred.

McKeldin v. Steedman, 203 Md. 89, 96, 98 A.2d 561 (1953).

 In 1916, the Goodnow Commission studied the fiscal problems of the State, found that the excess of expenditures over receipts was "ample proof that the methods of making appropriations now in force are defective," and proposed an executive budget system designed to bring about a fundamental "reform in State finance which is demanded by the people ...." Report of the Commission on Economy and Efficiency on a Budget System (Goodnow Commission), 1916 S. Jour. 129, 130-31.

 "The heart of the scheme," wrote the Court of Appeals, "is 'to impose upon the Governor the sole responsibility of presenting to the legislature a complete and comprehensive statement of the needs and resources of the State ....'" If the Legislature wanted "'to make provision for any purpose not included in the Governor's plan ...,'" it could do so, "'but on the condition that it provide for the revenue which the accomplishment of its purpose necessitates.'" 203 Md. at 97 (quoting Goodnow Commission Report).

 Thus, the Constitution requires that "[e]very appropriation bill shall be either a Budget Bill, or a Supplementary Appropriation Bill." Article III, §52(3). Furthermore, the budget, as prepared and proposed by the Governor, is to contain "a complete plan of proposed expenditures and estimated revenues." §52(4). "The Budget and the Budget Bill as submitted by the Governor to the General Assembly shall have a figure for the total of all proposed appropriations and a figure for the total of all estimated revenues available to pay the appropriations, and the figure for total proposed appropriations shall not exceed the figures for total estimated revenues ...." §52(5a). With certain exceptions not material here, the General Assembly may not increase the appropriations proposed by the Governor nor add to the Budget Bill items of appropriation not proposed by the Governor. §52(6). Finally, the Budget Bill as passed by the General Assembly must be balanced, i.e., the figure for the total proposed appropriations may not exceed the total estimated revenues. §52(5a). If the General Assembly desires to make other appropriations, it must do so in accordance with §52(8), which requires that it levy a tax to pay for the supplementary appropriation. Maryland Action for Foster Children v. State, 279 Md. 133, 142, 367 A.2d 491 (1977).

 Thus, "[t]he constitutional objective, as revealed by these provisions, is two-fold: first, to prevent the possible disturbance of the balanced budget which the plan contemplated, and, second, to allow legislative additions to the executive budget if, and only if, the legislature is willing to assume the burden and responsibility of sponsoring the necessary taxes to finance its proposals for additional expenditures." McKeldin v. Steedman, 203 Md. at 98.

 Given the well-established language, background, and intent of the Budget Amendment of the Constitution, if the question presented by House Bill 134 were entirely one of first impression, we would not hesitate to conclude that the diversion of State tax dollars from the general revenues of the State would so seriously undermine the Executive Budget system as to be clearly unconstitutional; for such diversions would preempt the Governor's ability to develop the complete and balanced plan of proposed expenditures and estimated revenues required by §52. However, we do not write upon an entirely clean slate.

 In 1921, only five years after the adoption of the Budget Amendment, Attorney General Armstrong advised the Secretary of the Board of Motion Picture Censors:

     In my judgment, the Budget Amendment applies only to appropriations made out of the Treasury and was not intended to prevent the Legislature from designating the manner of use of monies received by various agents of the State prior to the time when these monies find their way into the State Treasury. In the case presented by you, the fees earned by your Board are paid directly to you, and while Section 3 [of the Budget Bill] places a lien upon these fees to the extent of your Budget appropriation out of the Treasury, and thereby compels you to return to the Treasury out of your fees the full amount of your appropriation, your excess earnings remain in the hands of the Board, and if the General Assembly sanctions their use with the consent of the Governor, I do not believe that it has exceeded its constitutional authority or violated the limitations of the Budget Amendment, because its action does not constitute an appropriation of monies out of the Treasury of the State.

6 Opinions of the Attorney General 345, 346 (1921) (emphasis in original). See also 6 Opinions of the Attorney General 263, 265-66 (1921) (similar conclusion regarding University of Maryland's use of funds from sources other than the Treasury).

 Of even greater cause for concern is the decision of the Court of Appeals in Baltimore v. O'Conor, 147 Md. 639, 128 A. 759 (1925). In that case, the Court struck down a statute that would have authorized the diversion of surplus funds specifically required by Article XV, §1 of the Constitution to be deposited in the State Treasury. The Court did so because, in its words, "[i]f the General Assembly can, by the simple expedient of directing that certain State revenue be placed in special accounts in the treasury, secure the right to appropriate it without reference to the requirements of the Budget Amendment, then the General Assembly has the power to nullify the amendment." 147 Md. at 646-47.

 However, while striking down the law at issue, the Court, over the strong objections of then Attorney General Robinson, distinguished and approved an act that would have "divert[ed] to certain local uses money ... part of which would no doubt have eventually reached the treasury." 147 Md. at 647. The money referred to by the Court was derived from fines for motor vehicle offenses committed in a particular county. The statute directed certain State officials to credit those funds to the county, which was to use them to support the county police force.

 It is not easy to discern the rationale underlying this passage (which, although dicta, was stated unequivocally in response to a position that had been briefed fully, and which has not subsequently been called into question by the Court). Under the broadest of readings, the General Assembly would be empowered to direct the disposition, without regard to the appropriations process, of all State revenues prior to their deposit in the State Treasury, except where the Constitution itself expressly requires that a State official remit funds to the Treasury. This view would accord with that of Attorney General Armstrong.

 However, the same Court of Appeals described the Budget Amendment as "providing an intelligent and definite method of estimating and appropriating the income of the State," so as to remedy the prior situation in which "appropriations were more or less uncorrelated and deficits in the State Treasury were not unusual." 147 Md. at 644. As we discussed above, the Court of Appeals has since repeatedly reaffirmed the central role of the Budget Amendment in our constitutional scheme. Given the enormous growth in both State resources, State programs, and State expenditures since 1925, we cannot accept that the Court would today authorize a system of State resource allocation completely outside of, and necessarily destructive of, the Budget amendment. See 68 Opinions of the Attorney General at 91-92.6

 Accordingly, we read O'Conor more narrowly, as we think that the Court of Appeals would in 1990 and beyond. This narrow reading does not ignore O'Conor's endorsement of legislative power to categorize certain funds as local even though they might be held by a State official, but it does preserve the basic structure and intent of the Budget Amendment. That is, we read O'Conor to suggest the following: The General Assembly may determine by statute that a category of funds derived from the residents of a political subdivision or from events occurring within a subdivision are not to enter the ordinary flow of State revenues but instead are to be remitted directly to that subdivision for its general purposes or for some specific purpose identified in the statute.

 That is what the General Assembly has done, in TG §2-608(a), with the county or "piggyback" income tax and with the portion of the income tax identified in TG §2-607. In these provisions, the General Assembly has instructed the Comptroller to remit a portion of the tax revenues generated in each local jurisdiction to that jurisdiction — where, of course, the funds are subject to local budget procedures. The categories of funds described in these provisions are neither estimated as State funds in the Budget Bill nor appropriated for other purposes in the Budget Bill or by a supplementary appropriations bill. In effect, by statute these portions of income tax revenues never lose their local status, just as in Baltimore v. O'Conor the fines originating in one county were authorized to be kept at their source.

 House Bill 134 is significantly different, however. It does not identify an overall category of revenues derived from particular jurisdictions that are marked off, year after year, for the use of those jurisdictions. Instead, it allocates specific dollar amounts of Statewide income tax revenues that have already been estimated and appropriated in the Budget Bill, attaches conditions for their disbursement, and limits the disbursement to a single fiscal year. Indeed, because House Bill 134 seeks to require the disbursement of revenues already appropriated, we think that the Court of Appeals would be that much less likely to approve it under the dicta in O'Conor or otherwise.7 Unlike TG §§2-607 and 2-608(a), House Bill 134 in our view cannot be construed as a permissible demarcation of a category of local funds, to be returned to the source jurisdiction outside the ordinary process of appropriations.

 Hence, although the matter is not entirely free from doubt, we think that House Bill 134 can be given its intended effect only through a lawful appropriation.

C. Appropriation Methods

 Article III, §52 of the Constitution prescribes the permissible methods of appropriation. In a regular session, those methods are limited to appropriations by the Budget Bill or a supplementary appropriation bill.8

 The Department of Budget and Fiscal Planning has advised that Senate Bill 310, the Budget Bill for fiscal year 1991, does not contain an appropriation pursuant to which the Comptroller could make the disbursements required by House Bill 134. Nor is House Bill 134 a supplementary appropriation bill.

 Article III, §52(8)(b) requires that "[e]ach Supplementary Appropriation Bill shall provide the revenue necessary to pay the appropriation thereby made by a tax, direct or indirect, to be levied and collected as shall be directed in said bill." An example of a levy of such a tax is the standard clause used in bills that create a State debt, i.e., "[a]n annual tax is imposed on all assessable property in the State in rate and amount sufficient to pay the principal and interest ...." House Bill 134 does not levy a tax but rather distributes existing tax revenues that have been appropriated for other purposes by the Budget Bill.9

 Thus, the Maryland Constitution does not permit House Bill 134 to be given effect without further action. A possible vehicle for such action is the Budget Bill to be considered at the 1991 Session of the General Assembly. Traditionally, a portion of the annual Budget Bill includes deficiency appropriations, to deal with actual expenditures in excess of budgeted estimates. Although it is impossible to foresee the revenue situation at that time, if, when the Governor submits the Budget Bill for fiscal year 1992, funds are available to accommodate the expenditures contemplated by House Bill 134, the Governor in his discretion would be free to include such a deficiency appropriation. If that were possible, the funds could reach the four jurisdictions upon enactment of the Budget Bill, probably in April 1991.10

II

Home Rule Issue

 We have also considered the question of whether House Bill 134 (assuming it were implemented through the appropriations process described above) would impermissibly intrude on the home rule powers of Baltimore City and Allegany County by mandating that State funds be paid to these subdivisions "only if the property tax rate levied for fiscal year 1991 is at least equal to the property tax rate levied for fiscal year 1990." TG §2-608(d)(2). In our view, House Bill 134 is a public general law that would not violate the home rule provisions in Articles XI-A or XI-F of the Constitution.

 The legislative powers of the State and its political subdivisions are significantly different. The General Assembly inherently possesses full power to legislate on every subject, except as limited by the Maryland Constitution with regard to State and local matters and the federal constitution with respect to national matters. The subdivisions have only such legislative authority as has been given them by the State, either in the Constitution or by statute. Consequently, except to the extent that it is restrained by the home rule powers that the Constitution gives some subdivisions, the Legislature may regulate subdivisions in virtually any manner it sees fit. 62 Opinions of the Attorney General 275, 278-79 (1977).

 The City of Baltimore enjoys a form of constitutional home rule known as "charter government." See Article XI-A of the Constitution. Allegany County has adopted "code home rule." See Article XI-F. Garrett and Somerset Counties do not have home rule powers.

 Under Article XI-A, §4, the General Assembly may not enact a "public local law" on any subject covered by the express powers granted by the Legislature to Baltimore City in its charter. And Article XI-F, §4 prevents the General Assembly from enacting a "public local law which is special or local in its terms or effect within a code county," such as Allegany County.11

 As this office previously has observed, the distinction between public general laws and public local laws is extremely significant for home rule purposes, and often difficult to determine:

      [T]here is no categorical standard for distinguishing between public general and public local laws. Nevertheless, public local laws traditionally are confined in their operation to certain prescribed or defined territorial limits, and their subject matter is one of purely local concern.... Thus, ... "[the] classification of a particular statute as general or local is traditionally based on substance and not form," Cole v. Secretary of State, 249 Md. 425, 433 (1968); "[and] ... the fact that the statute takes the form of an amendment to the general law [traditionally has not made] it a public general law rather than a public local law if its subject matter is exclusively local." Id.

           In the Charter Home Rule Amendment [the] limitation [on the General Assembly's authority] took the form of a constitutional prohibition of the enactment of a public local law by the General Assembly on any subject covered by the Express Powers Act. However, since a law which applies to two or more of the geographical subdivisions of the State is not a local law for charter home rule purposes, and since "the General Assembly ... may enact a law on any matter of 'state concern' applicable to just one charter county or the city [of Baltimore]," this restraint has not been as significant as it might have been.

62 Opinions of the Attorney General at 300-01 (citations omitted).

 Applying these standards, we conclude that House Bill 134 is not a public local law, but a public general law on a subject of State concern: the distribution of State tax revenues. Although the decision to set a particular property tax rate is a home rule power of Baltimore City and Allegany County, the "tax effort" contingency in House Bill 134 is an integral component of a measure that distributes income tax dollars collected from citizens in all of the State's subdivisions. See Board of Public Works v. Baltimore County, 288 Md. 678, 682, 421 A.2d 588 (1980).

 In addition, the "tax effort" provision affects not just Baltimore City or Allegany County, but four subdivisions in all. Under both charter home rule and code home rule, laws affecting more than one county, by definition, are not public local laws. See Article XI-A, §4 and Article XI-F, §1.12

 Finally, just as Congress can attach conditions on the receipt of federal funds that, in effect, direct the states or restrain them in the exercise of their sovereign powers if they choose to accept the money, the General Assembly can take similar action with respect to the counties and Baltimore City. One recent example affecting Maryland was a condition on the receipt of certain oil overcharge funds, under which the State had to agree that the funds would be "used as a supplement to, and not a substitute for, otherwise available funding for the program." 71 Opinions of the Attorney General 226, 230 (1986). See also, e.g., South Dakota v. Dole, 483 U.S. 203 (1987); Oklahoma v. Civil Service Commission, 330 U.S. 127 (1947).

III

Conclusion

 As the discussion in Part I above made painfully evident, House Bill 134 touches upon constitutional issues that are both exceptionally complex and relatively novel. Although prior decisions of the Court of Appeals and prior opinions of this office are of some assistance, in truth they leave many questions unanswered. We can well understand how the Legislature, seeking to meet the critical needs of Baltimore and the other jurisdictions that are to be aided by this bill, chose a funding method that reasonable people could view as constitutionally self-executing. But after exacting analysis, and with due regard for the fiscal prudence that has been the philosophical anchor of the Budget Amendment and that has given the State of Maryland its national reputation for sound governmental management, we must conclude that another step — an act of appropriation — is required before House Bill 134 can be given effect.

                                         J. Joseph Curran, Jr.
                                         Attorney General

                                         Judson P. Garrett, Jr.
                                         Deputy Attorney General

                                         Jack Schwartz
                                         Chief Counsel
                                           Opinions & Advice

1
This opinion was sent to the Governor on May 1, 1990 as a bill review letter. Because of the importance and complexity of the issues addressed, we are reissuing it in this revised format.

2
Section 2 of Chapter 423 of 1988, as amended by Section 2 of Chapters 8 and 9 of the Laws of Maryland 1989, provides that this provision will be abrogated as of July 1, 1990. TG §2-608(c) was amended by the Targeted Tax Relief Act of 1989, which became law as of midnight, March 21, 1989. Supplemental Budget No. 3 of the Budget Bill for fiscal year 1990 took account of the legislation through a reduction in the estimated revenue.

3
The full text of TG §2-608(d) is as follows:
(1) For fiscal year 1991, in addition to the distribution required under subsection (a) of this section, the Comptroller shall pay the following amounts to selected counties:
Allegany $ 500,000
Baltimore City 10,678,000
Garrett 509,000
Somerset 767,000

           (2) The amounts shall be paid to the selected counties only if the property tax rate levied for fiscal year 1991 is at least equal to the property tax rate levied for fiscal year 1990.
           (3) The amounts shall be utilized to increase the amount of funds appropriated in the prior fiscal year by the selected counties for education or for limiting drug abuse.
           (4) By September 1, 1990 each selected county shall provide the Department of Fiscal Services with a report as to the use of the funds provided in this subsection.

4
Because the bill requires the receiving subdivisions to submit a report by September 1 to the Department of Fiscal Services on the use of the funds, arguably this provision implies that the distribution is to be made by that date. However, it can also be interpreted to mean that the subdivisions must submit plans by then for the use of the funds as a condition of receiving them.

5
This office approved these bills for constitutionality and legal sufficiency by form letter.

6
Indeed, it is not clear that even the O'Conor Court would reach the same result about general tax revenues, which were not at issue in the case.

7
To be sure, although House Bill 134 relies on the same source of revenues as were estimated in the budget and the Budget Bill, House Bill 134 does not result in a violation of the balanced budget requirement. Article III, §52(5a) merely requires that the "Budget and the Budget Bill as submitted by the Governor" and as enacted are to be balanced. The budget and Budget Bill for fiscal year 1991 satisfied this requirement.

8
Although an appropriation act during a regular session must be either a Budget Bill or supplementary appropriations bill, in a special session the Budget Amendment allows the General Assembly to enact emergency appropriations. Article III, §52(14). Thus, in Panitz v. Comptroller, 247 Md. 501, 503, 232 A.2d 891 (1967), the Court of Appeals stated that funds which had not been validly appropriated by a supplementary appropriations bill in a regular session could be appropriated by an appropriation act in a special session. See also 52 Opinions of the Attorney General 176, 180 (1967). This was, in fact, done by Chapter 1 of the Laws of Maryland, Special Session, June 22, 1967.

9
The Budget and Taxation Committee was advised by letter dated March 27, 1990 from Dennis Parkinson, Deputy Secretary of Budget and Fiscal Planning, that no provision had been made in the 1991 budget for the expenditures required under House Bill 134 and that in order to accommodate House Bill 134, appropriations in the Budget Bill would need to be reduced.

10
We have considered whether House Bill 134 might be viewed as a mandatory funding law under Article III, §52(11) and (12) of the Constitution. We think not, given that the bill intends to require outlays in fiscal year 1991 alone, while under §52(11) and (12) a level of mandatory funding could only be required for fiscal year 1992 at the earliest. We note that the statutory budget amendment process in §7-209 of the State Finance and Procurement Article might provide a means by which the goals of House Bill 134 could be pursued. We recognize that the constraints of §7-209 limit the availability of this remedy. Additionally, we are advised by the Department of Budget and Fiscal Planning that limited resources might well, as a practical matter, restrict the ability to resort to this remedy.

11
In the Code Home Rule Amendment, the local law prohibition is somewhat blurred. Article XI-F, §1 says that "laws which apply to more than one county" are not local laws, while §4 authorizes the General Assembly to "enact ... public local laws applicable to code counties only by general enactment which in terms or effect apply alike to all code counties [in a given class of code counties]." This office noted this apparent inconsistency previously, and resolved it by concluding that §4 applies only to laws affecting the incorporation, organization, or government of code counties. See 62 Opinions of the Attorney General at 304-06.

12
As long as the bill genuinely affects more than one county, it makes no constitutional difference that it does not apply to more than one charter or one code home rule subdivision. See Bill Review Letter on House Bill 1647 (May 16, 1984).