Can a Maryland county without home rule, like Somerset County, borrow money and issue general obligation bonds to pay for landfill improvements without getting separate permission from the state legislature each time?

Plain-English summary

Stephen M. Kraus, Director of the Maryland Water Quality Financing Administration, asked the Attorney General whether Article 25, §14A of the Maryland Code, which authorizes county commissioners to provide for solid waste disposal, gave Somerset County authority to borrow funds for landfill improvements without a separate act of the General Assembly, and, if so, whether that same statute let the County issue a general obligation bond pledging its full faith and credit and unlimited taxing power.

The opinion answered yes to both questions. Somerset County wanted to borrow from the Administration to improve an existing sanitary landfill, and the Administration typically required participating local governments to back such loans with general obligation bonds. Because Somerset County lacks home rule, it can only incur debt as expressly authorized by the General Assembly, but the opinion concluded that Article 25, §14A already provides that express authorization in broad terms: it lets county commissioners borrow money and issue bonds for land acquisition and capital improvements related to waste disposal, and lets them make "appropriate levies," including general taxes the county is otherwise authorized to collect, to meet those debt obligations.

Currency note

This opinion was issued in 2001. 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 or borrowing authority mentioned here, particularly since Article 25 has since been recodified into Maryland's Local Government Article.

Common questions

Did Somerset County need the state legislature to pass a special law before it could borrow money for landfill improvements?
According to this opinion, no. Although a prior 1995 opinion had noted that the General Assembly separately authorized Somerset County to borrow up to $5,000,000 for a specific landfill project, this opinion concluded the County already had broader, standing authority to borrow for landfill capital improvements under the existing general statute, Article 25, §14A, without needing project-by-project legislative authorization.

How could the County actually pay back a general obligation bond for landfill work?
The opinion explained that under §14A(c), the county commissioners could meet their debt obligations through "appropriate levies," which were not limited to the user fees the county was authorized to collect from landfill customers under §14A(a)(3), but could also include general taxes the county was otherwise authorized to levy.

Why did the opinion rely on a case about condemning land for a different conclusion about borrowing money?
The opinion reasoned that County Commissioners of Frederick County v. Schrodel, which broadly construed the county's power to condemn land "needed" for waste disposal under a related provision of §14A, implied that the rest of §14A, including its borrowing and bonding language, should likewise be read broadly rather than narrowly, consistent with the statute's legislative history.

Background and statutory framework

The Maryland Water Quality Financing Administration makes loans to local governments to finance wastewater facilities, including sanitary landfill construction and improvement, under the Maryland Water Quality Financing Administration Act (EN §§9-1601 through 9-1622), and ordinarily requires participating local governments to back such loans with general obligation bonds pledging their full faith and credit, even though the Act itself only requires a "dedicated source of revenue" for repayment.

Article 25, §14A, enacted in 1966 following a Legislative Council study of solid waste disposal, authorizes county commissioners to acquire, maintain, and operate land for refuse disposal, to construct incinerators or other disposal plants, to collect service charges, to acquire land by purchase, gift, or condemnation, and, under §14A(c), to make appropriations, borrow funds, issue notes or bonds, and make appropriate levies to meet those obligations. The opinion noted that although powers conferred on county commissioners are generally strictly construed absent home rule, the Court of Appeals' broad reading of the related condemnation power in §14A(a)(5) in Schrodel supported reading the section's borrowing and levy language broadly as well.

Citations and references

Statutes:
- Article 25, §14A, authorizing county commissioners to acquire and operate land for solid waste disposal
- Article 25, §14A(a), authorizing construction of incinerators and other refuse disposal plants
- Article 25, §14A(a)(3), authorizing collection of reasonable service charges or fees from users
- Article 25, §14A(a)(5), authorizing acquisition of needed land by purchase, gift, or condemnation
- Article 25, §14A(c), authorizing appropriations, borrowing, issuance of notes or bonds, and appropriate levies to meet debt obligations
- Article 25, §11A(a)(1)(i), the related condemnation-power provision construed alongside §14A(a)(5) in Schrodel
- EN §§9-1601 through 9-1622, the Maryland Water Quality Financing Administration Act
- EN §9-1605(d)(1) and §9-1605.1(d)(1), requiring a dedicated revenue source for loan repayment
- EN §9-682, authorizing the Somerset County Sanitary Commission to issue bonds
- EN §9-601(j), defining "project" to include a solid waste acceptance facility
- Chapter 570, Laws of Maryland 1966, the enacting legislation for Article 25, §14A
- Chapter 45, Laws of Maryland 1995, the prior special law authorizing Somerset County to borrow up to $5,000,000 for the Westover landfill

Cases:
- Walker v. Board of County Commissioners, 208 Md. 72, 116 A.2d 393 (1955), the general rule that powers conferred on county commissioners are strictly construed
- County Commissioners of Frederick County v. Schrodel, 320 Md. 202, 577 A.2d 39 (1990), broadly construing the county's condemnation power under Article 25, §14A(a)(5) and §11A(a)(1)(i), supporting a similarly broad reading of §14A's borrowing provisions

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/2001/86oag153.pdf

Original opinion text

Gen. 153] 153

                      COUNTIES

C OMMISSIONER C OUNTIES - B ONDS - E NVIRONMENT -
A UTHORITY OF S OMERSET C OUNTY TO B ORROW F UNDS AND
I SSUE G ENERAL O BLIGATION B ONDS FOR C APITAL
I MPROVEMENTS TO L ANDFILL

                      June 22, 2001

Mr. Stephen M. Kraus
Director, Maryland Water Quality
Financing Administration

 You have requested our opinion concerning Article 25, §14A,

a law that authorizes county commissioners to provide for the
disposal of solid waste. Referring to the authority of Somerset
County under this law, you have asked the following two questions:

 1. Does Article 25, §14A authorize the County to borrow

funds for the construction of improvements to a sanitary landfill
without obtaining express authority from the General Assembly?

 2. Assuming Article 25, §14A does authorize such

borrowing, does the statute also authorize the County to issue a
general obligation bond that pledges its full faith and credit and
unlimited taxing power?

 In our opinion, the answer to both of these questions is yes.


                             I

                      Background

A. State Financing of Improvements to Local Landfills

  We understand that Somerset County wishes to borrow funds

from the Maryland Water Quality Financing Administration
("Administration") for the purpose of constructing improvements to
an existing sanitary landfill. The Administration makes loans to
local governments to finance wastewater facilities, including the
construction and improvement of sanitary landfills, pursuant to the
Maryland Water Quality Financing Administration Act ("Act"). See
Annotated Code of Maryland, Environment Article ("EN"), §§9-
1601 through 9-1622. In connection with such a loan, the
Administration ordinarily requires a participating local government
to issue general obligation bonds,[1] by which the local government
pledges its full faith and credit -- that is, its unlimited taxing power
-- for the redemption of the bonds.

B. Article 25, §14A

  The General Assembly has authorized county commissioners

to acquire, maintain, and operate land within their respective
counties "for the disposal of refuse, garbage, rubbish or any other
matter as in their judgment may promote public health." Annotated
Code of Maryland, Article 25, §14A. For these purposes, the
commissioners may also construct incinerators or other refuse
disposal plants. Article 25, §14A(a). Subsidiary powers include the
power to "collect reasonable service charges or fees" from using
parties, §14A(a)(3), and the power to acquire land "as needed for
purposes of this section" by purchase, gift, or condemnation,
§14A(a)(5). With respect to the funding of these activities, §14A
provides:

       The county commissioners, in the furtherance
       of the provisions of this section, may make
       appropriations for land acquisition and capital
       improvements, or borrow funds for these
       purposes and issue notes, bonds, or other
       evidences of indebtedness and make such
       appropriate levies as may be required to meet
       these obligations.

Article 25, §14A(c).

    Section 14A of Article 25 was enacted by the General

Assembly in 1966. Chapter 570, Laws of Maryland 1966. Since its
enactment, §14A has not been amended. The law resulted from a
study of the problem of solid waste disposal, conducted by the
Legislative Council at the request of the General Assembly. See Jt.
Res. 30, Laws of Maryland 1965, and Legislative Council, Report to
the General Assembly of 1966 at II, 25-26, 175, and 209 (Legislative
Council Report). The Council recommended legislation to enable
the "counties to collect and dispose of refuse, trash and garbage."
Legislative Council Report at 25. Summarizing provisions of the
draft legislation, the Council noted that the bill "[a]uthorizes
counties to appropriate or borrow and to expend funds for refuse
disposal." Id. Except for the addition of a limitation that the land
and facilities for waste disposal must be located in the county and
the addition of clarifying language, the bill as recommended by the
Council was enacted. Legislative Council Report at 25-26 and
Chapter 570, Laws of Maryland 1966.

                              II

                          Analysis

  As Somerset County would like to borrow money from the

Administration to finance improvements to a sanitary landfill but
does not have home rule, you have asked if Article 25, §14A
provides the County with sufficient authority to borrow such funds
and to pledge its full faith and credit.

  In an earlier opinion, this Office concluded that, "[l]ike other

counties without home rule, Somerset County may only create debt
as expressly authorized by enactment of the General Assembly." 80
Opinions of the Attorney General 96 (1995). In accordance with this
principle, the 1995 Opinion observed that the General Assembly had
enacted a statute specifically authorizing Somerset County to borrow
up to $5,000,000 from the United States or a private lender on the
county's full faith and credit to finance the construction and
equipping of a landfill at Westover. Chapter 45, Laws of Maryland
1995. In our view, the County has even broader authority under
Article 25, §14A.

  As noted in the 1995 Opinion, the general rule is that the

powers conferred on county commissioners are strictly construed.
1995 Opinion (citing Walker v. Board of County Commissioners,
208 Md. 72, 86, 116 A.2d 393 (1955)). However, in County
Commissioners of Frederick County v. Schrodel, 320 Md. 202, 215-
216, 577 A.2d 39 (1990), the Court of Appeals broadly construed the
condemnation powers conferred on county commissioners by Article
25, §14A(a)(5), as well as by Article 25, §11A(a)(1)(i). Although
both provisions limit the power to condemn to land "needed" by the
county, the Court held that the determination of what land is
"needed" is a matter for the commissioners, unless their decision is
clearly arbitrary. Schrodel, 320 Md. at 216.

  The implication of the Schrodel case is that the remainder of

§14A is to be similarly construed. A broad construction is consistent
with the legislative history. Moreover, even without a rule of liberal
construction, §14A expressly and without qualification authorizes
county commissioners to borrow money to acquire land for waste
disposal and for capital improvements. Article 25, §14A(a), (c).
This would necessarily include the initial acquisition of the land, the
acquisition of additional land, the development of the land as a site
for the disposal of refuse, and the eventual closure of the site as a
landfill. In meeting their debt obligations the commissioners are not
limited by §14A to the fees they are authorized to collect from using
parties. See Article 25, §14A(a)(3). Rather, the commissioners may
make "appropriate levies" to meet those obligations. Article 25,
§14A(c). These levies could include not only user fees, but taxes
that the county is otherwise authorized to levy.[2]

                              III

                         Conclusion

  In conclusion, under Article 25, §14A, Somerset County has

the authority to borrow money to make capital improvements to a
sanitary landfill. Moreover, the County may issue general obligation
bonds for this purpose.

                                         J. Joseph Curran, Jr.
                                         Attorney General

                                         Richard E. Israel
                                         Assistant Attorney General

Robert N. McDonald
Chief Counsel
Opinions and Advice

[1] The Act itself does not mandate that the local government issue
such bonds; rather it requires that the local government establish a
"dedicated source of revenue" for repayment of a loan. EN §§9-
1605(d)(1), 9-1605.1(d)(1).

[2] We also note that the Somerset County Sanitary Commission is
authorized to pledge the full faith and credit of the County to finance
landfill construction. See EN §9-682 (authority to issue bonds); see also
EN §9-601(j) (definition of "project" includes solid waste acceptance
facility).