1 2 [93 O p . A tt’ y FEDERAL ENCLAVES
T AX AT I ON

– P ROPE RT Y T AX

– I MP ACT F EES

– W HE T HE R P RI V ATE I NT E RE ST S N R EAL P R O P E RT Y I N A N E NC L AVE OF E X CL U S I VE F ED ERAL J UR I SD I CT I ON A RE S UB J E CT T O S T AT E AN D L OCA L P ROPE RT Y T AX E S AN D I MP ACT F EES

J anuary29, 2008

E l izabeth F

. H

arris, Esquir e O f f i ce of t he G over nor

Y ou hav e request ed our op i nion on three qu est i on s th a t ar i se from t he fe de ral go vernm ent’ s i m plem entat i on of the base r eal i gnm entand cl os ur e ( “B R A C ”) pr oces s i n M ar y l and. T hat p ro c e ss is e x p e c ted to re su lt i n sig n if ica n t d e v e lo p m e n t at c e rta in m i l i t ar ybas es i n t he St at e, i ncl udi ng For t M eade and A ber deen P ro v in g G ro u n d

. F irst, y o u a sk w h e th e r rea l p ro p e rtylo c a ted w ith in an ar ea of

excl us i ve fe der al j ur i s di ct i on on a mi l i t ar yi ns t al l at i on, but l eased t o and developed by a pri vate enti t y , w i l l be subj e c t to M a ry lan d p ro p e rtytax e s. S e c o n d , y o u p o se th e sa m e q u e stio n a s to r eal pr oper t yw i t hi n an enc l ave of excl us i ve fede r al j ur i s di ct i on, but noton a mi l i t ar yi ns t al l at i on
. F inal l y , y ou as k w het her , i n ei t her c o n tex t, i m p a c t f

e e s m a yb e a ss e ss e d a g a in st th e p riv a te d e v e lo p e r to o f f se t th e e n h a n c e d c o sts f

o r sc h o o ls, tran sp o rta tio n , a n d o th e r p u b lic in f ra s tr u c tu re
. Pr oper t yw i t hi n an enc l ave of excl us i ve fe der al j ur i s di ct i on w ould n o t nor m al l ybe s ubj ectt o t he t axi ng j ur i s di ct i on of a s t at e. H ow ever , t he fe der al gover nm entcan w ai ve i t s i m m uni t yfr om l ocal t axat i on and, t her efor e, t he ans w ers to y our ques t i ons depend on w het hert he fe der al gover nm enthas w ai ved i t s i m m uni t y fr om l ocal t axat i on w i t h r es pectt o t he pr op erty i nt er es t s cr eat ed undert he l eas es , and t he ext entof anys uch w ai ver
. T he s ame anal y s i s appl i es w het hert he ar ea of

excl us i v e fe der al j ur i s di ct i on i s l ocat ed on a m il it aryinstall ati o n o r l o ca ted e ls e w h ere , alt h o u g h so m e w aive rs m ayappl yonl yon m i l i t ar yi ns t al l at i ons
. I n orde r to det er m i ne w het hert he fe der al gover nm enthas m ade s uch a w ai ver , and t he ext entof any w ai ver , one or di nar i l yl ooks t o t he l aw t hataut hor i zes t he l eas e of f

eder al pr oper t y
. I f fe der al i m m uni t yhas been w ai ved, M ary land law then d eterm ines w h ethe r t h e p rop ertyinteresti s s ubj ect to a ta x o r i s e x e m p t f

ro m th a t ta x
.G en. 12] 13

In this contex t, the term “jurisdiction” r efe rs to leg islative 1 jurisdiction. SeeUn ite d St ate s Co ns tit uti on , Art ic le I , § 8, c l. 1 7; se eals o Offutt Housing Co. v. County of Sarpy , 351 U.S. 253, 256 (1956). W i t h r e s p e c t t o i mpa c t f e e s , i t i s f

i r s t n e c e s s a r y t o det er m i ne w het hert he par t i cul ari m pactfee i s pr oper l y cat egor i zed as a t ax or a r egul at or yfee

. I f i t i s a t ax, t he quest i on t hen i s w het hert he fe der al go vernm ent has w ai ved i m m un ity f o r that t ype o f t ax. If i t i s a r e g u l a t o r yf

e e , t h e q u e s t i o n i s wh e t h e r t h e r e g u l a t o r yr e g i me i n v o l v i n g t h e f

e e e x i s t e d a n d r e ma i n e d a p p l i c a b l e a s f e d e r a l l a w at t he t i m e t hatt he St at e ce ded j ur i s di ct ion o vert he pr oper t yt o t he fede r al gover nm entor , i f t he St at e re g u lat or yr egi m e w as a l at er e n a c tm e n t, w h e th e r C o n g re ss h a s e x p re ss lysu b jec ted th e e n c lav e to t hatt ype of s t at e r egul at i on. Forexampl e, w e under s t and t h at l and atA ber deen Pr ovi ng G r ound w as r ece nt l yl eas ed t o a pr i vat e deve l oper p u rsua ntt o 10 U

. S. C

. §2667, w hi ch author i zes E nhance d U s e Leas es ( “EU L s ”) of l and on m i l i t ar ybas es
. T hats t atut e s peci fi cal l yw ai ves t he fe der al i m m uni t yfr om l ocal pr oper t yt axat i on for t he pri vat e i nt er es t s i n r eal p ro p e rtyc re a ted u n d e r a n E U L

. A c c o rd in g ly , tho se p riv a te in ter e sts are s ubj ect t o S t at e and l ocal t axati on , un l ess M ary l and l aw other w i se exempt s t he prope r t y
. H ow ever , i n our vi ew , t he fe der al s t atut e does n o t w a iv e f

e d e ra l im m u n ity w ith re sp e c t to a n im p a c t f e e th a t w o u ld be cons i der ed a t ax. N or does i t appea r t hatl ocal i m pactfee s exi s t ed at the t i m e t he St at e ce ded j ur i s di ct i on of t hi s l and t o t he fe der al g o v e rn m e n t.

I Backg r ound
A
. T axati on ofP r oper t

y I nter es t s in E xclusi ve Feder al

E nclaves W hen t he fe der al gover nm entacqui r es r eal pr oper t yi n a s t at e, fede r al j ur i s di ct i on overt hatpr oper t ycan r ange f r o m excl us i ve ju r is d ic tio n to v a rio u s le v e ls o f c o n c u rre n t ju risd ictio n sh a re d w ith t he s t at e to simpl e ow ner s hi p. T he det er m i nat i on of t he ext entof 1 fede r al j ur i s di ct i on depends i n par t on t he ext ent t o w hi ch a s t at e has c e d e d ju ri s d ic tio n to th e f e d e ra l g o v e rn m e n t. See A nnot at ed C ode of M ar y l an d , St at e G over nm entA r t i cl e ( “SG ”) §14- 101( cedi ng ju risd ictio n o v e r la n d n e e d e d b yth e f e d e ra l g o v e rn m e n t); see al so 63 O p in io n s o

f th e A tto r n e

y G e n e ra l 332 ( 1978) ; 61 O pi ni ons of

t he1 4 [93 O p . A tt’ y A tto rn e y G e n e ra l 441 ( 1976)

. T he fe der al gover nm entr et ai ns e x c lu siv e ju risd ictio n e v e n if it a llo w s p riv a te p a rties to o p e ra te w ith in th e e n c la v e
. H

um ble Pipe L i ne C o. v. W

. E

. W ag go nn er, 376 U

. S

. 3 6 9 , 3 7 2 -73 (19 6 4 ).
T he fe der al gover nm enti s exemptf r o m s t at e and l ocal t axat i on; m or eover , none of the pr oper t yi n an enc l ave of excl us i ve feder al j ur i s di ct i on w oul d nor m al l ybe s ubj ectto the ta xi ng j ur i s di ct i on of th e s ta te

. O

f f ut tH ous i ng C o. v. C ount

y of Sar py , 351 U

. S. 253, 256- 57 ( 1956)

. W hi l e t hi s exempt i on ext ends t o pr i vat e pr oper t yl ocat ed i n an ar ea of excl us i ve fede r al j ur i s di ct i on, C ongr es s m ayal l ow s uch in te re s ts to b e s u b

je c t to lo c a l ta x a tio n
. I d.
B. BRAC
T he B R A C pr oces s i s i nt ended t o i ncr eas e t he eff i ci encyof t he m i l i t ar ys er vi ces , byper i odi cal l ycl os i ng r edundantfac i li ti es and con sol i dati ng op erat i on s w i t hin a reduced nu m ber of m i l i t arybases. See U ni ted S ta t es D epar t m entof D efe ns e, B as e R eal i gnm entand C lo s u re , F re q u e n tly A s k e d Q u e s tio n s , < w w w .d e f e n se lin k .m il/ T he c u rre n t p ro c e ss is e x p e c te d to re su lt i n a sig n if ica n t in c re a se in po p u l a t i o n a n d o p e r a t i o n s a t s o me o f t h e b a s e s s e l e c t e d for cons ol i dat i on. Sever al of t he s el ect ed l oca ti o n s ar e i n M ar y l and, in c lu d in g A n n e A ru n d e l C o u n ty(F o rt M e a d e ) a n d H a rf o rd C o u n ty (A b e rd e e n P ro v in g G ro u n d ).
C
. E nhan ced U

s e Lease s W e u n d e r s t a n d t h a t , a s pa r t o f t h e i mp l e me n t a t i o n o f

BRAC, th e f e d e ra l g o v e rn m e n t is lea sin g lan d a t m ili tar yin sta llatio n s to pr i vat e deve l oper s pur s uant to 10 U

. S. C

. §2667, w hi ch author i zes E nh a n c e d Us e Le a s e s ( “ EULs ” )

. Fo r e x a mpl e , a ma s t e r l e as e for A ber deen Pr ovi ng G r ound i ncl udes a gr ound l eas e author i zed byt he E U L s ta tu te

. See, e. g. , M ast er A greem ent t o L ease for E nh anced U se L eas es , A ber deen Pr ovi ng G rou nd ( M ar y l and B oul evar d Si t e) bet w een U ni t ed St at es of A m er i ca, A ct i ng byand thr ough t he Secr et ar yof t he A r m y as t he G over nm entand O PU S E as t , L

. L

. C

. as t he D evel oper( Sept ember 25, 2006)

. T he gr ound l eas e al s o i ndi cat es t hat t he i m pr ovement s w i l l be ow ned byt he pr i vat e deve l operfort he te rm o f th e le a s e
.G en. 12] 15
W e al s o under s t and t hat s om e of t he l eas ed si t es atFor t M eade w i l l be on fe der al l yow ned l and w i t hin t he enc l ave of excl us i ve f e d e ra l ju risd ictio n , b u t o u tsid e o f th e se c u re d a re a a n d w ill b e to tally orpar t i al l y ac ces s i bl e byt he gene r al publ i c. U ndert he l eas e, t he pr i vat e devel operw i l l cons t r uctand oper at e var i ous t ypes of i m pr ovement s on t hatl an d

. T hes e i m pr ovement s w i l l be made avai l abl e t o pr i vat e def

ense c ont r act or s , as w el l as ot hers ubl es s ees w ho m aybe un r e l a t e d t o t he mi l i t a r yop e r a t i on s a nd t he de fe nse c o n tr a c to rs
. Si nce t he E U L s w i l l cr eat e pr i vat e i nt er es t s i n fede r al l yow ned pr oper t y , y ou have a s ked w het heranyof t he pr i vat e i nt er es t s i n r eal p ro p e rtyw ith in th e m ili tar y in sta llatio n s w ill b e su b jec t to p ro p e rty t ax ori m pactfee s
. Y ou have a l s o pos ed t he s ame ques t i on as t o nonm i l i t ar ys i t es of exc l us i ve fe der al j ur i s di ct i on.

II
Taxat i on o f

Pri va t e I nt e r e s t s i n R eal P ropert y i n F ederal E ncl aves A
. W h e th e r th e Fe de ra l G o v e rn m e n t Ha s C o n se n tedto S ta te T axati on N o fede r al l aw gener al l yw ai ves i m m uni t y as t o s t at e and l ocal pr oper t yt axes
. T hus , t o det er m i ne w het herfede r al t ax i m m uni t yhas been w ai ved w i t h r es pectt o a l eas e of pr oper t yw i t hi n a fe der al encl ave t o a pr i vat e par t y , one mustl ook t o t he l aw gover ni ng t he par t i cul arl eas e. For exampl e, C ongr es s has cons ent ed t o t he t axi ng o f p r i v a t e i n t e r e s t s i n f

e d e r a l p r o p e r t yi n t h e s t a t u t e a u t h o r i z i n g EULs a t m ili tar yin sta llatio n s. It p ro v id e s, a m o n g o th e r th in g s, th a t:

T he i nt er es t of a l es s ee of pr oper t yl eas ed undert hi s s ect i on m aybe t axed bySt at e or l ocal gover nm ent s
. A l eas e undert hi s s ect i on s hal l pr ovi de t hat , i f and t o t he ext entt hatt he lea se d p ro p e rtyis la ter m a d e tax a b le b yS tate orl ocal g o v er nm ent s underan A ctof C ongr es s , t he l eas e s hal l be r enegot i at ed.
1 0 U

. S

. C

. § 2 6 6 7 (f).1 6 [93 O p . A tt’ y

Th e pr e de c e sso r o f S G § 14 -1 02 (a) w a s o ri g inally enacted in 2 1943. SeeCh a

p te r 6 8 7 , L aw s o f

M ar yla n d 1 9 43 o r i g i nally codified as Article 96, §41.
Th is d ate de sc ribe s a c qu isi tio ns ma de prior to the e ff e c tiv e date 3 of the pre dece ssor of SG §14-102(a). Seenote 2 above

. B
. W hetherMar

yland Has R etained Juri s di cti on to T

ax A tone t i m e in M ar y l and, t he St at e gene r al l ycede d excl us i ve j uri sdi ct i on ov er federal enclaves w i t ho ut s i gn i fi cant r eser vati on s. See 63 O pi ni ons of t he A t t or ney G ener al3 3 2 , 3 3 3 ( 1 9 7 8 )

. C u r r e n t l y, t he St at e r et ai ns j ur i s di ct i on overfed era l encl aves t o t he ext ent per mi t t e d b yfe de r a l l a w a nd c on s i s t e ntw i t h f e de r a l pu rpo ses, s ubj ec t t o anyot herSt at e l aw gover ni ng a s peci fi c fe der al a c q u isitio n . T h e S tate ’s r e se rv a tio n o f ju risd ictio n is s e t f

o rth in st at ute as foll ow s:

W i t h r es pectt o l and that t he U ni t ed St at es or anyof i t s uni t s l eas es or ot her w i s e hol ds i n t he St a t e , t he St a t e r e s e r ve s jur is di ct i on and aut hor i t y ove rt he l and

and overpersons, p ro p e rty , and t r ans act i ons on t he l and t o t he ful l es text entt hat i s per m i t t ed byt he U ni t ed St at es C ons t i t ut i on and t hati s noti ncons i s t ent w it h the gover nm ent al purpos e forw hi ch t he la n d is h e ld

. SG §14- 102( a) ( emphasi s s uppl i ed)

. B yr es er vi ng “j ur i s di ct i on and 2 aut hor i t y
. . . overt he l and” and “over

. . . pr oper t y , ” t he St at e r es er ved t he pow ert o i m pos e pr oper t yt ax on t he pr oper t y i nt er es t s i n fede r al e n c l a v e s t o t h e f

u l l e s te x t e n t p e r mi t t e d b yf e d e r a l l a w.
E x ce p ted o u t of

the g en era l st atem en t in S G § 1 4

– 1 0 2 (a) are ac q u isi ti o n s o f l an d in M ary land b y the U n it ed S tat es on o r b e f o re M ay31, 1943, forw hi ch t he St at e cede d j ur i s di ct i on unders peci fi ed 3 l aw s. T he st at ute l i st s t ho se l aw s as fol l ow s:

(1 ) C h a p te r 1 9 3 , § § 3 a n d 4 , o f th e A c ts of t he G ener al A s s embl yof 1874; ( 2) C hapt er395, §§ 13 and 14, of t he A ct s of t he G ener al A s s embl yof 1874;G en. 12] 17

Ab e r d e e nPro v in gGr o un d w a s o rig in a lly

c e d e d to th e f e d era l 4 g overnme nt in 1917 with additional parce ls acquire d there afte r. We have been a dvised that the parc els which make up the Mary land B oulevard Site, which is the site of the EUL , wer e ac quired from April 1940 thru October 1942. L etter of Robert J

. Penn, Assistant Chief , Real Estate D ivision of the B altimore District, U.S. Army Corps of Eng ineer s, Depa rtm en t of Army to David M. Lyon, Assistant Attorney Gene ral (October 21, 2005). T h er efore, that prope rty would have be en ac quired with exclusive jurisdiction under existi ngstate law. F or t Me a dewa s a lso orig inally c e de d to thefe de ral g ov e rn me nt i n 1917. In the late 1990' s, approximately 265 additional acres we re c eded to Fort Mea de as a

security buffe r. S G § 1 4 -1 02(a) . Our re view of the EUL sites indicate that th ey

wer e par t of the orig inal transfe r and that there forethe State would have c eded e x clusive jurisdiction to the fede ral g overnme nt. ( 3) C hapt er67, § 21, of t he A ct s of the

G ener al A s s embl yof 1900; (4 ) C h a p ter 7 4 3 , § § 2 a n d 3 , o f th e A c ts of t he G ener al A s s embl yof 1906; ( 5) C hapt er194 of t he A ct s of t he G ener al A s s embl yof 1908; or ( 6) any ot her act t hat gave cons ent fort he acqui s i t i on of pr oper t yand ce ded j ur i s di ct i on w i t h r e s p e c tt o t h a t p r o p e r t y. S G § 1 4 -10 2 (b). T o o u r k n o w ledg e, m o st o f the rea l pro p ertyat F o rt M ead e a n d Abe r d e e n Pr o v i n g Gr o u n d was o b t a i n e d b yt h e f e d e r al gover nm entpr i ort o M ay31, 1943, and l i kel yfal l s w i t hin o n e of t hese categori es. 4
H ow ever , even w i t h r es pectt o pr oper t yt hatfal l s w i t hi n one of t he s i x cat egor i es underSG §14- 102( b) , t he St at e h as as s er t ed au tho ri tyto tax to the fu ll e st ex tent p erm it ted b yfe d era l l aw
. In part i cular , t he rel evan tst at ute pr ov i des:1 8 [93 O p . A tt’ y

Th is s tatut e wa s o ri g inally e na c te d as e me rg e nc y

le g isl atio n in 5 19 45

. Cha

pte r 71 , L aws of Ma

ry land 19 45 , orig inally

c odif ie d a s Art ic le 81, §6(1).
Th e c a seinv olv e d p ro pe rt y in f our o the r f

e de ral e nc lave s in 6 Maryland, although the Court only described lease s at For

t Meade

. The E UL l aw was then c odified at 10 U.S.C. §1270d, the 7 prede cessor

to 10 U.S.C. §2667. Pr oper t ys ubj ectt o assess m entand t ax under t hi s ar t i cl e i ncl udes pr oper t y ow ned or l eas ed bythe U ni t ed St at es or anyagenc yor dep art m ent o f

t he U nit ed S t at es, t o the full est ext entpos s i bl e unde r t he C ons t i t ut i on of t he U nit ed S t at es and t he l a w s o f t he U ni t ed S ta te s

. A nnotat ed C ode of M ar y l and, T ax- Pr oper t yA r t i cl e ( “TP ”) , §6- 101( a) ( 2) ( emphasi s s uppl i ed). A t t he t i m e t hi s pr ovi s i on w as 5
enac t ed, the G en er al A s s embl ym ade c l eart hati t s uper s eded the exempt i ons fort he ac qui s i t i ons s etfor t h i n SG §14- 102( b) ( 1)

- ( 6) by p r o v i d i n g “ [ t ] h a ta n ya n d a l l p u b l i c g e n e r a l l a ws o r p u b l i c l o c a l l a ws o r a n yp a rt o r p a rts th e re o f in c o n s is ten t w ith th e p ro v isio n s o f th is A c t a re h e re b yre p e a l e d to th e e x te n t o f a n ys u c h in c o n s is te n c y .” C h a p te r 7 1 , § 2 , L a w s o f M a ryla n d 1 9 4 5

. A ccor di ngl y , forp r o p e r tyt a x purpos es , St at e l aw aut hor i zes t he t axi ng o f

t h e p r i v a t e i n t e r e s t s i n a l l f e d e r a l p r o p e r t ywhe n e v er p e rm is s ib le u n d e r f

e d e ra l la w
. C
. Me a de He ig h ts
T he r el at i ons hi p bet w een the fe der al E U L s t atut e an d t he M a ry lan d p ro p e rtytax law w a s a d d re ss e d b yth e C o u rt o f A p p e a ls in a ca s e i nvol vi ng pr oper t yatFor t M eade

. Meade Heigh ts, I nc. v. 6 S ta te T a x C o m m is s io n , 202 M d. 20, 95 A

. 2d 280 ( 1953)

. I n t hat cas e, t he mi l i t ar yhad l eas ed l and i n an ar ea of excl us i ve fe der al j u r i s d i c t i o n wi t h i n Fo r tM e a d e t o a p r i v a t e d e v e l o p e r u n d e r a n EUL. T he deve l oper b u il tand ow ned mi l i t ar yhous i ng uni t s on t hatl and. T he C our t fi r s t not ed t hat t he E U L s t atut e t hataut hor i zed the l eas es 7 had expl i ci t l y w ai ved t ax i m m uni t yfort he l eas ehol d i nt er es t s
. 202 M d. at24. C it i ng t he pr edec es s orof curr entT P §6- 101( a) ( 2) , t he C our tt hen obs er ved t hatM ar y l and l aw pr ovi ded fort he as s es s m entG en. 12] 19

a n d tax a tio n o f

re a l p ro p e rtyo w n e d b yth e f e d e ra l g o v e rn m e n t, i ncl udi ng l eas ehol d i nt er es t s i n that p roper t y , t o t he ful l es t ext ent p e rm itte d b yf

e d e ra l la w
. Id . at 2 5 -2 8 . T h e C o u rt c o n c lu d e d th a t “it is ... c lea r th a t p riv a te in ter e sts in g o v e rn m e n t p ro p e rty a re tax a b le to th e ir f u ll v a lu e
.. .. In th e in sta n t ca se , C o n g re ss h a s d e f in itely cons ent ed t o t he t axat i on of t he l es s ee’ s i nt er es t , w hat evert hatm ay be. ” Id . at 28 (c itatio n s o m itt e d ). A c c o rd in g ly , the p riv a te in ter e sts in th e im p ro v e m e n ts lo c a te d a t F o rt M e a d e w e re ta x a b le

. Fol l ow i ng t he Me a d e He ig h ts deci s i on, t he Legi s l atur e ena ct ed a sta tu te e x p licitly se tti n g f o rth th e tax tre a tm e n t o f p riv a te in ter e sts i n fede r al l y - ow ned pr oper t y
. C hapt er884, L aw s of M ar y l and 1961,
no w cod i f i ed a s T P §6- 102( e)

. T hatpr ovi s i on now r eads , i n r el evant p a rt:
U nl es s exempt ed under[TP ] § 7

- 2 1 1 , § 7

- 2 1 1. 1,

or7- 501.

. . , t he i nt er es t or pr i vi l ege of a per s on i n pr oper t y thati s ow ned byt he fe der al g o v e rn m e n t, .

.. o r a n a g e n c y o r in stru m e n tality o f th e f e d e ra l g o v e rn m e n t, .

.. is s u b jec t to pr oper t y t ax as t hough t he l es s ee or t he us erof th e p ro p e rtyw e re th e o w n e r o f th e p ro p e rty , if t he pr oper t y i s l eas ed or ot her w i s e m ade avai l abl e t o t hatper s on: ( 1) byt he fe der al g o v er nm ent , . . . oran agenc yor i ns t r um ent al i t yof t he feder al gover nm ent

. . . ; and (2 ) w ith th e p riv ileg e to u se th e p ro p e rtyin connec t i on w i t h a b u s i nes s t hati s conduct ed f o r p ro f it.
T P § 6 -1 0 2 (e ); see al

so U n ited S ta tes v . C ity o

f D e tro it , 355 U

. S. 466 (19 5 8 ) (ho lding that sim il ar M ichig an statu te w as c o n sti tuti o n al). T h u s, a p riv a te in ter e st c re a ted p u r su a n t to a n E U L f o r a f o r-p ro f it e n tit y in f

e d e ra lly o w n e d p ro p e rty in a n e x c lu siv e f e d e ra l en c lav e is t axabl e i n M ar y l and, u n le s s St at e l aw pr ovi des an exe m pt i on fr om t axat i on.2 0 [93 O p . A tt’ y

TP §6-10 2 (e ) wo u ld not apply if the privateparty

was a cting 8 sim ply a s th e a g e nt o f t

hefe de ral g ov e rnme nt c arr yingout a

sp eci fi c g overnme nt purpose under direc t c ontrol of the g overnme nt a nd without discretion eve n as to the daily activities an d if it is ult imately the g overnme nt wh i ch is responsible f or the a ctivity

satisfying a

leg al o bligation. See L e tt e r

f r o m N o r ma nE

. Pa r k e r , Jr

. , D ep uty

Attorney Ge ne ral, a

nd Jac k Sc hw artz, Ch ie f C ouns e l, O pin ion s and Ad vic e to Ro n a ld W. Wi n e h o lt , D ire c to r

o f SD A T (N o v e mb e r

2 2 , 1 9 9 6). T hat restric tion rare ly

applies and does not seem applica ble to the cur

rent lea ses under c onsideration at F ort Meadeand Abe rdee n Proving Ground, as we understand the m. D
. E xempti ons underMar

yland L aw A ss u m in g th a t a p a rticu lar p riv a te p ro p e rty in ter e st f a lls w ith in th e w a iv e r to f

e d e ra l ta x im m u n ityse t o u t ab o v e , the n e x t ste p is to d e t e r mi n e i f

t h e p r o p e r t y i n t e r e s t i s e x e mp t u n d e r M a r y l a n d t a x l a w. S e v e r a l t a x e x e m p t i o n s c o u l d a p p l y.
T P § 7 -2 1 0 e x e m p ts a ll g o v e rn m e n t-o w n e d p ro p e rtyd e v o ted to a governm ent al us e orpurpos e. H ow ever , as n o ted ab o ve, T P §6- 102 (e) cr eat es an exc ept i on t o t hatr ul e and i m pos es a t ax on gover nm entow ned pr oper t yt hati s l eas ed orot her w i s e made avail able t o a pri vate, for- profi t enti t yusi ng i t for bu si ness purpo ses. A c c o rd in g ly, th e lan d lea se d to th e p riv a te p a rtyw o u ld b e tax a b le u n d e r T P § 6 -10 2 (e) to the lessee as if tha t l esse e w ere the o w n er. 8 T P §§ 7- 21 1 a nd 7- 50 1 p r ov i de e xe mpt i on s t o p r op e r t yothe r w i se taxa b le un d er T P § 6 -10 2 (e).
T P § 7 -2 1 1 (a ) ex e m p ts a n in ter e st in f e d e ra llyo w n e d p ro p e rty if th e p rop ertyis l o ca ted w ith in d ef ined b o u n d aries o f a m il it ary i ns t al l at i on and i s us ed fornat i onal defe ns e, w hi ch i nclud es hom el and s ecur i t y , or m i li t ar yhous i ng. Si nce the purpos e of 10 U

. S. C

. §2667 i s t o aut hor i ze the l eas e of none xces s m i l i t ar yl and, so m e o f th e p ro p e r ty le a se d u n d e r a n E U L m a yf a ll w ith in th is e x e m p tio n
. T P § 7 -2 1 1 (c ) c re a tes a n e x e m p tio n w h e n th e re is a p a y m e n t in li eu o f tax ag ree m en t ( P IL O T ). T h u s, if t h e f ed era l go v ern m en t w ere t o ent eri nt o a PI L O T w i t h t he t axi ng aut hor i t i es , t he i nt er es t of t he pr i vat e par t yi n t he fe der al l y ow ned pr oper t y w oul d be exe m ptfr om propert yt axes.G en. 12] 21
T P §7 -50 1 ( a) aut hor i zes cer t ai n count i es ( i ncl udi ng A nne A ru n d e l C o u n ty ) t o c re a te b y law a n e x e m p tio n f ro m c o u n typ ro p e rty t ax forpr oper t yt hatw oul d ot her w i s e be s ubj ectt o t ax under T P §6- 102( e)

. W e ar e not aw ar e of any cur r ent l ocal l aw t hat cr eat es s uch a n e x e m p tio n in A n n e A ru n d e l C o u n ty.
T P § 7 -50 1 (b) c rea tes an o ther P IL O T -relat ed ex em p ti o n . It a llo w s th e g o v e rn in g b o d yo f a n ym u n icip a lity o r o f a n yc o u n ty ( ot her t han W or ces t er C ount y ) t o aut hor i ze byl aw an exe m pt i on for p ro p e rtyth a t w o u ld b e tax a b le u n d e r T P § 6

- 1 0 2 (e ), if a P IL O T is e x e c u te d w ith th e lo c a l g o v e rn in g b o d y
. T P § 7 -2 1 1 .2 c re a tes a re late d e x e m p tio n w h ich is o n ly appl i cabl e w hen t he fe der al gover nm entow ns a par t i al in t er es t ( at lea st 5 0 % ) in th e p ro p e rty

– o r in th e e n tityw h ich o w n s th e p ro p e rty – and t he pr oper t yi s l ocat ed on fe der al l yow ned land w ithi n a m i l i t ar yi ns t al l at i on and us ed for n at i onal defe ns e purpos es or m i l i t ar yhous i ng. In su m , o n e c an n o t draw a d ef init ive c o n clu s ion w h ethe r a par t i cul arpr i vat e i nt er es t i n fede r al pr oper t y i s t axabl e under T P §6- 102( e) unt i l t he appl i cabi l i t y of t he exempt i ons l i s t ed above has been anal y zed. T hatdet er m i nat i on depends on t he t er m s of t he l eas e and ot heri ns t r um ent s gover ni ng t he r el at i ons hi p bet w een the l es s ee a nd f e d e ra l g o v e rn m e n t, an y P IL O T w ith th e S tate o r lo c a l g o v e rn m e n t, r el at ed l ocal l aw s , and i nfor m at i on about t he act i vi t i es of t he l es s ee o n th e p ro p e rt y
. E
. T axabili t y of P r i vatel y O w ned I

mpr ovem ent

s o n Feder al Land
I ti s our under s t andi ng t hat , under t he E U L l eas e at A ber deen P ro v in g G ro u n d , the p riv a te e n tityth a t lea se s th e f e d e ra l lan d w ill cons t ructand ow n t he i m pr ovement s on t hat l and for t he t er m of t he le a s e
. See P a rt I.C . o f th is o p in io n . T h u s, th o se im p ro v e m e n ts w ill b e p riv a te ly -o w n e d p ro p e rty , n o t a p riv a te in ter e st in g o v e rn m e n tow ned pr oper t y
. T hati s a cr i t i cal di s t inction t hataff ect s t he appl i cat i on of s om e of the S tat e tax pr ovi s i ons and exe m pt i ons o u tlin e d in th e p re v io u s s e c tio n o f th is o p in io n
.2 2 [93 O p . A tt’ y

As outli ne d in P art

I I .C- D a bo ve , a n e xcepti on

to t heowne rs hip 9 rule is established in T P § 6 -1 0 2(e) when the g overnme nt owns the prop e rt y and e ith e r l e a se s it

or oth e rw isemake s it

ava ila bleto a private entity for use in a busi ness for profit. Ma y or of B altim orev . B oit

no tt , 356 Md . 6 05 , 74 1 A. 2d 10 79 (1 99 9) . T hat prop e rt y the n b e c ome s taxab le to the privatelessee, unle ss an exemption applies.

S e ea ls o D o ll

a r Th r if ty A u to m o ti v eGro u

p, I n c

. , e t a l. v. 10 Su pe rv iso r of Asse

ssm e ntsof A nn eArun de l Co un ty , Md

. Tax Cour t Ca se Nos. 06-RP-AA-021 6 through 0220 (August 14, 2007) (deny ing exemption under TP §7-211(b) so u gh t by lessee of g overnme nt-owned land for theimprovements owned by lessee be causetaxation was based on leg al title beingin the lessee)

. U nderT P §6- 101, al l r eal pr oper t yi s gener al l yt axabl e t o t he ow ner
. H ow ever , gover nm ent

- ow ned pr oper t y d evot ed t o a gover nm ent al us e i s exempt underT P §7- 210. T hatexempt i on does 9 not ap p l yt o pr i vat el

y ow ned i m pr ovement s r egar dl es s of w het her t h e y a r e l o c a t e d o n g o v e r n me n t l a n d

. Th e e x e mpt i o n s s e t f o r t h i n TP §§7- 501 and 7 -21 1 appl yt o gover nm entpr oper t ym ade t axabl e by §6- 102( e) and do notappl yt o pr i vat el yow ned pr oper t yl o cat ed on g o v e rn m e n t o w n e d p ro p e rt y
. See 55 O pi ni ons of

t he At t or ney G ener al339, 343 ( 1970) ( pr i vat el y ow ned car go handl i ng fac i l i t yon lan d o w n e d b yM a ry lan d P o rt A u th o rityw a s tax a b le) ; A l l i ed H a n g a rs , In c . v. S u

p e rv is o r o

f A ss e ss m e n ts o

f S t. M a ry ’s C o u n ty , (C ase N o. 18 56 S ept. T erm , 20 02 ) ( C ou rtof S pecial A pp eal s, A ug ust 1 9 , 2 0 0 3 ) (u n re p o rte d ) (p riv a telyo w n e d h a n g a rs lo c a ted o n c o u n ty o w n ed airpo rth eld tax ab le). 10
T h e p r i v a t e l yo wn e d i mp r o v e me n t s c o n s t r u c t e d a t t h e E UL s i t es w oul d be t axabl e t o t he pr i v ate ow nerundert he gene r al t axabi l i t yof al l pr oper t y ( T P §6- 101) and t he exe m pt i ons i n T P §7- 210 and TP §7- 211 w oul d not appl y
. A ccor di ngl y , t her e w oul d be no exempt i on appl i cabl e t o pr i vat el yow ned i m pr ov em en t s l ocat ed on fede r al pr oper t yunl es s t he ul t i m at e us e fe l l wi t hi n anot herexempt i on orcr edi tot her w i s e author i zed byt he Tax- Pr oper t yA r t i cl e.
F
. S u m m ary W hen r eal pr oper t yi n an enc l ave of ex cl us i ve fe der al j ur i s dict i on i n M ar y l and i s l eas ed t o a pr i vat e deve l oper , t he l eas eho ld i nt er es ti n t hatpr oper t yi s s ubj ectt o St at e and l ocal p ro p e rtytax e s if

th e f e d e ra l g o v e rn m e n t h a s w a iv e d its tax im m u n ity and i f t he pr oper t yi nt er es t s ar e notot her w i s e exe m ptfr om t ax underG en. 12] 23

A m ili tary

webs itea c kn ow le dg e s t

h a t t axa b i l i t y o f d e ve lop me nts 11 under a n EUL “is a c ase by

case , locality

by locality deter min at i on.” htt p://eu l.a rmy .mi l/f a qs .htm. Se eals o 4 United States Gene ral Acc ounting Of

fice , Principles of F ederal Appropriations L aw Ch. 16, §2 (2 d e d. Marc h 2 00 1) , ava ila ble at 20 01 WL34 03 84 79 (EUL statut e p er m i t s s t ateand

loc a l taxati on

of int e re sts of

le sse e s) ; M em o ran d

umfr om R. Chuck Mason, L eg islative Attorney , Americ an L aw Divisi o n o f the Congressional Resea

rch Se rv ice to the Honorable C.A. Rupper sberg er (De cember 11, 2007). M ar y l and l aw
. U nder 10 U

. S. C

. §2667, t he fe der al gover nm enthas w a iv e d t ax im m un i t yw i t h respect t o E U L s on m i l i t arybases. W het hert he s ame r es ul t per t ai ns i n l eas es of pr oper t you tsi de m i l i t ar yr es er vat i ons depends on t he s t atut e governi ng t he par t i cul ar l eases. 11

III
A ppl i cabi l i t y of

I m pact F ees i n F ederal E ncl aves
Y o u a lso a sk e d w h e th e r a p riv a te le ss e e o f re a l p ro p e rtyw ith in a n e x c lu siv e f

e d e ra l en c lav e w o u ld b e re q u ire d to p a y im p a c t f e e s to th e lo c a l g o v e rn m e n t.
A
. I mpact Fees A n i m pactfee i s t ypi cal l y i m pos ed bya l ocal gover nm enton a d e v e lo p m e n t to h e lp d e f ra y th e c o st o f

in f ra stru c tu re im p ro v e m e n ts a n d p u b lic f

a c iliti e s n e c e s s a ry to s u p p o rt th e n e w d e v e lo p m e n t. See R i ver w alk Apartm ent

s , LLC v. Tw i

gg , 396 M d. 527, 532 n. 3, 914 A

. 2d 770 ( 2007) ; 89 O pi ni ons o

f t he At t or ney G ener al212, 213 (2 0 0 4 ). M a ya lo c a l g o v e rn m e n t a s s e s s s u c h a f e e a g a in st a d e v e lo p m e n t in a n a rea o f e x c lu siv e f

e d e ra l ju risd ictio n ? A th re sh o ld ques t i on i s w het hera par t i cul ar i m pactfee i s pr oper l ychar act er i zed as a r egul at or yfee ora t ax – an d, i f a t ax, w hatt ype of t ax. I f t he i m pactfee i s a t ax, t her e mustbe a de t er m i nat i on – s i m i l art o t he anal y s i s i n t he pr evi ous s ect i on of t hi s opi ni on – w het her and t o w hat ext entt he fe der al gover nm enthas w ai v ed i t s t ax i m m uni t y
. I f t he i m pactfee i s a r egul at or y fee , t her e mustbe an a nal y s i s of t he ext ent t o w hi ch t he St at e r egul at or yreg im e appl i es t o t he fe der al encl ave.

B
. Charac ter i

z ati on of I mpact Fee as Fee orT

ax2 4 [93 O p . A tt’ y

The labe l give n to a cha rg e by state or local law i s not 12 controllingunder f

ederal law. National

Railroad Passenger Co v. City of Ne w York, 882 F.2d 710, 715 ( 2 Cir. 1989). nd
The Massa c hu se ttscaseconce rned theannual a ircra ft 13 reg istration tax imposed by the fede ral g overnme nt under the A irport and Ai rw ay RevenueAct on all aircra ft using thenational airw ay s. The re ve nu e g e ne rate d by thetax wa s p a id t o th e Ai rp or t and Ai rw ay Tr us t fund which w as dedic ated to the e xpansion, improvement and maintenanc e of theair tra nsp o rt ation sy stem. The ca se involved the question whether

imposit ion of the tax on police helicopters vi olated the implied immunity

of the states f

rom fede ral taxation. Ap ply ingthethre e -p art

te st o utl ine d in

the te xt ab ov e , th e Sup re me Court concluded that the reg istration tax represe nted a use r fe e that wa s fairly applied to all users of the national airwa y s, including the states, that did not exceed the cost of the benefits rec eived by the us er, a nd that was structure d to producereve nue less than the c ost of the program. Th is t e st i s so me wh at di ff e re nt f ro m th e c ri te ri on

a pp lie d in 14 Maryland. Under Maryland law, the characte rization of a development related cha

rg e as a tax or a feedepe n d s o nwhether the purpose of

the enac tment is primarily

reve nue raisingor re gulatory

. Eastern Dive rsified Prop e rti es, In c . v . M

on tgome ry

Cou nty , 319 Md. 45, 570 A.2d 850 (1990). I f a devel opm enti s t ot al l yw i t hi n a fe der al encl ave, fede r al l aw w oul d cont r ol t he det er m i nat i on w het hera cha r ge i s a r egul at or yfee or a t ax. I n Mas s achus et t s v. U ni t ed St at es , 4 3 5 U

. S

. 4 4 4 (19 7 8 ), 12 t he Supr eme Courts etfor t h a t es t us ed t o di s t i ngui s h fee s fr om t axes fort he purpos e of de t ermi ni ng w het heran i nt er gover nm ent al i m m uni t yappl i ed. T hatt es t i nvol ved an exa m inat i on of t hr ee ques t i ons : ( 1) D oes t he char ge di s cr i m i nat e agai ns t t he user ? (2)

13 D o e s it re p re se n t a f

a ir a p p ro x im a ti o n o f

th e c o st o f

th e b e n e f

its re c e iv e d b yth e u se r f

ro m th e p ro g ra m ? a n d (3 ) Is th e a g g re g a te col l ect i on exce s s i ve i n r el at i on t o t he cost of t he benefi t s pr ovi ded by t h e p r o g r a m? See a l

so M a i n e v

. Dep a r tmen t of

N avy , 973 F. 2d 14 1007, 1012- 13 ( 1s tC i r
. 1 9 92) ( appl y i ng M a ss a c h u se tts c a se in co n text o f S tat e f

ee s ch arg ed ag ains t a fe d era l age n cy ).
Im p ac t fe es t h at are d esig n ed to of fse t g en era l in f

ra stru cture cos t s pr obabl ydo nots uffi ci ent l ybenef i t a d evel opm entw i t hi n a f e d e ra l en c lav e to b e d e e m e d a re g u lato ry f e e a n d , the re f

o re , w o u ld b e c o n s id e re d a ta x
. C f

. E as t er n D i ver

s i f i ed Proper t i es , I

nc. v. Montgom er

y C ount

y, 319 M d. 45, 570 A

. 2d 850 ( 1990)G en. 12] 25 (char act eri zi ng i m pact fee as t ax u n d e r M ary l and l aw becau se pr i m ar ypurpos e w as t o r ai s e r evenue )

. H ow ever, anydeci s i on w oul d have t o be bas ed on t he purpos e and m et hod of i m pos i t i on of th e s p e c if

ic im p a c t f

e e
. C
. A nal ys is of I mpact Fee as a T

ax 1. T y pe of

T ax If a n im p a c t f

e e is d e ter m in e d to b e a tax , fu rth e r a n a ly sis is n ec essa ry t o d eterm ine th e typ e o f tax

. T h is an aly sis i s n ec essa ry beca us e t he fe der al gover nm entm ayhave w ai ved i m m uni t yas t o one t ype of t ax, but not anot her

. For exampl e, C ongr es s has al l ow ed t he i m pos i t i on of cer t ai n t axes foract i vi t yw i t hi n an enc l ave unde r t he B uck A c t , 4 U. S. C. § § 1 0 4 - 1 1 0 , whi c h a d d r e s s e s s a l e s , u s e a nd i ncome t axes
. A nd, as s een a bove, i n 10 U

. S. C

. §2667, C ongr es s has t ai l or ed a s peci fi c w ai verfora pr i vat e l es s ee’ s i nt er es t i n fede r al pr oper t y– i

. e. , a w ai ver as t o p ropert yt axes. If p ro p e rlyc h a ra c ter ize d a s a tax , a n im p a c t f e e c lea rlyw o u ld notbe an i ncome t ax or sa les and us e t ax. A n i m pactfee m i ght be char act er i zed a s a pr oper t y t ax or an exci s e t ax. W hi l e a pr oper t yt ax i s i m pos ed upon one’ s gener al ow ner s hi p of pr oper t y , an exc i s e t ax i s one i m pos ed “upon a par t i cul ar us e of pr oper t yor t he exe r ci s e of a s i ngl e pow er over pr oper t y i nci dent al t o ow ner s hi p. ” See Brom l ey v. McC aughn , 2 8 0 U

. S

. 1 2 4 , 1 3 6 (19 2 9 ); Mu r p hy v

. I RS , 493 F. 3d 1 7 0 , 1 8 4 -8 5 (D .C . C ir . 2 0 0 7 ), c e r t

. f i l ed , 7 6 U SL W 3324 ( D ec 13, 2 0 0 7 ).
A sim il ar a n aly sis is u sed u n d er State law

. In W at ers Landi ng L td . P a rtn e rs h ip v

. Mo n tg o m e ry C o u n ty , 337 M d. 15, 650 A

. 2d 712 ( 1994) , the C our tof A ppeal s us ed a thr ee- par t t es t t o det er m i ne w het h e r a n i mpa c t f

e e was a p r o p e r t y t a x o r e x c i s e t a x
. Fi r s t , t he C our tcons i der ed t he l abel gi ven t o t he cha r ge byt he l egi s l at i ve body t hatenac t ed i t

. W hi l e t he t it l e of the cha r ge i s notconcl us i ve, t he label cho sen by t he legi sl at i ve b od yi s ent i t l ed to con si dera b le defe r ence
. 337 M d. at25. Second, t he C o ur ti ndi cat ed t hatt he “a ctual oper at i on and p ra c tica l ef

f e c t” o f th e tax m u st b e e v a lu a ted

. A p ro p e rtytax is char g ed bas ed on ow ner s hi p al one w hi l e an e xci s e t ax i s i m pos ed upon t he per for m ance of an act , t he engage m ent i n an occupa t i on, or th e e n jo y m e n t o f

a p ri v ile g e
. Id

. at25- 26.2 6 [93 O p . A tt’ y

It is not poss ible or appropriate to c atalogin th is opinion the 15 my riad law s that g overn the application of State law in a federal enc lave. See, e .g. , Assimilative Crimes Act, 18 U.S.C. §§7, 13. Rather, wefocus in this section on laws pertinent to State and local impact fee s. T h ir d , the m etho d o f c o m p u ti n g the tax m u st b e co n side red

. If i ti s based st ri ct l yon value and creat es a l i en on t he p ropert y , i t i s a p ro p e rtytax . If

it i s m e a su re d b yth e e x te n t to w h ich a p riv ileg e is e x e rc is e d w ith o u t c o n s id e ra tio n o f v a lu e , it is a n e x c is e ta x
. Id

. at 26.
2. L ocal E x ci s e T ax es i n F ederal E ncl aves
B as ed on bot h t he St at e and fe der al t es t , i t s eems l i kel yt hatan im p a c t f e e w o u ld b e c o n sid e r e d a n e x c ise tax a s it is g e n e ra lly t r i gger ed and meas ur ed byt he deve l opm entof t he pr oper t yand not bas ed on t he gene r al ow ner s hi p of t he prope r t y
. H ow ever , t he act i vi t yth att r i gger s t he i m pactfee occur s ent i r el yw i t hi n t he enc l ave. T he cons t i t ut ion al g r antof exc l us i ve l egi s l at i ve author i t yw i t hi n a fede r al encl ave pr ecl udes s t at e j ur i s di ct i on t o i m pos e a n ex cis e t ax o n p ro p e r tyw ith in th e e n c lav e u n les s th e re is a sp e c if ic co n g r es s i onal defe r r al t o s t at e author i t yor t he s t at e r es er ved s uch au tho ri ty at the t im e i t ce d ed juri sd ict io n
. Sur pl us Tradi ng C o. v. C ook , 281 U

. S. 647 ( 1930)

. T her efor e, t he exc l us i venes s of t he f e d e ra l ju risd ictio n w ith in th e e n c lav e w o u ld p re c lu d e sta te i m pos i t i on of a t ax on a n act i vi t ycarr i ed outent i r el yw i t hi n t he encl ave unl es s t hataut hor i t yhas been r es er ved at t he t i m e of feder al ac q u isi ti o n o r C o n g ress su b seq u en tl yw aive d tax im m u n ity. T h ere i s no g eneral w ai ver by C on gress t hat w ou l d all ow a st at e t o im po se an exc i s e t ax on deve l opm entw i t hi n an enc l ave.
D
. A nal

ys is of I mpact Fee as a R egulator

y Fee 1
. G e n e r a l R u le
A s a general r ul e, i f C ongr es s has excl us i ve l egi s l at i ve 15
a u th o rityo v e r a f

e d e ra l en c lav e , fe d e ra l in stru m e n talities o r p ro p e rty i n t hatencl ave a r e nots ubj ectt o s t at e r egulati o n “w i t hout a cl ear ex p ression o r im p li ca ti o n to th at ef fe ct” by C o n g ress. Ha ncock v. T ra in , 426 U

. S. 167, 179 ( 1976)

. I n H ancock , t he C our t s t at ed:G en. 12] 27

In Hancock, the fe deral Cl eanAir Ac t require d fede ral 16 installations to m eet stateenvironmenta l standards. A fe deral installation in K entu cky

s at i s fi ed th e r equ i re m ent s , b utth e f ed er al go v ernment refuse d to seek a permit from the state . The St at e o f Ke n tucky arg ued that an application wa s require d beca use that wa s the meth od for c ollecting in f o r mati o nto d e v e lo p e mi s s io ns ta n d ar d s an d

to mo n it o r

c o mp li an c e. Th e Sup re meCourt

he ld t hat th e re wa s no cle ar state me nt that Co ngre ss wanted thefede ral gove rnment to participate in the local process other than meetingthe re quirements. Withou t a clea r statement, the Court ref used to expand state re gulat o ry authority over a n exclusive federal encla ve. For example, in response to Hancock, Con gress amended the 17 Clean Air Ac t and, usinga cle ar, pr ecises t at em ent, re quired the f ederal govern ment to n ot o nly

me e t lo c a l e nv ir onme ntal st and ard s, but a lso to comply with the local re gulat o ry proce ss, including the pa y ment of regulatory

fee s. Clean Air Ac t, 42 U.S.C. §7418. B eca us e of the fundament al i m por t ance of t he pr i nci pl es s hi el di ng fede r al i ns t al l at i ons and ac ti vi t i es fr om r egul at i on byt he St at es , an a u th o riz a tio n o f

sta te r e g u latio n is f

o u n d o n ly w hen and t o t he ext ent t her e i s a c l ear congr es s i onal m andat e, s peci fi c congr es s i onal a c tio n th a t m a k e s th is au th o riz a tio n o f th e sta te re g u la tio n c le a r a n d u n a m b ig u o u s
. I d. (i n terna l q u o tat ion m ark s an d fo o tno te om it ted); s ee al s o P aul 16
v. U ni t ed St at es , 371 U

. S. 245, 263 ( 1 9 6 3) ( “The cas es m ake c l ear t hat t he gr antof ‘ excl us i ve’ l egi s l at i ve pow ert o C ongr es s over e n c l a v e s t h a tme e t t h e r e q u i r e me n t s o f Ar t

. I , s 8 , c l

. 1 7 , b yi t s o wn w eigh t, b ars st ate r eg u lat ion w ith o u t spe cific c o n g ression al ac ti o n ”). W hi l e C ongr es s has cons ent ed t o par t i cul ar t ypes of re gul at i on byt he sta tes , w e a re n o t aw a re o f a n y o v e ra rc h in g sta tem e n t co n se n tin g to 17 l ocal i m pactfee s
. A ddi t i onal l y , a s t at e r es er vat i on of ot her j ur i s di ct i onal aut hor i t y , s uch as t axi ng aut hor i t y , w oul d notaut hor i ze t he enf or cementof an or di nance i nvol vi ng t he per m i t for , and contr ol of, cons t r uct i on beca us e t hatw oul d be out s i de t he rese rvat i on and, th e re f o re , o u ts id e o f

th e s ta te ’s ju ri s d ic tio n
. W e st R ive r E lec tric A s s o c ia tio n , In c

. v

. B la c k Hills P o w e ra n d L ig h t C o m

p a ny , 918 F. 2d 7 1 3 (8 C ir. 1 9 9 0 ); C i t

y of B i r m i ngham v. Thom ps on , 200 F. 2d 505 th (5 C ir . 1 9 5 2 ). th2 8 [93 O p . A tt’ y 2. C ont i nuati on of

St at e R egul at i on at T i m e of Federal A cqui s i t i on
E ven w hen the fede r al gover nm entobt ai ns excl us i ve j u r i s d i c t i o n o v e r a n a r e a , l o c a l l a ws t h a t e x i s t e d a t t h e t i m e t he fede r al gover nm ent acqui r ed excl us i ve j ur i s di ct i on r emai n i n eff ect as l aw of t he fe der al t er r i t or yunl es s t heyw er e s peci fi cal l yr ej ect ed orabr ogat ed byl egi s l at i ve ac t i on o r a re inc ons i s t entw i t h ot her f e d e ra l la w
. J

a m e s S te w a r t & C o . v . S a dr a k u la , 309 U

. S. 94, 99- 104 (1 9 4 0 ); P aul

, s upr a, 371 U

. S. at265. “Thi s as s ur es t hatn o ar ea how evers m all w il l be l eftw i t hout a deve l oped l egal s y s t em for pr i vat e r i ght s
. ” J

a m e s S te w a r t, 3 0 9 U

. S . a t 1 0 0 . H o w e v e r, a s ubs equentenac t m entbyt he l ocal gover nm entw oul d nor m al l ynot be ef fec t i ve w i t hi n t he fe der al encl ave w i t hout congr es s i onal act i on. I d.
3. A ppl i cat i on t o A berdeen P rovi ng G round an d F ort

M e ade
I m pact fee s ar e a r el at i vel yr ece ntgover nm entr es pons e t o t he publ i c cos t s of new devel opm ent and m os t l i kel y di d not exi s t w hen t he fe deral go vernm ent fi rs t ob t ai ned exclusi ve jur i sdi ct i on of m ost of i t s encl aves i n M ar y l and. T her efor e, t hey w oul d pr obabl ynotbe par tof t he exi s t i ng l aw t hatr emai ned appl i cabl e i n t he enc l ave a t t he tim e th e p ro p e rty w a s c e d e d to th e f e d e ra l g o v e rn m e n t. H o w e v e r, if t hey wer e , t h e r e wou l d s t i l l h a v e t o b e a d e t e r mi n a t i o n t hat t he re g u lato rysc h e m e th a t in c lu d e d th o se f e e s w a s n o t in c o n sis ten t w ith t he fe der al aut hor i t yaut hor i zi ng t he cons t r uct i on.
I ti s ourunder s t andi ng t hatt he pr oper t i es t hatar e t he s ubj ectof E U L s atbot h A ber deen Pr ovi ng G r ound and For t M eade ar e i n ar eas o f e x c lu s iv e f

e d e ra l ju ri s d ic tio n c e d e d b yth e S ta te p ri o r t o 1 9 4 3

. See Par tI I

. B of t hi s opi ni on and footnot e 4 above

. Im p a c t f e e s w e re n o t au th o riz e d in H a rf o rd C o u n tyu n til aut hor i zed byt he G ener al A s s emb lybyC hapt er389, L aw s of M a r y l a n d 2 0 0 4 a n d i mp l e me n t e d b yBi l l No

. 0 5

- 2 1 wh i c h b e c a me eff ect i ve on J une 10, 2005. T hator di nance aut hor i zed s chool r el at ed i m pactfee s i m pos ed onl yon new r esi d en t i al devel opm ent , not c o m m e rc ial d e v e lo p m e n t. A c c o rd in g ly , im p a c t f e e s w e re n o t in eff e c t a t t h e t i me o f t h e t r a n s f e r o f e x c l u s i v e j u r i s d i c t i o n t o t he fede r al gover n m entand eve n cur r ent l y , w oul d not appl yt o t he d e v e l o p m e n tp l a n n e d u n d e r t h e E U L s u n d e r r e v i e w
. C o n s e q u e n t l y, i m pact fee s cannot be eff ect i vel y i m pos ed now atthe A b er deen P ro v in g G ro u n d

.G en. 12] 29
Im p a c t f e e s w e r e o r ig in a ll y a u th o r iz e d in A n n e A r u n d e l C o u n ty byC hapt er350, L aw s of M ar y l and 1986 and i m ple m ent ed i n 1987 as B i l l N o. 50- 87, aut hor i zi ng fe es r el at ed t o s chool s and t r ans por t at i on. T her efor e, i m pactfee s as a re gul at or y fee coul d not b e im p o s e d a t th e F o rt M e a d e s ite

. 4. Sum m ary
I m pac t fee s t hatar e a pr er equi s i t e t o devel opm entw oul d be t r i gger ed byevent s occurr i ng ent i r el y w i t hi n an encl ave of exc l us i ve fede r al j ur i s di ct i on. A ccor di ngl y , r egar dl es s of w h ethe r t he d e v e l o p m e n tw a s b e i n g d o n e b y t h e g o v e r n m e n t o r a p r i v a t e p a r t y, i m pos i t i on of i m pactfee s o n devel opm entw i t hi n an enc l ave of excl us i ve fe der al j ur i s di ct i on w oul d not b e per m i t t ed unl es s t hat r egul at or y s cheme fel l w i t hi n t he j ur i s di ct i on r es er ved byt he St at e, h a d b e c o m e p a rt o f

th e law f

o r th a t en c lav e a t th e tim e th e p ro p e rty w as cede d t o t he fe der al gover nm ent , or w as ot her w i s e perm i t t ed by congr es s i onal act i on. IV
C oncl usi on
I ti s ouropi ni on t hatr eal pr oper t yl ocat ed w i t hi n an are a of excl u sive feder al j ur i s di ct i on on a mi l i t ar ybas e and l eas ed t o a pr i vat e deve l operi s s ubj ect t o St at e and l ocal t axat i on t o t he ext ent t hatt he f ed er al gover nm enthas w ai ved i t s t ax i m m uni t y– as i t has i n t he s t atut e aut hor i zi ng E U L s on m i l i t ar yi ns t al l at i ons
. W het hert he pr oper t yi nt er es ti s t axab le orexempt fr om t axat i on i s t hen d e te rm in e d u n d e r M a ryla n d la w
. W het hera deve l opm entw i thi n a fe der al encl ave of excl us i ve j ur i s di ct i on w oul d t r i ggeri m pactfee s m aydepend on w h ether t he fede ral go vernm ent has w ai ved i m m un i t yas t o e x c i se t axes. Al t e r n a t i v e l yi tma y d e p e n d o n wh e t h e r t h e S t a t e r e g u l a t o r yr e g i me i ncl udi ng t he i m pactfee exi s t ed att he t i m e t he pr o p erty w as cede d t o t he fe der al gover nm entor w het her C ongr es s l at ercons ent ed t o t hat r egul at or yr egi m e.3 0 [93 O p . A tt’ y
T he s ame anal y s i s w oul d appl yt o rea l p r oper t yi n an enc l ave of exc l us i ve fe der al j ur i s di ct i o n that i s noton a mi l i t ar ybas e, alt h o u g h so m e w aive r pro v isi o n s m a yap p lyo n lyo n m il it ary in s ta lla tio n s
. D ougl as F. G ans l er A t t or ney G ener al
D avi d M

. L y on A ss i s t ant A tto rn ey G eneral
R o b e rt N . M c D o n a ld C hi ef C ouns el O pi ni ons and A dvi ce