March 19 (Bloomberg) -- A senior member of the U.S. House’s tax-writing Ways and Means Committee from California has been taking advantage of a tax break for a home in Maryland that he claims as his principal residence.

Representative Pete Stark, the second-ranking Democrat on the Ways and Means panel, in 2007 and 2008 saved a total of $3,853 in state and Anne Arundel County taxes on a Maryland waterfront home that he claims as his primary residence, according to Maryland tax disclosures.

Maryland officials, contacted by a Bloomberg reporter about the tax break Stark received, said they plan to look into his eligibility for it.

Homeowners in Maryland qualify for the tax credit for residences they use “for the legal purposes of voting, obtaining a driver’s license, and filing income tax returns,” according to the Maryland Assessment Procedures Manual.

Stark, 77, confirmed in a telephone interview last week that he and his wife, Deborah, are registered to vote in California’s 13th congressional district using the address of her parents in San Lorenzo, about 25 miles southeast of San Francisco. Stark also said both he and his wife have California driver’s licenses.

Inquiry Planned

Joseph Glorioso, the Maryland supervisor of assessments for Anne Arundel County, said he would investigate Stark’s eligibility for the tax break after being told of the congressman’s comments. “It doesn’t sound like he should get the credit,” Glorioso said. “Now that you’ve brought it up, I have to make an inquiry.”

Stark, in the telephone interview, said, “Insofar as I know, I’m obeying the law.” He said that he stays in the Maryland home about two-thirds of the year and that, “I don’t have, I don’t own another residence.” He also said he rents an apartment in his district where he stays when he is there.

Stark is not alone among politicians who have claimed the tax credit. Last week, the Associated Press reported that U.S. Representative Eliot Engel, a Democrat from New York, was declared ineligible by Maryland officials for the tax break he has been receiving for a home he owns in Montgomery County, Maryland, a Washington suburb. A state official said her office is reviewing the eligibility of other members of Congress who own property in Montgomery County and claim the credit.

Special Privileges

Questions about the tax credits some lawmakers claim come amid growing public anger over special privileges for the well- connected, both in the public and private spheres. Senator Chris Dodd, a Connecticut Democrat who heads the Senate Banking Committee, faces a potentially tough re-election bid next year because of reports that Countrywide Financial Corp. gave him a discounted mortgage. American International Group Inc. became the target of congressional wrath this week because of its payment of more than $165 million in bonuses to employees who were partially responsible for the company’s financial distress.

Stark would save $3,770 under the credit this year on his 3,600-square-foot home located on 6.35 acres in Harwood, Maryland, on the Chesapeake Bay, according to state tax records. The home, with an assessed valuation of $1.7 million, is located about 30 miles east of the U.S. Capitol and 12 miles south of Annapolis, Maryland.

Maryland officials in 2007 began requiring verification of eligibility for its so-called homestead tax credit, said Robert Young, associate director of the state’s Department of Assessments and Taxation.

Applications Sent

Young said the state has been sending applications to determine eligibility to about a third of Maryland homeowners each year, beginning in December 2007. The form asks, among other things, whether a property owner uses the address in registering to vote and obtaining a driver’s license.

Stark, who has served in the House since 1973, said in a telephone interview yesterday that he had recently filed the form. If he was deemed ineligible for the tax break, “then I’d pay whatever the tax was or the state would take my home away,” he said.

Young said his staff told him an application for the tax credit was submitted for Stark’s property on Feb. 6. Young said it’s likely to be rejected.

“When we process that application, we will deny it based on that factual situation,” Young said when told of Stark’s responses about his ties to California. “As long as you answer those questions truthfully, you’re not going to run afoul of anything. But at the same time we’re not going to grant the credit going forward” if a homeowner doesn’t meet the criteria.

Refunds Won’t Be Sought

Young also said the state doesn’t plan to seek recovery of all tax breaks granted in past years.

Stark, in the telephone interview last week, was asked if he thought a veteran member of the Ways and Means Committee could be faulted for accepting the type of state tax credit that he has. He responded that he refrained from disputing an increased tax assessment on his Maryland home in a year in which real estate prices have “dropped in just about every nook and cranny of this country. I ought to know to go in and fuss about that or if you were me would you ignore it and just pay your taxes and also be glad that they fill the pothole?”

Young said Maryland last month revoked the homestead tax credit that Engel, the representative from New York, was receiving for his home in Montgomery County, Maryland. Engel also rents an apartment in the district he represents in the Bronx.

“I have always abided by whatever determination the Montgomery County Assessment Office makes,” Engel said in an e-mailed statement on March 13. “I have never asked for any special privileges for being a congressman.”

Daschle Case

Tom Daschle, a South Dakota Democrat, lost his U.S. Senate seat in 2004 after a campaign during which reports surfaced that the year before he had claimed a homestead tax break on a $1.9 million residence in Washington. The Republican who defeated him, John Thune, sought to depict Daschle as out of touch with their home state.

Roberta Ward, office manager of the state Department of Assessments and Taxation’s Montgomery County branch, said her staff has been cracking down on members of Congress from other states who were claiming the homestead tax credit.

“Somebody let it be known that a lot of congressmen were getting the tax break, Ward said. ‘‘So then we got a list’’ a few years ago and ‘‘we sent letters to all the congressmen’’ who own property in the county. She estimated the process involved more than a dozen lawmakers.

Constitutional Requirements

To serve in the House, the U.S. Constitution says that candidates must be U.S. citizens for at least seven years, an ‘‘inhabitant’’ of the state in which they seek election and 25 years old when their first term would begin. California law says the residence for its House members is determined by where they are registered to vote, which is ‘‘conclusively presumed’’ to be their domicile.

Stark’s 13th district includes industrial and port towns in Alameda County along the southern stretch of San Francisco’s East Bay. He has held his seat with little difficulty since he first won it with 53 percent of the vote in 1972. Last November, he won re-election with 76.5 percent of the vote.

To contact the reporter on this story: Timothy J. Burger in Washington at tburger2@bloomberg.net

Last Updated: March 19, 2009 00:01 EDT