Judge Strikes Down Montgomery County’s Rain Tax

Gordon Feinblatt LLC and its member Maggie Witherup contributed the following article. 

Last week, the Circuit Court for Montgomery County struck down the County’s water quality protection charge – also known as a stormwater remediation fee or “rain tax” – on the grounds that the charge violates a State law requiring the fee to be reasonably related to the stormwater management services provided by the County. The decision raises questions about the validity of other local stormwater fees, including in Baltimore City and County.

Montgomery County’s stormwater remediation fee was established under the authority of § 4-202.1 of the Environment Article of the Maryland Code. Section 4-202.1 requires that if a county establishes a stormwater remediation fee, the fee shall be “based on the share of stormwater management services related to the property and provided by the county.” The law also provides that the fee may be based on “(1) A flat rate; (2) An amount that is graduated, based on the amount of impervious surface on each property; or (3) Another method of calculation selected by the county or municipality.”

The owner of a 34-acre commercial park challenged Montgomery County’s assessment of an $11,000 stormwater fee, arguing that he should be entitled to a 100% credit because he built and maintained stormwater management ponds that collected and treated all of the stormwater from his property as well as additional drainage areas. The owner presented testimony that the County performed essentially no maintenance services for the facilities and that the owner did it all.

The court ruled that the fee was invalid per se because it is not related to the stormwater services provided to the property by the County. Although the County’s fee was calculated based on impervious surface, the law still requires that the fee be based on the stormwater management services provided to the property by the County. The court also ruled that the charge was invalid as applied to the owner’s property because comparable properties with no private stormwater facilities were assessed the same rate as the owner’s property.

Although the court’s decision was limited to Montgomery County’s stormwater fee, the decision raises questions about the validity of other local jurisdictions’ fees. Many local jurisdictions have enacted stormwater fees that are also calculated based on the amount of impervious surface but are not directly tied to the provision of stormwater services to a particular property. Montgomery County has not yet indicated whether it will appeal the court’s decision.

The court’s decision could be significant for properties that do not discharge into any local jurisdiction’s stormdrain system and/or that are covered under an industrial discharge permit that requires the property owner to manage stormwater. Appeal procedures for challenging the fees vary by jurisdiction but generally must be filed within a certain number of days after receipt of a stormwater fee bill.  For additional information or to discuss the application of your local jurisdiction’s stormwater fee to a specific property, please contact Maggie Witherup at mwitherup@gfrlaw.com or 410-576-4145.

 

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