Relating to Real Estate
Here Comes the Rain Tax
In response to requirements of the U.S. Environmental Protection Agency (EPA) to improve water quality in the Chesapeake Bay, the Maryland General Assembly passed legislation last year requiring Baltimore City and the nine largest counties to establish a stormwater remediation fee (the so-called “rain tax”) to improve their stormdrain systems and overall stormwater management.
The fee was required to be in place by July 1, 2013.
This article summarizes the current status of stormwater fees in the jurisdictions that are required to adopt the fees.
Most jurisdictions have adopted a fee structure based on the amount of impervious surface on the property with separate rates for residential and nonresidential properties. Impervious surface is generally defined as any surface that does not allow water to infiltrate into the ground.
The state law also requires the jurisdictions to provide an appeal process and to allow for hardship exemptions as well as credits for properties that take steps to manage their stormwater runoff.
Fees in Baltimore City are the highest, but are capped at 20% of property taxes for most nonsingle family residential properties.
The City Council also approved several hardship exemptions and credits for industrial properties that already manage their stormwater.
Additional credits will be in forthcoming regulations to be promulgated by the City Department of Public Works. Two jurisdictions (Charles County and Frederick County) have enacted flat fees per parcel rather than relying on impervious surface as a basis for calculating a fee. One jurisdiction (Carroll County) has declined to impose any new fee on its residents and businesses, deciding instead that existing sources of county funding are adequate for its stormwater management program.
The following chart summarizes the current fee structure by jurisdiction and provides selected highlights and comments about the fees:
| Jurisdiction | Residential Base Fee/Yr. | NonRes. Base Fee Per Acre/Yr. | Comments/Notes |
| Anne Arundel County | $34, $85 or $170 | $1,259 | Nonresidential fee capped at 25% of property taxes; flat $1 fee for religious groups; phase-in for base fee >$500; properties with NPDES permit charged 30% of base fee |
| Baltimore City | $40, $60, or $120 | $2,489 | Nonresidential fee capped at 20% of property taxes; reduced rate for religious nonprofits; 55% credit for properties with NPDES permit; 30% credit for direct discharge to Harbor; fees set until FY 2017, thereafter to be set by Board of Estimates |
| Baltimore County | $21, $32, or $39 | $1,503 | Reduced rate for nonprofits; fees set for FY 2014, thereafter to be set by County Executive |
| Carroll County | None | None | County will use existing County $ and grants instead of imposing a new fee |
| Charles County | $43/parcel | $43/parcel | Industrial stormwater permit holders exempted; credits available for up to 50% for nonresidential properties |
| Frederick County | $.01/parcel | $.01/parcel | Properties in municipalities will not be charged the fee |
| Harford County | $125 | $610 | Reduced rate for nonprofits; property owners pay only 10% of fee in 2013; task force will consider fee structure for 2014 and beyond |
| Howard County | Variable ($39-$500) | $1,306 | Proposed amendments (incl. 3-tiered fee for residential properties at $15, $45 or $90), nonprofit cap, & phase-in) to be considered on 7/25; credits available for up to 50% of base fee |
| Montgomery County | Variable ($29-$264) | $1,593 | Reduced rate for nonprofits; fees phased in over 3 years; up to 50% credit for stormwater management practices or 60% if site is completely treated by environmental site design practices |
| Prince George’s County | $33, $41 or $62 | $390 | Council approval expected 7/24. Policies & procedures to be developed shall include credits to reduce base fee and exemption for nonprofits |
For more information about the stormwater fees in your jurisdiction or to evaluate your appeal options, contact Michael C. Powell.
Michael C. Powell
410-576-4175 • mpowell@gfrlaw.com
Date
July 16, 2013