Now What? How You Can Minimize The Cost Of Your Stormwater Fees
This article is one in a series presenting information on the current status of local legislation implementing stormwater fees in ten jurisdictions across Maryland. For background on the stormwater fees and their purpose, please see this earlier article. This article summarizes information on the ability for property owners to appeal the imposition of the fees and to obtain credits and rebates against the fees.
As you’ve probably heard by now, many Maryland jurisdictions have a new local stormwater fee that most property owners will have to pay each year beginning July 1, 2013. Derided by some as a far-reaching “rain tax” and hailed by others as a key step in protecting the Chesapeake Bay, the local stormwater fees were mandated in 2012 by the Maryland General Assembly for the state’s ten most densely developed jurisdictions -- Anne Arundel, Baltimore, Carroll, Charles, Frederick, Harford, Howard, Montgomery, and Prince George’s counties and Baltimore City.
Current Status: Each jurisdiction has responded in one way or another to the State’s mandate. Some jurisdictions have programs in place and property owners saw the charges appear on the July 2013 County real estate tax bills. Other jurisdictions have delayed billing property owners in order to finalize their programs and administrative processes.
Rights of Appeal, Credits & Rebates: In general, property owners have a legal right to challenge the specific fees imposed for a few limited reasons:
- errors made in calculating the amount of impervious surface on a property;
- errors in assigning improper use or zoning classifications to certain properties;
- errors in identifying property owners; and
- mathematical errors made in calculating the fees to a particular property.
What does vary is the timeframe in which a property owner has to appeal the fees when they believe an error exists.
With regards to credits, each jurisdiction has a different process and opportunity to reduce the fees charged. As required by state law, each has provisions intended to offer reduced charges for those that can demonstrate that their properties reduce the quantity of stormwater or improve the quality of stormwater discharged from a property. Other jurisdictions provide rebates for expenses previously incurred to manage stormwater. The processes required to obtain these credits vary, as do the requirements for documenting their existence.
Details on the status of each jurisdiction’s program and fees, rights of appeal and available credits are all provided below and summarized in a separate spreadsheet here. Please note this is an ever-evolving matter in each county and Baltimore City, so please contact your attorney or the author for the most current information available and to determine how you can best take advantage of these opportunities to minimize the fees you are charged.
Anne Arundel County
Fees: Anne Arundel County will include its charge to property owners on their July 2013 real property tax bills. The bill establishes an annual flat fee for residential properties of $34, $85 or $170 per dwelling unit based on the property’s zoning classification. A fee of $85 per 2,940 square feet of impervious area will be charged annually for any multifamily residential and non-residential (i.e., commercial, industrial, agricultural, etc.) properties, with several exemptions and modifications, among others:
- For single family residential properties and those multi-family and non-residential properties with a base fee exceeding $500, the charges will be phased-in at 60% for the 1st year, 80% for the 2nd year and 100% thereafter.
- Non-residential fees are capped at 25% of the base property tax.
- Property owned by a religious group or organization is charged a flat $1 fee.
- Property owned by other non-profit groups or organizations will be charged $340 per half-acre of impervious area or fraction thereof.
Appeals: Appeals must be filed on or before August 15th to receive a correction for the succeeding taxable year.
Credits: Procedures for obtaining credits and rebates have yet to be finalized by the County, but are expected soon. Commercial property owners can receive reductions of up to 50% against the base stormwater fee they are charged. Residential property owners may obtain rebates for existing stormwater management expenses incurred on a first-come, first-serve basis.
Baltimore City
Fees: Baltimore City currently plans to begin charging its fees in October 2013. The annual fee will generally be invoiced to property owners in equal quarterly increments on the property’s City water bill- not the real estate tax bill. The City will charge an annualized flat fee of $40, $60 or $120 for single-family residential properties based on the amount of impervious surfaces they contain. An annualized fee of $60 per 1,050 square feet of impervious area would be charged for other properties in the City. Religious groups and organizations will be generally charged a rate of $12 per 1,050 square feet of impervious surface on an annualized basis.
Appeals: Appeals must be filed within 30 days of the date of the bill the owner wishes to contest.
Credits: Draft regulations, to be finalized shortly, provide that credits may be applied in amounts not to exceed 45% of the initial calculated fee. Credits will be available for those practices that improve the quality or reduce the quantity of stormwater discharged, for properties subject to a NPDES industrial stormwater permit, and for property that discharges stormwater directly to Baltimore Harbor. Exemptions are available for privately maintained streets open to the public, areas subject to impervious caps required by federal or state environmental authorities, areas where stormwater is discharged to the City's wastewater system, and certain other properties.
Baltimore County
Fees: Baltimore County will include its charge to property owners on their July 2013 real property tax bills. The charges for residential property owners are $21, $32 or $39 per year. Institutional, non-residential property (i.e., private schools, churches, etc.) will be charged $20 annually per every 2,000 square feet of impervious surfaces. Other commercial and industrial property, including apartment complexes, will be charged $69 per every 2,000 square feet of impervious surface.
Appeals: Appeals must be filed within 30 days of the date the owner receives the bill they wish to contest.
Credits: Baltimore County is unique in that it is the only jurisdiction that automatically applies credits to the charges invoiced for non-residential properties. However, it will only apply credits for those existing stormwater management features on which the County has information. Non-single-family residential property owners should be certain to research just what credits, if any, have been assigned to their properties since the County does not automatically include that information on its tax bills. Credits generated by recognized best management practices (“BMPs”) may not reduce the fee charged by more than 26% of the initial calculated rate.
Carroll County
Property owners in Carroll County will not be charged any new fees or charges for stormwater management. Carroll County is unique in that it has elected to fund its stormwater management program through the County’s existing real property taxes and appropriations process. Because this approach is arguably in contravention to the state law’s purpose to establish a separate, dedicated funding source it is uncertain how and when the State of Maryland might respond.
Charles County
Fees: Charles County will include its charge to property owners on their July 2013 real property tax bills. The County has established a flat $43 fee per parcel of real property. This fee does not vary based on the amount of impervious surface the parcel contains or the property’s use. Charles County does provide exemptions from the fee that do not exist in the state law, including for properties subject to a NPDES industrial stormwater permit that includes certain treatment provisions, property owned by volunteer emergency medical services, property owned by the federal government and property owned by disabled veterans.
Appeals: Appeals must be filed within 30 days of the date of the bill the owner wishes to contest.
Credits: Credits are only available for non-residential properties that meet or exceed standards in the Maryland 2000 Stormwater Design Manual, up to 50% of the base fee. The County has not yet announced procedures regarding how these credits may be sought.
Frederick County
Fees: Frederick County has implemented a Program that charges a flat rate of one (1) cent ($0.01) per parcel. This charge will appear on the County’s July 2013 real property tax bills. It is unclear how the County anticipates fully funding work that may be required for its stormwater management program and whether or not a different fee structure may eventually be approved by the County Commissioners.
Note that the City of Frederick has a pre-existing fee program dedicated to stormwater management so properties within the City limits will not be subject to the County Program once implemented.
Appeals: An appeal must be filed on or before September 30th in order to contest the fee charged.
Credits: While not practical given the current fee structure, procedures for obtaining credits have yet to be released by the County.
Harford County
Fees: Harford County will impose fees on its July 2013 real property tax bills. However, the County will only invoice property owners for 10% of the base stormwater fee otherwise due in 2013-14. The County charges an annual flat fee of $125 for any property with a residential use (except for apartment buildings) or agricultural use. A fee of $7 per 500 square feet of impervious area will be charged annually for any property with a business, commercial or industrial use, including apartment buildings, mobile home parks and separate common area parcels owned by condominium associations or HOAs. However, nonprofit owners of these properties will be charged a flat fee of $125. The fee will not apply to properties in Aberdeen, Bel Air, Havre de Grace or any other incorporated town or city as they are not subject to the County’s MS4 permit.
Appeals: An appeal must be submitted on or before October 1st in order to receive a correction for the taxable year.
Credits: Credits of up to 100% of the initial stormwater fee calculated for a property may be applied based on the use of BMPs. Regulations and procedures will be developed by the County to implement the credit program but have yet to be finalized and announced.
Howard County
Fees: Howard County will not charge property owners any fee until it issues its January 2014 real property tax bills. A bill and resolution passed in March established an annual fee of $15 per 500 square feet of impervious area to be charged to every improved residential, commercial and industrial property in the County. However, a new bill was introduced on June 20th at the request of the County Executive that would reduce the fees charged to residential property owners to either $15, $45 or $90 per year depending on the property’s size. The County will only issue its charges to all property owners once its program has been finalized.
Appeals: It is anticipated that appeals will need to be filed within 30 days of the date of the bill the owner wishes to contest.
Credits: Under the current program, the County will allow a 50% reduction to the impervious area assessed for a property subject to a Site Development Plan that was filed with the County on or after January 1, 2003. A credit for the use of various specific stormwater treatment practices on properties will be available for properties not eligible for this automatic reduction, up to a maximum of 50% of the fee otherwise applicable. In addition, one-time reimbursements are available for investments in certain stormwater management practices implemented on properties where stormwater is not treated to the current State standards. These credits and rebates may be adjusted as the program is debated and finalized.
Montgomery County
Fees: Montgomery County will include an amount equal to 1/3 of the base stormwater fees otherwise due on its July 2013 real property tax bills. For 2013-2014, annual single-family residential rates will range from approximately $29 to $264. Multifamily, commercial and industrial properties will be charged annually based upon a rate of approximately $88 per 2,406 square feet of impervious area on the property. The bill provides that one-third of the fees otherwise calculated will be charged in the first year, two-thirds charged in the second year and the full amount charged in the third year.
The Executive Regulation will also include a “tiered” cap for property owned by non-profit organizations. These three tiers, based on the actual amount of impervious surface on a property, will cap the amount the property owner may be charged. Montgomery County's fees will not apply in the Cities of Rockville or Takoma Park as they have their own existing stormwater programs. The City of Gaithersburg has elected to have the County’s existing program apply within its boundaries.
Appeals: An appeal must be filed no later than September 30th of the year that payment is due.
Credits: Credits of up to 60% of the otherwise calculated fee are available for properties subject to the most-current environmental site design stormwater standards and 50% for those that utilize less-advanced stormwater BMPs. Montgomery County has released processes and forms associated with obtaining credits for both residential and non-residential properties. Note that credits must be applied for before September 30th of each tax year.
Prince George’s County
Fees: Prince George’s County will include the stormwater fees on its July 2013 real property tax bills. However, the issuance of these bills will be delayed while the county’s program is finalized. Fees charged include a flat fee charged to each property, regardless of property use, plus a fee based on the County's ERU. Prince George’s County charges residential property owners $33, $41 or $62 per year. Single-family residential properties are charged using a three-tier structure, all other properties are charged based on the amount of impervious surfaces on the property at a rate of $21 per every 2,465 square feet of impervious surfaces (plus a one-time base fee of $21).
Appeals: An appeal must be filed no later than October 1st of the year the fee is assessed.
Credits: Credits, often in the form of rebates, are available for improvements in quality and reduction in quantity of stormwater discharged from a property. Regulations and forms have been developed by the County to implement the credit program.
M. Trent Zivkovich advises clients and handles appeals and credit applications for local stormwater fees, known by some as the “rain tax”, on behalf of commercial and industrial clients throughout the state of Maryland. For additional information please contact him at 410.347.8778 or tzivkovich@wtplaw.com.