Court Upholds City’s Stormwater Fee, Finds No Violation of Free Exercise Clause

An Associated Press article in the Baltimore Sun (2018-04-28) reported that the Maryland Court of Special Appeals upheld Baltimore City’s stormwater remediation fee (also known as the “rain tax”) and found that it did not violate the constitutional right of the Shaarei Tfiloh Congregation synagogue to freely exercise its religion. Legislation enacted during the 2012 Session (HB 987) required all counties subject to a Phase I Municipal Separate Storm Sewer System (MS4) permit to adopt a stormwater remediation fee. Subsequent legislation passed in 2015 (SB 863) repealed the fee requirement if a county submitted a financial assurance plan to the Maryland Department of the Environment showing the county had an alternative means of funding sufficient to meet its MS4 permit goals. The City chose to implement a fee, adopted as Article 27 in the City’s Code.

The Congregation raised four key issues in its challenge to the fee, including that the City’s fee was actually a property tax and that the fee violated the Maryland Declaration of Rights’ Free Exercise Clause. While finding that the fee was a tax, the Court determined that the nature of the fee made it an excise tax rather than a property tax and that the fee did not violate the Free Exercise Clause. From the opinion:

We hold that the City acted within its authority under the state enabling law when it enacted Article 27 of the Baltimore City Code. We agree with the Congregation that despite its name, the Stormwater Fee is a tax because its primary purpose is to raise revenue and because property owners’ only obligation under the statute is to pay the charge. However, we hold that the Stormwater Fee is an excise tax, rather than a property tax, because it is based on the particular use of the property, not the value of the property or property ownership. We also hold that Article 27 does not violate the Free Exercise Clause of the Maryland Declaration of Rights and does not implicate the Religious Land Use and Institutionalized Persons Act of 2000 (“RLUIPA”). Finally, we discern no failure by the [Baltimore City Board of Municipal and Zoning Appeals] to follow its established procedures.

The Congregation could appeal the decision to the Maryland Court of Appeals.

Useful Links

Court of Special Appeals Opinion: Shaarei Tfiloh Congregation v. Mayor and City Council of Baltimore

HB 987 of 2012

SB 863 of 2015

Prior Conduit Street Coverage of Stormwater Remediation Fees