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 Subsequent legislation passed in 2015 (SB 863) repealed the fee requirement if a county submitted a financial assurance plan to the Maryland Department of the Environment showing the county had an alternative means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

Maryland Certification Requires Exelon to Address Conowingo Dam’s Water Pollution

A Maryland Department of the Environment (MDE) press release (2018-04-27) announced the release of the state’s Water Quality Certification for the relicensing of the Conowingo with special conditions that includes requiring Exelon Generation Company LLC, the dam’s owner, to address the nutrient and sediment pollution generated by the dam and its reservoir. The certification also requires Exelon to improve conditions for aquatic life and fish migration and improve debris management.

The dam has posed a challenge for restoration efforts under the Chesapeake Bay Total Maximum Daily Load after research revealed that the dam’s reservoir has unexpectedly reached its capacity to trap sediment and nutrients from moving further downstream of the Susquehanna River and eventually into the Chesapeake Bay. Exelon needs Maryland’s certification as part of its 50-year federal relicensing bid, which gives the state leverage over Exelon regarding the dam’s water pollution issues.

The Certification was jointly developed between MDE and the Maryland Department of Natural Resources. From the press release:

“Maryland has taken bold, decisive action to reduce pollution in  the Chesapeake Bay and we are making tremendous progress, but all of our progress could be at risk if we do not pursue a comprehensive regional approach to reducing pollution in the Susquehanna River,” said Governor Larry Hogan. “From the beginning of our administration we have sounded the warning on the problems caused by the Conowingo Dam. This certification provides a strong framework for working with the upstream states and private partners such as Exelon to take real actions to address  the sediment and nutrient pollution problems caused by the dam so we can preserve the Bay for future generations.”

“The stringent environmental conditions in the certification are at the heart of a comprehensive strategy to speed up the cleanup of the Bay and hold our partners accountable for doing their part to create a healthier watershed. This water quality certification, based on sound science and law, includes responsible and necessary conditions for pollution prevention and continued progress for the Susquehanna River and the Chesapeake Bay,” said Maryland Environment Secretary Ben Grumbles. “This water quality certification is part of a holistic approach, working with Exelon and our fellow watershed states, to meet our Bay restoration goals and help launch a restoration economy.” …

MDE sought to find a constructive solution to the challenges at Conowingo Dam by working together with Exelon, but recently concluded that it is unrealistic for the department and the company to reach a negotiated settlement regarding the water quality certificate prior to the May 17, 2018, deadline, as mandated under the Clean Water Act, for a state response to the application.

As previously reported on Conduit Street, the Executive Council of the Chesapeake Bay Program determined that the Conowingo Dam should have its own Watershed Implementation Plan (WIP) but it was unclear who would bear ultimate responsibility for the dam’s pollution loads. Maryland’s Certification would hold Exelon responsible, although the company’s responsibility would be reduced based on pollution reductions achieved by affected Bay watershed states. The Executive Council, which Hogan currently chairs, is expected to meet again during the summer of 2018 to further discuss the Conowingo WIP.

Bay Journal article (2018-04-29) also reported on the Certification and included responses from Exelon and environmental groups. From the article:

The state’s action drew praise from environmental groups. Alison Prost, acting vice president of the Chesapeake Bay Foundation, thanked Hogan and MDE for wanting to hold Exelon accountable, saying that “the very presence of this dam alters the form and timing of river water and pollution reaching the Chesapeake Bay.” …

Exelon spokeswoman Deena O’Brien said the company was reviewing the state’s conditions, while reiterating its longstanding position that the dam itself is not adding nutrient pollution to the river or the Bay. …

The Exelon spokeswoman said the company “will continue to work with the state, local communities and environmental organizations to find a comprehensive and long-term solution” to the impacts of pollutants flowing past the dam.

The article noted that Exelon has 30 days to appeal the Certification by requesting an administrative hearing and then potentially going to court. Grumbles indicated in the article that MDE was prepared to defend the Certification if necessary

Useful Links

MDE’s Water Quality Certification for the Conowingo Dam

Prior Conduit Street Coverage of the Conowingo Dam

Smart Growth@20: What Are the Next Steps for Land Use in Maryland?

Governors old and new attended a recent seminar that reviewed the successes and failures of the first 20 years of Maryland’s Smart Growth policies and considered the future of Smart Growth in the state. The National Center for Smart Growth Research and Education, in conjunction with the Town Creek Foundation, 1000 Friends of Maryland, and the Maryland Building Industry Association, held a “Smart Growth@20” event in Annapolis on April 18, 2018, that drew around 125 attendees from across the state.

From Left to Right: Secretary of Planning Robert McCord, former Governor Parris Glendening, Governor Larry Hogan, Gerrit Knaap, and Special Secretary for Smart Growth Wendi Peters (Source: National Center for Smart Growth Research and Education)

At the event, Maryland Governor Larry Hogan reiterated his support for Smart Growth, noting that the Maryland Department of Planning was conducting listening sessions in every county for the State’s new development plan “A Better Maryland.” Hogan also presented a citation to former Maryland Governor Parris Glendening for his pioneering work in Smart Growth. Glendening noted that the Smart Growth concepts started in Maryland are now found in states and cities across the country. Looking forward, Glendening stressed that Smart Growth needed to focus on: (1) maximizing the use of mass transit, transit oriented development and walkable communities; (2) addressing climate change; and (3) the growing social inequity in America.

The seminar also included an unveiling of potential new planning visions that would replace the existing 12 planning visions adopted by the State in 2009. The draft language included 4 completely new planning values and 12 modified or new visions. The planning visions and values would form the foundation upon which local governments draft their comprehensive plans.

The planning values would be: (1) quality of life and sustainability; (2) public participation; (3) stewardship; and (4) implementation. The planning visions included: (1) concentrate population growth; (2) maintain and design diverse communities; (3) provide efficient infrastructure; (4) balance competing transportation needs; (5) provide access to opportunity through housing; (6) build a 21st century economy; (7) protect Maryland’s environment and ecosystem services; (8) preference clean and renewable energy; (9) mitigate the impacts of climate change; (10) wisely adopt new smart infrastructure technologies; (11) promote public health; and (12) human and capital development.

Caroline County Planning Director Katheleen Freeman was also a speaker at the event and raised concerns that some of the draft visions: (1) would not relate well in some suburban or rural areas; (2) were too specific to be considered as a vision; and (3) addressed issues that counties had little or no control over through land use.  Other speakers raised concerns that local government comprehensive plans should have additional mandatory elements, such as for housing or climate change. MACo Legal and Policy Counsel Les Knapp attended the event and stressed during group discussions that as new Smart Growth policies are considered, it is critical to ensure that the policies acknowledge the differences in rural, suburban, and urban growth patterns and account for these differences rather than apply a “one-size-fits-all” approach.

It is likely that the discussions started at thee Smart Growth@20 event will continue throughout the 2018 interim and the 2019 Session.

Useful Links

Smart Growth @ 20 Visions and Materials

National Center for Smart Growth Research and Education Website


Maryland’s Climate Change Commission to Consider Carbon Tax, Transportation Issues in 2018

The Maryland Commission on Climate Change established its 2018 working group goals and discussed how it would handle discussion of controversial policies, such as taxing carbon and addressing greenhouse gas emissions from the energy and transportation sectors at its meeting on April 24, 2018.

The Commission was established in 2007 through executive order and later codified in statute in 2015 (SB 258). The Commission’s primary task is to recommend how Maryland can reduce its greenhouse gas emissions and adapt to the impacts of climate change. The Greenhouse Gas Reduction Act of 2016 (SB 323) requires Maryland to achieve a 40% reduction of greenhouse gas emissions from their 2005 levels by 2030. The legislation also includes some economic and job protections as the State works to achieve the reduction goal. Maryland is on track to meet a prior emission reduction goal of 25% by 2025.

The Commission has 26 members including Administration, General Assembly, local government, business, labor, public health, and environmental representatives. Prince George’s County Council Member Deni Taveras is MACo’s representative on the Commission. Maryland Secretary of the Environment Ben Grumbles chairs the Commission. The Commission has four working groups that offer recommendations to the full Commission: (1) Adaptation and Response; (2) Education, Communication and Outreach; (3) Scientific and Technical; and (4) Mitigation. MACo Legal and Policy Counsel Les Knapp is a member of the Mitigation Working Group.

At the April 24 meeting, several Commission members, including Maryland Senator Paul Pinsky, a representative for Maryland Delegate Dana Stein, and Mike Tidwell from the Climate Change Action Network, expressed concerns over how the Commission was approaching the “40 by 30” plan. Pinsky noted that the Commission needed to address the two largest sources of greenhouse gas emission in Maryland – the energy and transportation sectors. Pinsky argued that the Commission needed to have discussions on difficult issues such as considering a tax on carbon, phasing out fossil fuel usage, prioritizing funding for mass transit, and taxing gasoline or vehicle miles traveled. While Grumbles disagreed with Pinsky’s assertion that the Commission’s current approach to the 40 by 30 plan was flawed, Grumbles did agree that all topics raised by Commission members would be discussed in an open and transparent manner. The issues raised by Pinsky will be taken up by the Commission, with input from the various working groups and the Commission’s steering committee.

Useful Links

SB 258 of 2015

SB 323 of 2016

Maryland Commission on Climate Change Webpage

New RPS Study Group Set to Chart Maryland’s Energy Future

A new work group has been convened to review Maryland’s Renewable Portfolio Standard (RPS) and recommend potential future energy policy actions. The current RPS calls for 25% of the energy used by Maryland to come from renewable sources by 2025 and the state is currently on track to meet this goal.

Legislation passed during the 2017 Session (HB 1414) requires the Department of Natural Resources Power Plant Research Program (PPRP) to to conduct a comprehensive review of the history, implementation, costs and benefits, and effectiveness of Maryland’s RPS standards. The legislation requires the study to examine:

  1. the availability of all clean energy sources at reasonable and affordable rates, including in-state and out-of-state renewable energy options;
  2. the economic and environmental impacts of the deployment of renewable energy sources in the State and in surrounding areas of the PJM energy grid region;
  3. the effectiveness of the RPS in encouraging development and deployment of renewable energy sources;
  4. the impact of alterations that have been made in the components of each energy tier of the RPS, the implementation of different specific goals for particular sources, and the effect of different percentages and alternative compliance payment scales for energy in the tiers;
  5. an assessment of alternative models of regulation and market-based tools that may be available or advisable to promote the goals of the standard and the energy policies of the State; and
  6. the potential to alter or otherwise evolve the standard in order to increase and maintain its effectiveness in promoting the State’s energy policies.

In response to HB 1414, the PPRP created the Maryland RPS Work Group, which held its inaugural meeting on April 26, 2018, and received several background presentations on the current state of renewable energy usage in Maryland, associated costs and grid issues, and projected future trends for solar and wind. Work Group members include representatives from affected State agencies, power utilities, solar and wind companies, energy policy groups, environmental groups, and land preservation groups and the PJM energy grid. MACo Legal and Policy Counsel Les Knapp is the local government representative. The Work Group is staffed by PPRP personnel.

The Work Group must submit a preliminary report to the General Assembly by December 1, 2018, and a final report is due by December 1, 2019. The Work Group terminates after June 30, 2020.

Information about the Work Group, including minutes and presentations made at meetings can be found on the Work Group’s webpage. The next meeting of the Work Group has not yet been scheduled.

Useful Links

RPS Study Work Group Webpage

HB 1414 of 2017


Op-Ed: Natural Gas Part of Energy Future Along With Renewables

Delmarva Now op-ed (2018-04-24) Salisbury University Perdue School of Business finance professor Dan Ervin cautioned against energy policies that completely discard fossil fuels, particularly natural gas, in favor of solar and wind energy. Ervin argued that implementing a 100% renewable energy policy based on current solar and wind energy technologies will drive up Maryland’s energy prices and stifle the state’s economy.

Ervin stated that continuing innovations and investments need to be made in natural gas technologies and supported proposed pipeline projects in the state and that while solar and wind costs have dropped neither are “economically viable without subsidies.” Ervin also highlighted energy sector emission declines in the United States for carbon dioxide, sulfur dioxide, and nitrogen oxide declines since 2006. From the op-ed:

In general, pipelines are the safest method of fuel transportation. Nationally, dozens of environmental groups are involved in a “keep-it-in-the-ground” campaign, zeroing in on oil and gas companies that provide 80 percent of the nation’s energy and 12 million jobs. …

The proponents of solar and wind know the combination of these two technologies account for just slightly more than 3 percent of America’s energy supply and 7 percent of the nation’s electricity, despite generous help from federal tax credits and state mandates for renewables. …

With energy consumption expected to grow substantially during the next 30 years, we’d better be prepared. For all the talk about the prospects of wind and sun meeting all of our energy needs by mid-century, the evidence suggests it’s a bad idea, and we would pay a huge price for such shortsightedness in electricity shortages, in closed industries and in lost jobs.

Conowingo Dam to Get Separate Nutrient Targets But Who Pays Remains Up in the Air

Maryland Reporter article (2018-04-12) reported that the Conowingo Dam will be getting its own nutrient reduction targets under the Chesapeake Bay Total Maximum Daily Load Phase III Watershed Implementation Plan (WIP). The Dam and its reservoir on the Susquehanna River has reached its capacity to trap nutrients and sediment and during major storm events can release significant pollution that disrupts efforts underway further down the main stem of the Bay and some of its tributaries.

Earlier WIPs assumed that the Dam’s nutrient and sediment trapping capacity remained intact but after research showed that the trapping capacity had been exhausted, the Bay watershed states were left with an unanticipated new source of water pollution that has to be addressed. The Dam’s pollution is estimated to generate 6 million pounds of nitrogen and 260,000 pounds of phosphorus annually that now must be offset. In response, the Dam will now have its own Phase III WIP goals, similar to those of each Bay watershed state. From the article:

The Conowingo plan will identify nutrient reduction efforts that go “above and beyond” those in the state plans. The rationale for the shared plan, [Maryland Department of the Environment Water and Science Administration Director Lee] Currey said, is that Bay-wide water quality benefited when Conowingo was trapping nutrients, effectively lessening the amount of cleanup work each state had to do. Now that those nutrients are being washed downstream, all of the jurisdictions should pool their resources and work together to offset their impact.

The article explained that the actual implementation of nutrient control actions will be focused on those areas that will have the maximum effect in offsetting the Dam’s pollution – mainly parts of Maryland, New York, and Pennsylvania. This approach is more cost effective than requiring all parts of the Bay watershed to share the Conowingo’s load equally. However, this approach leads to a secondary question – who will pay for all of this?

The cost to offset the Conowingo’s pollution load is expected to cost many millions of dollars and the article states that Exelon, the dam’s owner, will be expected to contribute a reasonable portion of the funding but it is unlikely that the company can afford all of the costs. Maryland has significant power over how much Exelon will pay as Exelon requires the State’s approval as part of its relicensing process under the Federal Energy Regulatory Commission. The Maryland Department of the Environment will make a final decision on its re-certification decision (along with conditions such as a funding requirement) in mid-May. From the article:

“Once we know how much additional capital results from [the Conowingo certification], there may be a gap,” Currey said. “Then the question is, ‘How do we best close that gap?’”

To help answer that question, the EPA will soon seek a third-party contractor to manage the implementation of the Conowingo WIP. That includes identifying where pollution control practices can be implemented most cost-effectively and overseeing pooled money to implement the plan.

But a major part of the job will be identifying sources of money that could help plug any funding gap. Options could range from finding previously untapped sources of federal funding to testing new types of public-private partnerships that could bring more nongovernmental money to the effort.

The article also discussed how the United States Environmental Protection Agency would hold Bay watershed states accountable if the Conowingo Dam fails to meet its nutrient reduction targets. A draft version of the Conowingo plan will be available for public comment in early 2019.

Useful Links

Prior Conduit Street Coverage of Conowingo Dam



Unique Long-Term Study Finds Sewer Overflows, Stormwater BMPs Have Greatest Water Quality Impacts in Gwynns Falls Watershed

Baltimore Sun article (2018-04-16) reported on a recently released study quantifying pollution sources and clean-up efforts in the Baltimore City and Baltimore Count Gwynns Falls watershed. The study was compiled by the United States Geological Survey (USGS), in partnership with Blue Water Baltimore and the Cary Institute of Ecosystem Studies. The study tracked water quality in the 171 square kilometer watershed from 1998 to 2016.

Source: USGS

The study is unusual in that it was able to analyze 20 years of water quality data for an urban area (something that does not exist for many urban environments areas) and pinpoint both water pollution sources leading to watershed degradation as well as the positive effects of various kinds of watershed restoration projects. The study factored in climate change and the increased precipitation the watershed has received over time.

The study found that a major contributor to watershed degradation was sewer overflows while the installation of stormwater best management practices (BMPs) likely have a positive effect on water quality. From the study:

However, sanitary sewer overflows and best management practices, are factors that appear to affect the water quality at Carroll Park, the most downstream location monitored in the Gwynns Falls watershed. The increasing duration of sanitary sewer overflows was related to increasing loads and concentrations of nutrients; sanitary sewer overflow volume was related to total coliform levels. In contrast, installation of  structural best management practices appears to be related to declines in phosphorus. These outcomes, while preliminary, indicate that current efforts and investments in gray and green infrastructure improvements likely positively affect the water quality of the Gwynns Falls watershed. Further, this study has established a framework to evaluate the effect of future gray infrastructure repairs in accordance with the Baltimore City and County Consent Decrees and green infrastructure installation.

Additional comments provided by the Sun article:

“We’ve known a long time, sewage bad, stormwater projects good,” said Alice Volpitta, water quality manager for Blue Water. “Now we can say with scientific certainty that that is the case, and that carries a lot of weight.” …

“This is the first time with statistical accuracy we can say sewage is really detrimental to water quality,” Volpitta said.

Peter Groffman, professor at the City University of New York Advanced Science Research Center and a senior research fellow at the Cary Institute of Ecosystem Studies in New York, said long-term data “is the only way to know for sure whether our investments in clean water infrastructure are working.”

“Even with 20 years of water quality data, we are just beginning to see the long-term effects of sewage overflows and water main breaks, along with the stormwater projects that are designed to address polluted runoff,” Groffman said.

Useful Links

USGS 2018 Report: Factors Affecting Long-Term Trends in Surface Water Quality in Gwynn Falls Watershed

Does Annapolis Landfill Project Point to the Future of Utility Scale Solar?

Bay Journal article (2018-04-16) questioned whether a new solar facility that is sited on a closed municipal landfill can help answer the land use concerns posed by utility scale solar projects. The Annapolis Renewable Energy Park, a 16 Mega Watt solar array set on roughly 80 acres that used to be the landfill for the City of Annapolis, is largest landfill-based energy generation project in the nation according to the project’s developers.

MACo has noted that large scale solar projects can provide many benefits but also pose land use challenges that include the targeting of prime agricultural lands and open space. While the Maryland General Assembly responded to a MACo initiative during the 2017 Session by passing legislation (HB 1350) that provided a greater role for counties and municipalities in the siting of all kinds of energy generation facilities, there is still immense pressure to for solar developments on farmland and open space throughout Maryland. MACo has supported solar development on alternative sites, such as brownfields and greyfields.

The article stated that Maryland has developed an estimated 958 megawatts of solar and is second only to New York in solar development among Chesapeake Bay watershed states. Conversely, the article noted that Virginia’s market has just started to rapidly expand due to recent state legislation while Pennsylvania’s market remains stagnant due to “unfavorable” state rules.

The article discussed recent zoning actions taken by several counties in order to ensure solar facilities do disrupt the agricultural, natural, historical, or cultural fabric of their jurisdictions. The article cited Anne Arundel, Caroline, Frederick, Kent, and Talbot counties in particular.

The article also provided various viewpoints on the agricultural and land use issues posed by utility scale solar:

“It’s almost like the wild, wild West out there, and whoever gets their stake in the ground first wins,” said Colby Ferguson, government relations director of the Maryland Farm Bureau. …

“For every 1,000 acres taken out of [agricultural] production, we lose a farm,” Ferguson said. …

“These guys are coming in and dangling pots of money [in front of landowners],” said state Sen. J. B. Jennings, a Republican representing Baltimore and Harford counties, and a farmer himself. “It’s just taking up valuable farmland.” …

“How do we find something that’s balanced?” [Anne Arundel County Planning and Zoning Officer Philip] Hager asked. “It’s a very complex situation, with a lot of stakeholders.” …

“It’s unfortunate there’s a perception problem,” said Mike Volpe, vice president of Open Road Renewables, a Texas firm, and spokesman for a coalition of utility-scale solar developers. He pointed out that such projects can generate jobs and much-needed tax revenue for poor rural counties. …

“It’s cheaper to just go out to a farm field and drill ground screws and anchor to the ground,” said Paul Curran, managing director of BQ Energy LLC, the New York-based firm developing the [Annapolis] landfill project. It also took longer to plan and get regulators’ approval, Curran said, something many solar developers wouldn’t put up with.

Useful Links

HB 1350 of 2017

Prior Conduit Street Coverage of Solar Energy Facility Siting

Federal Court Strikes Down Maryland’s Generic Drug Price Protections

Baltimore Sun article (2018-04-13) reported that the 4th Circuit Court of Appeals in a 2-1 ruling has struck down a Maryland law regulating prices on generic drugs as violating the dormant commerce clause. The recently enacted law (HB 631 of 2017) was heavily supported by Maryland Attorney General Brian Frosh and was designed to protect consumers from rapidly increasing generic medicine costs. The law allowed the Office of the Attorney General to review generic drug prices and order price reductions or fines if the Office determined the prices increased too steeply without a valid reason.

The case was brought against Frosh and then-Maryland Secretary of Health Dennis Schrader by the Association for Accessible Medicines (AAM). The holding is the first of its kind and could chill the efforts of other states to address generic drug prices.

From the article:

“To be clear, we in no way mean to suggest that Maryland and other states cannot enact legislation meant to secure lower prescription drug prices for their citizens,” [majority opinion author Judge Stephanie Thacker] wrote. “Although we sympathize with the consumers affected by the prescription drug manufacturers’ conduct and with Maryland’s efforts to curtail prescription drug price gouging, we are constrained to apply the dormant commerce clause.” …

Judge James A. Wynn dissented from the majority opinion, saying the other judges had interpreted the commerce clause too broadly. Wynn wrote that their ruling would stop “Maryland from protecting its citizens against unconscionable pricing practices by out-of-state generic drug manufacturers.”

The article noted that Frosh is considering the State’s options, which include requesting an en banc review by all the 4th Circuit judges or appealing the case to the United States Supreme Court.

Useful Links

HB 631 of 2017

4th Circuit Court of Appeals Opinion – Association for Accessible Medicines v. Frosh, et al.