Agenda Item 9
November 17,2015·
Public Hearing/Action
MEMORANDUM
November 13,2015
TO:
FROM:
SUBJECT:
County Council
Amanda Mihill, Legislative Attorney
~'\,UJ)
Public Hearing/Action:
Expedited Bill 45-15, Stonnwater Management - Water
Quality Protection Charge - Curative Legislation
Expedited Bill 45-15, Stonnwater Management - Water Quality Protection Charge - Curative
Legislation, sponsored by Lead Sponsor Council President at the request ofthe County Executive,
was introduced on October 27,2015. Action on this bill is tentatively scheduled following this
hearing.
Bill 45-15 would designate the Water Quality Protection Charge as an excise tax imposed under
the County's general taxing authority; ratify the collection of stonnwater management charges
levied under Section 19-35 since July 1,2013; and continue the levy and collection of the Water
Quality Protection Charge from property owners under the same tenns and conditions as set out in
Section 19-35.
A detailed explanation regarding the purpose of this bill can be found in the Bill's uncodified
legislative history section on ©3-4.
Council staff recommendation:
enact Bill 45-15.
This packet contains:
Bi1145-15
Legislative Request Report
Memo from County Executive
Fiscal Impact Statement
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Expedited Bill No.
45-15
Concerning: Stormwater Management ­
Water Quality Protection Charge ­
Curative Legislation
Revised:
10/22115
Draft No. 2
Introduced:
October 27,2015
Expires:
April 27, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date:
~No:::!.n!.:::e:....-
_ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the request ofthe County Executive
AN EXPEDITED ACT
to:
(1)
(2)
(3)
designate the Water Quality Protection Charge as an excise tax imposed under the
County's general taxing authority;
ratify the collection of stormwater management charges levied under Section 19-35
since July 1,2013; and
continue the levy and collection ofthe Water Quality Protection Charge from
property owners under the same terms and conditions as set out
in
Section 19-35.
By amending
Montgomery County Code
Chapter 19, Sediment Control and Storm Water Management
Sections 19-21 and 19-35
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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ExPEDITED BILL
No. 45-15
1
Sec. 1. Sections 19-21 and 19-35 are amended as follows:
ARTICLEll. STORMWATERMANAGEMENT.
19-21. Definitions.
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In
this Article, the following words and phrases have the following meanings
unless the context indicates otherwise:
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*
*
*
~
Water Quality Protection Charge: An excise
tax
charged to
property owner
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for the privilege of maintaining impervious surfaces on the owner's property.
19-35. Water Quality Protection Charge.
(a)
As authorized by [State law] Section 52-17
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11
W
or Maryland Code,
Environment
Art.,
§
4-204, or both, the Director of Finance must
annually impose and collect a Water Quality Protection Charge, as
provided in this Section. The Director must collect the Charge in the
same manner as County real property taxes, apply the same interest,
penalties, and other remedies (including tax sale) if the Charge is not
paid, and generally treat the Charge for collection and administration
purposes as if it were a County real property
tax.
The Director may
treat any unpaid Charge as a lien on the property to which the charge
applies.
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*
*
*
Sec. 2. Expedited Effective Date:
The Council declares that this legislation
is necessary for the immediate protection of the public interest. This Act takes effect
on the date on which
it
becomes law.
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Protection
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ExPEDllED BILL
No. 45-15
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Sec. 3. Curative Effect: This Act retroactively validates and ratifies the levy
and collection under Section 19-35 of all stormwater management charges collected
since July 1,2013.
Expedited Bill 34-12 amended County Code Section 19-35 to subject all
properties not otherwise exempt under State law to the Water Quality Protection
Charge, allow property owners to obtain credits for undertaking certain water quality
protection measures on their properties, and authorize financial hardship exemptions
for certain owner-occupants of residential properties. The effective date of Expedited
Bill 34-12 was July 1,2013.
In
Paul
N.
Chod
v.
Board of Appeals for Montgomery County
(Civil No.
398704-V, entered July 23,2015) the Circuit Court for Montgomery County opined
that the Water Quality Protection Charge "is invalid per se because this charge need
not reasonably relate to the stormwater management services provided by the
County." The County has appealed this decision. This Act is intended to correct the
potential defect noted by the Circuit Court
by designating the stormwater
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management charges imposed by Section 19-35 as an excise tax imposed under the
general taxing authority of Montgomery County to levy excise taxes. This Act is not
intended to alter the policy, purposes, or substance of Section 19-35.
The County Council fmds
that:
(
a)
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Montgomery County had the authority in 2013 to adopt Section 19-35
under the County's taxing authority-see Section 52-17;
(b)
This Act furthers the original purpose of Section 19-35 to requITe
individual owners of property with impervious surfaces to pay a share
of the public costs associated with mitigating and remediating the
environmental impact of stormwater runoff throughout the County;
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(c)
The legal defect in the adoption of Bill 34-12 (if any) was minor,
because the County had in 2013 and continues to have the authority to
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Protection Charge\Bill 2.Doc
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ExPEDITED BILL
No. 45-15
52
levy and collect from property owners an excise tax for the purpose of
producing revenue to fund the water quality protection measures needed
to ameliorate the environmental impact of stormwater runoff;
(d)
All property owners have benefitted from water quality protection and
restoration measures made possible by the revenues generated from the
stormwater management charges imposed under Section 19-35; and
(e)
It is just and proper that this Act take effect as of July 1, 2013
in
order
that the public will continue to benefit from the water quality protection
and restoration measures undertaken and to be undertaken as a result of
the revenues provided by the Water Quality Protection Charge.
Approved:
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George Leventhal, President, County Council
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Approved:
Date
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Isiah Leggett, County Executive
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Date
This is a correct copy o/Council action.
Linda M. Lauer, Clerk ofthe Council
Date
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LEGISLATIVE REQUEST REPORT
Expedited Bill 45-15
Stormwater Management- Water Quality Protection Charge
-
Curative Legislation
DESCRIPTION:
This legislation would correct a potential defect
in
Section 19-35 by
explicitly designating the Water Quality Protection Charge as an
excise tax authorized under the County's general taxing authority to
levy excise taxes.
The State law referenced
in
Section 19-35 as the enabling authority
for the Water Quality Protection Charge ("WQPC") authorizes local
adoption of a tax to provide the revenue needed to implement the
water quality protection and restoration measures mandated by the
State in accordance with the federal Clean Water Act. A court ruling
has called into question the validity of the WQPC as a tax under the
Environment Article of the Maryland Code. At the same time,
Section 19-35 makes no reference to the general taxing authority that
the State granted to the County under 1963 Md. Laws, ch. 808 which
unequivocally authorizes local imposition of excise taxes.
PROBLEM:
GOALS AND
OBJECTIVES:
To clarify the County's authority to enact the Water Quality
Protection Charge as an excise tax.
Office ofthe County Attorney
None
None
COORDINATION:
FISCAL IMP ACT:
ECONOMIC IMPACT:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
N/A
Marc Hansen, Office ofthe County Attorney, 240-777-6700,
Lisa Feldt, Department ofEnvironmental Protection, 240-777-7700,
Joseph Beach, Department ofFinance, 240-777-8860
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Does not apply
in
Rockville, Takoma Park, or Gaithersburg.
N/A
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':j
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O~CEOFTHECOUNTYEXECUTNE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
October 21,2015
TO:
George Leventhal, President
County Council
FROM:
Isiah Leggett
County Executive
SUBJECT:
---e
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~
Water Quality Protection Charge
The County's water quality protection charge produces approximately $32
million in revenue per year. This revenue is critical to funding the water quality protection
measures mandated by the State in accordance with the Federal Clean Water Act. The
water quality protection charge, which is imposed under Section 19-35, was enacted
pursuant to authority granted to the County under State law (Maryland Code, Environment
Article, Section 4-204).
In
Paul
N.
Chod
v.
Board ofAppeals for Montgomery County
(Civil No.
398704-V, entered July 23,2015), the Circuit Court for Montgomery County opined that
the water quality protection charge "is invalid
per se
because this Charge need not
reasonably relate to the stormwater management services provided by the County."
Although the County has appealed this decision, the Circuit Court's opinion
makes it impractical at this time for the County to issue revenue bonds predicated on the
collection of the water quality protection charge. The County had planned to issue bonds
in early 2016. Without these revenue bonds being issued in early 2016, the County will be
unable to implement a significant portion of its stonnwater management program that is
mandated by the Clean Water Act and is necessary to address the cleanup oflocal water
bodies and the restoration of the Anacostia River and Chesapeake Bay.
. I am forwarding with this memorandum curative legislation that would
correct the. potential defect noted by the Circuit Court by designating the stormwater
management charges as an excise
tax
imposed under the County's general authority to levy
excise taxes.
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····-1
.. : ' j
George Leventhal, President
October 21,2015
Page 2
The legislation, which I am proposing, would have a retroactive effective
date of July 1,2013. The retroactive nature of this legislation is justified because the
County had, in 2013, and continues to have the authority to levy and collect from property
owners an excise tax for the purpose of producing revenue to fund the water quality
protection measures needed to ameliorate the environmental impact of stormwater runoff.
Moreover, all property owners who have paid the water quality protection charge have
benefited from water quality protection and restoration measUres made possible,by the
revenues generated from the stormwater management charges imposed under current
County law. The proposed legislation is not intended to alter the policy, purposes, or
substance of the currently existing water quality protection charge.
Executive staff stands ready to work with the CounciJ on this important
curative legislation.
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Fiscal Impact Statement·
Council
Bill XX-1S -
Stormwater Management - Water Quality Protection Charge
1.
Legislative Summary.
Bill XX-IS is an expedited Act that would:
(l)
designate the Water
Quality
Protection Charge as an excise
tax
imposed under the
County's general taxing authority;
"
(2) mtify the collection ofstonnwater management charges levied under Section I9-3S
since July I, 2013;
(3) "continue the levy and collection ofthe Water Quality Protection Charge from property
owners under the same teImS and conditions as
set
out in Section 19-35; and
(4) make a certain technical correction to Section 19-35.
2.
An
estimate of changes in County revenues and expenditures regardless of whether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions, and methodologies
used.
County Code Section 19-35 subjects all County properties not otherwise exempt u:nder
State law to the Water Quality Protection Charge (WQPC), allows property owners
to
obtain credits for undertaking certain water quality protection measures on their
properties, and authorizes financial hardship exemptions for certain owner-occupants of
residential properties.
Bill XX-15 designates the stonnwater management charges imposed by Section 19-35 as
an excise tax imposed under the general taxing authority of Montgomery County to levy
excise taxes. 1his Act is not intended
to
alter the policy, purposes, or substance of
Section 19-35.
Bill XX-IS would not change the total Water Quality Protection Charge (WQPC)
revenues, estimated at $32,633,364 in FYI6, or estimated expenditures ofthe funds to
support the County's stormwater management programs.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
See #2 above. The approved FYI6-21 Fiscal Plan includes long term projections for
collections ofthe WQPC of$235 million over the next six years.
4.
An
actuarial analysis through the entire amortization period for each bill that would
affect retiree pension or group insurance costs.
Not Applicable.
S.
An
estimate of expenditures related to County's iDformation technology
(IT)
systems, including Enterprise Resource Planning (ERP) systems.
Bill XX-IS would not impact expenditures relating
to
the County's ERP or IT systems.
®
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6. Later actions that may affect future revenue and expenditures
if
the bill authorizes
future spending.
.
Not Applicable.
7.
An
estimate of the staff time needed
to
implement the bill.
There would not
be
a need for
staff
time
to
implement Bill XX-15.
8. An explanation of how the addition of new staff responsibilities would affect other
duties.
.
Not Applicable.
9.
An
estimate of costs when an additional appropriation is needed.
No additional appropriation
is
needed
to
implement Bill XX-IS.
10. A description of any variable that could affect revenue and cost estimates.
Not Applicable.
11. Ranges of revenue or expenditures that are uncertain or difficult
to
project.
Not Applicable.
12.
If
a bill
is
likely
to have no fiscal impact, why' that
is
the case.
Bill XX-IS is not intended to alter the policy, purposes, or substance of the currently
existing Water Quality Protection Charge. The purpose ofthe bill is to designate the
stormwater management charges imposed
by
Section
19-35 as an
excise
tax
iiuposed
under the general taxing authority ofMontgomery County to
levy
excise taxes.
13. Other fiscal impacts or comments.
Bill XX-15
will
ensure
that
collections ofthe WQPC continue as planned and that there
will be no fiscal impact
to
the County's Stormwater Management
program.
14. The following contributed to and concurred with this analysis:
Marc
Hansen, Office
of the County Attorney
Walter Wilson,
Office
ofthe County Attorney
Joseph Beach, Department of
Finance
lisa
Feldt, Department of Environmental Protection
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Alex Espinosa., Office of Management and
~udget
Matt Schaeffer, Office of Management and Budget