Is a Virginia locality's stormwater charge a tax or a fee, can it be enforced like a tax lien, and can landowners be 'grandfathered' or charged for runoff that originated on someone else's property?

Plain-English summary

The City of Staunton had adopted a stormwater control ordinance under Va. Code § 15.2-2114. A delegate asked the AG five tied-together questions about how the charging mechanism worked: is it a tax or a fee, can it be enforced like one, did a newly enacted bill delay enforcement, can older properties be grandfathered out of paying, and can a landowner be charged for runoff that came onto their property from somewhere else?

The AG answered:

• It is a fee, not a tax. The statute calls it a "service charge," requires that it be based on a property's contribution to runoff, and limits revenue to actual program costs. That fits the legal pattern of a regulatory fee, not a tax.
• The fee is enforceable, including by liens against the property under § 15.2-2114(D). The General Assembly has expressly given localities lien authority for similar charges in other statutes.
• Senate Bill 395 did not pause enforcement. SB 395 simply delayed the effective date of certain new regulations. Existing stormwater control programs adopted under § 15.2-2114 stay enforceable in the meantime.
• There is no grandfathering for properties with conditions predating the local ordinance. The Dillon Rule means localities have only the powers expressly given to them, and § 15.2-2114 does not authorize exemptions for older properties.
• There is no waiver for landowners whose properties can't physically be mitigated.
• A landowner is not responsible for runoff coming onto their property from other parcels or public streets. The statute requires the charge to be based on the property's own "contribution to stormwater runoff," not on water passing through.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Virginia's stormwater statutory framework has been significantly reorganized since 2010, with the Virginia Stormwater Management Act and Erosion and Sediment Control Law going through major consolidation and amendment. The specific Chesapeake Bay TMDL regulatory deadlines referenced in SB 395 are long past. Anyone setting up or contesting a current stormwater program should look at the current Title 62.1 and Title 15.2 provisions and current DEQ guidance.

Common questions

Why is the distinction between a "tax" and a "fee" important?
Different procedures, voter approval requirements, and constitutional limits apply. Localities in Virginia have only those taxing powers the General Assembly expressly grants. Fees, by contrast, are usually justified by linking them to a specific service or regulatory program. Calling something a fee but operating it like a tax can put the program at legal risk.

How does the AG decide something is a fee and not a tax?
Two key features pushed the answer toward "fee" here: the charge had to be based on each property's contribution to runoff (a service-related metric), and total revenue could not exceed the locality's actual program costs (no surplus going to general government).

Can the locality really put a lien on the house for unpaid stormwater fees?
Under § 15.2-2114(D) at the time, yes. The AG noted that the Code permits localities to assert liens against real property for nonpayment of charges or fees in numerous instances, and that § 15.2-2114 itself expressly grants localities authority to file suit and assert a lien for unpaid stormwater charges and interest.

What was Senate Bill 395?
A 2010 bill that pushed back the effective date of new state stormwater regulations until after EPA established a Chesapeake Bay-wide Total Maximum Daily Load (TMDL), and in any event no later than December 1, 2011. The AG said SB 395 only delayed those specific new regulations, not the existing program a city had already adopted.

What is the Dillon Rule and why does it matter here?
The Dillon Rule, an old principle of Virginia municipal law, holds that local governments in Virginia have only those powers (1) expressly granted, (2) necessarily or fairly implied from express powers, or (3) essential and indispensable. Bd. of Supvrs. v. Countryside Investment Co., 258 Va. 497 (1999). Any doubt is resolved against the locality. City of Richmond v. Bd. of Supvrs., 199 Va. 679 (1958). The AG used the Dillon Rule to reject grandfathering and waiver theories that had no express statutory hook.

Can a property owner appeal a stormwater bill that includes runoff from a neighbor's yard?
Based on the statute as it stood in 2010, the answer was that a landowner is responsible only for the runoff their own property contributes. Runoff coming from other parcels does not count as the receiving owner's "contribution." Staunton's ordinance, which based charges on each property's impervious-surface square footage, was given as an example of a permissible structure.

Background and statutory framework

Section 15.2-2114 authorized Virginia localities to adopt stormwater control programs and assess utility charges to fund them, with enforcement provisions in subsection (D). Localities adopt these programs to meet the requirements of the Virginia stormwater management regulations.

The AG cited a recent (2010) AG opinion involving Chesapeake (Op. No. 09-098, Hallman), which had reached the same fee-not-tax conclusion. On the Dillon Rule line, the opinion strung together a sequence of cases standing for the proposition that any doubt about local authority must be resolved against the locality. On grandfathering, the AG quoted a 2009 opinion describing grandfathering as a matter of legislative grace requiring express authorization (citing County of Fairfax v. Fleet Indus. Park Ltd. P'ship, 242 Va. 426 (1991)), and contrasted the express waiver authority in § 15.2-2114(B) for runoff-reduction practices with the absence of any exemption for impossible-to-mitigate properties.

Citations

• Va. Code Ann. § 15.2-2114(B), (D)
• Senate Bill 395 (2010)
• Bd. of Supvrs. v. Countryside Investment Co., 258 Va. 497, 503, 522 S.E.2d 610, 613 (1999)
• Chesapeake v. Gardner Enters., 253 Va. 243, 246, 482 S.E.2d 812, 814 (1997)
• Commonwealth v. County Bd., 217 Va. 558, 574, 232 S.E.2d 30, 40 (1977)
• Bd. of Supvrs. v. Home, 216 Va. 113, 117, 215 S.E.2d 453, 455 (1975)
• City of Richmond v. Bd. of Supvrs., 199 Va. 679, 684, 101 S.E.2d 641, 645 (1958)
• County of Fairfax v. Fleet Indus. Park Ltd. P'ship, 242 Va. 426, 431, 410 S.E.2d 669, 672 (1991)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-045-Bell.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

July 28, 2010

The Honorable Richard P. Bell
Member, House of Delegates
Post Office Box 239
Staunton, Virginia 24402

Dear Delegate Bell:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You ask several questions, as follows, concerning local ordinances adopted to establish stormwater control programs pursuant to § 15.2-2114 of the Virginia Code: 1) whether the authorized service charges constitute a tax; 2) whether the enforcement provisions are enforceable; 3) whether recent legislation delays that enforcement; 4) whether certain properties may be grandfathered or exempted; and finally, 5) whether landowners are liable for run-off from their property that is created by drainage originating elsewhere.

Response

It is my opinion that the utility or service charge authorized by § 15.2-2114 is a fee, not a tax, that is enforceable by localities pursuant to § 15.2-2114(D) and that Senate Bill 395 does not affect localities' ability to enforce existing stormwater control programs. It further is my opinion that § 15.2-2114 neither provides for the grandfathering of properties, nor does it provide an exemption for landowners who own property with characteristics that make runoff mitigation infeasible. Finally, a landowner cannot be held responsible for reducing or paying a charge for runoff from his property caused by drainage from other properties.

Background

You report that the City of Staunton has adopted an ordinance establishing a stormwater control program pursuant to § 15.2-2114. You also note that, during its 2010 session, the General Assembly adopted Senate Bill 395, which delays the effective date of the regulation that will establish the procedures by which the Department of Conservation and Recreation delegates authority for stormwater management programs to localities and the water quality and quantity criteria to be enforced by such programs, as well as the criteria by which such programs will be evaluated.

Applicable Law and Discussion

You first inquire whether the utility or service charge authorized by § 15.2-2114 is a tax. The language of the statute indicates that it is a fee, not a tax. Not only is it called a "service charge" rather than a tax, but § 15.2-2114(B) requires that the charges must be based on properties' contributions to stormwater runoff, and that the income derived from service charges may not exceed the actual costs incurred by a locality in operating a stormwater control program. As expressed in a recent Opinion of this office, because these charges are structured to produce only sufficient revenue to cover the costs of operating a stormwater control program, such a stormwater control charge assessed by the City of Chesapeake pursuant to § 15.2-2114 is a service fee, not a tax.

You next ask whether the enforcement provisions of § 15.2-2114(D), which are consistent with tax lien enforcement, can be applied to a utility charge. The Code permits localities to assert a lien against real property for nonpayment of charges or fees in numerous instances. In this case, § 15.2-2114 explicitly grants localities authority to impose stormwater control program charges, to file suit to recover unpaid charges and interest, and to assert a lien against real property for the unpaid charges and interest. Because the General Assembly has expressly authorized localities to use this approach, the provisions set forth in § 15.2-2114 are enforceable.

You further inquire whether the passage of Senate Bill 395 delays these enforcement measures until the new stormwater management regulations take effect. Localities adopt stormwater control programs pursuant to § 15.2-2114 to meet the requirements of the Virginia stormwater management regulations. These regulations currently are in effect. Senate Bill 395 simply delayed the effective date of new regulations that will replace portions of the existing regulations. As such, those localities that have adopted stormwater control programs pursuant to § 15.2-2114 may continue to administer and enforce those programs, but will need to satisfy the new regulations when they take effect.

You also ask whether a property with conditions predating the adoption of an ordinance establishing a stormwater control program is "grandfathered" and thus exempt from payment of the charge and whether a landowner who has property with unique characteristics is exempt from the ordinance requirements when the runoff from the property cannot be mitigated. The Dillon Rule dictates that, "'municipal corporations have only those powers expressly granted, those necessarily or fairly implied from expressly granted powers, and those that are essential and indispensable.'" Section 15.2-2114 does not provide for "grandfathering" of properties. Therefore, the General Assembly has not shown an intention to exempt properties with conditions predating local stormwater control ordinances from the requirements of such ordinances, including the service charge. I am not aware of any basis, absent express legislation, upon which such properties may be "grandfathered." Similarly, the Code does not authorize local governments to exempt from the charge a landowner who is unable to mitigate runoff and pollutants and thereby obtain a waiver. The General Assembly has expressly authorized localities to waive fees when certain conditions are met, but it has not provided similar authorization for a locality to exempt owners of properties for which stormwater flow and pollutants cannot be reduced.

Your final inquiry is whether a landowner can be held responsible for reducing or paying a charge for runoff from his property caused by drainage coming onto his property from other properties or public streets. Section 15.2-2114(B) requires that stormwater charges assessed to property owners "be based upon their contributions to stormwater runoff." Runoff draining onto a property from other sources, therefore, does not constitute that property's "contribution" to stormwater runoff, and as such, the landowner is not liable. The ordinance adopted by the City of Staunton serves as an illustration: it provides that the stormwater control program fee is to be based on a property's square footage of impervious area. Such a fee makes the property owner responsible only for runoff attributed to his property's impervious areas while meeting the requirement of § 15.2-2114(B) that the charge be based on a property's contribution to stormwater runoff.

Conclusion

Accordingly, it is my opinion that the utility or service charge authorized by § 15.2-2114 is a fee, not a tax, that is enforceable by localities pursuant to § 15.2-2114(D). It is further my opinion that Senate Bill 395 does not affect localities' ability to enforce existing stormwater control programs adopted pursuant to § 15.2-2114. Additionally, it is my opinion that § 15.2-2114 does not provide for the grandfathering of properties with conditions that predated the passage of local ordinances, nor does it provide an exemption for landowners whose properties have unique characteristics that prevent the reduction of stormwater runoff. Finally, I conclude that a landowner cannot be held responsible for reducing runoff or paying a charge for runoff from his property when that runoff is caused by drainage from other properties.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General