United States v. Harford County

• Decision Date: 12 October 1983
• Docket Number: Civ. No. H-82-1464.
• Citation: 572 F. Supp. 239
• Parties: UNITED STATES of America, Plaintiff, v. HARFORD COUNTY, Maryland, Defendant.
• Court: U.S. District Court — District of Maryland

572 F. Supp. 239

UNITED STATES of America, Plaintiff, v. HARFORD COUNTY, Maryland, Defendant.

Civ. No. H-82-1464.

United States District Court, D. Maryland.

October 12, 1983.

Gregory Hrebiniak, Tax Div., Dept. of Justice, Washington, D.C., for plaintiff.

James A. Close, Asst. County Atty., Bel Air, Md., for defendant.

ALEXANDER HARVEY, II, District Judge.

This case presents the question whether an instrumentality of the federal government must, as the owner of property in Harford County, pay a so-called front foot benefit assessment imposed upon it by the County for water and sewer services. The United States contends that this exaction is a tax which cannot be constitutionally imposed upon it by a state or one of its political subdivisions. Harford County argues that a benefit charge rather than a tax is involved and that the County can collect such an exaction from an instrumentality of the federal government as well as from other private users of water and sewer services.

The essential facts have been stipulated. Briefs in support of the parties' positions have been filed and oral argument heard in open court. For the reasons herein stated, this Court concludes that the assessments at issue here are in the nature of a tax and as such cannot be constitutionally imposed on the federal government by a political subdivision of the State of Maryland.

The plaintiff in this case is the United States, and defendant is Harford County, Maryland. In its complaint, the federal government has challenged the constitutional validity of an assessment imposed by the County on property owned by the United States Postal Service and used as a Post Office in Edgewood, Harford County, Maryland. The United States is here seeking the return of monies already paid and also declaratory and injunctive relief.

Since December, 1973, the United States Postal Service has owned a parcel of property in Harford County on Hanson Road. Following the erection of a Post Office at that location, the Postal Service in November, 1978, received notice that "a front foot benefit assessment" had been levied against the property in the amount of $112.50, plus $10.50 interest, for the fiscal year from July 1, 1977 to June 30, 1978. The Post Office was further advised that if the total sum claimed was not paid immediately, all water service to the facility would be cut off. Plaintiff paid the sum claimed under protest. In July, 1978, plaintiff received another notice indicating that the annual assessment for the fiscal year from July 1, 1978 to June 1, 1979 was $112.50. Refusing to pay this amount or the assessments for any of the following years, the United States has filed suit in this Court.

Jurisdiction over this dispute exists pursuant to 28 U.S.C. §§ 1345 and 2201. The narrow issue presented is whether the so-called front foot benefit assessment is a direct tax or is a service charge for a benefit conferred on the property by Harford County.

Between 1960 and 1962, the Metropolitan Commission of Harford County constructed the Edgewood Sanitary Subdistrict for the area where the Post Office is now located. General tax revenues of the County were not used for the Commission's projects. Rather, pursuant to common practice, the Commission sold bonds to finance the Edgewood Subdistrict project.

There are three types of charges which the users of water and sewer services provided by the County must pay. First, there is a service charge based on the amount of water actually consumed. Harford County, Md., Code § 24-18 (Supp.1980). Secondly, there is an area or connection charge, which is a one-time exaction imposed against the property or the applicant. Id. § 24-12. Sums collected pursuant to such a charge are used to pay for hooking up properties to the Subdistrict's treatment plants, pumping stations and transmission facilities so that service may be brought into the area where new construction is located. Thirdly, there is the annual front foot benefit assessment involved in this case. Id. §§ 24-24, 24-26. This charge is based on the cost of constructing the project within a particular development and the amounts collected pursuant to this assessment are used to repay bonds issued for the construction of the project. In the case of the Edgewood Sanitary Subdistrict, annual assessments cover a period of thirty years at which time the bonds would be fully repaid.

Defendant here contends that area charges and front foot benefit assessments are essentially the same since they both amortize indebtedness incurred by Harford County for providing water and sewage services of benefit to plaintiff's property. Since plaintiff paid the area charge, defendant argues that it should also be required to pay the front foot benefit assessment.

Since McCulloch v. Maryland, 4 Wheat. 316, 4 L.Ed. 579 (1819), it has been settled that the federal government is not subject to any form of taxation by a state or political subdivision in the absence of express Congressional consent. United States v. County of Allegheny, 322 U.S. 174, 177, 64 S.Ct. 908, 911, 88 L.Ed. 1209 (1944). The federal government has, however, recognized its obligation to pay state or county charges based on the quantum of water and sewer services rendered. 29 Comp.Gen. 120 (1949). Furthermore, the United States also concedes that it must pay one-time connection fees as a cost of construction, levied when a federal building is hooked up with a local sewer system. 39 Comp.Gen. 363 (1959). Pursuant to this accepted practice, plaintiff has paid Harford County the one-time connection charges for the Edgewood Post Office and has continued to pay the charges for the amount of water consumed.

Nevertheless, the United States vigorously opposes annual front foot benefit assessments of the kind at issue in this case. See, e.g., 9 Comp.Gen. 41 (1929). Plaintiff here argues that such exactions amount to a tax on the United States which is prohibited by the Constitution.

Two cases are relied upon by plaintiff in support of its contention that the federal government is not liable for front foot benefit assessments levied by local...