Wielepski v. Harford County

• Decision Date: 01 September 1993
• Docket Number: No. 617,617
• Citation: 635 A.2d 43,98 Md.App. 721
• Parties: Joseph J. WIELEPSKI v. HARFORD COUNTY, Maryland. ,
• Court: Court of Special Appeals of Maryland

Page 721

98 Md.App. 721

635 A.2d 43

Joseph J. WIELEPSKI v. HARFORD COUNTY, Maryland.

No. 617, Sept. Term, 1993.

Court of Special Appeals of Maryland.

Jan. 5, 1994.

William R. Phelan, Jr. (Alfred Neil Kramer, on the brief), Aberdeen, for appellant.

Nancy L. Giorno, Asst. County Atty. (Diane T. Swint, Assistant County Atty., on the brief), Bel Air, for appellee.

Argued before BISHOP, WENNER and CATHELL, JJ.

BISHOP, Judge.

Pursuant to Rule 2.4 of the Harford County Administrative Rules of Procedure for Regulations and Hearings, appellants, Joseph J. Wielepski and Mr. and Mrs. Stanley Wielepski (collectively, "the Wielepskis"), filed an appeal to the Circuit Court for Harford County from a final decision of the Harford County Director of Administration (the "Director") requiring the Wielepskis to pay a road improvement fee as a condition to the development of real estate. Appellee, Harford County (the "County"), filed a motion to dismiss the appeal, which the circuit court denied. After the court heard oral argument, it affirmed the decision of the Director. The Wielepskis filed a timely notice of appeal to this Court.

Issue

The Wielepskis raise one question for our consideration: Does § 4.051 of the Harford County Subdivision Regulations impose an illegal tax? We shall answer that question in the affirmative and, accordingly, reverse the judgment of the circuit court.

Facts

The facts of this case are undisputed. The Wielepskis, owners of real property in Harford County, sought to develop that property by subdividing it into nine individual home lots. In the course of dealings with the County to gain all necessary approvals, the Wielepskis learned that they would be required to pay the County approximately $97,000 for future road improvements to two public roads bordering their property. That estimate was based on the anticipated cost of improving the roads to meet County standards. This charge would add $10,000 to $12,000 to the price of each lot, thereby driving the cost of the lots above market value.

Over a year after learning of the estimated charge, the Wielepskis signed a Preliminary Plan Approval letter that included, next to their signatures, the following statement: "I hereby accept the conditions of this preliminary plan approval." Paragraph three of that letter contained the following language: "Road frontage improvements will be required along Robinson Mill Road and Day Road."

The County imposed the road improvement charge pursuant to § 4.051 of its Subdivision Regulations, which provides in pertinent part:

c. Frontage improvements.

1. Proposed developments, including residential, business, industrial or institutional developments or subdivisions to be constructed along existing County roadways not meeting County road standards for existing or contemplated traffic demands will be required to improve one half ( 1/2) of the County roadway along their property to required County road standards. Should construction of the roadway be considered infeasible at the time of development, the developer may deposit the estimated construction cost in an account with Harford County for the future improvements of that roadway to the designated County road standards.

2. Frontage improvements are required when a parcel of land is subdivided or developed for purposes of creating:

* * * * * *

(b) any residential use for more than five (5) dwelling units....

Because construction of the roadway was deemed to be "infeasible" at the time of development, the Wielepskis were required to deposit the fee into an escrow account pursuant to § 4.051(e)(3), which provides:

Upon the written request of the subdivider/developer, in lieu of completing the improvements required, and upon mutual recommendation by the Department of Public Works and Department of Planning and Zoning and approval by the Department of Law, the subdivider/developer shall deposit the cost, as estimated by Harford County of constructing/installing any and all improvements required in an interest-bearing escrow account with Harford County, thereby insuring the actual construction/installation of such improvements. Such an account may be permitted to be established when:

(a) The construction of the road improvement is considered by the Department of Public Works to be infeasible at the time because of existing physical or topographical conditions, or the developer/County is unable to acquire the necessary rights-of-way; or (b) The County has a proposed capital project set forth in the Capital Improvements Program.

At the hearing before the Director, there was a discussion regarding to what use the funds would be applied. The Wielepskis maintained that the funds would not be used to improve the roadways, but would be used to maintain them. Arden Holdredge, Chief of Current Planning, said that "the money is put in escrow, but it would have to be used on these two roads. For example to improve an intersection impacted by this development, drainage, etc." The Director said that "the money would be used to perform any maintenance required or make any improvements needed as a result [of] this subdivision--it would not be used for snow removal, etc." The County, through counsel, explained that the funds "would be used for anything that effects [sic] this road because of this subdivision." The County also acknowledged that, were the County actually to make the road improvements, there is no question that people other than the subdivision's residents would benefit from those improvements. In his decision letter, the Director concluded that, "[w]here traffic volume does not immediately warrant major widening or reconstruction, funds collected for road improvements may be used to do maintenance and repair work in the years to come."

The circuit court affirmed the Director's decision in a letter opinion, which reads:

The Court will make the analysis of this case relatively simple as we believe that the County's Memorandum correctly analyzes the matter, including that the monies to be paid in this case are not an unlawful tax. Accordingly, the decision of the Director of Administration must be AFFIRMED.

We can see a practical problem that may present in this and like situations. You may have a case where a significant amount of money is deposited for future road improvement where the road may never be improved. This will leave a considerable amount of money in limbo on a potentially indefinite basis. In that connection, the County may wish to amend the law and/or regulations to allow for some refund after a fixed period of time if the road is not improved.

Discussion

I

"As subdivisions of the State, counties may only act when specific grants of power are conferred upon them. They do not have the power to tax on their own authority, but may do so only if the power has been granted by the State." Eastern Diversified Properties, Inc. v. Montgomery County, 319 Md. 45, 49, 570 A.2d 850 (1990) (citations omitted); see also Md. Const. art. XI-A, § 2.

As a charter county exercising home rule powers, Harford County is governed by the Express Powers Act, Md.Ann.Code art. 25A, §§ 1-6 (1990 & Supp.1993). Section 5(O) of that act expressly grants Harford County the power to levy a property tax, but it does not grant a general taxing power. See Eastern Diversified, 319 Md. at 50, 570 A.2d 850; Montgomery County Bd. of Realtors, Inc. v. Montgomery County, 287 Md. 101, 106-07, 411 A.2d 97 (1980). Under § 5(S), however, Harford County may

pass all ordinances ... not inconsistent with the provisions of [Article 25A] or the laws of [Maryland], as may be proper in executing and enforcing any of the powers enumerated in [§ 5] or elsewhere in [Article 25A], as well as such ordinances as may be deemed expedient in maintaining the peace, good government, health and welfare of the county.

The Court of Appeals has

characterized § 5(S) "as a broad grant of power to legislate on matters not specifically enumerated in Art. 25A," in pursuance of which necessary and beneficial ordinances may be enacted consonant with the general powers of the charter county; moreover, [the Court of Appeals has] recognized that § 5(S) must be liberally construed to afford wide discretion to charter counties in the good faith exercise of their police powers in the public interest.

Eastern Diversified, 319 Md. at 50-51, 570 A.2d 850 (quoting Montgomery Citizens League v. Greenhalgh, 253 Md. 151, 161, 252 A.2d 242 (1969)). Thus, we must determine whether the road improvement fee in the case sub judice is an illegal tax, or a reasonable fee incidental to a valid regulation enacted pursuant to Harford County's police power.

In Maryland Theatrical Corp. v. Brennan, 180 Md. 377, 381-82, 24 A.2d 911 (1942), the Court of Appeals distinguished the characteristics of revenue measures from those of regulatory measures.

A regulatory measure may produce revenue, but in such a case the amount must be reasonable and have some definite relation to the purpose of the Act. A revenue measure, on the other hand, may also provide for regulation, but if the raising of revenue is the primary purpose, the amount of the tax is not reviewable by the courts. There is no set rule by which it can be determined in which category a particular Act primarily belongs. In general, it may be said that when it appears from the Act itself that revenue is its main objective, and the amount of the tax supports that theory, the enactment is a revenue measure. "In general, * * * where the fee is imposed for the purpose of regulation, and the statute requires compliance with certain conditions in addition to the payment of the prescribed sum, such sum is a license proper, imposed by virtue of the police power; but where it is exacted solely for revenue purposes and its payment give[s] the right to carry on the business without any further conditions, it is a tax."

(Quoting 33 Am.Jur. Licenses p 19, at 340). The Wielepskis argue...