Summary of a Recent
Judicial Development in
Clean Water Act

County Assessment Charge to Comply with NPDES
Permit Classified as a Regulatory Fee

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Uselmann v. Clark County, No. 27949-5-II, 2002 WL 31630855 (Wash. Ct. App. Nov. 22, 2002), the Court of Appeals of Washington, Division Two, affirmed the decision of the trial court which granted the county's cross-motion for summary judgment. Two Clark County landowners challenged the validity of a county ordinance establishing a fee to be used for storm water regulation. The landowners claimed that the fee was an unconstitutional tax and that the trial court was in error for granting summary judgment. The appellate court held that the charge was a regulatory fee and not an impermissible tax.

Background

Two Clark County landowners separately owned parcels of unincorporated land. Id. at *3. On November 8, 1999, the Clark County Board of Commissioners adopted Ordinance 1999-11-09, which classified the landowners' properties as category 2 properties and assessed each of them a monetary fee. Id. The county was required to obtain a National Pollution Discharge Elimination System (NPDES) permit by the Federal District Court for the Western District of Washington to comply with the Clean Water Act. Id. at *2-3. Both landowners paid the fee, and then unsuccessfully appealed the assessments to the county, arguing that the fee was an illegal tax, and not a regulatory fee. Id. at *3.

Arguments

The landowners argued that the assessment was an illegal tax rather than a regulatory fee. Id. They also alleged that the fees were unconstitutional because they violated procedural due process, substantive due process, equal protection, were ultra vires, and constituted an unconstitutional taking. Id.

The county countered that the assessment was a regulatory fee imposed under the state's taxing power. Id at *5.

Analysis and Holdings

To distinguish between a regulatory fee and a tax, Washington courts apply three factors originally set out in Covell v. City of Seattle, 905 P.2d 324 (1995): "(1) whether the primary purpose of the fee is to raise revenue . . . or to regulate . . . ; (2) whether the money collected must be allocated only to the authorized regulatory purpose; and (3) whether there is a direct relationship between the fee charged and the service received . . . ." Id. at *5. In applying the Covell factors, the court held that the primary purpose of the fee was to generate revenue in order to implement additional activities required as conditions of the NPDES permit, the allocated revenues generated by the charge would fund the regulation of storm water quality in the areas prescribed by the ordinance, and the fee charged was directly related to regulation of storm water in the unincorporated areas of the county. Id. at *8. Because the court held that the charge was a fee and not a tax, it did not address the landowners' other arguments. Id.

The case was decided on November 22, 2002.