Impact fee suit merits argued

Developers, homeowners ask judges to overturn dismissal by Circuit Court

Ruling expected this year

Accused of using money improperly, county says Tax Court should preside

April 11, 2002|By Andrea F. Siegel | Andrea F. Siegel,SUN STAFF

Hoping to revive a lawsuit filed by developers and homeowners seeking to claim fees that developers paid to Anne Arundel County, a lawyer for the property owners told appellate judges yesterday that the county's position on how his clients should seek the money is illegal and unworkable.

An attorney for the county countered that a Circuit Court judge was right to dismiss the lawsuit because state law provides a framework for disgruntled property owners who are trying to recoup impact fees of several thousand dollars per house. Their class-action lawsuit is not the remedy prescribed by state law, the lawyer said.

With an estimated $27 million potentially at stake, an appeal is expected whatever ruling emerges from the three-judge panel of the Court of Special Appeals this year.

Homeowners and a developer in the West County community of Seven Oaks contend that the county has wrongly spent impact fees - charges levied since the late 1980s to help the county's infrastructure accommodate population growth - or has held them beyond the six-year limit, when a refund should have been offered if the money wasn't spent or the county didn't seek an extension.

The county maintains that a property owner should take the administrative route of asking the county for a refund and, if dissatisfied, take up the issue with the Maryland Tax Court.

Anne Arundel County Circuit Judge Eugene M. Lerner agreed with the county early last year. With the case dismissed early, how the county might have spent impact fees has not been aired.

The legal battle is one of several by builders who are trying to press the county to back off its development fees. Developers are suing for refunds from the county forest conservation fund.

Their challenge to the county's waiver agreements - side contracts for developers to give money and land for public improvements in exchange for approval to build - will be heard in the fall by the state's highest court.

Yesterday, two judges peppered Senior Assistant County Attorney William D. Evans Jr. with questions about how the county's impact fee law and the state's refund law would mesh.

Judge James A. Kenney III asked how the refund law, which gives property owners three years to file claims, can be reconciled with the local law that gives the county six years to spend the money.

Evans responded that the state's three-year limit on claims would start after the county's six years end.

"Are these folks taxpayers? When did they pay the tax?" Kenney asked, pointing out that developers, not homeowners, wrote the checks for the impact fees.

Evans replied that in many cases, developers no longer own the properties on which impact fees were levied.

John R. Greiber Jr., attorney for the developers and property owners, said not only is there no provision in the county impact fee law to ask the county for the money, but also the Tax Court is likely to tell homeowners that it lacks jurisdiction and cannot give them money they can't prove they paid.

"They are not the taxpayer," he said, later telling retired Court of Appeals Judge Lawrence F. Rodowsky that the county law "provides for a refund but no administrative remedy" and that other issues, such as whether to use the county's 5 percent interest rate or the state refund law's variable interest rate, remain.

Greiber said making property owners go to Tax Court would be unfair because homeowners would probably have to spend huge sums to recoup a few thousand dollars.

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