*Update: Governor Wolf Signs into Law HB 1325, Now Act 62

*On July 1, 2016, Pennsylvania Governor Tom Wolf signed into law House Bill 1325, now Act 62, authorizing second-class townships to assess reasonable and uniform fees for storm water management activities and facilities, without the need to establish a municipal authority. Act 62 also authorizes a second-class township to enact and enforce ordinances to govern and regulate the planning, management, implementation, construction and maintenance of storm water facilities. Act 62 shall take effect in 60 days from the Governor’s signing.

On June 15, 2016 the Pennsylvania Senate passed House Bill 1325 (“HB 1325”) and referred it to the House Rules committee for review. Upon its anticipated enactment, HB 1325 will have significant ramifications for Pennsylvania’s second-class townships and their regulation of storm water facilities.

HB 1325 amends Article 27 of the Pennsylvania Second Class Township Code to authorize a second-class township to assess reasonable and uniform fees for storm water management activities and facilities, without the need to establish a municipal authority. HB 1325 will also authorize a second-class township to enact and enforce ordinances to govern and regulate the planning, management, implementation, construction and maintenance of storm water facilities.

While the Municipality Authorities Act authorizes a storm water authority to impose a fee, the current Second Class Township Code does not authorize a township to do so, even though the township is the entity ultimately responsible for complying with the Federal Municipal Separate Storm Sewer System (MS4) regulations. HB 1325’s sponsoring legislators believed it was overly burdensome to require a township that already has the power to construct and manage a storm water system under Article 27 of the Second Class Township Code to, in effect, create another layer of government in order to implement a fee to fund the operation and maintenance of that system.

HB 1325 requires that fees imposed by a township be reasonable and uniform, based in whole or in part on property characteristics, which may include installation and maintenance of best management practices approved and inspected by the township.

Importantly, townships may not impose fees in excess of the amount necessary to comply with the minimum requirements of the Federal Water Pollution Control Act (more commonly referred to as the Clean Water Act), and any federal or state laws governing the implementation of the Clean Water Act, for the construction, operation and maintenance of storm water facilities.

HB 1325 serves to benefit those property owners who are already implementing best management practices in their storm water facility operation. The bill contains language requiring townships imposing fees to provide a credit or exemption for properties which have installed and are maintaining storm water facilities that meet best management practices and are approved by the township.

Second-class townships have some discretion under HB 1325 in determining how to levy storm water fees. Townships are permitted to impose a fee on all properties in the township; on all properties benefited by a specific storm water project; or to establish a storm water management district and impose the fee on all property owners in the district. Notably, HB 1325 does not provide an exception for properties which are typically considered tax-exempt and clearly states that the fee may be imposed “on all properties in the township.” All storm water fees collected by a township must be used for the purposes contemplated by Article 27; the management of storm water activities.

HB 1325 will assist second-class townships in funding the construction and maintenance of storm water systems and defraying the costs of compliance with federal storm water regulations.

For further information contact Max O’Keefe. Max is an associate in the litigation and municipal practice groups at Lamb McErlane PC.