In this discriminatory taxation, the district court properly concluded that the City of Roanoke’s stormwater management charge is a fee, rather than a tax. This distinction matters because only taxes are subject to challenge under the Railroad Revitalization and Regulatory Reform Act of 1976.
A charge is more likely to be a tax if it’s imposed by a legislative body, like Roanoke’s City Council, rather than an administrative agency. A charge is also more likely to be a tax if its primary purpose is to raise revenue for general government activity that benefits the entire community. Here, the charge’s purpose is more consistent with that of a fee than a tax, because the charge forms part of a comprehensive regulatory scheme. Although municipalities may have traditionally provided stormwater management as a public benefit at the discretion of their legislatures, the Clean Water Act’s regulatory scheme now requires the City to take myriad concrete actions to reduce discharges and pollutant concentrations — many of them relating directly to runoff from the appellant’s property and the waters that receive it.
A classic regulatory fee is designed to address harmful impacts of otherwise permissible activities, and to ensure that the actors responsible for those impacts bear the costs of addressing them. That is exactly the function served by Roanoke’s stormwater management charge, which ensures that owners of impervious surfaces bear the cost of managing stormwater runoff.
In sum, the charge is part of a regulatory scheme, rooted in the Clean Water Act, whose purpose is to remedy the environmental harms associated with stormwater runoff and to hold stormwater dischargers responsible for footing the bill. EPA’s regulations ensure that the harms of stormwater discharge are addressed, and the City levies a charge (as directed by the state) upon those whose activity creates the need for regulation. The charge also serves the regulatory function of incentivizing property owners to reduce the amount of impervious surface on their land and engage in stormwater management practices that qualify them for credits.
The third factor has controlling weight here because the charge’s regulatory purpose provides a better indication of its overall nature than the body that implemented it or the class of persons it is levied upon.