A bid by Maryland Gov. Larry Hogan’s administration to spare poultry farmers from higher stormwater permit fees has hit a snag: the law.

Top officials with the Maryland Department of the Environment are assessing their next move after the agency’s own counsel rebuffed the proposed fee structure. Matthew Standeven, the attorney general’s office lawyer assigned to the MDE, warned in a July 17 memo that the agency would be treading into “unlawful” territory if it moved forward with its plan.

Poultry houses on Maryland's Eastern Shore

On the Delmarva Peninsula, one of the densest poultry regions in the Chesapeake Bay watershed, more than 5,000 chicken houses churn out more than 600 million chickens a year.

Attorney General Brian Frosh and the General Assembly’s counsel, Sandra Benson Brantley, also have condemned the proposal as against the law.

State Sen. Paul Pinsky (D-Prince George’s County) accused the administration of dragging its feet on implementing the fees.

“The law says they have to collect enough money to provide oversight and technical assistance” to farmers, Pinsky said. “This won’t do it.”

The fee impasse represents an escalation in environmentalists’ fight to get farmers to bear a larger portion of the cost of cleaning up the Chesapeake Bay. Livestock and chicken manure account for nearly half of the nutrients that are deposited on the land and about a fifth of those that reach the Bay, according to estimates from the state-federal Chesapeake Bay Program.

On the Delmarva Peninsula, one of the densest poultry regions in the Bay watershed, more than 5,000 chicken houses churn out more than 600 million chickens a year for agribusiness giants, such as Perdue and Tyson. The birds are raised indoors, but the poultry litter — a mix of manure and bedding materials such as sawdust, woodchips or straw — is usually spread as fertilizer on neighboring farmland.

The MDE made changes in 2009 that greatly expanded the number of operations needing to comply with its stormwater management program. The agency under then-Gov. Martin O’Malley waived the permit fees to encourage farmers to make necessary drainage improvements around their properties.

Hogan continued offering the break after taking office in 2015. The state has lost out on about $400,000 a year in potential revenue by waiving the fees, critics estimate.

But under a 2019 measure approved by the General Assembly, the biggest farms — new or expanding farms with at least 350,000 square feet of total house space — would have to pay a $2,000 application fee (and renewal fee every five years) as well as an annual charge of $1,200.

All other poultry operations would have to begin paying a fee, too. But lawmakers left it up to MDE staff to determine how much should be charged and how often.

“I hate to micromanage,” said Pinsky, one of the law’s sponsors.

MDE Secretary Ben Grumbles responded last fall with a plan to charge farms with less than 350,000 square feet an application fee between $60 and $800, depending on their size. The fee would be due when the permit’s renewal deadline crops up once every five years. He didn’t propose an annual fee for the smaller operations.

In November, the Joint Committee on Administrative, Executive and Legislative Review put a hold on the measure, pending further analysis. After discussions with key members of the committee, Grumbles proposed moving forward with the regulations as previously drafted.

“Following discussion with the AELR chairs and after carefully considering public comments on the proposed regulations, MDE continues to believe that the 2019 regulatory proposal is appropriate,” Grumbles wrote in a July 1 letter.

The biggest sticking point: The new fee structure would collect $425,000 less per year compared with the totals called for — but not collected — under the existing law, state officials say. Under a longstanding regulation, the application fees must be set at an amount “designed to cover the cost of the permit procedure.”

Grumbles said that the program is adequately funded through a “combination of sources,” including the state’s Clean Water Fund.

Jay Apperson, an MDE spokesman, said the agency’s counsel initially found legal sufficiency in the secretary’s action but later withdrew it. In his July memo, Standeven, the agency’s attorney, pointed to the argument made several months earlier by Benson Brantley.

“Although there is no prohibition against the administration from appropriating additional funds to support the program, when the statute directs the agency to set the application fee ‘to cover the cost of the permit procedure,’ other funding should not be relied on to supplant the fee revenue MDE needs to cover those costs,” she wrote last October.

The MDE is working to determine what to do now, Apperson said.

“The matter is still under discussion,” he said.

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