Montgomery County’s tax on carbon dioxide emissions — which targeted one power company — is actually not a tax at all but a “punitive fee,” an appeals court ruled Monday. The ruling means that the lawsuit, filed by Mirant Mid-Atlantic, will return to the district court, which will decide if the county can legally require the company to pay the fee.
Mirant spokeswoman Misty Allen would not comment on the lawsuit, citing company policy.
The company sued Montgomery County after the county passed a tax of $5 for every ton of carbon dioxide emitted. The tax applies only to power stations producing more than 1 million tons in a year. Mirant Mid-Atlantic’s coal-burning plant in Dickerson releases about 3 million tons of carbon dioxide annually. It is the only plant in the county that has to pay the tax.
The district court dismissed the original suit, claiming it lacked jurisdiction. However, the Fourth Circuit Court of Appeals ruled that because the tax is actually a fee, the district court does have jurisdiction.
The ruling was “certainly not a favorable decision, but it has not been resolved,” said County Councilman Roger Berliner, D-Bethesda, who sponsored the bill creating the tax last year.
He said the tax would have funded “vitally important programs” aimed at reducing greenhouse gases.
Montgomery County collected about $6 million from the tax last year, although Berliner said the county has not spent any of that money because of the lawsuit.
The Fourth Circuit Court praised the county for its environmental efforts.
“We do not at all begrudge Montgomery County its regulatory purpose here, and there is much to be said for the worthy office of environmental stewardship,” Judge Paul Wilkinson wrote in the opinion.
Berliner emphasized that he is optimistic the district court will approve the fee.
“I think the county can still prevail,” he said.
