A dispute brewing in Annapolis over a late bid to alter Maryland's storm-water fee law - one that reportedly threatened approval of the state's budget - was resolved Thursday, with lawmakers agreeing to limit a proposed exemption from the controversial "rain tax" to Carroll and Frederick counties.

Senators meeting with their House counterparts this week to work out differences over the state budget sparked the furor by proposing language that would allow any county or municipality to avoid levying a storm-water management fee on its property owners.

The provision was ostensibly put forward to shield Carroll County, where local officials feared they could be sued for failing to enact a storm-water fee as required by a 2012 law. 

The law requires fees in Baltimore city and the state's nine largest counties - including Carroll - to pay for reducing polluted runoff from streets, parking lots and rooftops, a growing threat to the Chesapeake Bay. Carroll refused, however, contending it had set aside enough money in its budget to fund its cleanup projects. Frederick argued likewise, but technically complied with the law by adopting a 1-cent fee.

Carroll struck a deal with the Maryland Department of the Environment, which had threatened to sock the county with thousands in fines.  In lieu of the fee, Carroll officials pledged to set aside some of its property tax revenue to pay for stormwater cleanup. Though the deal was declared legal by the attorney general's office, county officials nevertheless feared being sued, and sought some legislation to reinforce its position.

Environmentalists protested that the budget language said to be meant for Carroll was too broad, and that any locality could use it to seek to repeal its fee.  While communities would still have to pledge property tax revenue to stormwater projects, critics pointed out that would effectively exempt churches and other nonprofit property owners from having to pay their share toward the cleanup.

The furor threatened to become a standoff. House members present at the budget conference contended they never agreed to the storm-water provision, but senators insisted they had - and refused to take it out. The dispute reportedly drew in leaders of both chambers, before a compromise was finally reached.

The budget conferees agreed Thursday to a new provision specifying that only Carroll and Frederick counties may come up with alternative ways of paying to clean up polluted runoff.  Those other arrangements must be adopted in local law and approved by the state environment department. 

Environmentalists grudgingly accepted the compromise, though still unhappy over how it had occurred so quickly, without public hearings and the normal legislative process. 

Their frustration stems from believing they had successfully fended off repeal or weakening of the storm-water law this year - seemingly a real prospect at the beginning of the 90-day legislative session. Last year, businesses, churches and some homeowners complained about the fees and questioned having to pay for cleaning up pollution carried by rain. 

Much of the criticism in Annapolis of the "rain tax" came from Republicans, but even Senate President Thomas V. Mike Miller made known he'd like to see the law revised to standardize fees and reduce the financial burden on churches and nonprofits. Bill after bill was introduced to repeal the law, revise it or exempt different counties, while activists fought to keep the fee mandate, arguing it was needed to clean up the bay.

"There were 20 bills that were heard in public that were put in in the proper way," said Dru Schmidt-Perkins of 1000 Friends of Maryland. "All of them were defeated or are not moving forward in this General Assembly.

"When none of that worked," she added, "then a group of people held the budget hostage and worked to put in some reforms to those important programs."

Nevertheless, Schmidt-Perkins said she's relieved that the compromise does not appear to let any county off the hook for paying to clean up its pollution

"We're not happy that the language is in the bill, but at the end of the day," she concluded, "the program was not curtailed in any way."