Fees & Exactions

Subscribe to Fees & Exactions

By Dave Lanferman

Silicon Valley Taxpayers Ass’n v. Santa Clara County Open Space Authority (July 14, 2006, Case No. S136468) ___ Cal.4th ___.

The California Supreme Court declared that Proposition 218 “changed the law governing assessments” in this unanimous decision issued on July 14, 2008, and applied the “new law” to invalidate assessments levied by a special district to fund the acquisition of unspecified “open space.” The opinion lays out the new rules for the establishment, and judicial review, of assessments under the new substantive and procedural standards mandated by Proposition 218. Since these new requirements were added to the State constitution (Articles XIII C and D), the Court explained that the determination of the validity of an assessment “is now a constitutional question” subject to a more rigorous “independent judgment” standard of judicial review. The Court held that Prop. 218 shifted the burden of proof to the assessing agency. Then, applying its “independent judgment,” the Court found the agency had not met its burden of proof and these open space assessments were fatally deficient in at least two respects: (a) the assessments did not meet the new requirements that they be limited to “special benefits” enjoyed by the assessed properties; and (b) the assessments did not meet the new requirements that the amounts assessed to parcels be “proportional” to the special benefits conferred on the assessed properties.…

Continue Reading Supreme Court Raises The Bar: Holds Prop. 218 Requires Court To Exercise Independent Judgment Regarding Validity Of Assessments And Places Burden Of Proof On Assessing Agency

California Farm Bureau Federation et al. v. California State Water Resources Control Board, (January 17, 2007, C050289) __ Cal.App.4th__ http://www.courtinfo.ca.gov/opinions

By David P. Lanferman and Ella Foley-Gannon

The Court of Appeals for the Third Appellate District has declared that regulatory fee schedules adopted by the State Water Rights Control Board (“Board”) in 2003, imposing new annual fees on holders of water rights permits and licenses are unconstitutional and invalid. The decision was based largely on the court’s finding that the Board failed to demonstrate the requisite “proportionality” between the costs of the Board’s regulatory program and the fees imposed on the targeted fee payors, and addressed several important issues frequently raised in the implementation and litigation of regulatory fees.…

Continue Reading New State Fees For Water Rights Permits and Licenses Unconstitutional Due To Failure To Demonstrate Reasonable “Proportionality” To Fee Payors

Bighorn-Desert View Water Agency v. Verjil, (July 24, 2006, S127535) __ Cal.4th __

By Dave Lanferman and Misti Schmidt

On July 24, the California Supreme Court unanimously held that the initiative power reserved to the voters by Article XIII C of the California Constitution permits use of an initiative to reduce or repeal water delivery charges, and suggested that this initiative power extends to all local government levies that are ordinarily understood to be fees or charges. However, the Court also held that XIII C does not permit such initiatives to require voter approval of future increases in those charges, and invalidated the particular initiative proposal on this basis. The Court’s decision acknowledged concerns that recognition of the right of local voters to repeal or reduce governmental fees by initiative may result in fiscally irresponsible actions by voters, but invoked the presumption that governing boards and their voters will act reasonably and in good faith to reach financially and legally sound compromises on fee-setting actions.…

Continue Reading California Supreme Court Permits Use Of Local Initiatives To Reduce Or Repeal Water Delivery Charges, But Such Initiatives May Not Require That Future Rate Increases Be Submitted For Voter Approval

By David P. Lanferman

The recent decision of the California Supreme Court in Barratt-American v. City of Rancho Cucamonga(37 Cal.Rptr.3d 149) [covered in an earlier update on this site] raises serious questions as to the way many jurisdictions calculate, collect, and apply fees from developers for building permits and building inspections. Back in 1993, the California Attorney General published an opinion which concluded that fees for building permits and inspections are required to be based on the actual or reasonable costs of providing such services, rather than on the value of the proposed construction or improvements [76 Ops.Cal.Atty.Gen. 4]. Nevertheless, many (perhaps most) cities and counties continue to charge building permit fees which are based on the valuation of the construction, rather than being based on staff time and costs of providing service. To the extent that such valuation-based fees may exceed the reasonable costs of providing those services, recent court decisions may now hold cities and counties accountable for the excess revenues collected.
Continue Reading Building Permit Fees: Considerations Raised by the Recent Cal. Supreme Court Decision in Barratt-American v. City of Rancho Cucamonga

By David P. Lanferman

In Barratt American, Inc. v. City of Rancho Cucamonga, the California Supreme Court clarified questions of procedure and potential remedies available in actions challenging building permit and inspection fees under the Mitigation Fee Act, California Government Code § 66000 et seq. (the “Act”). Appellant Barratt American had sued the City on the basis that its inspection and permit fees (1) exceeded the City’s costs of providing building inspection services; and (2) the City was improperly accumulating excessive fee revenues from its building permit operations. The Court agreed with lower court holdings that, when building inspection and permit fees are at issue, the only statutory relief was an action for invalidation of the resolution pursuant to Gov. Code § 66022. However, the Court disagreed with lower courts that Barratt’s action was barred by the 120-day statute of limitations applicable under § 66022, finding instead that the City’s reenactment and minor modification of the building permit fee schedule started a new limitations period. Lastly, the Court held that, when building inspection and permit fees are at issue, the appropriate remedy under the Act was not a refund but rather to reduce the fees going forward.
Continue Reading Cal Supreme Court Illuminates the Path for Suing Local Entities Over Excessive Building Permit Fees