City of Ocean Springs v. Homebuilders Ass'n. of Miss., Inc., et al.


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Docket Number: 2004-CC-01278-SCT
Oral Argument: 02-15-2006
 

 

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Supreme Court: Opinion Link
Opinion Date: 06-15-2006
Opinion Author: RANDOLPH, J.
Holding: AFFIRMED
Additional Case Information: Topic: Assessment of impact fees - Authority of municipality - Section 21-17-5 - Section 17-1-11 - Collateral estoppel
Judge(s) Concurring: WALLER AND COBB, P.JJ., EASLEY, CARLSON, AND DICKINSON, JJ.
Non Participating Judge(s): DIAZ, J.
Dissenting Author : GRAVES, J.
Concurs in Result Only: SMITH, C.J.
Procedural History: Bench Trial
Nature of the Case: CIVIL - OTHER
Trial Court: Date of Trial Judgment: 05-24-2004
Appealed from: Jackson County Circuit Court
Judge: Dale Harkey
Disposition: Held the impact fees to be a void taxing measure
Case Number: 2003-00093(3)
Note: Nature of the Case: Impact Fee Ordinances
  Party Name: Attorney Name:  
Appellant: MAYOR AND BOARD OF ALDERMEN, CITY OF OCEAN SPRINGS, MISSISSIPPI




 RALPH PRESTON KING, II, ROBERT H. FREILICH, E. TYSON SMITH, JOHN B. EDWARDS, II



  
Appellee: HOMEBUILDERS ASSOCIATION OF MISSISSIPPI, INC., et al. STEVEN H. SMITH, BENNY McCALIP “MAC” MAY, ROBERT QUENTIN WHITWELL, JR., WILLIAM LEE GUICE, III  
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Topic: Assessment of impact fees - Authority of municipality - Section 21-17-5 - Section 17-1-11 - Collateral estoppel
Summary of the Facts: The Mayor and Board of Aldermen of the city of Ocean Springs adopted a Comprehensive Plan, which included separate impact fee ordinances which authorized the assessment, collection, and expenditure of “development impact fees” for various municipal improvements, services, equipment, and vehicles. The Home Builders Association of Mississippi, Inc. appeared at three public hearings conducted by the City regarding impact fees which were defined as “[a] fee relating to a capital expenditure or service provided by the City which is imposed on new development as a condition of approval of such development as a pre-requisite to obtaining development approval . . .” The impact fees were to be paid in addition to any and all other applicable land-use, zoning, planning, adequate public facilities, platting, or other related fees, requirements, standards, and conditions imposed by the City. After the City’s adoption of the ordinances, The Home Builders Association of Mississippi, Inc. and numerous other parties filed a Bill of Exceptions appealing the adoption of the impact fee ordinances. Appellees claimed that the impact fees constituted facial and per se illegal taxes which the City did not have the power to enact. The circuit court held the impact fees to be a void taxing measure. The City appeals.
Summary of Opinion Analysis: The appellees argue that the City officials assumed authority in violation of Article 4, Section 80 of the Mississippi Constitution and that regardless of how reasonable the City’s fees are, the City was without authority to adopt the fees, and whether the impact fees are reasonably related or roughly proportional to the needs of Ocean Springs is of no import. To date, the Mississippi legislature has not adopted a statute authorizing development impact fees or enabling legislation to authorize a city to adopt and implement impact fees. The City argues the authority to adopt impact fees is derived from Mississippi general planning and zoning statutes, as well as section 21-17-5, the Home Rule statute. The City further argues section 17-1-11 grants authority for the City to impose impact fees even absent Home Rule authority. However, under the Municipal Planning Statutes, sections 17-1-1, et. seq., there are no provisions which grant authority to adopt impact fees or other revenue raising mechanisms to implement the City’s Comprehensive Plan. Home Rule authority grants municipalities authority to impose fees, as long as the imposition is not inconsistent with legislative mandate or the Mississippi Constitution, and is a fee, as opposed to a tax. The chief distinction between a fee and a tax is that a tax is an exaction for public purposes while a fee relates to an individual privilege or benefit to the payer. The fees at issue do not qualify as regulatory in nature. These fees cannot be said to cover “administrative expenses” incurred by the City. In order to obtain a building permit, these fees must be paid; however, the fees are not based on the administrative expense the City incurs in issuing the building permit. The circuit court in this matter did not err in holding the City’s impact fees constituted an illegal tax. The county and city are not authorized to impose taxes without direct authorization from the Legislature. Even under home rule provisions the city and county are explicitly barred from levying taxes other than those authorized by statute. Some of the appellees involved in this case filed suit in state court against Madison. A settlement agreement and a Consent Judgment were entered in the Madison County Chancery Court. The City argues that because some appellees consented to judgment, and that in the settlement, some appellees admitted that cities in Mississippi have the authority to adopt impact fees if they are reasonable, this admission collaterally estops and precludes appellees from re-litigating this issue. Collateral estoppel, unlike the broader question of res judicata, applies only to questions actually litigated in a prior suit, and not to questions which might have been litigated. Madison’s ordinances are not being considered in this matter. Furthermore, the parties are not the same, nor do they fall within the definition of parties in privity.


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