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NATIONAL LEGAL RESEARCH GROUP INC

2421 IVY ROAD, POST OFFICE BOX 7187
CHARLOTTESVILLE, VIRGINIA 22906-7187
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e-mail: nlrgi@aol.com web: www.nlrg.com

March 30, 2001

Michael D. Thompson, Esquire
Post Office Box 729
Charles Town, West Virginia 25414

Re: West Virginia/Local And State Government/Powers/Impact Fees--County
File: 35-37567-015

Your
File: Jefferson County

Dear Mr. Thompson:

Enclosed is the memorandum you requested on the above-referenced matter. As you will see, the weight of authority is against the power of a West Virginia county commission to impose the proposed developer's impact fee pursuant to W. Va. Code Ann. §§ 8-24-1 et seq., thereby avoiding compliance with the prerequisites for impact fees which are set forth in the Local Powers Act.

Thank you for using our services.

Sincerely,

John M. Stone
Senior Attorney,

JMS /bhm
Enclosures

MEMORANDUM

TO: Michael D. Thompson, Esquire
FROM: National Legal Research Group, Inc John M. Stone, Senior Attorney
RE: West Virginia/Local And State Government/Powers/Impact Fees- -County
FILE: 36-37567-015 March 30, 2001

YOUR FILE: Jefferson County

QUESTION PRESENTED

Does a West Virginia county commission have the implied authority under W. Va. Code Ann. §§ 8-24-1 et seq. to impose a developer's fee on developers based on the impact of a development on community infrastructure and services?

CONCLUSION

A county commission does not have such authority. A specific provision in the Local Powers Act gives a county the power to impose impact fees but only if certain prerequisites are met. Section 8-24-30, from which the implied power would have to come, does not mention impact fees and has been given a narrow interpretation. The more specific statutory provision in the Local Powers Act controls over the general provisions of § 8-24-30 on the issue of authority to impose impact fees. Statutes on land use controls, like § 8-24-30, are in derogation of common-law property rights and thus are to be strictly, not expansively, construed.

A county in West Virginia has only such powers as are expressly granted by the legislature, are necessarily implied from express powers, or are essential and indispensable. Doubts as to powers are resolved against exercise of the power. An express power to use impact fees is granted by the Local Powers Act, if prerequisites are met. No such power is expressly granted by, or necessarily implied in, § 8-24-30 or the other statutes on subdivision regulation.

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The weight of authority from other jurisdictions, especia1ly those following the Dillon Rule, is that impact fees imposed on new development are not implicitly authorized by general police power enabling legislation, and that exercise of any expressly granted power to impose impact fees must be undertaken in compliance with all conditions or restrictions placed on the exercise of that power.

DISCUSSION OF AUTHORITIES

I. West Virginia

The primary holding in Kaufman v. Planning & Zoning Commission of City of Fairmont, 171 W. Va. 174, 298 S.E.2d 148 (1982), was that, given the lack of specificity in the legislature's use of "harmonious development" in W. Va. Code Ann. § 8-24-30(4), the city could not use that factor to deny subdivision approval without first specifying in its subdivision ordinance what considerations could be included under such a requirement. In the case before the court, the city planning commission had improperly considered the alleged effect on property values and the rental nature of the proposed housing project or the economic background of the renters. Similarly, commission members had erred in taking into consideration matters outside the evidentiary record, such as their own life experiences in the area.

The thrust of Kaufman, then, is that a developer must have advance notice, through statutes and any local ordinances and regulations, of what requirements the developer must meet for

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approval of a subdivision. See also Singer V. Davenport, 164 W. Va. 665, 264 S.E.2d 637, 642 (1980) ("Obviously the regulations of the planning board must be reasonably definite and carefully drafted so that property owners may know in advance what is required of them and what standards and procedures will apply."). The court in Kaufman was unwilling to give an expansive reading of § 8-24-30 so as to allow it to encompass the factors which the planning commission had taken into account in denying approval of the subdivision application before it. It stands to reason that the court similarly would be reluctant or unwilling to give § 8-24-30 the kind of expansive interpretation which is necessary in order to see that statute as authorizing the fees proposed by Citizens for Jefferson's Future (hereinafter "CJF")

Mr. Michael's memorandum for CJF asserts that § 8-24-30 clearly contemplates use of impact fees in local subdivision regulations, stating in particular that an impact fee requirement would qualify as a "provision," as that term is used in § 8-24-30(5)

In determining whether an application for approval shall be granted, the commission shall determine if the plat provides for:

. . . .

(5) Fair allocations of areas for streets, parks, schools, public and semipublic buildings, homes, utilities, business and industry.

As a condition of approval of a plat the commission may specify:

(1) The manner in which streets shall be laid out, graded and improved;

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(2) Provisions for water, sewage and other utility services;

(3) Provision for schools;

(4) Provision for essential municipal services; and

(5) Provision for recreational facilities.

While "provision" could be construed broadly enough to include impact fees, it is not obvious that it should be so construed, and the statute does not mention such fees. For example, a "provision" for utilities, schools, municipal services, or recreational facilities could simply mean a requirement that space in a subdivision be allocated for such uses, as is referred to in the first sentence of § 8-24-30(5). It is not redundant for the statute to be read as, first, requiring a determination that a plat provides for fair allocation of areas for specific uses and, second, allowing the commission to condition plat approval on the provision of space for such uses. The court in Singer appears to have contemplated such a reading of this statute:

W.Va.Code, 8-24-30(5) [1969] sets forth certain criteria which are within the power of the developer and certain criteria which are exclusively within the power of the government. Obviously, a developer cannot build a school and requiring him to do so may be unreasonable; however, he is capable of providing such facilities as protected areas for children to await their school buses.

Different rules may be developed for differing categories of land based upon topography, the availability of services from existing public service districts, or the existence of highways, but the planning commission is not entitled to block out a section of unzoned land and, in effect, forbid its subdivision regardless of how artfully they design their regulations to this end.

264 S.E.2d at 642-43 (emphasis added)

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CJF asserts that the fees they propose are not "preempted" by the Local Powers Act, W. Va. Code Ann. §~ 7-20-1 et seq., which specifically authorizes impact fees, but only if seven prerequisites, as described in § 7-20-6 (a) (1) - (7), are satisfied. The argument is that "impact fees," as defined in § 7-20-3 (g), is defined to exclude fees otherwise allowed by law. Section 7-20-3(g) reads as follows:

(g) "Impact fees" means any charge, fee, or assessment levied as a condition of the following: (1) Issuance of a subdivision or site plan approval; (2) issuance of a building permit; and (3) approval of a certificate of occupancy, or other development or construction approval when any portion of the revenues collected is intended to fund any portion of the costs of capital improvements for any public facilities or county services not otherwise permitted by law. An impact fee does not include charges for remodeling, rehabilitation, or other improvements to an existing structure or rebuilding a damaged structure, provided there is no increase in gross floor area or in the number of dwelling units that result therefrom.

(Emphasis added.) It is not at all clear that the phrase "not otherwise permitted by law" modifies the phrase "charge, fee, or assessment." In fact, the phrase "not otherwise permitted by law" seems to hang by itself at the end of the sentence. It is more logical, however, to read that phrase as modifying "public facilities or county services," which immediately proceeds it. In any case, this point could be moot. Even accepting CJF's reading of this statute, the fees they propose could be imposed, in addition to the impact fees authorized by §~ 7-20-1 et seq., only if they are "permitted by law." As the following discussion indicates, the better supported position is that the proposed fees are not permitted or authorized by West Virginia law.

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CJF notes that West Virginia's statute on subdivision approval, W. Va. Code Ann. § 8-24-30 (1998), was enacted in 1969, while the Local Powers Act was enacted in 1990. It is true that the legislature is presumed to know of its prior enactments, and it may also be true that the legislature did not mean to implicitly repeal or revoke powers conferred by § 8-24-30 when it passed the Local Powers Act. Where there is a conflict between two pieces of legislation, the one later enacted may be declared to be the law, as containing the latest expression of legislative will; however, that rule of construction is applied only where there is an irreconcilable conflict between the different statutes, and there is no other means available for ascertaining legislative intent. Ebbert v. Tucker, 123 W. Va. 385, 15 S.E.2d 583 (1941).

It does not follow, however, that the legislature meant to implicitly authorize impact fees, or their functional equivalent, in passing § 8-24-30, and that such authorization was unaffected by later passage of the Local Powers Act. In fact, it seems more plausible that the legislature enacted the Local Powers Act to give localities a specific power (to use impact fees) that localities had not previously been granted by the more general powers of subdivision control referred to in § 8-24-30. If, as CJF contends, the power to impose impact fees was conferred by § 8-24-30 in 1969, there would have been no need for the 1990 legislation. It is always presumed that the legislature will not enact a meaningless or useless statute. Baker v. Board of Education, 270 W. Va. 513,

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534 S.E.2d 378 (2000); Brooks v. City of Weirton, 202 W. Va. 246, 503 S.E.2d 814 (1998)

As a general rule, a statute that is more specific with regard to a subject will control over a more general statute. Dalton V. Spieler, 184 W. Va. 471, 401 S.E.2d 216 (1990); State v. Hillyard, 172 W. Va. 605, 309 S.E.2d 105 (1983) . While this principle is generally used to resolve conflicts between statutes, in the instant case it suggests that the specific grant of a conditional power to use impact fees in the Local Powers Act is the~ authoritative statement on the subject by the legislature, and that counties may not avoid the conditions imposed by the legislature by resort to a more general statute, § 8-24-30, which is silent on the subject of such fees.

Statutes relating to the same subject matter should be read and applied together so that the legislature's intention can be gathered from the whole of the enactments. Dababnah v. West Virq~inia Board of Medicine, 207 W. Va. 621, 535 S.E.2d 220 (2000); State v. Ritchie County Court, 147 W. Va. 521, 129 S.E.2d 319 (1963) (construing two statutes on offices for county officers); Delardas v. Morgantown Water Commission, 148 W. Va. 76, 137 S.E.2d 426 (1964) (construing two statutes on municipal sewer systems)

The Local Powers Act and § 8-24-30 can be read and applied together to mean that, while § 8-24-30 grants general powers over subdivision regulation, the Local Powers Act grants an additional, specific power which can only be exercised if the stated conditions are met.

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Statutes in derogation of common law are strictly construed and are given effect only to the extent that is clearly indicated by the terms used; nothing can be added except by necessary implication arising from such terms. Teter v. Old Colony Co., 190

W. Va. 711, 441 S.E.2d 728 (1994) (declining to interpret statute as preventing operation of common-law rules of evidence) . Since statutes regulating land use through zoning and subdivision controls are in derogation of common-law rights to use land, a court may well decline to read into § 8-24-30 a power to impose fees that the legislature did not expressly confer. Moreover, because subdivision regulation can mean various specific powers apart from imposition of fees, the power to impose fees does not arise by necessary implication from the terms in § 8-24-30.

Nothing in the West Virginia Constitution prohibits exercise by a county government of powers ordinarily associated with municipalities. Taylor County Commission v. Spencer, 169 W. Va. 37, 285 S.E.2d 656 (1981). Like a county, however, a municipal corporation has only such powers as are expressly granted to it by the legislature, or are fairly implied or essential and indispensable; moreover, if any reasonable doubt exists as to whether a power exists, the power must be denied. Calabrese v. City of Charleston, 204 W. Va. 650, 515 S.E.2d 814 (1999); McCallister v. Nelson, 186 W. Va. 131, 411 S.E.2d 456 (1991)

A county commission is a corporation, created by statute, and possessed only of such powers as are expressly conferred by the Constitution and the legislature, together with such as are

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reasonably and necessarily implied in the full and proper exercise of express powers; the commission can only do such things as are authorized by law, and in the mode prescribed. State v. Teach, 187 W. Va. 271, 418 S.E.2d 585 (1992); Butter v. Tucker, 187 W. Va. 145, 416 S.E.2d 262 (1992)

In Teach, the court ruled that an expressly granted power in counties to adopt and enforce building codes necessarily implied the power to punish violators by means of a pecuniary fine or penalty, even though the statute was silent on that particular-~ subject. In reversing a circuit court's ruling that the ordinance imposing monetary penalties was invalid because not authorized by statute, the court stated:

It is undisputed that neither W.Va.Code, 29-3-5b nor W.Va.Code, 7-l-3n expressly authorizes a county commission adopting the state building code to enact penalties for violations thereof. Nor are we directed to any general grant of power to impose penalties for the violation of county ordinances, such as that conferred upon municipalities.

It appears, however, that such power may arise by implication. The general rule is that a grant of the police power to a local government or political subdivision necessarily includes the right to carry it into effect and empowers the governing body to use proper means to enforce its ordinances. . . . Pursuant to this rule, it has been held that even in the absence of an express grant of authority, the power to punish by a pecuniary fine or~pena1ty is implied from the delegation by the legislature of the right to enforce a particular police power through ordinances or regulations. .

W.Va.Code, 29-3-5b(d), provides: "Enforcement of the provisions of the state building code is the responsibility of the respective local jurisdiction." By authorizing county commissions to exercise the police power with regard to the safety and quality of building construction, maintenance, and operation, and by placing

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the responsibility for enforcement on the adopting local government, the legislature has, by implication, granted counties the power to enforce violations of building code ordinances by imposing a fine. We conclude, therefore, that the power to impose pecuniary penalties for violations of the county building code was within the legislature's delegation of authority to the county commission.

418 S.E.2d at 589-90 (footnotes and citations omitted).

An implied power to use penalties as a means of enforcing an express power to enact a building code makes sense because the building code would not accomplish its purposes if it could not be enforced effectively. By contrast, the general powers of subdivision control are capable of being exercised without reading into them an additional implicit power to impose fees proposed by CJF. If the county wishes to use the mechanism of impact fees, it may do so, but only after fulfilling prerequisites set forth in the Local Powers Act.

If there is a conflict between a local ordinance and a state statute, the statute prevails and the ordinance is of no force or effect. Rite Aid of West Virginia, Inc. v. City of Charleston, 189 W. Va. 707, 434 S.E.2d 379 (1993); Vector Co. v. Board of Zoning Appeals, 155 W. Va. 362, 184 S.E.2d 301 (1971) (ordinance requiring four out of five members of zoning board to agree on granting exceptions to zoning ordinance was of no force and effect where statute required approval by only a bare majority). In other words, a local ordinance must be consistent with the law of the state. City of Huntington v. Salyer, 135 W. Va. 397, 63 S.E.2d 575 (1951). If the county's ordinance on impact fees is to be

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consistent with state law, it must be adopted in compliance with the Local Powers Act, and § 7-20-6 (a) (1) - (7), in particular.

II. Other Jurisdictions

There is some authority for the position that even broadly worded statutes can contain the authority for municipal impact fees implicitly, despite the absence of explicit references to such fees, or perhaps even to conditions attached to subdivision approval. In upholding a city's authority to require subdividers either to dedicate park land, or pay money in lieu thereof, the court in Coulter V. City of Rawlins, 662 P.2d 888, 901 (Wyo. 1983), stated:

The appellant correctly points out that there is no statute upon which the City of Rawlins can rely which serves as express authority for the enactment of a park-land dedication ordinance, which also contemplates a plan for the payment of money in lieu of dedication. However, the statutory provisions previously set out clearly and unqualifiedly empower the City of Rawlins to hold and acquire property for the purpose of establishing parks and recreational facilities thereon. With regard to this and the City's power to plan, zone and regulate property development, counsel for the City argues that the power to adopt Ordinance No. 7-80 can be fairly and necessarily implied. We agree.

See also Call v. City of West Jordan, 606 P.2d 217 (Utah 1979) (subdivision ordinance requiring dedication of land for flood control and/or recreation, or cash payment in lieu thereof, was authorized in light of planning and subdivision statutes, viewed together).

In some cases local impact fees have been held authorized by state statutes which may not have explicitly mentioned such fees,

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but which were at least so specific as to authorize conditions to be placed on subdivision approval which relate to the adequacy of public spaces or facilities. For example, in Jenad, Inc. v. Village of Scarsdale, 18 N.Y.2d 78, 83, 271 N.Y.S.2d 955, 957 (1966), New York's highest court stated:

We find in section 179-i of the Village Law a sufficient grant to villages of power to make such exactions. In specific terms the statute validates "in proper cases" requirements by village planning boards that a subdivision map, to obtain approval, must show "a park or parks suitably located for playground or other recreation purposes." There is, to be sure, no such specificity as to a village rule setting up a "money in lieu of land" system. However, section 179-i says that a village planning board, when the specific circumstances of a particular plat are such that park lands therein are not requisite, may "waive" provision therefor, "subject to appropriate conditions and guarantees". We agree with the above-cited opinions of the State Comptroller that the phrase "appropriate conditions and guarantees" reasonably includes the kind of arrangement here made. That is, instead of allotting part of the subdivision itself for parks and play areas, the subdivider may be ordered to pay so much per lot into a separate village fund which is "to be used for park, playground and recreational purposes", in such manner as the village trustees may decide.

See also Jordan v. Village of Menomonee Falls, 28 Wis. 2d 608, 137 N.W.2d 442 (1965), appeal dismissed, 385 U.S. 4 (1966) (subdivision ordinance requiring fee of $200 per lot in lieu of dedication of land for school, park, or recreation was authorized by subdivision regulation statute which included a declared purpose to facilitate adequate provision for schools, parks, playgrounds, and other public requirements).

The circumstances in the above-mentioned cases are different from those in West Virginia. There were no specific statutes, like the Local Powers Act, which authorized impact fees if certain

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conditions were met. In other words, if the legislature has not already spoken explicitly on the subject, it is more supportable to argue that the power to impose impact fees may be inferred or implied from a more general statute on regulation of subdivisions.

In any case, some courts have held that impact fees, or some close variation on them, were not authorized by, or exceeded the scope of, enabling statutes on zoning and subdivision regulation. See Coronado Development Co. v. City of McPherson, 189 Kan. 174, 368 P.2d 51, 54 (1962) ("The exaction of cash payments was a material departure from the statutory authorization [on subdivision approval] and not reasonably related to the regulatory power delegated to the City."); Gordon v. Village of Wayne, 370 Mich. 329, 121 N.W.2d 823 (1963); City of Montgomery v. Crossroads Land Co, 355 So. 2d 363, 365 (Ala. 1978) ("without specific legislative authorization, the City of Montgomery has no power to require the payment of a fee in lieu of dedication of land for public parks.")

A county and county school district have been held by the Supreme Court of Nevada to lack the authority to impose a "fair share cost program" involving a fee imposed on new subdivision development to pay for new school facilities. Douglas County Contractors Association v. Douglas County, 112 Nev. 1452, 929 P.2d 253 (1996). Rather than being simply a regulatory measure, the fee had all the indicia of an assessment against each dwelling unit, making it an impact fee as defined by a statute authorizing such fees. As such, however, the fee only could be used to finance such capital improvements as were set out as an exclusive list in the

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impact fee statute. 929 P.2d at 257. To have accepted the defendants' contention that the fee was anything other than an impact fee would be to render "essentially meaningless" the constraints written into the impact fee enabling statute.

The defendants also argued in Douglas County to no avail that the fee at issue was authorized by one or more of eight different police power statutes, including general planning and zoning statutes. Rejecting this as an attempt to make an "end run" around the specific impact fee legislation with which the defendants had not complied in full, the court stated that finding authority for the fee in the other statutes "would collide with the strict limitations placed upon political subdivisions by the legislature." Id. at 260. The legislature had carefully planned the means of orderly school financing using methods other than the challenged fee, and such plans occupied the entire field on the subject. For this reason as well, the court ruled that the challenged fee had been preempted by Nevada's impact fee enabling legislation. Id. at 261; see a1so Kamhi v. Town of Yorktown, 141 A.D.2d 607, 529 N.Y.S.2d 528 (1988), aff'd 74 N.Y.2d 423, 548 N.Y.S.2d 144 (1989) (town recreation fee imposed as a condition of site plan approval could not stand where it was in contravention of statute not authorizing such a fee at the site plan approval stage).

In Home Builders & Contractors Association of Palm Beach County_, Inc. v. Board of County Commissoners, 446 So. 2d 140 (Fla. Dist. Ct. App. 1983), an impact fee ordinance was held to have been authorized by general constitutional and statutory provisions, but

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such provisions had the effect of giving the county in question home rule powers. Thus, unlike the Dillon Rule which is observed in West Virginia, the Florida county could exercise any powers not preempted by the legislature. Accord Hollywood, Inc. v. Broward County, 431 So. 2d 606 (Fla. Dist. Ct. App. 1983); see also Krughoff v. City of Naperville, 68 Ill. 2d 352, 369 N.E.2d 892 (1977) (upholding requirement of land dedication, or money in lieu of land, for subdivision approval as an exercise of home rule powers); City of College Station v. Turtle Rock Corp., 680 S.W.2d. 802 (Tex. 1984) (same)

The Supreme Court of Colorado has held that a statute which specifically authorized an impact fee for schools in connection with subdivision approval could not be enlarged upon by a county under its general land use authority, so as to require an additional fee when a certificate of occupancy or building permit is sought. Board of County Commissioners v. Bainbridge, Inc., 929 P.2d 691 (Cob. 1996). In so ruling, the court observed that Colorado counties have only such powers as are expressly granted them, or are reasonably implied from express powers. j~ at 699. Moreover, the court stated that the specific statutory language limiting the fees to the subdivision approval process controlled over the broadly stated powers of counties under the state's land use law. Id. at 707.

A city's impact fees imposed on all new construction requiring a building permit was held to be invalid for lack of statutory authority in Idaho Building Contractors Association v. City of

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Coeur D'Alene, 126 Idaho 740, 890 P.2d 326 (1995). A development impact fee statute did not apply because of the population of the area in question. Nor could the impact fee's authorization be found in constitutional or statutory provisions which in general terms give municipalities the authority to enact police power measures. In fact, the court in Coeur D'Alene held that because the impact fees generated revenue which was used for capital improvements throughout the city, not solely to benefit permit applicants, they constituted taxes that were not within the legitimate regulatory powers of the city. 890 P.2d at 330; accord Haugen v. Gleason, 226 Or. 99, 359 P.2d 108 (1961) (nothing in the subdivision regulation statute delegated a power to levy any tax or to produce revenue)

In Newport Building Corp. v. City of Santa Aria, 210 Cal. App. 2d 771, 26 Cal. Rptr. 797 (1962), the court struck down a city ordinance requiring a subdivider to pay a per-lot fee as a condition precedent to approval of a subdivision map, to partially cover outlays for parks, recreation, and fire protection. The fee was in conflict with the state's Subdivision Map Act, which confined local subdivision regulation to matters pertaining to design and improvements and did not authorize a fee like that at issue. Accord Santa Clara County Contractors & Homebuilders Association v. City of Santa Clara, 232 Cal. App. 2d 564, 43 Cal. Rptr. 86 (1965). As support for its holding, the courts in Newport Building Corp. and City of Santa Clara cited Kelber v. City of

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Upland, 155 Cal. App. 2d 564, 318 P.2d 561 (1957). In pertinent part, the court in Kelber stated:

The authority to adopt local ordinances containing requirements supplementary to the Map Act is limited by the terms of the statute. While the power of a city to adopt many regulations in connection with the matters covered by the statute may well be implied, even though not expressly stated, the power to require the payment of large fees or contributions for general city benefits as a condition of the approval of a map may not reasonably be implied, and it is entirely inconsistent with the language and apparent intent of the statute.

318 P.2d at 566 (emphasis added); see also Home Builders Association of Central Arizona v. City of Apache Junction, 198 Ariz. 493, 11 P.3d 1032 (Ct. App. 2000) (development fee imposed on residential development to finance additional schools was not implicitly authorized by any of various statutes, including those on city's powers to abate nuisances, to impose special assessments, and to expend money for recreational facilities on school property).

A statute authorizing a city or county to impose development fees in connection with a subdivision approval requires strict compliance with its terms. Trimen Development Co. v. King County, 124 Wash. 2d 261, 877 P.2d 187 (1994) (park development fees upheld as condition of plat approval). In the instant case, the West Virginia legislature has spoken on the subject of impact fees in the Local Powers Act, permitting them only when each of seven prerequisites is met. Strict compliance with such prerequisites is required before impact fees can be used. It would render the Local Powers Act a nullity if localities could impose what for all purposes are impact fees without complying with the Local Powers

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Act, simply by arguing that the authority for such fees emanates from some other, more general, statute.

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