Agenda - Planning Commission - 04/02/1996

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Z.B. February 15, 1996- Page 7 Fees -- Developers Claim Wetlands Filing Fees Are Really Unconstitutional Taxes Baker v. Department of Environme~tal Protection, 657 N.E. 2d 480 (Massachusetts) ]995 Under a state statute, landowners intending to develop wetlands in Massachusetts had to file a "notice of intent to develop wetland." That statute and other state regulations required such developers to pay a filing fee to "defray state and local administrative costs." If unsure, landowners could ask the conservation commission for a determination of whether they had to file. Some landowners who paid the filing fee sued the state Department of Environmental Protection, asking the court to declare the fees were unautho- rized and were unconstitutional taxes masquerading as fees. Under state law, the characteristics considered in determining whether a charge was a fee rather than a tax were: whether the charge was levied in exchange for a particular governmental service which benefited the party pay- ing the fee in a manner not shared by other members of society; whether the charge was compulsory or a matter of choice; and whether the charge was used to raise revenue or offset the cost of governmental services. The court found the total revenue received by the department in connec- tion with the wetland development filings did not even cover the actual costs associated with administering the statute, so the charges were lawful fees. The landowners appealed. DECISION: Affirmed. The trial court properly determined the wetland filing charges were law- ful fees, not unauthorized taxes. The fees were charged in exchange for government services benefiting those paying the fees in ways not shared by other members of society. Although the protection of wetlands was a public benefit, members of the public did not commonly develop wetlands. Those particular members who owned wetlands could undertake development expecting to gain an economic benefit. In return, landowners shouldered the financial burdens associated with protecting wet- lands from adverse development. Owners of wetlands paid the filing charges by choice; they were charged only if they chose to use the government services associated with wetlands development. Landowners were no more compelled to pay the fees than they were compelled to develop their lahd. Agency fees could serve regulatory purposes by deliberately discouraging particular conduct by making it more expensive. The charges were not used to raise revenue. The fees were authorized for the purpose of defraying state and local administrative costs. The revenue received did not cover the department's actual cost of administering the statute. Nuclear Metals Inc. v. Low-Level Radioactive Waste Management Board, 656 N.E. 2d 563 (]995). Emerson College v. Boston, 462 N.E. 2d ]098 (1984).