Agenda - Planning Commission - 10/04/2012

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Zoning Bulletin July 10, 2012 1 Volume 6 1 No. 13 , Homes II, L.L.C., John Henry Homes, Inc., and Charleston Signature Homes, L.L.C., all: sought zoning certificates to construct single-family homes; paid a $200 zoning -application fee; and, under protest, paid impact fees of $2,030.16 per application. These developers, along with Home Builders Association of Greater Cincinnati, (collectively, the "Developers") eventually brought an ac- tion against the Township, challenging the impacts. The Developers alleged that the impact fees were a prohibited form of taxation that were contrary to Ohio's home rule statute. Under Ohio's home rule statute, limited -home -rule townships such as the Township here, are prohibited from enacting taxes other than those authorized by general law. Here, the Developers noted that Ohio law already empowers townships to employ specified methods of taxation to raise money to pay for police and fire service (R.C. 505.51 and 505.39), parks (R.C. 511.27 and 511.33), and roads (R.C. 5571.15, 5573.07, 5573.10, 5573.11, and 5573.211). There was no dispute that the impact fees imposed by the Township did not meet the require- ments of those methods of taxation. The Developers argued that the "impact fees" imposed by the Township were taxes "other than those authorized by general law," and thus the Town'ship was unauthorized to impose them. The Township maintained that the impact fees were permitted fees, not taxes. Finding there were no material issues of fact in dispute, and deciding the matter on the law alone, the trial court issued summary judgment in favor of the Township. The Developers appealed. The Twelfth District Court of Appeals affirmed. It held that, contrary to the Developers' arguments, the impact fees were fees and were not a prohibited form of taxation, and did not conflict with general laws of the state. The Developers again appealed. . DECISION: Judgment of court of appeals reversed and matter remanded. The Supreme Court of Ohio held that the Township's impact fees were taxes, imposed in violation of Ohio's limited home rule statute. In so holding, the court explained that in order to determine whether certain assessments are taxes, it must analyze "the substance of the assessments and not merely their form." Impact fees are a revenue -generating measure designed to support infrastructure improvements benefitting the entire township, said the court. Whereas, "[t]axation refers to those general burdens imposed for the purpose of supporting the government, and more especially the method of providing the revenues which are expended for the equal benefit of all the people." The court acknowledged that it was "not possible to come up with a single test that will correctly distinguish a tax from a fee in all situations where the words 'tax' and 'fee' arise." However, the court was able to look to its own case law and that of other jurisdictions for guidance in making its determina- tion in this case. The court said that in determining whether an assessment is a fee or a tax, the court must consider: "(1) the entity that imposes the assess- © 2012 Thomson Reuters 5