Agenda - Planning Commission - 12/07/2017

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Zoning Bulletin October 10, 2017 I Volume 11 I Issue 19 requires developers to pay impact fees before the City approves a development project. Those impact fees are designed to defray antici- pated increased city expenditures caused by the proposed development, including increased expenditures for roads, water services, police protection, storm water infrastructure, and sewer services. Utah's Impact Fees Act regulates the manner in which cities may assess and spend such impact fees. (See Utah Code §§ 11-36a-101 to -705.) Various developers (the "Developers") paid impact fees to the City between 2003 and 2006. In 2012, the Developers sued the city. They al- leged that the City violated the Impact Fees Act by failing to spend or encumber all of the impact fees within six years of collection (see Utah Code § 11-36a-602(2)(a)), and by spending portions of the impact fees on impermissible uses (see Utah Code § 11-36a-602(1)). The Develop- ers argued that those violations of the Impact Fees Act constituted "a taking of private property for public use without just compensation" in violation of the Fifth and Fourteenth Amendments to the U.S. Constitu- tion because: (1) any violation of the Impact Fees Act by the City also constituted a per se violation of the takings clause; and (2) the City's failure to spend all of the impact fees on statutorily mandated expendi- tures within six years violated the United States Supreme Court's un- constitutional conditions doctrine requiring monetary exactions in exchange for a land use permit have an essential nexus and rough proportionality between the amount of money requested and the social cost of the proposed development. The Developers also asserted that the City's violations of the Impact Fees Act gave the Developers an "equitable" right to reimbursement of the impact fees they had paid. The City filed a motion to dismiss the Developers' claims. The district court denied the City's motion to dismiss. The City appealed. DECISION: Judgment of district court reversed, and matter remanded. The Supreme Court of Utah determined that the Developers' claims failed, and directed that the district court dismiss them on remand. In dismissing the Developers' takings clause claims for "failure to state a takings claim for which relief can be granted," the court first explained that the Fifth Amendment of the United States Constitution provides that "[p]rivate property [shall not] be taken for public use without just compensation." The takings clause is applied against States through the Fourteenth Amendment, and encompasses physical takings and regulatory takings. Next, the court rejected the Developers' argu- ment that any violation of Utah's Impact Fees Act was a per se violation of the takings clause of the United States Constitution, noting that it is the courts and not the legislature that establish "the bounds of protec- © 2017 Thomson Reuters 9