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Rough Proportionality Standard Does Not Apply to Impact Fees

In Dabbs v. Anne Arundel County, 458 Md. 331, 182 A.3d 798 (2018), the Court of Appeals affirmed the denial of refunds for impact fees paid by developers to Anne Arundel County even though the fees were unused or unencumbered by the County for six years.

Starting in 1987 Anne Arundel County imposed road and sewer impact fees, usually on developers and builders. Anne Arundel County Code §17-11-210, part of the Anne Arundel County Impact Fee Ordinance, provided that under certain circumstances, including failure of the County to utilize or encumber funds within six years, the fees were to be refunded. A later statute, Bill 27-07, permitted the application of the fees to capital projects that had been completed before Bill 27-07 was enacted, and this precluded refunds to the persons who paid the fees.

The plaintiffs in Dabbs, who have been in litigation for 15 years, claimed that the Anne Arundel County Impact Fee Ordinance was a taking of property subject to the “rational nexus/rough proportionality test” set forth in the United State Supreme Court case of Dolan v. City of Tigard, 512 U.S. 374 (1994), and Nollan v. California Coastal Commission, 483 U.S. 825 (1987). The Supreme Court had expanded these rulings in Koontz v. St. Johns River Waste Mgmt. Dist., 570 U.S. 595 (2013). However, the Court of Appeals read Koontz as being limited to situations involving costs assessed against governmental demands for money in connection with the permit review process for an individual property being developed. According to the Court of Appeals, the nexus and rough proportionality rule does not apply in situations like that in Dabbs, which involved a predetermined legislatively-imposed development impact fee based on a pre-established monetary schedule that applies to anyone developing property in a particular district.

The plaintiffs in Dabbs also argued that Bill 27-07, which eliminated their right to a refund of impact fees paid if the fees were not used or encumbered within six years, was invalid. However, the Court of Appeals found that the plaintiffs had no vested rights in impact fee refunds, and Bill 27-07 did not effectuate a substantive change in policy, but only a change in remedy.

Senior Judge Glenn T. Harrell, Jr. wrote the unanimous opinion in Dabbs for the Court of Appeals. Senior Judge Dale R. Cathell was on the panel for the decision.

On to the Supreme Court?

William A. Dabbs, Jr., one of the original plaintiffs, filed a petition for certiorari with the United States Supreme Court on July 10, 2018, No. 18-54. The Supreme Court has not yet decided whether to grant cert.

For questions, please contact Ed Levin (410) 576-1900.

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Date

09.04.18

Type

Publications

Authors

Levin, Edward J.

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