Disguised Takings: Disproportionate Impact Fees

Petitioner operates a business that has its headquarters in the City of Tigard. Because of crowding in the existing headquarters building, petitioner decided to construct a second building on the same site. Petitioner planned to relocate approximately 40 employees from the existing building to the new one. In February 1997, petitioner applied for a building permit for the new building. After reviewing the permit application and other materials relating to the proposed development, the city determined that, the Traffic Impact Fee (TIF) assessed under a Washington County ordinance, petitioner’s proposed development fit the use category  of “general light industrial.”Applying the formula applicable to that category, the city assessed a TIF of $37,102. Petitioner challenges the TIF assessed against it as a taking of its property without just compensation, in violation of the Fifth Amendment to the United States Constitution.

In response to Petitioner’s federal constitutional challenge, respondents argued that the Takings Clause and Dolan‘s rough proportionality test do not apply to the TIF, for three reasons:  (1) the TIF is a tax, not an exaction;  (2) the TIF is not the result of an ad hoc adjudicative decision;  and (3) the TIF, even if it is an exaction, does not require the dedication of property. The state circuit court rejected petitioner’s challenge to the TIF, reasoning that the TIF is a tax and that Dolan therefore does not apply to it. The Oregon Court of Appeals held that Dolan does not extend to a generally applicable development fee imposed on a broad range of specific, legislatively determined subcategories of property through a scheme that leaves no meaningful discretion either in the imposition or in the calculation of the fee. 

Issue Areas:

Limited Government, Property Rights

Case:

Rogers Machinery v. City of Tigard, (US) (merits stage)

Question(s) Presented:

May a local government exact development fees it has adopted through a legislative process without complying with the “rough proportionality” standards of Dolan v. City of Tigard, 512 U.S. 374 (1994)?

ALF’s Amicus Brief:

In an amicus brief ALF argues that the Oregon Court of Appeals erred when it concluded that Dolan does not apply to uniform fees that lack discretion in assessment, because Dolan applies a standard of rough proportionality to all exactions for permissible development, regardless of whether or not discretion is involved in assessment. Because the TIF exaction bears no relationship to the actual traffic impact of the proposed development, it is unconstitutional under Dolan. The Hearings Officer who considered Roger’s application made an uncontested finding that Rogers’ new building would have no impact on traffic because it would merely move existing personnel to a new building. Given that the stated goal of the TIF is to minimize the traffic impact in the area under the ordinance, any fee must be in proportion to the traffic impact. Because the impact is zero, and the fee is around $40,000, it is disproportionate and therefore a violation of Takings Clause of the Fifth Amendment to the United States Constitution. The court below erroneously read Dolan to only apply to adjudications and not to legislative determinations, allowing other municipalities to escape Dolan and the Fifth Amendment under the same reasoning, therefore this Court should grant Certiorari to clarify the scope of protections the Constitution grants to property owners from arbitrary takings.

Status:

On March 3, 2003, Petition for Certiorari was denied.