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Mississippi Circuit Court Knocks Down Local Impact Fee Ordinance

The municipality had imposed multiple impact fees for fire and police facilities, park and recreational facilities and water and roadway infrastructure, totaling almost $5,000 per single-family home.

In knocking down the fee program, the court ruled that the state's Home Rule Statute did not enable Ocean Springs to implement the fees in the absence of express enabling authority.

The court found that the municipality was not authorized to impose fees through its general planning and zoning powers, and determined that the purported “regulatory” fees were operating instead as illegal taxes. According to the court, the city's “venture into the realm” of taxation, without express taxing authority, was illegal.

The court ordered Ocean Springs to develop a detailed accounting of funds already collected and to submit a written plan for refunding the fees. Ocean Springs is certain to appeal the circuit court's decision and the case could ultimately end up in the Mississippi Supreme Court.

NAHB's Legal Action Fund provided financial assistance to builder interests in this case, and is currently accepting applications for funding that will be considered during the NAHB Fall Board of Directors Meeting in Columbus, OH, in September.

For further information on this case, e-mail John Luther, NAHB legal counsel, or call him at 800-368-5242 x8329.

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