New Hampshire Municipal Association
New Hampshire Municipal Association

Court Update

Impact Fee Protected by Vesting Statute

R.J. Moreau Companies, Inc. v. Town of Litchfield
No. 2002-011, 12/24/2002

The plaintiff developer was working on two subdivisions: Sawmill Reserve and Brookview Place. Sawmill was approved by the planning board October 5, 1999 and recorded on October 13, 1999. Brookview was approved on August 1, 2000 and recorded on August 17, 2000. On March 14, 2000 the town amended its ordinance to authorize the selectmen to modify impact fees. On August 22, 2000 the planning board used this authority to change the impact fees in Litchfield from .91 cents per square foot to $3.80 cents per foot. The developer subsequently applied for building permits and the town assessed impact fees pursuant to the new fee schedule.

The Supreme Court ruled that the planning board’s assessment of impact fees was erroneous where the developer had established a statutory reliance interest in the lower .91 cent rate, which was in place when both of the subdivision plans were recorded. This statutory reliance interest derives, of course, from RSA 674:39, which allows developers to rely on the status quo of zoning ordinances for four years if they have begun “active and substantial development” within 12 months of approval. The developer is thus, save a few public health related exceptions, exempt from zoning changes for the four years following the recording of his/her plan. The Court clearly stated in its opinion that the town’s authority to revise an impact fee constitutes an amendment to a zoning ordinance and is derived from its zoning power, not from a general police or taxation power. Thus, impact fees do not escape the protections of RSA 674:39.

The town argued that the developer could not have a vested interest in the lower impact fee because the fee had not and could not be assessed until the building permit was issued. The Court disagreed, stating, “Any developer would likely take the existing impact fee schedule into account when proposing its site plan.” The town also argued that the “zoning change” actually took place before the recording of the Brookview subdivision. The Court disagreed, finding that the only change that took place prior to the recording was the town vote to authorize the planning board to make the change. The actual change did not occur until August 22, one week after the recording of the Brookview subdivision, when the protections of RSA 674:39 attached.

Please be advised that the foregoing case summary is based upon a Supreme Court slip opinion. Slip opinions are subject to change following motions for rehearing and/or motions for reconsideration. The Court may also modify the opinion without motion. The final version of the Court’s opinion is that which appears in the New Hampshire Reports.

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