This is the first New Hampshire Supreme Court case to address RSA 674:21, V(j), enacted in 2004, which authorizes planning boards to impose off-site improvement “exactions” as a condition of development approval, even though the municipality has not adopted an impact fee ordinance.
Before the 1991 enactment of impact fee enabling legislation, RSA 674:21, V, off-site improvement fees had been upheld by the Court in a line of planning board subdivision and site plan cases beginning with K.B.W. v. Bennington, 115 N.H. 392 (1975). Off-site improvement fees were valid when the fees represented the developer’s proportional share of the costs of off-site improvements that were necessitated by the proposed development and reasonably related to the benefits accruing to the development from the improvements. This became known as the “rational nexus” test.
After enactment of RSA 674:21, V, the Court, in Simonsen v. Derr, 145 N.H. 38 (2000), interpreted the statute to prohibit imposition of off-site iymprovement fees except through a duly enacted impact fee ordinance. In response to Simonsen the legislature added RSA 674:21, V(j), which essentially codifies the rulings of the pre-Simonsen case law as a case-by-case alternative to comprehensive impact fees.
Upton applied for a subdivision for four new building lots on a 21-acre parcel with frontage on a gravel Class V highway known as the Branch Londonderry Turnpike that is subject to frequent temporary closure for flooding at a point about 500 feet from the applicant’s land. Alternative access is through adjoining towns. The planning board granted subdivision approval with the condition that the applicant pay one-third of the estimated $250,000 to $300,000 cost of a box culvert to alleviate the flooding problem.
Upton appealed the planning board decision to the superior court which upheld the planning board. The plaintiff appealed to the Supreme Court, claiming that there was no rational nexus because “the proposed project has no relationship to the area of the road in need of repair.” The plaintiff pointed out that the need to improve the Turnpike preexisted the proposed project, and the flooding condition would not be worsened by it. The plaintiff focused on language in RSA 674:21, V(a) and the town’s ordinance, which provides: “Upgrading of existing facilities and infrastructures, the need for which is not created by new development, shall not be paid for by impact fees.” The Court rejected Upton’s interpretation and held that, although the flooding itself would not worsen, “[t]he board could reasonably have determined that ‘[e]xposing more households to the risk that emergency vehicles would be unable to respond when their services were required’ magnified the Turnpike’s existing hazard, and made it imperative that the Turnpike be improved now.” This justified imposition of off-site improvement fees.
Upton also claimed that one-third of the costs was not a proportional share. The Court cited the five-part test of the early off-site improvement case, Land/Vest Props., Inc., 117 N.H. 817 (1977), for proportional share of road improvement costs: (1) current road standard; (2) frontage of proposed subdivision; (3) potential traffic increase from the proposed subdivision; (4) character and potential for development of the neighborhood; and (5) number of residences presently fronting on and putting traffic on the road. The Court held that the planning board had properly considered these criteria and dismissed the appeal.