Case Title: Drees Co. v. Hamilton Twp.

Citation: 2012-Ohio-2370

Docket Number: 2010-1548

State: ohio

Court: Ohio Supreme Court

Date: 2012-05-31T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Drees Co. v. Hamilton Twp., Slip Opinion No. 2012-Ohio-2370.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2012-OHIO-2370 
DREES COMPANY ET AL., APPELLANTS, v. HAMILTON TOWNSHIP ET AL., 
APPELLEES. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Drees Co. v. Hamilton Twp., Slip Opinion No. 2012-Ohio-
2370.] 
R.C. 504.04(A)(1)—Impact fees imposed by township upon applicants for zoning 
certificates for new construction or redevelopment operated as taxes, so 
township was unauthorized to impose them. 
(No. 2010-1548—Submitted June 8, 2011—Decided May 31, 2012.) 
APPEAL from the Court of Appeals for Warren County, No. 2009-11-150, 2010-
Ohio-3473. 
__________________ 
 
PFEIFER, J. 
{¶ 1} In this case we consider whether Hamilton Township, a limited-
home-rule township, was authorized under Ohio law to impose its system of 
impact fees upon applicants for zoning certificates for new construction or 
redevelopment within its unincorporated areas.  We hold that the impact fees 
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2 
operated as taxes; thus, Hamilton Township was unauthorized to impose them 
pursuant to R.C. 504.04(A)(1). 
Factual and Procedural Background 
{¶ 2} Appellee Hamilton Township is a township that has adopted a 
limited-home-rule government, as defined by R.C. Chapter 504, and is located in 
Warren County.  It has seen significant growth in recent years; the population 
grew from 5,900 in 1990, to 9,630 in 2000, to 23,556 in 2010.  
http://www.census.gov/prod/cen1990/cp1/cp-1-37.pdf  (page 583, accessed May 
3, 
2012); 
http://factfinder2.census.gov/faces/tableservices/jsf/pages/ 
productview. xhtml?pid =DEC_10_DP_DPDP1&prodType=table (accessed May 
3, 
2012) 
and 
http://factfinder2.census.gov/faces/tableservices/jsf/pages/ 
productview.xhtml?pid= DEC_00_SF1_DP1&prodType=table (accessed May 3, 
2012).  Appellee Hamilton Township Board of Trustees is the legislative and 
administrative body responsible for governing Hamilton Township under R.C. 
Title 5. 
{¶ 3} On May 2, 2007, the board of trustees passed Amended Resolution 
No. 2007-0418, descriptively titled “Amended Resolution Implementing Impact 
Fees Within the Unincorporated Areas of Hamilton Township, Ohio for Roads, 
Fire and Police, and Parks.”  The resolution adopted a schedule of fees to be 
charged to applicants for zoning certificates for new construction or 
redevelopment.  The resolution included four categories of fees: a road-impact 
fee, a fire-protection-impact fee, a police-protection-impact fee, and a park-impact 
fee.  The parties in this case made the following stipulation regarding the purpose 
of the resolution: 
The purpose of the impact fee is to benefit the property 
by providing the Township with adequate funds to provide the 
same level of service to that property that the Township currently 
affords previously developed properties. 
January Term, 2012 
3 
The Resolution assesses an impact fee to previously 
undeveloped property, and property undergoing redevelopment, 
to offset increased services and improvements needed because of 
the development. 
{¶ 4} The amount of the fees varies based upon the land use.  Owners of 
property to be used for single-family detached dwellings, multifamily units, and 
hotel/motel rooms are assessed fees on a per-unit basis.  Owners of property to be 
used for retail/commercial, office/institutional, industrial, warehouse, church, 
school, nursing-home, and hospital purposes are assessed fees on a per-1,000-
square-feet basis.  Only owners of property to be used for single-family detached 
and multifamily units are assessed the park component of the impact fees. 
{¶ 5} For example, the fees for the owner of property to be used as a 
single-family detached dwelling, broken down by category, are $3,964 for roads, 
$335 for fire, $206 for police, and $1,648 for parks, for a total assessment of 
$6,153.  The fees, per 1,000 square feet, for the owner of property to be used for 
retail/commercial purposes are $7,265 for roads, $432 for fire, and $265 for 
police, for a total assessment of $7,962.  The township phased in the impact fees 
over time, charging only one-third of the total fee the first year after passage and 
two-thirds the second year.  As of August 31, 2009, the township has charged the 
full impact fees. 
{¶ 6} All impact fees collected by the township are deposited into impact-
fee accounts, not into a general fund.  The resolution created accounts for each of 
the four types of impact fees.  Money in each discrete account may be used only 
for the purpose of the account.  The accounts do not contain geographic 
subaccounts.  The money in each account is to be spent on a “first-in/first-out” 
basis, meaning that the money that has been in each account the longest will be 
spent first.  Funds must be spent on projects initiated within three years of the 
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fees’ collection; any money not spent within seven years of its collection is 
refunded to the current owner of the property. 
{¶ 7} The resolution permits the township to give credits to offset against 
the impact fees for certain improvements.  A land owner or developer can receive 
partial or full credit for contributions toward the cost of major roadway-system 
improvements, provided the roadway is on the township’s thoroughfare plan.  
However, no credit will be given for dedication of right-of-ways or for 
improvements to the major roadway system that primarily serve traffic generated 
by the improved property, such as acceleration/deceleration lanes into and out of 
the property. 
{¶ 8} The township allocates a maximum of 75 percent of the impact fees 
collected each year to reimburse developers for eligible improvement credits.  If 
the amount allocated for reimbursements is not sufficient to make all payments 
due to developers for that year, each developer will receive a pro rata share of the 
amount owed, and the unpaid amount will be carried forward to the following 
year.  If less than 75 percent of the impact fees collected is required for 
reimbursements in any given year, the remainder may be used for public-project 
expenditures. 
{¶ 9} The township will not issue a zoning certificate until the applicant 
has paid the applicable impact fee.  Within the first year of the passage of the 
resolution, appellants the Drees Company, Fischer Single Family Homes II, 
L.L.C., John Henry Homes, Inc., and Charleston Signature Homes, L.L.C., all 
sought zoning certificates to construct single-family homes; all paid a $200 
zoning-application fee and, under protest, paid impact fees of $2,030.16 per 
application. 
{¶ 10} Appellants named above and appellant Home Builders Association 
of Greater Cincinnati then brought this action against appellees, the township and 
its trustees, seeking a declaratory judgment, injunctive relief, and damages, 
January Term, 2012 
5 
alleging that the impact fees are contrary to Ohio law and are unconstitutional.  
The parties submitted stipulated facts and exhibits, and each side filed a motion 
for summary judgment.  The trial court granted the township’s motion, holding as 
follows: 
Hamilton Township, pursuant to its statutory limited police 
powers, may make and fund improvements to benefit new 
development by use of its system of impact fees, because the 
resolution is not in conflict with any other Ohio statute, and 
because it is sufficiently narrowly tailored to provide services to 
the class of fee payers in exchange for the fees. 
{¶ 11} The Twelfth District Court of Appeals affirmed.  The court held 
that, contrary to appellants’ arguments, the impact fees were not a prohibited form 
of taxation, did not conflict with general laws of the state, and did not alter the 
structure of township government. 
{¶ 12} The cause is before this court upon the acceptance of a 
discretionary appeal.  127 Ohio St.3d 1460, 2010-Ohio-6008, 938 N.E.2d 362. 
Law and Analysis 
{¶ 13} In Ohio, “townships are creatures of the law and have only such 
authority as is conferred upon them by law.”  State ex rel. Schramm v. Ayres, 158 
Ohio St. 30, 33, 106 N.E.2d 630 (1952).  Hamilton Township is a limited-home-
rule township created under R.C. Chapter 504.  R.C. 504.04(A)(1) states that 
limited-home-rule townships may, by resolution,  
[e]xercise all powers of local self-government within the 
unincorporated area of the township, other than powers that are 
in conflict with general laws, except that the township shall 
comply with the requirements and prohibitions of this chapter, 
and shall enact no taxes other than those authorized by general 
law * * *. 
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(Emphasis added.) 
{¶ 14} This opinion focuses on whether the impact fees imposed by the 
township are taxes “other than those authorized by general law.”  Ohio law 
already empowers townships to employ specified methods of taxation to raise 
money to pay for police and fire service (R.C. 505.51 and 505.39), parks (R.C. 
511.27 and 511.33), and roads (R.C. 5571.15, 5573.07, 5573.10, 5573.11, and 
5573.211).  There is no dispute in this case that the impact fees at issue do not 
meet the requirements of those methods of taxation, so if the impact fees are 
actually taxes, they violate R.C. 504.04. 
Distinguishing a Fee from a Tax 
{¶ 15} The fact that the township’s resolution calls the assessments “fees” 
is certainly not sufficient to establish that the assessments are not taxes.  In order 
to determine whether certain assessments are taxes, we must analyze “the 
substance of the assessments and not merely their form.”  State ex rel. Petroleum 
Underground Storage Tank Release Comp. Bd. v. Withrow, 62 Ohio St.3d 111, 
116, 579 N.E.2d 705 (1991), fn. 5.  Although this court has stated that “[i]t is not 
possible to come up with a single test that will correctly distinguish a tax from a 
fee in all situations where the words ‘tax’ and ‘fee’ arise,” id. at 117, we can look 
to our own case law and that of other jurisdictions for guidance in making our 
determination in this case. 
Withrow Factors 
{¶ 16} In Withrow, this court considered whether assessments imposed 
upon owners and operators of underground storage tanks (“USTs”) by the 
Petroleum Underground Storage Tank Release Compensation Board were taxes.  
The assessments helped fund the Petroleum Underground Storage Tank Financial 
Assurance Fund.  That fund was created “to reimburse owners and operators of 
USTs for the costs of corrective actions in the event of a release of petroleum into 
the environment and to compensate third parties for bodily injury and/or property 
January Term, 2012 
7 
damage resulting from such occurrences.” Withrow at 111.  The proceeds from 
the assessment were kept separate from the general fund of the state treasury.  Id. 
at 116. 
{¶ 17} This court cited a number of factors in concluding that the 
assessment in Withrow was not a tax, but a fee.  First, this court found it 
significant that the fees were imposed in furtherance of regulatory measures 
designed to address the environmental problems caused by leaking USTs; by 
statute, the owners and operators of USTs were strictly liable to take corrective 
actions and to pay damages for leaking USTs.  Id.  The fund into which the fees 
were paid ensured that UST owners could meet those statutory obligations. 
{¶ 18} Second, the assessments were never placed in the general fund and 
were to be used only “for narrow and specific purposes, all directly related to 
UST problems.”  Withrow, 62 Ohio St.3d at 116-117, 579 N.E.2d 705. 
{¶ 19} Third, the court noted that “[a] fee is a charge imposed by the 
government in return for a service it provides.”  Id. at 113.  And it held that in 
exchange for the fee, the UST owners and operators received protection that 
resembled insurance.  Id. at 117. 
{¶ 20} Fourth, this court was also persuaded by the fact that when the 
unobligated balance in the fund exceeded a certain amount, there would be no 
assessment for that year.  Further, if the fund dipped below a certain amount, the 
assessing authority was permitted to charge a supplemental assessment.  The court 
concluded, “Thus, the assessment appears to function more as a fee than as a tax, 
because a specific charge in return for a service is involved.” Id. 
Applying Withrow Factors to this Case 
{¶ 21} The assessment in this case differs in several important respects 
from the assessment this court deemed a fee in Withrow.  First, the township’s 
assessment lacks the regulatory aspect of the fee charged in Withrow.  Unlike the 
fee in Withrow, the assessment at issue is not imposed in furtherance of statutes 
SUPREME COURT OF OHIO 
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designed to protect the public from harms associated with a specific industry.  
Rather, it is a revenue generator with the stated purpose of guaranteeing a 
consistent level of services to all members of the community.  It does not 
encourage the assessed parties’ compliance with certain statutory obligations or 
protect the public from specific threats. 
{¶ 22} Second, unlike the fee collected in Withrow, the revenue generated 
by the assessment in this case is spent on typical township expenses inuring to the 
benefit of the entire community.  It is true that the Hamilton Township 
assessments are not placed into the general fund; rather, the revenue goes into 
separate funds for roads, fire, police, and parks.  However, as the court pointed 
out in Withrow, “if these assessments [are] actually taxes, the simple act by the 
legislature of placing them in a segregated fund [does] not transform them into 
fees.  We must examine the substance of the assessments and not merely their 
form.”  Withrow, 62 Ohio St.3d at 116, 579 N.E.2d 705, fn. 5.  Here, although the 
funds are segregated, the use of the money from the funds is general in nature.  
The money is not earmarked so that it is spent to improve the area around the 
particular property upon which the assessments are imposed; in other words, there 
are no geographic sub-accounts among the accounts.  For instance, there is no 
requirement that monies placed into the police fund go to create a police 
substation near a new neighborhood.  Instead, the funds can be spent on any 
police expenditure throughout the community.  Within the specific fund, money is 
spent in a general way, all toward the normal expenditures of government. 
{¶ 23} Third, this court found that the assessment in Withrow was a fee for 
a service that the government provided; that is, the fund into which the fees were 
deposited operated, essentially, as insurance coverage for catastrophic damage 
caused by leaking tanks.  Here, assessed parties get no particular service above 
that provided to any other taxpayer for the fee that they pay.  As taxpayers and 
residents of Hamilton Township, they are entitled to police and fire protection and 
January Term, 2012 
9 
to use township parks and roadways.  They already pay taxes for those services; 
in fact, when they improve their property, they pay higher taxes than they did 
when the property was undeveloped.  But targets of the assessment receive no 
greater benefit than any other taxpayer despite the payment of the additional 
assessment. 
{¶ 24} Finally, the fee that was charged in Withrow was tied to events, not 
the spending whims of government.  In Withrow, UST owners were liable for a 
supplemental fee if the situation warranted it, that is, if the fund dwindled as tank 
leaks increased.  Further, if the fund were at sufficient levels, the board could 
suspend the fees.  In regard to the township assessment in this case, there is a 
refund of the fees only if the township decides not to spend the money.  Whether 
the money is spent is up to the local government.  Since the money is not tied to 
any particular type of expenditure within any of the four funds, the only way the 
money would not be spent is by governmental frugality.  And unlike the system in 
place in Withrow, there is no mechanism to require a further assessment should 
the situation demand it.  Thus, unlike the fee in Withrow, this assessment is not 
responsive to need.  Thus, it bears less resemblance to a fee for a service than the 
assessment in Withrow did. 
{¶ 25} Overall, an application of the Withrow factors in this case points to 
the assessments as constituting taxes. 
Am. Landfill Analysis 
{¶ 26} In Am. Landfill, Inc. v. Stark/Tuscarawas/Wayne Joint Solid Waste 
Mgt. Dist., 166 F.3d 835 (6th Cir.1999), the Sixth Circuit Court of Appeals 
employed an analysis similar to that used in Withrow in considering whether 
assessments imposed by solid-waste-management districts on persons disposing 
of material at solid-waste-disposal facilities located within their districts 
constituted fees or taxes for purposes of the Tax Injunction Act, 28 U.S.C. 1341.  
The funds, collected by owners or operators of disposal facilities, were to be used 
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for various purposes, including “preparing and implementing the district’s solid 
waste management plan,” “develop[ing] and implement[ing] * * * solid waste 
recycling or reduction programs,” “providing financial assistance to local boards 
of health for water analysis and other enforcement activities,” “providing 
financial assistance to counties for maintenance of roads, public facilities, and 
emergency services which result from the location of a solid waste facility in the 
counties,” and “assist[ing] * * * local law enforcement and boards of health [in] 
enforc[ing] littering and open dumping laws.”  Am. Landfill at 836. 
{¶ 27} The court in Am. Landfill applied a three-factor analysis that had 
been employed by the courts in Bidart Bros. v. California Apple Comm., 73 F.3d 
925, 931 (9th Cir.1996) and San Juan Cellular Tel. Co. v. Pub. Serv. Comm. of 
Puerto Rico, 967 F.2d 683, 685 (1st Cir.1992) to determine whether the 
assessment was a fee or tax.  As set forth in Bidart, a court should consider “(1) 
the entity that imposes the assessment; (2) the parties upon whom the assessment 
is imposed; and (3) whether the assessment is expended for general public 
purposes, or used for the regulation or benefit of the parties upon whom the 
assessment is imposed.”  Bidart at 931. 
The court in San Juan described the classic versions of a tax and a fee: 
The classic “tax” is imposed by a legislature upon many, or all, 
citizens. It raises money, contributed to a general fund, and spent 
for the benefit of the entire community.  * * * The classic 
“regulatory fee” is imposed by an agency upon those subject to 
its regulation.  * * *  It may serve regulatory purposes directly 
by, for example, deliberately discouraging particular conduct by 
making it more expensive.  * * * Or, it may serve such purposes 
indirectly by, for example, raising money placed in a special 
fund to help defray the agency's regulation-related expenses. 
San Juan at 685. 
January Term, 2012 
11 
{¶ 28} In regard to the first two factors—the entity that imposes the 
assessment and the entity that must pay the assessment— “an assessment imposed 
directly by the legislature is more likely to be a tax than an assessment imposed 
by an administrative agency” and “[a]n assessment imposed upon a broad class of 
parties is more likely to be a tax than an assessment imposed upon a narrow 
class.”  Bidart, 73 F.3d at 931, citing San Juan, 967 F.2d at 685. 
{¶ 29} Most assessments fall somewhere near the middle of the spectrum 
between a fee and a tax; in such cases, the use of the funds becomes the 
predominant factor in making the ultimate determination: 
Both San Juan and Bidart indicate that for cases where the 
assessment falls near the middle of the spectrum between a 
regulatory fee and a classic tax, the predominant factor is the 
revenue’s ultimate use.  See San Juan, 967 F.2d at 685; Bidart, 
73 F.3d at 932.  When the ultimate use is to provide a general 
public benefit, the assessment is likely a tax, while an assessment 
that provides a more narrow benefit to the regulated companies is 
likely a fee.  See id. 
Am. Landfill, 166 F.3d at 837-838. 
{¶ 30} In applying the San Juan and Bidart approach, the court in Am. 
Landfill determined that the assessment was a tax.  The court found that the entity 
imposing the assessment—the local solid-waste-management district—and the 
parties upon whom the assessment was imposed—users of solid-waste-
management facilities—were factors that weighed in favor of the assessment’s 
being a fee.  But that was balanced by the fact that the General Assembly had 
been involved in authorizing the districts to impose the assessment, keeping the 
case “near the middle of the spectrum between a pure regulatory fee and a classic 
tax.”  Am. Landfill at 839.  The court concluded that the third factor pushed the 
assessment into the realm of a tax: “The revenue’s ultimate use as a benefit shared 
SUPREME COURT OF OHIO 
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by the public and not just the waste disposal facilities indicates that the 
assessment here is a tax.”  Id. at 839-840.  The court made that finding despite the 
fact that the revenues were placed in a fund separate from the general fund.  The 
court pointed to the public purposes to which the revenue collected was to be put, 
including the development of recycling programs, road and public-facility 
maintenance, and emergency services: “These purposes ‘relate directly to the 
general welfare of the citizens of [Ohio],’ and dedication to a particular aspect of 
state welfare makes them ‘no less general revenue raising levies.’ ”  Id. at 839, 
quoting Wright v. McClain, 835 F.2d 143, 145 (6th Cir.1987). 
Application of Am. Landfill Analysis 
{¶ 31} Applying the three-factor test that the court employed in Am. 
Landfill in this case yields the conclusion that the assessment at issue is a tax.  As 
for the first factor, the entity imposing the assessment in this case is a legislative 
body, not a regulatory body, which favors characterizing the assessment as a tax.  
In regard to the second factor, the entities paying the assessment are not part of a 
single industry or group.  The assessment applies to a fairly large swath of 
people—anyone who wants to engage in any type of development in the 
township.  However, it also is not imposed on every township resident.  That 
pushes the needle further from a classic tax, but not into the realm of a classic fee.  
The third factor, the ultimate use of the revenue, places the assessment solidly in 
the realm of taxation.  The fact that the funds from the assessments are segregated 
into separate accounts is irrelevant; the fact that the revenue is earmarked for 
police protection, fire protection, road improvement, and parks that benefit the 
entire community is the key factor.  The assessments raise revenue for the 
public’s benefit.  All members of the community will benefit from improved 
roadways and parks, as well as from consistent levels of police and fire 
protection. 
 
 
January Term, 2012 
13 
Other State Supreme Courts 
{¶ 32} Although Withrow and Am. Landfill are instructive as to the fee-
versus-tax issue, neither involved the type of assessment at issue in this case.  
However, other state supreme courts facing very similar matters have found that 
impact fees constituted taxes.  A key factor in those cases was the extent of the 
public benefit that resulted from the assessment.  In Home Builders Assn. of 
Greater Des Moines v. W. Des Moines, 644 N.W.2d 339 (Iowa 2002), the court 
considered an impact fee paid by land developers and builders that was used by 
the city to create or improve parks.  The court pointed to the lack of a special 
benefit inuring to the targets of the fee in determining that the fee was a tax: 
[T]he fee is based on the cost of building the neighborhood 
parks, an expense representing the general benefit to the 
community at large.  Therefore, the parks fee is not based on 
special benefits conferred on the property owners so as to fall 
outside the definition of a tax. See E. Diversified Props., Inc. [v. 
Montgomery Cty., 319 Md. 45] 570 A.2d [850] at 855 
[Md.App.1990] (holding that impact fee was not a regulatory fee 
where it was not based on the “service provided to the property 
owner”); Haugen v. Gleason, 226 Or. 99, 359 P.2d 108, 111 
(1961) (holding fee charged as condition of plat approval was an 
illegal tax because the fees were not required to be used for “the 
direct benefit of the regulated subdivision”).  To conclude 
otherwise would in essence permit the City to assess property for 
a public improvement without regard to the limitations on its 
taxing authority* * *. 
Id. at 349. 
{¶ 33} In Mayor of Ocean Springs v. Homebuilders Assn. of Mississippi, 
Inc., 932 So.2d 44 (Miss.2006), the court addressed a city’s ordinances that 
SUPREME COURT OF OHIO 
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authorized it to collect impact fees from developers for funding various public 
improvements and services.  In holding that the impact fees were a revenue-
raising mechanism that constituted taxes, the court concluded: 
“Courts cannot fault the logic or the foresight that induces the 
municipality to consider the long term impact of permitted 
development on municipal resources and public facilities. 
However, in the absence of legislative intent, municipalities 
cannot depart from traditionally authorized methods of financing 
public facilities so as to allocate the costs of substantial public 
projects among new developments on the basis of their 
anticipated impact.” 8 McQuillin, Municipal Corp.3rd Ed., 
Rev.2000, § 25.118.50 at 384. 
Id. at 60. 
Public Benefit Versus Private Benefit 
{¶ 34} In the present case, the potential public benefit appears to be the 
main reason for the assessment.  But in addressing the tax-versus-fee question, the 
court of appeals put great stock in one of the stipulations that the parties agreed to 
in this case, using it as proof that the assessments were made for the benefit of the 
targeted property: 
[Appellants’] claim flies in the face of the parties stipulated facts, 
which state, in pertinent part: 
“The purpose of the impact fee is to benefit the property 
by providing the Township with adequate funds to provide the 
same level of service to that property that the Township 
currently affords previously developed properties.” (Emphasis 
added.) 
To quote [appellants], “[i]n order to be classified as a fee, 
a charge must specially benefit the property that pays the fee.” 
January Term, 2012 
15 
Based on the parties stipulated facts, that is exactly what occurs 
here; namely, a payment to the Township to obtain a zoning 
certificate in order to build on property within its unincorporated 
areas so that “that property” can receive the same level of service 
provided to previously developed properties. By stipulating to 
these facts, [appellants] are now bound by their agreement. 
(Emphasis sic.)  Drees Co. v. Hamilton Twp., 12th Dist. No. 2009-11-150, 2010-
Ohio-3473, ¶ 17-19. 
{¶ 35} It is unlikely that appellants would stipulate to a fact that dooms 
their claim.  More importantly, the stipulation implicitly recognizes that the goal 
is for the township to have the necessary funds to allow all properties in the 
township to maintain their same level of service despite recent, rapid growth.  The 
parties also stipulated that the impact fees were imposed “to offset increased 
services and improvements needed because of the development.”  The impact fees 
are intended to prevent any diminishment of services to anyone in the township. 
{¶ 36} Lest there be any doubt as to whether the impact-fee resolution was 
designed to affect the whole community, the factual findings in the resolution 
itself contain statements indicating that maintaining the general welfare of the 
community is the aim of the resolution.  The resolution states that the impact-fee 
system “assures the continuation of capital services to benefit one of the fastest 
growing townships in the State of Ohio and the United States of America, utilizing 
a system which is widely accepted as a valid exercise of the police power to 
protect health, safety and the wellbeing of the community.”  (Emphasis added.)  
The board states in the resolution that “the protection of the health, safety, and 
general welfare of the citizens and property owners of the Township” requires that 
the major roadway facilities, fire-protection and police-protection facilities, and 
the park facilities of the township “be improved to maintain them at their current 
SUPREME COURT OF OHIO 
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levels of service in order to meet the demands of new development.”  (Emphasis 
added.) 
{¶ 37} In Home Builders Assn. of Mississippi, Inc. v. Madison, 143 F.3d 
1006, 1012 (5th Cir.1998), the court dealt with a similar impact-fee plan and an 
ordinance with language similar to the resolution in this case.  The ordinance 
stated: 
“This Ordinance shall be used for the purposes of implementing 
and funding the [public-improvement plan] and to otherwise 
further the protection and promotion of the public health, safety 
and welfare of the City of Madison and its citizens and to 
regulate the adverse effects of rapid residential development by 
insuring adequate public facilities and services to present and 
future residents of the City.” 
Id. at 1012. 
{¶ 38} Home Builders stated, “[I]t is difficult to imagine that an ordinance 
designed to protect and promote the public health, safety and welfare of an entire 
community could be characterized as anything but a tax.” Id. 
{¶ 39} We reach the same conclusion.  Here, the assessment results in no 
direct service to the landowner, other than the issuance of a zoning certificate, for 
which there is already a separate $200 fee.  When the amount of the fee exceeds 
the cost and expense of the service, the fee constitutes a tax.  Granzow v. 
Montgomery Cty. Bur. of Support, 54 Ohio St.3d 35, 38, 560 N.E.2d 1307 (1990).  
The impact fees are a revenue-generating measure designed to support 
infrastructure improvements benefitting the entire township.  “Taxation refers to 
those general burdens imposed for the purpose of supporting the government, and 
more especially the method of providing the revenues which are expended for the 
equal benefit of all the people.” Cincinnati v. Roettinger, 105 Ohio St. 145, 153-
154, 137 N.E. 6 (1922). 
January Term, 2012 
17 
Conclusion 
{¶ 40} Having analyzed the substance of the assessments, and not merely 
their form, we conclude that the impact fees charged by Hamilton Township in 
this case constitute taxes.  Since those taxes were not authorized by general law, 
Hamilton Township was unauthorized to impose them pursuant to R.C. 
504.04(A)(1).  Accordingly, we reverse the judgment of the court of appeals and 
remand the matter to the trial court. 
Judgment reversed 
and cause remanded. 
 
O’CONNOR, C.J., and LUNDBERG STRATTON, O’DONNELL, LANZINGER, 
CUPP, and CELEBREZZE, JJ., concur. 
 
FRANK D. CELEBREZZE JR., J., of the Eighth Appellate District, sitting for 
MCGEE BROWN, J. 
__________________ 
 
Keating, Muething & Klekamp, P.L.L., Joseph L. Trauth Jr., Thomas M. 
Tepe Jr., and Charles M. Miller; and Aronoff Rosen & Hunt, Richard A. Paolo, 
Kevin L. Swick, and Edward P. Akin, for appellants. 
Rendigs, Fry, Kiely & Dennis, L.L.P., Wilson G. Weisenfelder Jr., James 
J. Englert, and Lynne M. Longtin; and Keating Ritchie & McGary, L.P.A., and 
Warren J. Ritchie, for appellees. 
Keating Ritchie & McGary, L.P.A., and Thomas T. Keating, urging 
affirmance for amicus curiae Ohio Township Association. 
 
Maurice A. Thompson, urging reversal for amici curiae 1851 Center for 
Constitutional Law and the Tax Foundation. 
Christopher M. Whitcomb, urging reversal for amicus curiae National 
Association of Home Builders. 
Robert N. Eshenbaugh Jr., urging reversal for amicus curiae Ohio Home 
Builders Association.