Source: http://www.kentlaw.edu/perritt/courses/property/some-exactions-constitutional-some-not.htm
Timestamp: 2018-03-18 21:12:01
Document Index: 409284480

Matched Legal Cases: ['§ 2', '§ 2', '§ 2', '§ 2', '§ 9', '§ 13']

Illinois takings case involving impact fee
NORTHERN ILLINOIS HOME BUILDERS ASSOCIATION, INC., et al., Appellants,
No. 76503.
649 N.E.2d 384
In this case of first impression in Illinois, plaintiffs, Northern Illinois Home Builders Association, Inc., et al., *29 challenge the constitutionality of two State enabling statutes and three Du Page County ordinances adopted pursuant thereto which impose transportation impact fees on new development. Plaintiffs filed a complaint for mandamus in the circuit court of Du Page County which in effect sought a declaratory judgment that the legislation and ordinances are unconstitutional. Following a bench trial, the circuit court denied plaintiffs' complaint and they appealed. The appellate court, while holding that both enabling acts are constitutional, found a provision of one ordinance to be violative of due process but severable from the remainder of the ordinance (251 Ill.App.3d 494, 190 Ill.Dec. 559, 621 N.E.2d 1012). We granted plaintiffs' petition for leave to appeal (145 Ill.2d R. 315).
In this court, plaintiffs contend that the enabling legislation and/or Du Page County ordinances are unconstitutional because they: (1) violate the takings clauses of the United States and Illinois Constitutions; (2) constitute special legislation; (3) impose taxes on real property in violation of the Illinois Constitution; (4) violate the uniformity clause of the Illinois Constitution; and (5) violate the right to travel. Plaintiffs also argue that the appellate court erred in holding that the Du Page County ordinances comply with the requirements of the second enabling act, that the unconstitutional forfeiture provision of the current ordinance is severable from the rest of the ordinance and that the appeals provisions do not violate procedural due process. Finally, plaintiff Joe Keim Builders, Inc., contends it is entitled to a refund for certain impact fees previously paid.
The first transportation impact fee enabling statute passed by the Illinois legislature was former section 5-608(a) of the Illinois **388 ***332 Highway Code, which became effective January 1, 1988. That act provided:
"The county board of any county of over 400,000 population but less than 1,000,000 population may establish *30 transportation impact districts and may collect transportation impact fees from persons constructing new developments in those districts, if such developments require direct or indirect access to the county highway system or State highway system. The fees shall be in addition to any amounts otherwise required to be paid by the developer and shall be collected at the time a building permit is issued or at such other time that the county board directs. The county board shall establish by ordinance or rule the amount of such fees, which shall be based on the amount of estimated traffic generated by various land uses and the amount of improvements needed to maintain a reasonable level of service on the existing and proposed highway systems in light of expected traffic growth." (Ill.Rev.Stat.1987, ch. 121, par. 5-608(a), repealed by Pub.Act 86-97, § 2, eff. July 26, 1989.)
Under the first enabling act, all fees collected were to be retained in a special fund established for each district and used in the same manner as motor fuel tax monies, except that all expenditures were to be made for improvements within or immediately adjacent to the district from which the monies were collected. Ill.Rev.Stat.1987, ch. 121, par. 5-608(b), repealed by Pub.Act 86-97, § 2, eff. July 26, 1989.
Pursuant to the first enabling act, Du Page County passed ordinance ODT-016-88 on or about November 22, 1988. The stated purpose of this ordinance was "to ensure that new development * * * pays a fair share of the costs of transportation improvements needed to serve new development." (Du Page County Ordinance ODT-016-88, § 2(3).) The ordinance divided the county into 11 districts, and set forth a formula for the calculation of fees to be paid, taking into consideration the cost of road construction and providing credits for taxes and developer-financed improvements. The ordinance contained fee tables for residential, commercial and other types of land use in each district. On June 27, 1989, Du Page County passed an amended ordinance, ODT-*31 021-89, which made certain textual changes and corrected computational errors made in the first ordinance, providing a new set of impact fee tables. The third Du Page County ordinance, ODT-021A-89, passed on July 25, 1989, changed the fee tables to reflect increases in the gas tax.
On July 26, 1989, the legislature repealed the first enabling act and passed the Road Improvement Impact Fee Law (605 ILCS 5/5-901 et seq. (West 1992)), which provided a comprehensive scheme for the enactment of impact fee ordinances in counties with a population of over 400,000 and all home rule municipalities. This second enabling act included the requirement that "[a]n impact fee payable by a developer shall not exceed a proportionate share of costs incurred by a unit of local government which are specifically and uniquely attributable to the new development paying the fee * * *." (605 ILCS 5/5-904 (West 1992).) Du Page County subsequently passed ODT-021B-89, effective January 1, 1990, which amended the fee schedules to reflect changes in the motor fuel and property tax credits. The county's current impact fee ordinance, ODT-021C-89, became effective July 25, 1990. This ordinance provided new fee tables which reflected the elimination of charges to developers for their impact on State roads. This change resulted in three "zero impact fee districts" where no impact fees are due because there are fewer miles of county road in those districts and the credits exceed the fees that would be owed.
[1][2][3] We first examine plaintiffs' claim that the enabling acts and ordinances violate the takings clauses of the fifth amendment of the United States Constitution and section 2 of article I of the Illinois Constitution of 1970 (Ill. Const.1970, art. I, § 2). "One of the principal purposes of the Takings Clause is 'to bar Government from forcing some people alone to bear public burdens *32 which, in all fairness and justice, should be borne by the public as a whole.' " (Dolan v. City of Tigard (1994), 512 U.S. 374, ----, 114 S.Ct. 2309, 2316, 129 L.Ed.2d 304, 315-16, quoting **389***333Armstrong v. United States (1960), 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554, 1561.) However, a land use regulation does not effect a taking if it substantially advances legitimate State interests and does not deny an owner economically viable use of his land. (Dolan, 512 U.S. at ----, 114 S.Ct. at 2316, 129 L.Ed.2d at 316; Agins v. Tiburon (1980), 447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106, 112.) In Nollan v. California Coastal Comm'n (1987), 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677, and recently in Dolan, the United States Supreme Court discussed the standards for determining what constitutes a "legitimate state interest" and the type of connection which would satisfy the requirement that the regulation "substantially advance" the State interest.
"In evaluating petitioner's [taking] claim, we must first determine whether the 'essential nexus' exists between the 'legitimate state interest' and the permit condition exacted by the city. Nollan, 483 U.S., at 837, 107 S.Ct., at 3148-49. If we find that a nexus exists, we must then decide the required degree of connection between the exactions and the projected impact of the proposed development." Dolan, 512 U.S. at ----, 114 S.Ct. at 2317, 129 L.Ed.2d at 317.
In the instant case, it is clear that the need to minimize or reduce traffic congestion is a legitimate State interest (Dolan, 512 U.S. at ----, 114 S.Ct. at 2317-18, 129 L.Ed.2d at 318; see also Devon Bank v. Department of Transportation (1981), 95 Ill.App.3d 690, 697, 51 Ill.Dec. 191, 420 N.E.2d 605 (State has interest in promoting safety and efficient road use)), and it is equally clear that a nexus exists between preventing further traffic congestion and providing for road improvements to ease that congestion. However, the second part of the analysis, whether the degree of the exactions demanded bears the required relationship *33 to the projected impact of the new development, is not as easily determined. As the Supreme Court noted in Dolan:
"In some States, very generalized statements as to the necessary connection between the required dedication and the proposed development seem to suffice. See, e.g., Billings Properties, Inc. v. Yellowstone County, 144 Mont. 25, 394 P.2d 182 (1964); Jenad, Inc. v. Scarsdale, 18 N.Y.2d 78, 271 N.Y.S.2d 955, 218 N.E.2d 673 (1966). * * *
Other state courts require a very exacting correspondence, described as the 'specifi[c] and uniquely attributable' test. The Supreme Court of Illinois first developed this test in Pioneer Trust & Savings Bank v. Mount Prospect, 22 Ill.2d 375, 380, 176 N.E.2d 799, 802 (1961). Under this standard, if the local government cannot demonstrate that its exaction is directly proportional to the specifically created need, the exaction becomes 'a veiled exercise of the power of eminent domain and a confiscation of private property behind the defense of police regulations.' Id., at 381, 176 N.E.2d, at 802." Dolan, 512 U.S. at ----, 114 S.Ct. at 2318-19, 129 L.Ed.2d at 319.
The appellate court correctly found, and the parties agree, that Pioneer Trust sets forth the standard applicable in this case. Thus, "in order for the impact fees to pass constitutional muster the need for road improvement impact fees must be 'specifically and uniquely attributable' to the new development paying the fee." (251 Ill.App.3d at 501, 190 Ill.Dec. 559, 621 N.E.2d 1012, quoting Pioneer Trust & Savings Bank v. Village of Mount Prospect (1961), 22 Ill.2d 375, 380, 176 N.E.2d 799.) However, our examination reveals that only the second of the two enabling acts complies with the stringent requirements of Illinois' Pioneer Trust test. As previously noted, the second enabling act mandates that the road improvements for which impact fees are imposed must be "specifically and uniquely attributable to the traffic demands generated by the new development paying the fee." (605 ILCS 5/5-906(a)(1) (West 1992).) The second enabling act further provides, in its definitional section:
*34 " 'Specifically and uniquely attributable' means that a new development creates the need, or an identifiable portion of the need, for additional capacity to be provided by a road improvement. Each new development paying impact fees used to fund a road improvement must receive a direct **390 ***334 and material benefit from the road improvement constructed with the impact fees paid. The need for road improvements funded by impact fees shall be based upon generally accepted traffic engineering practices as assignable to the new development paying the fees." (605 ILCS 5/5-903 (West 1992).)
We believe that this language comports with the dictates of Pioneer Trust, wherein this court indicated that an exaction which required a developer to provide for improvements " 'which are required by [his] activity,' " would be permissible, but one which required him to provide for improvements made necessary by " 'the total activity of the community,' " would be forbidden. Pioneer Trust, 22 Ill.2d at 380, 176 N.E.2d 799, quoting Rosen v. Village of Downers Grove (1960), 19 Ill.2d 448, 453, 167 N.E.2d 230.
On the other hand, it appears clear that the first enabling act was not written with the specifically and uniquely attributable test in mind, where no such language is contained anywhere in its three-paragraph text. Indeed, the first act directs that the fees paid by new developments be used to fund all road improvements "needed to maintain a reasonable level of service," with the single proviso that "all expenditures must be made for improvements within, or in areas immediately adjacent to, the transportation impact district from which the expended monies were collected." (Ill.Rev.Stat.1987, ch. 121, pars. 5- 608(a), (b).) We agree with the appellate court that, in order for Du Page County to comply with the "specifically and uniquely attributable" test, "it can only impose impact fees for the road improvements made necessary by the additional traffic generated by new development * * * [and] the new development paying the impact fee must receive a direct *35 and material benefit from the improvement financed by the impact fee." (Emphasis in original.) (251 Ill.App.3d at 502, 190 Ill.Dec. 559, 621 N.E.2d 1012.) However, it is only Du Page County's current impact fee scheme, developed in accordance with the second enabling act, which complies with both of these requirements.
[4] There is nothing in the first enabling act, or the ordinances based upon it, which restricts the expenditure of funds collected thereunder to deficiencies created by the new development providing those funds. Additionally, the fact that funds could be used for areas outside the transportation impact district prevents the new development from receiving the direct and material benefit of the road improvements financed by its fees. Although we agree with the appellate court that there is no requirement that the improvements financed by impact fees must be used exclusively or overwhelmingly by the development paying the fee (251 Ill.App.3d at 503, 190 Ill.Dec. 559, 621 N.E.2d 1012), the funds collected from new development in a particular district must be used to finance improvements in that same district. [FN1] We are satisfied that a carefully drawn district system, such as that adopted by Du Page County, can successfully limit a geographic area so that fee payers receive a direct and material benefit.
FN1. Evidence at trial established that fee payers in a district do benefit from the decrease in congestion resulting from the improvements made in that district, because the districts were drawn to reflect transportation and development corridors and municipal boundaries and to link improvements to the area in which travel from new development is expected.
In sum, we hold that the first enabling act is constitutionally flawed because of its failure to meet the "specifically and uniquely attributable" test set forth in Pioneer Trust. Consequently, the Du Page County ordinances passed pursuant to the first enabling act are invalid and the monies collected thereunder should be *36 returned. (See Mills v. Peoples Gas Light & Coke Co. (1927), 327 Ill. 508, 535, 158 N.E. 814 (an unconstitutional act confers no rights, affords no protection, imposes no duties, and is, in legal contemplation, as inoperative as though it had never been passed).) However, we believe the second enabling act has rectified the constitutional deficiencies of the first act. Therefore, fees imposed on new development under an ordinance which conforms to the requirements of the second enabling act are not a confiscation of private property in violation of the takings clauses of our State and Federal Constitutions, but are instead a "reasonable **391 ***335 regulation under the police power." Pioneer Trust, 22 Ill.2d at 380, 176 N.E.2d 799.
[5] We next address plaintiffs' related contention that the current Du Page County ordinance, ODT-021C-89, does not comply with the second enabling act. [FN2] Plaintiffs claim that the second enabling act requires that individual impact fee calculations be made with respect to each proposed development within a county, and that the Du Page County ordinance does not comply because it predetermines areawide fees without considering the particular characteristics of a specific development. However, the second enabling act states that the "need for road improvements funded by impact fees shall be based upon generally accepted traffic engineering practices as assignable to the new development paying the fees." (Emphasis added.) (605 ILCS 5/5-903 (West 1992).) Our review shows that testimony presented at trial established that the fee calculation method used by Du Page County complies with generally accepted traffic engineering practices and that a majority of *37 impact fee ordinances nationwide use averages to predetermine impact fees.
FN2. Because we have held the first enabling act to be unconstitutional for authorizing an impermissible taking, and the ordinances passed pursuant to it to be invalid, we find it unnecessary to consider plaintiffs' remaining challenges to this legislation.
Plaintiffs correctly note that under section 5-906(b) of the second enabling act, the unit of local government imposing the impact fee shall consider eight factors in determining the proportionate share of the cost of road improvements to be paid by the developer, including "[t]he extent to which the new development should be credited for providing road improvements." (605 ILCS 5/5-906(b)(5) (West 1992).) However, this requirement is met by the current Du Page County ordinance, which provides mechanisms by which a developer may obtain credits against his fees for his individual contributions to the cost of road improvements. (See Du Page County Ordinance ODT-021C-89, § 9(1) ("the Fee Payer may enter into a Fair Share Fee Agreement with the County providing for * * * reduction of the fee through transportation systems management strategies, recapture payments for construction credits, credit and security arrangements and other matters relating to the fee"); see also § 13(1) ( "[a]ny person who initiates development may apply for an improvement credit against the fair share impact fee imposed by this Ordinance for any contribution, payment, recapture, construction, or dedication of land accepted and received by Du Page County for system improvements in accordance with the provisions of this Section").) Thus, Du Page County's use of a fee formula coupled with credits against the fee for individual developers complies with the requirements of the second enabling act.
[Analysis of other challenges omitted]
[13][14] Next we address plaintiffs' argument that an appeals provision of the current Du Page County ordinance violates procedural due process by making it "practically and financially impossible for a fee payor to contest the computations." It is clear that the fundamental requirement of procedural due process is the opportunity to be heard at a meaningful time and in a meaningful manner. (Mathews v. Eldridge (1976), 424 U.S. 319, 333, 96 S.Ct. 893, 902, 47 L.Ed.2d 18, 32; People v. R.G. (1989), 131 Ill.2d 328, 353, 137 Ill.Dec. 588, 546 N.E.2d 533.) However, "[t]he concept of *46 due process is 'flexible and calls for such procedural protections as the particular situation demands.' " (People v. P.H. (1991), 145 Ill.2d 209, 235, 164 Ill.Dec. 137, 582 N.E.2d 700, quoting Mathews, 424 U.S. at 334, 96 S.Ct. at 902, 47 L.Ed.2d at 33.) Section 12 of ODT-021C-89 allows a developer to provide an individual assessment of the impact of the proposed development upon the transportation system in the county. Plaintiffs specifically argue that compliance with this section, which requires that an individual assessment use trip-generation data collected from local empirical surveys, would be so difficult and time-consuming as to preclude any meaningful appeals. Although plaintiffs' expert testified that the time and effort involved in contesting the fee computation would "add up to a significant cost," without a more precise estimate of the expense, this argument is purely speculative. We find that when the current Du Page County ordinance is examined as a whole, it provides sufficient mechanisms whereby a fee payer may be meaningfully heard.
In conclusion, we hold that: (1) the first enabling act is unconstitutional; (2) the Du Page County ordinances passed pursuant to the first enabling act are invalid and the monies collected thereunder should be returned; (3) the second enabling act is constitutional; (4) Du Page County ordinance ODT-021C-89 complies with the requirements of the second enabling act; and (5) section 11(2) of ODT-021C-89 is unconstitutional but severable from the remainder of the ordinance.
The judgment of the appellate court is affirmed in part and reversed in part, and the judgment of the circuit court is affirmed in part and reversed in part. *51 The cause is remanded to the circuit court for proceedings consistent with this opinion.
165 Ill.2d 25, 649 N.E.2d 384, 208 Ill.Dec. 328
• 1994 WL 16029879 (Appellate Brief) Plaintiffs' Reply Brief (Apr. 19, 1994)Original Image of this Document (PDF)
• 1994 WL 16029877 (Appellate Brief) Brief and Argument of Defendants-Appellees (Apr. 05, 1994)Original Image of this Document (PDF)
• 1994 WL 16029878 (Appellate Brief) Plaintiffs/Appellants' Brief (Jan. 25, 1994)Original Image of this Document with Appendix (PDF)