NESCT to hear appeal of Lincoln City "impact fees"

High court will review legality of 'impact fees' LINCOLN (AP) - Cities and developers across the state are watching a Nebraska Supreme Court case that will decide the legality of Lincoln's so-called "impact fees" on new homes.S-04-0782, Home Builders Association of Lincoln,et al v. The City of Lincoln, The high court will hear a case next month brought by the Home Builders Association of Lincoln and Hartland Homes Inc., which sued after the fees were adopted by the City Council in 2003. People buying new, single-family homes in Lincoln are paying at least $2,800 in impact fees, which can be used to help pay for things like streets and sewers elsewhere in the city. The builders argue that the fees are not authorized by the Legislature and amount to an illegal tax. Lancaster County District Judge Paul Merritt Jr. ruled that Lincoln lacked the power to collect a fee to pay for growth but said that its city charter gave it the right to collect an impact tax similar to the occupation tax charged for vending machines. The builders' lawyer, William Blake, cites a 1980 court case in which Lincoln charged developers a fee as a condition for having a new subdivision approved so nearby arterial streets could be paved. In that case, the high court ruled the fee was illegal because the arterial streets were general improvements and there was no local benefit that could be specially assessed against the subdivision. Blake said the impact fees are merely a way to generate revenue. Chief Assistant City Attorney Rick Peo cites a case decided by the Montana Supreme Court that said impact fees imposed only upon new users of expanded water and wastewater services in Billings was "a valid exercise" of a city's home rule power. The Montana court distinguished taxes and special assessments from service charges. "A tax is levied for the general public good, and without special regard to the benefit conferred upon the individual or property," the court said. "A special assessment is levied to force payment for benefit equal in value to the amount. "The fee is imposed for the benefit of new users of water and sewer facilities, whose use of these systems gives rise to the need for the additional water and sewer capacity," the court said