Sunday, March 6, 2011

Iron County Overcharged for Permits

In part the meeting minutes from the Iron County
Finance Committee meeting of January 6, 2011,
states:

"New Business:
Iron Conservation District’s County Enforcing Agent,
Bob Gussert, presented the Iron County Erosion
Control Annual Report for 2010. There were 49
total permits: 39 were Residential, 10 were Non-
Residential and there was also one Gravel Pit
permit. There was $13,855.50 Total Fees collected,
and the Expenses for 2010 were $8,698.34, leaving
a Ending Balance of $5,157.16. This balance will be
applied to the 2011 program for active 2010 projects
and other expenses. Lind made a motion, seconded
by Camp, to accept the 2010 Erosion Control
Report. On Voice Vote, the motion carried."

It is clear that the cost of regulating that which the
permits were designed to oversee was significantly
less than the "fees" collected. The overcharges
amount to roughly 40% of the total charges. As
such, under the laws of this state, the excessive
charges must be refunded because any excess
amounts to a tax prohibited under the Headlee
Amendment to the Michigan Constitution.

Although there are a number of judicial cases
involved in creating the "case law" that is
controlling of this case, the primary one that
spells everything out is Bolt vs. City of Lansing,
587 NW.2d 264 which ca be found on the
internet at:

www.michbar.org/opinions/supreme/1998/122898/Bolt.html

Briefly, the Michigan Supreme Court identified
three primary criteria that differentiate a
legitimate fee imposed by government as
opposed to a tax or a penalty:

"The first criterion is that a user fee must serve
a regulatory purpose rather than a revenue-
raising purpose."

"A second, and related, criterion is that user fees
must be proportionate to the necessary costs of
the service."

"..this Court articulated a third criterion:
voluntariness."

Obviously those who sought permits did so
voluntarily. But the fact that there was a 40%
overcharge, beyond the cost to government of
regulating, places the charges out of the realm
of a legitimate fee for service because the
charges are not proportionate to the costs of
the service.

The Bolt case refers to, and embraces, another
older finding by the U.S. Supreme Court:

Nat'l Cable Television Ass'n v. United States,
94 S.Ct. 1146.

"In that case the Supreme Court held that, "The
public agency performing those services normally
may exact a fee for a grant which, presumably,
bestows a benefit on the applicant, not shared
by other members of society."

It is clear from the minutes of the Iron County
Finance Committee meeting that benefits will,
illegally, confer advantage to other members of
society from the excess proceeds of the "fees"
charged by a division or a department of the
Iron County Board.

Will this County Board do the right thing and
refund the excessive charges without someone
actually suing them in a court of law to force
this issue? This will provide a measure of the
honesty of the Iron County Board.

Bill Vajk

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