Opinion 99 - 13


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

FEES -- Classification (based on whether structure is unheated and seasonal) -- Rates (requirements for building permit fees)

TOWN LAW, §§130(1), 138, 261; EXECUTIVE LAW, §381: Town permit fees must bear a direct relation to the costs of issuing the permit and inspecting or enforcing the permitted activity, and may not be charged to offset the cost of general governmental functions. Reasonable classifications of applicants may be established and different fees fixed for each such class, if the town has a rational basis for such distinctions. A higher town building permit fee for seasonal, unheated structures would appear to be more readily justifiable if the town's administrative costs for processing the permit and inspecting and regulating the site were greater for this type of structure.

You ask whether a town may impose a higher building permit fee for structures that would have no heat and would be used on a seasonal basis than for structures that have heating facilities.

It is a fundamental principle that a permit fee must bear a direct relation to the costs of issuing the permit and inspecting or enforcing the permitted activity (see, e.g., NY Tel. v City of Amsterdam, 200 AD2d 315, 613 NYS2d 993; Bon Air v Village of Suffern, 32 AD2d 921, 302 NYS2d 304; Orange & Rockland Utilities v Town of Clarkstown, 80 AD2d 846, 444 NYS2d 670; 1986 Opns St Comp No. 86-42, p 69; see also Executive Law, §381[2]). "Exact congruence" between the total expenses and total permit charges is not required (see, e.g., Suffolk County Builders v County of Suffolk, 46 NY2d 613, 621, 415 NYS2d 821,824-5; Opn No. 86-42, supra). The fees, however, must be reasonably necessary to cover the cost of issuance, inspections and enforcement and may not be charged to offset the cost of general governmental functions (see, e.g., NY Tel., supra, in which the court, quoting from Torsoe Bros. v Board of Trustees, 49 AD2d 461, 375 NYS2d 612, stated that "[t]o the extent that [the] fees charged are exacted for general revenue purposes or to offset the cost of general government functions they are invalid as an unauthorized tax ***"). Further, the fee sought to be imposed generally should be estimated based on reliable factual studies or statistics (NY Tel., supra; Jewish Reconstructionist v Inc. Village of Roslyn Heights, 40 NY2d 158, 386 NYS2d 198 rearg denied 40 NY2d 846, 387 NYS2d 1033; Cimato v Town of Pendleton, 237 AD2d 883, 654 NYS2d 888; Wright v LaGrange, 181 Misc 2d 625, 694 NYS2d 862) and bear a reasonable relationship to average costs incurred by the local government (see, e.g., Jewish Reconstructionist, supra; Wildlife Associates v Town of Southampton, 141 AD2d 651, 529 NYS2d 548).

Reasonable classifications of applicants may be established and different fees fixed for each such class, if the local government has a rational basis for such distinctions (see, e.g., Jewish Reconstructionist, supra; cf. Larsen Baking v City of New York, 30 AD2d 400, 292 NYS2d 145 affd 24 NY2d 1036, 303 NYS2d 80; NY Const, art I, §11; US Const, 14th Amd; 9 McQuillin, Municipal Corps., §§26.36, 26.60; 1983 Opns St Comp No. 83-70, p 81). Each situation must be examined on the individual facts and circumstances relating to the local government's justification for the classification. Generally, this Office does not evaluate the validity of the basis for particular proposed classifications (1989 Opns St Comp No. 89-27, p 63; cf. 1988 Opns St Comp No. 88-57, p 116). Rather, we believe that determination should be made, in the first instance, by the local government.

In making its determination here, we believe the town should be guided by the principles set forth above. Those principles suggest a differentiation in charges for seasonal, unheated structures would be more readily justifiable if the town's administrative costs for processing a permit and inspecting or regulating the site were greater for that type of structure (see, e.g., Jewish Reconstructionist, supra; Larsen Baking, supra; 1990 Opns St Comp No. 90-14, p 32; 9 McQuillin, Municipal Corps., §§26.36, 26.60), than if the higher fee were intended for some other purpose (see, e.g., Jewish Reconstructionist, supra, 40 NY2d at 164-167, 386 NYS2d at 201-202, discussing fees that may discourage access to governmental functions).

December 24, 1999
Robert Krutman, Esq., Town Attorney
Town of Fallsburg