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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
COUNTIES -- Powers and Duties (imposition of fees at county landfill)
FEES -- Rates (authority to impose fees to produce revenue for general purposes)
LANDFILL -- County (imposition of fees) -- Fees (authority to impose fees to produce revenue for general purposes)
COUNTY LAW, §226-b: A county may establish rates or fees for the use of a county landfill pursuant to County Law, §226-b which are reasonably related to the cost of providing the landfill. Such rates or fees, however, may not be imposed to generate revenues in excess of such cost for the purpose of offsetting the general cost of county government.
This is in reply to your letter concerning user fees imposed for the use of the county landfill. You indicate that the county operates a county-wide sanitary landfill and has imposed a system of charges for its use. You ask whether the county may fix user fees for the use of the landfill at an amount which generates revenue in excess of the cost of operating the landfill. The excess revenues would be used for general county purposes.
County Law, §226-b(1) authorizes a county to appropriate and expend such sums as it may deem proper to provide for the separation, collection and management of solid waste in the county. That section further authorizes a county to acquire, construct, operate and maintain solid waste management facilities, acquire the necessary lands therefor, and purchase, operate and maintain all necessary appliances appurtenant thereto (County Law, §226-b). County Law, §226-b(2) authorizes the legislative body of the county, by resolution, to establish schedules of rates or fees to be charged for any solid waste management facilities or services provided pursuant to section 226-b. The schedule of user fees may establish varying rates for different classes of users, subject to equal protection guarantees (see NY Const, art 1, §11; AA & M Carting v Town of Hempstead, 183 AD2d 738, 583 NYS2d 473).
It is a well-established general principle that the amount of a regulatory license or permit fee must be reasonably related to the municipality's cost of the particular regulatory program (see, e.g., Suffolk County Builders Association v County of Suffolk, 46 NY2d 613, 415 NYS2d 821; Jewish Reconstructionist Synagogue of North Shore v Incorporated Village of Roslyn Harbor, 40 NY2d 158, 386 NYS2d 198). It is also well established, however, that a license or permit fee which is not directly related to the cost of administering the program or which is imposed for the purpose of generating revenue to offset the cost of governmental functions generally is a tax (see Orange and Rockland Utilities, Inc. v Town of Clarkstown, 80 AD2d 845, 444 NYS2d 670; Torsoe Brothers Construction Corp. v Board of Trustees of the Incorporated Village of Monroe, 49 AD2d 461, 375 NYS2d 612; Bon Air Estates, Inc. v Village of Suffern, 32 AD2d 921, 302 NYS2d 304; Rauscher v Village of Boonville, 131 Misc 2d 264, 499 NYS2d 832; Nitkin v Administrator of the Health Services Administration of City of New York, 91 Misc 2d 478, 399 NYS2d 162, affd 55 AD2d 566, 389 NYS2d 1022, affd 43 NY2d 673, 400 NYS2d 817; Mobil Oil Corporation v Town of Huntington, 85 Misc 2d 800, 380 NYS2d 466). A charge which, although denominated a fee, is truly a tax, may not be imposed by a municipality without express statutory authority (see NY Const., art XVI, §1; Sonmax, Inc. v City of New York, 43 NY2d 253, 401 NYS2d 173; Nitkin, supra; Mobil Oil Corporation, supra). These principles are equally applicable to fees established for the use of a municipal service or facility (see Watergate II Apartments v Buffalo Sewer Authority, 46 NY2d 52, 412 NYS2d 821; see also 1992 Opns St Comp No. 92-18, p 43).
In Watergate II Apartments, supra, the Court of Appeals considered the validity of a sewer rent formula having three components: (1) actual water consumption; (2) the assessed value of taxable real property; and (3) the assessed value of exempt real property. At issue was whether the third component constituted an unauthorized tax as a matter of law. The Court sustained the formula noting that:
[u]nlike taxes, which go to the support of government without any necessity to relate them to particular benefits received by the taxpayer [citation omitted], the charges that the authority was empowered to collect were in the nature of fees which had to bear a direct relationship to the cost of furnishing the water services [citations omitted]. * * * Exact congruence between the cost of the services provided and the rates charged to particular customers is not required. Where only an approximation of cost or value is possible, discrepancies may have to be endured in the name of administrative flexibility so long as there exists a rational underpinning for the charges levied [citations omitted]. (46 NY2d at 59, 60, 412 NYS2d at 824, 825).
The Court held that the particular user fees bore a direct relationship to the services and benefits actually rendered to users and thus were properly regarded as rents rather than taxes.
Based on the foregoing, in our opinion, a county may establish fees for the use of the county landfill which are reasonably related to the cost of providing the landfill. There is no authority, however, for a county to establish fees for the use of its landfill which are designed to generate revenues in excess of the cost of providing the facility for the purpose of offsetting the general cost of county government (cf. General Municipal Law, §94, which authorizes municipalities operating certain public utilities to earn "a fair return on the value of the property used and useful in such public utility service").
December 30, 1992
Marvin Newberg, Esq., County Attorney