TIM Fee Upheld
Allen Matkins

PLACERVILLE, California (InEDC) Nov 17, 2022 — California’s Court of Appeal for the Third District recently held that El Dorado County’s imposition of a Traffic Impact Mitigation Fee (TIM) as a condition of approval for a residential building permit was valid under the California Mitigation Fee Act and did not violate the takings clause of the Fifth Amendment. …

This case also confirms that legislatively-adopted impact fees imposed as a condition of approval for a land-use permit are subject to the Mitigation Fee Act’s “reasonable relationship” requirement, which requires the local agency to demonstrate that there is a reasonable relationship, in both intended use and amount, between a project’s impact and the fee imposed. By contrast, development fees imposed on an ad-hoc, individual, discretionary basis are subject to heightened judicial scrutiny under the Nollan/Dolan test discussed below.

Here, the County adopted the TIM to fund street construction to mitigate traffic impacts from new development. Consequently, the court reviewed the TIM under the “reasonable relationship” requirement after rejecting petitioner’s argument that heightened scrutiny should apply. The court determined that the County had established a reasonable relationship between the TIM’s amount and the residential project’s impacts …

This case continues the line of cases distinguishing between general, legislatively-adopted impact fees and individualized, project-specific impact fees, and reiterates that when reviewing an agency’s application of legislatively-adopted fees to a project, courts are deferential to agencies and typically uphold an agency’s action unless it was “arbitrary, capricious or entirely lacking in evidentiary support.”

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