## Facts

- The City of Ocean Springs adopted a Comprehensive Plan and related ordinances establishing “development impact fees” after conducting a needs study on costs attributable to new development.
- The ordinances required payment of impact fees as a condition of development approval, including issuance of building permits.
- The fees were imposed in addition to ordinary land-use and permitting charges.
- The fee program funded a wide range of municipal services and capital items, including police and fire services, parks, roadways, water facilities, and general municipal facilities, equipment, and vehicles.
- Development and real-estate groups participated in public hearings and objected, but the City enacted the ordinances.
- Challengers filed a bill of exceptions in circuit court; the circuit court held the ordinances void as unauthorized taxes.
- The City appealed to the Supreme Court of Mississippi.

## Issues

1. Whether the City’s “development impact fees” were, in substance, taxes requiring specific legislative authorization or permissible regulatory fees under municipal police power, home rule, or planning/zoning authority.
2. If the charges were taxes, whether Mississippi law provided enabling legislation authorizing the City to levy and collect them.

## Decision

- The Supreme Court of Mississippi affirmed the circuit court.
- The court held the development impact fees operated as taxes rather than regulatory fees.
- The court found no statutory authorization permitting the City to impose these impact-fee exactions.
- Because the City acted beyond its legal authority, the impact-fee ordinances were invalid and void.

## Legal Principles

- A municipality may not levy a tax without legislative authorization; labels do not control when a charge functions as a tax in substance.
- Broad, mandatory exactions imposed to raise revenue for core governmental services and facilities are treated as taxes, not regulatory fees tied to a narrow service or program.
- Municipal legislative actions are generally upheld unless arbitrary, capricious, discriminatory, or beyond the governing body’s legal authority; lack of statutory authority renders an ordinance ultra vires even if supported by factual studies.
- General home rule, police power, and planning/zoning authority do not, without more, confer power to create new revenue-raising measures equivalent to taxes.

## Conclusion

The court invalidated Ocean Springs’ development impact fee scheme because it functioned as a tax supporting general municipal services and capital needs, and the City lacked express statutory authority to impose such a tax.


Mayor & Bd. of Aldermen, City of Ocean Springs v. Homebuilders Ass’n of Miss., Inc., 932 So. 2d 44 (Miss. 2006)