Bald Head Island is a resort community and incorporated municipality on a barrier island. The main form of transportation on the island is by electrically powered golf cart, and the village imposes fees on the use on internal-combustion engines. In a ruling Jan. 17, the N.C. Court of Appeals upheld the village’s 2002 10-fold increase of the fees to as high as $200 a day.
In 1997 law, the General Assembly took note of the “unique nature of Bald Head Island with its combination of structures, land, and vegetation, including the oldest standing lighthouse along the coast of the State and approximately 172 acres of publicly owned prime maritime forest, that exist in a delicate ecological balance requiring careful planning, nurture, and support, as evidenced in the development plan for the island.”
The island’s roads are designed to accommodate golf carts, not cars. The village has charged for some years a fee on the use of vehicles powered by internal-combustion engines. The amount of the fee depends on the vehicle’s gross weight, width, and duration of use.
In 2002, Bald Head Island raised the fees dramatically. While previously the top annual permit fee had been $200, after the increase it went to $2,000. Daily fees on construction vehicles and delivery vans were set at $200. The same year, the legislature expressly authorized the village to regulate vehicles through the assessment of fees; the legislature had previously authorized it to regulate motor vehicles.
A number of companies that did business on the island challenged the fee increase in court. They argued that Bald Head Island’s “fees” really amounted to a tax, and that while the village had the authority to impose a fee, it did not have the power to levy a tax. The argument was based on the assertion that the fees exceeded the village’s cost of enforcement with the balance used to subsidize the maintenance and construction of roads, which is what “taxes” are used for.
The Court of Appeals, however, was not persuaded by this line of reasoning.
“As the fees are based on a vehicle’s weight and width, and on the duration of the permit, we conclude that they are squarely within the legislative grant of power to assess fees based on ‘criteria that bear upon the Village’s costs,’” Judge Robin Hudson wrote for the court.
“Furthermore, in the amended Charter, the General Assembly explicitly stated that the fees must be used to finance ‘the establishment and maintenance’ of the Village’s roads. Accordingly, we conclude that the Village has not exceeded its statutory authority.”
The court also rejected user’s constitutional due-process argument, finding the fee scheme rationally related to the village’s regulation and maintenance of roads.
The case is dDBald Head Island, Ltd. v. Village of Bald Head Island, (04-1209)
http://www.aoc.state.nc.us/www/public/coa/opinions/2006/041209-1.htm
Michael Lowrey is associate editor of Carolina Journal.