Revolving funds were authorized by the Legislature for the deposit of departmental

							Hardwick Special Town Meeting of November 15, 2001 — Case # 1914

Case Comment

        The Attorney General disapproves the portion of proposed by-law amendment that would
        authorize the Conservation Commission to return any unused portion of the consultant
        fee to the applicant because it is inconsistent with G.L.c. 44, §§ 53 and 53E-1/2, which
        states that all unused funds must be put into the town’s general fund.


                                              January 4, 2002

Paula L. Roberts, Town Clerk
307 Main Street
Gilbertville, MA 01031

RE:     Hardwick Special Town Meeting of November 15, 2001 — Case # 1914
        Warrant Article # 17 (General)

Dear Ms. Roberts:

        I return the amendments to the town by-laws adopted under Article 17 of the warrant for the
Hardwick town meeting that convened on November 15, 2001, with the approval of this Office, except
as provided below.

       The amendments adopted under Article 17 add a new section authorizing the Conservation
Commission to impose consultant fees. Specifically, the proposed by-law provides in pertinent part as
follows:

        The Commission may require the payment of the consultant fee at any point in its deliberations prior to
        a final decision. The applicant shall pay the fee to be put into a consultant services account of the
        Commission which may be drawn upon by the Commission for specific consultant services approved by
        the Commission at one of its public meetings. The Commission shall return any unused portion of the
        consultant fee to the applicant.

(Emphasis added.)

        The above text requires consultant fees paid by the applicant to be deposited into a “consultant
services account” which the conservation commission would access to pay for consulting services.
Any unpaid balance would be returned to the applicant. It is unclear whether the “consultant services
account” is intended to be an account authorized under state law or whether it is intended to be a special
account created by by-law.
         General Laws Chapter 44, § 53, provides that “[a]ll moneys received by a city, town or district
officer or department, except as otherwise provided by special acts and except fees provided for by
statute, shall be paid by such officers or department upon their receipt into the city, town or district
treasury.” While we find no facial inconsistency between state laws and the mere imposition and
collection of the fee as prescribed in the first sentence in the above quoted text, it is our opinion that the
funds collected become part of the town's general fund unless placed in a fund established by the
Legislature by general law or special act. In the packet of materials submitted to us for review, we
were not given any information showing that the town has received a special act from the Legislature
authorizing the creation of the “consultant services account.”

         In the absence of any general or special law to the contrary, fees of the sort contemplated here
would, pursuant to G.L. c. 44, § 53, have to be deposited with the Town Treasurer and made part of the
town's general fund, thus not available to the Commission for the purpose for which they were assessed
unless in accordance with an appropriation made by Town Meeting. Illustrative of such legislative
authority is G.L. c. 44, § 53G. General Laws Chapter 44, § 53G, which authorizes zoning boards,
planning boards, and boards of health acting under authority conferred by G.L. c. 40A, §§ 9 and 12, c.
41, § 81Q, c. 40B, § 21, and c. 111, to impose such a fee to pay for its anticipated expenses in retaining
a consultant, to draw upon the funds collected for the stated purpose, and to return unused portions to
the applicant. It must be noted that the Legislature did not include conservation commissions within
the small class of local boards that enjoy the benefits of Section 53G. Such inclusion would require
special legislation or an amendment to the statute to accomplish this. We point out that there is
proposed legislation to include conservation commissions when acting under the State Wetlands Act,
G. L. c. 131, § 40, among the regulatory boards that may establish consulting fee accounts under G.L.
c. 44, § 53G; however, Section 53G as it is now written, cannot be construed to have application other
than to the three boards expressly specified therein. Thus, the “consultant services account” is not an
account authorized by Section 53G.

        Another such general law is established by G.L. c. 44, § 53E-1/2, authorizing revolving funds.
We see many practical problems and difficulties in trying to adapt the functionality of the revolving
fund to purposes which the fund established under G.L. c. 44, § 53G, was uniquely designed to
achieve. Revolving funds were authorized by the Legislature for the deposit of “departmental receipts
received in connection with the programs supported by such revolving fund.” It is not entirely clear
whether the term “program” is malleable enough to be applicable to the project-oriented review
functions of the Conservation Commission, or that the “consultant fee” is the functional equivalent of
the “program fee” for which revolving fees were authorized by the Legislature. We wish to point out,
however, that the purposes intended require an applicant to give money to the town to cover anticipated
– but only estimated – expenses for consulting services.

        We consider next, the underlined sentence that prescribes the return of unused portions of the
consultant fee. Of the methods of handling the fee which we described above, unused portions of the
fee may not be returned to the applicant if the fee was deposited either to the general fund under G.L. c.
44, § 53, or in a revolving fund under G.L. c. 44, § 53E-1/2. While Section 53G funds are equipped
with a statutory basis for the return of unused portions, no mechanism for the return of funds is
incorporated into the revolving fund under Section 53E-1/2. For this reason, we disapprove and delete
the above underlined text of the proposed
by-law. [Disapproval # 1 of 1].

        Lastly, G.L. c. 44, § 53E ½, requires revolving funds to be established and renewed annually by
Town Meeting, and may not be set up in the body of a town by-law. Each town meeting has the power
to decide whether or not to authorize a revolving fund for the upcoming fiscal year and if so, what
particular receipts will be credited to the fund and how the funds may be spent. It is unclear what
purpose this new text is intended to serve since one town meeting cannot bind future town meetings
with respect to authorizing a revolving fund. Thus, if a fund were not authorized for the fees covered
by this by-law, then the fees would become part of the general fund pursuant to G.L. c. 44, § 53,
notwithstanding the provisions of this amendment. While we are aware of no compelling basis to say
that the amendments adopted under Article 17 are inconsistent with state law, we urge the town to
consult with Town Counsel so as to assure that all of the provisions of G.L. c. 44, § 53E-1/2, are
complied with in the handling of such fees.

        The proposed by-law also establishes a schedule of maximum consultant fees to be borne by
the applicant. Consultant fees range from $1,000 for projects whose cost is up to $100,000 to fees of
$10,000 for projects that cost up to $2,000,000. For each additional $500,000 of project cost increment
over $2,000,000, there would be an additional $2,500 maximum fee per increment.

        While we are unable to ascertain that, as a matter of law, the overall consultant fee structure of
the by-law is facially inconsistent with state law, we caution the town that application of the by-law's
consultant fee provisions could foreseeably result in municipal revenues brushing up against or
exceeding the limits imposed on local government by the Constitution and the statutes of the
Commonwealth. The town might wish to discuss with town counsel whether the fee provisions,
collectively and as applied, amount to a tax not specifically authorized by the Legislature and are
therefore unlawful. Valid fees are distinguishable from invalid taxes by three criteria: (i) the fee is
assessed for a particular government service benefitting the party paying the fee in a manner not shared
by other persons; (ii) the person assessed has the option to decline the service and thus avoid the
charge; and (iii) the amounts paid compensate the town for its costs and expenses of providing the
services rather than raising revenues. Emerson College v. Boston, 391 Mass. 415, 427-428 (1984).
Moreover, a lawful fee is one that only covers the Commission's reasonably anticipated costs of
providing the services for which the fee is assessed. Southview Cooperative Housing Corp. v. Rent
Control Board of Cambridge, 396 Mass. 395, 402 (1985).

NOTE: We ask that you forward to us a copy of the final text of the amendments adopted under Article
17 after making the deletions identified in this letter. It will be sufficient to send us a copy of the by-laws
as published pursuant to G.L. c. 40, § 32.

                                                   Very truly yours,

                                                   THOMAS F. REILLY
                                                   ATTORNEY GENERAL


                                                   by: Kelli E. Lawrence, Assistant Attorney General
                                                   Municipal Law Unit
                                                   436 Dwight Street
                                                   Springfield, MA 01103-1317
                                                   (413) 784-1240, x 46


enc.
pc:

Town Counsel

                                                                                                             3
309947e7-cd8e-495d-a1fd-6967f34d700e.rtf