Capistrano Beach Water District v. Taj Development Corporation

We decide here whether a sewer connection fee of capacity charge, paid by a developer to connect its hotel to a sanitation district’s sewer system, falls within the definition of a “development fee” under Government Code section 66000 et seq. (the Mitigation Fee Act, hereafter the Act). The Act restricts the imposition and use of development fees and provides developers a limited right of refund. (§ 66001, subd. (e).) The right to a refund was not allowed for sewer connection fees and capacity charges under the Act in place at the time of the underlying action. (Former § 54991.) Under current law, sewer connection fees and capacity charges are specifically excluded from the refund provisions of the Act. (§ 66013, subd. (h).) We conclude the fees paid by appellant were connection fees (or capacity charges) and not development fees, and so affirm the judgment.

I

Taj Development Corporation and Chandulal Patel (collectively, Taj) own ánd operate the Dana Point Hilton. In July of 1989, Taj requested a sewer connection permit from the Capistrano Beach Water District (District). The District issued the permit and Taj paid a fee in the amount of $393,490.48 to connect its…