A unanimous three-judge panel of the N.C. Court of Appeals has agreed that Durham County has no right to collect school impact fees.

Appellate judges announced this morning that the trial court ruled correctly in rejecting the fees. The General Assembly never gave Durham permission to collect the fees.

In writing for the three-judge panel, Judge Richard Elmore recognized that Durham passed a school impact fee ordinance “to generate the hundreds of millions in expanding capital expenditures necessary for school improvements and construction.”

“While a laudable goal, the County must have statutory authority to pass the ordinance requiring the fee,” Elmore continued.

The appeals court says Durham County must refund the fees. Appeals judges overruled a trial court decision that the county should pay interest on those fees. The new ruling requires no interest payments.

Durham’s county attorney argued back in February that the “fees charged on new residential construction are legal because they pay for schools the county is obligated to provide,” according to a News & Observer article February 8.

Homebuilders disagreed. Thirteen of them sued the county in 2003.

Durham County charged $2,000 for each new single-family home and $1,155 for each apartment of condominimum. The News & Observer indicated more than $7 million in collected fee revenue is in escrow.