Suffolk County Builders Assn. v. Suffolk County, 46 N.Y.2d 613 (1979)

A county board of health has the implied authority to impose reasonable fees for health permits if the fees are reasonably related to the cost of the regulatory program, even if the enabling statute does not explicitly grant such authority.

Summary

Suffolk County Builders Association challenged the validity of a schedule of site inspection charges imposed by the Suffolk County Department of Health Services. The regulation, section 301(1)(a) of the Suffolk County Sanitary Code, authorized the Commissioner of Health Services to impose fees for permits consistent with the cost of examination and field inspections. The builders argued the board lacked statutory authority to impose fees and that the fee schedule was improperly calculated. The Court of Appeals held that the board had implied authority to impose reasonable fees related to the cost of the regulatory program, and the delegation to the commissioner was proper. The use of estimates in calculating the fee schedule did not invalidate it.

Facts

The Suffolk County Board of Health adopted section 301(1)(a) of the Suffolk County Sanitary Code, authorizing the Commissioner of Health Services to establish a schedule of fees for health permits. The health department conducted a study to determine the expenses incurred in issuing health permits for new construction, considering the cost of related services, the number of inspections, and the time required for processing applications. Based on this study, the commissioner established a fee schedule ranging from $25 to $140 for residential construction permits. Plaintiffs, Suffolk County Builders Association, challenged the validity of the fee schedule.

Procedural History

The Supreme Court declared the regulation invalid, agreeing with the builders’ arguments. The Appellate Division reversed, rejecting all of the builders’ arguments. The builders appealed to the New York Court of Appeals.

Issue(s)

1. Whether the County Board of Health had the authority to impose fees for health permits in the absence of explicit statutory authorization.
2. Whether the delegation of authority to establish the fee schedule from the board to the commissioner and the health department was lawful.
3. Whether the fees imposed by the commissioner were “consistent with the cost of examination and field inspections,” given that the cost figures were based partly on estimates.

Holding

1. Yes, because the power to impose reasonable fees in connection with effective regulation can be implied from a broad delegation of authority.
2. Yes, because legislative delegations of power to administrative bodies are legitimate so long as adequate standards exist to channel the exercise of that power. Subdelegation is a commonsense incident of hierarchical organization.
3. Yes, because exact congruence between total expenses and total permit charges was not required; a reasonable correspondence between costs and fees is sufficient.

Court’s Reasoning

The court reasoned that section 347 of the Public Health Law delegated broad authority to county boards of health to create regulations for the security of life and health. While the statute did not explicitly authorize the imposition of permit fees, such power can be implied from broad delegations. The court stated, “Though the statute nowhere provides explicitly for the imposition of permit fees by the board, in other contexts the power to impose reasonable fees in connection with effective regulation has been implied from similarly broad delegations.” The court further reasoned that the power to regulate subsumes the power to license and set fees reasonably related to the cost of licensing. “For, without the power to do so, a local governmental agency might well find itself without the means to fulfill its statutory imperative.”

Regarding the delegation of authority, the court emphasized that delegations of power to administrative bodies are acceptable if adequate standards exist to guide the exercise of that power. The court found that the subdelegation from the board to the commissioner and the department was reasonable. It stated, “It is a commonsense proposition that subdelegation is an inevitable incident of hierarchical organization; the issue then is one of degree.”

Finally, the court addressed the builders’ argument that the fees were not consistent with the cost of inspections because the figures were based on estimates. The court acknowledged that the commissioner relied on estimates when separating commercial from noncommercial inspections because no prior time studies existed. The court reasoned that “exact congruence between total expenses and total permit charges was not required” and that the commissioner had aimed for “a reasonable correspondence between costs and fees”. The court also noted that the actual total cost of the program came within 10% of the projected costs, favoring the licensees.