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Here’s an analysis of how the IVGID’s “recreational facility fee” would likely be classified under Nevada law:

Classification of IVGID’s Recreational Facility Fee

The IVGID’s recreational facility fee would likely be classified as a **special assessment tax** rather than a fee under Nevada law. Here’s why:

1. Purpose of the charge: The primary purpose appears to be raising revenue for recreational facilities and services, rather than regulating a specific activity or defraying the costs of a particular service[1].

2. Lack of voluntariness: The fee is mandatory for property owners and collected through property tax bills, making it compulsory rather than optional[1][2].

3. Beneficiary of the charge: While the fee is assessed on properties, the benefits accrue to individuals (property owners or their designees) rather than directly to the properties themselves[2].

4. Proportionality to benefit: There’s no clear indication that the fee is proportionate to the benefit received by each property or owner[1][2].

5. Allocation of funds: The funds are used for a variety of recreational purposes, not necessarily tied directly to specific services used by each payer[1][2].

Comparison to Nevada’s Fee Criteria

Applying the three-factor test from Clean Water Coalition v. The M Resort, LLC:

1. The charge does not apply solely to direct beneficiaries of particular services.

2. While allocated to recreational services, it’s not clearly tied to specific service costs.

3. There’s no evidence of proportionality between the fee and benefits received.

Special Assessment Tax Considerations

The IVGID’s recreational facility fee may face challenges as a special assessment tax:

1. Benefit requirement: In City of Reno v. Folsom, the Nevada Supreme Court held that special assessments must provide a commensurate benefit to the property assessed. The IVGID fee benefits individuals rather than properties directly[3].

2. Ambiguity in classification: If there’s ambiguity in how to classify this charge, Nevada courts would likely interpret it in favor of the taxpayer, potentially invalidating it as a tax[4].

3. The statute NRS 318.235 appears to be relevant to the IVGID situation, where the district has been levying a special assessment (labeled as a recreation facility fee) for years – likely after bonds were repaid. According to the statute, the board must take into account the maturing general obligation indebtedness, deficiencies, and defaults of prior years when certifying annual levies. It also states that if the money produced from levies and other revenues is not sufficient to pay the annual installments on such obligations, interest, and to pay defaults and deficiencies, the board shall make additional levies of taxes as necessary for these purposes.

Furthermore, the statute emphasizes that such taxes must be made and continue to be levied until the general obligation indebtedness of the district is fully paid, but must not continue after that date. This suggests that if the IVGID has been levying a special assessment (recreation facility fee) after the repayment of bonds, it may be in violation of this statute.

In this case, property owners could potentially argue that the continued levying of the recreation facility fee after bond repayment violates NRS 318.235, making the fee an unlawful tax.   This could lead to legal action and potentially result in refunds for property owners, as well as penalties or other legal consequences for the district for violating NRS 318.235.

For a valid parcel fee levy, look at NRS 548, which enables a Conservation District to assess a per parcel fee on NO MORE THAN $25 annually,  and requires a VOTE by parcel owners.    Nevada Conservation Parcel Fee Levy   

 

If the Nevada legislature intended to allow a per parcel fee – they would have written controls into the legislature like NRS 548, wouldn’t have they? So isn’t it likely that in reality – there is no power to levy a per parcel fee – and IVGID has been fooing the property owners for decades?

In conclusion, while the IVGID calls this charge a “fee,” its characteristics more closely align with those of a special assessment tax under Nevada law. However, it may face legal challenges due to the lack of direct property benefit and potential classification ambiguity.  Since 1969, IVGID has collected an estimated $109 million dollars from the assessment of these charges.  Nevada law limits property taxes to $3.64 per $100 of assessed valuation, so the per-parcel property “recreation facility” charge may be in excess of the statutory limit for a majority of Incline Village/Crystal Bay properties.

 

 

 

Footnotes

[1] https://www.tahoedailytribune.com/news/incline-village-board-sets-recreation-and-beach-fees/

[2] https://www.yourtahoeplace.com/parks-recreation/about-recreation/ivgid-passholder-information

[3] https://www.steveandchristineperry.com/about-incline-village/incline-village-amenities-and-ivgid/

[4] https://www.yourtahoeplace.com/parks-recreation/rec-center