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H.B. 114

             1     

IMPACT FEES AMENDMENTS

             2     
1999 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Gerry A. Adair

             5      AN ACT RELATING TO CITIES, COUNTIES, AND LOCAL TAXING UNITS; MODIFYING
             6      THE REQUIREMENTS FOR IMPOSING IMPACT FEES; MODIFYING THE PROCESS FOR
             7      CHALLENGING AN IMPACT FEE; AND MAKING TECHNICAL CHANGES.
             8      This act affects sections of Utah Code Annotated 1953 as follows:
             9      AMENDS:
             10          11-36-201, as enacted by Chapter 11, Laws of Utah 1995, First Special Session
             11          11-36-202, as enacted by Chapter 11, Laws of Utah 1995, First Special Session
             12          11-36-401, as enacted by Chapter 11, Laws of Utah 1995, First Special Session
             13      Be it enacted by the Legislature of the state of Utah:
             14          Section 1. Section 11-36-201 is amended to read:
             15           11-36-201. Impact fees -- Analysis -- Capital facilities plan -- Exemptions.
             16          (1) (a) Each local political subdivision shall comply with the requirements of this chapter
             17      before establishing or modifying any impact fee.
             18          (b) A local political subdivision may not:
             19          (i) establish any new impact fees that are not authorized by this chapter; or
             20          (ii) impose or charge any other fees as a condition of development approval unless those
             21      fees are a reasonable charge for the service provided.
             22          (c) Notwithstanding any other requirements of this chapter, each local political subdivision
             23      shall ensure that each existing impact fee that is charged for any public facility not authorized by
             24      Subsection 11-36-102 (11) is repealed by July 1, 1995.
             25          (d) (i) Existing impact fees for public facilities authorized in Subsection 11-36-102 (11)
             26      that are charged by local political subdivisions need not comply with the requirements of this
             27      chapter until July 1, 1997.


             28          (ii) By July 1, 1997, each local political subdivision shall:
             29          (A) review any impact fees in existence as of the effective date of this act, and prepare and
             30      approve the analysis required by this section for each of those impact fees; and
             31          (B) ensure that the impact fees comply with the requirements of this chapter.
             32          (2) (a) Before imposing impact fees, each local political subdivision shall prepare a capital
             33      facilities plan.
             34          (b) The plan shall [identify]:
             35          (i) include an inventory of all existing public facilities;
             36          [(i)] (ii) identify demands placed upon existing public facilities by new development
             37      activity; [and]
             38          [(ii)] (iii) identify the proposed means by which the local political subdivision will meet
             39      those demands; and
             40          (iv) include a detailed estimate of the capital costs for any proposed system improvements.
             41          (c) Municipalities and counties need not prepare a separate capital facilities plan if the
             42      general plan required by Sections 10-9-301 and 17-27-301 contains the elements required by this
             43      subsection.
             44          (d) (i) If a local political subdivision prepares an independent capital facilities plan rather
             45      than including a capital facilities element in the general plan, the local political subdivision
             46      shall[,]:
             47          (A) before adopting the capital facilities plan, give public notice of the plan according to
             48      this [subsection, make a copy of the plan available to the public] Subsection (2)(d);
             49          (B) at least 14 days before the date of the public hearing[,]:
             50          (I) make a copy of the plan, together with a summary easily understood by the general
             51      public, available to the public at no cost; and
             52          (II) place a copy of the plan and summary in each public library within the local political
             53      subdivision; and
             54          (C) hold a public hearing to hear public comment on the plan.
             55          (ii) Municipalities shall comply with the notice and hearing requirements of, and receive
             56      the protections of, Subsections 10-9-103 (2) and 10-9-402 (2).
             57          (iii) Counties shall comply with the notice and hearing requirements of, and receive the
             58      protections of, Subsections 17-27-103 (2) and 17-27-402 (2).


             59          (iv) Special districts shall comply with the notice and hearing requirements of, and receive
             60      the protections of, Section 17A-1-203 .
             61          (v) Nothing contained in Subsection (2)(d) or in the subsections referenced in Subsections
             62      (2)(d)(ii) and (iii) may be construed to require involvement by a planning commission in the
             63      capital facilities planning process.
             64          (e) Local political subdivisions with a population or serving a population of less than 5000
             65      as of the last federal census need not comply with the capital facilities plan requirements of this
             66      part, but shall ensure that the impact fees imposed by them are based upon a reasonable plan.
             67          (3) In preparing the plan, each local political subdivision shall [generally]:
             68          (a) consider all revenue sources, including impact fees, to finance the impacts on system
             69      improvements; and
             70          (b) specifically explain the effect that other revenue sources would have on the average
             71      household if the other revenue sources were used instead of impact fees.
             72          (4) A local political subdivision may only impose impact fees on development activities
             73      when its plan for financing system improvements establishes that impact fees are necessary to
             74      achieve an equitable allocation to the costs borne in the past and to be borne in the future, in
             75      comparison to the benefits already received and yet to be received.
             76          (5) (a) Each local political subdivision imposing impact fees shall prepare a written
             77      analysis of each impact fee that:
             78          (i) identifies the impact on system improvements required by the development activity;
             79          (ii) demonstrates how those impacts on system improvements are reasonably related to the
             80      development activity;
             81          (iii) estimates the proportionate share of the costs of impacts on system improvements
             82      that are reasonably related to the new development activity; and
             83          (iv) based upon those factors and the requirements of this chapter, identifies how the
             84      impact fee was calculated.
             85          (b) In establishing that impact fees are necessary to achieve an equitable allocation to the
             86      costs borne in the past and to be borne in the future, in comparison to the benefits already received
             87      and yet to be received, and in analyzing whether or not the proportionate share of the costs of
             88      public facilities are reasonably related to the new development activity, the local political
             89      subdivision shall identify[, if applicable]:


             90          (i) the original cost of all existing public facilities;
             91          (ii) the manner of financing existing public facilities, such as user charges, special
             92      assessments, bonded indebtedness, general taxes, or federal grants;
             93          (iii) the relative extent to which the newly developed properties and the other properties
             94      in the municipality have already contributed to the cost of existing public facilities, by such means
             95      as user charges, special assessments, or payment from the proceeds of general taxes;
             96          (iv) the relative extent to which the newly developed properties and the other properties
             97      in the municipality will contribute to the cost of existing public facilities in the future;
             98          (v) the extent to which the newly developed properties are entitled to a credit because the
             99      municipality is requiring their developers or owners, by contractual arrangement or otherwise, to
             100      provide common facilities, inside or outside the proposed development, that have been provided
             101      by the municipality and financed through general taxation or other means, apart from user charges,
             102      in other parts of the municipality;
             103          (vi) extraordinary costs, if any, in servicing the newly developed properties; and
             104          (vii) the time-price differential inherent in fair comparisons of amounts paid at different
             105      times.
             106          (c) In identifying the items in Subsection (5)(b), each local political subdivision shall, in
             107      its written analysis, explain in detail the information on which the local political subdivision bases
             108      its determination of the equitable allocation of the costs borne by existing and new development
             109      in comparison to the benefits already received and yet to be received by both.
             110          (d) A local political subdivision may not adopt an impact fee enactment if any of the items
             111      in Subsection (5)(b) is not expressly identified or if the explanation required under Subsection
             112      (5)(c) is not provided for any of those items.
             113          (e) A local political subdivision may not prepare, consider, or adopt a written analysis
             114      required under this Subsection (5) until 60 days after adoption of a capital facilities plan.
             115          (f) (i) Before adopting a written analysis under this Subsection (5), each local political
             116      subdivision shall:
             117          (A) give public notice of the written analysis according to this Subsection (5)(f);
             118          (B) at least 14 days before the date of the public hearing:
             119          (I) make a copy of the written analysis, with a summary easily understood by the general
             120      public, available to the public at no cost; and


             121          (II) place a copy of the written analysis and summary in each public library within the local
             122      political subdivision; and
             123          (C) hold a public hearing to obtain public comment on the analysis.
             124          (ii) Each municipality shall comply with the notice and hearing requirements and receive
             125      the protections of Subsections 10-9-103 (2) and 10-9-402 (2).
             126          (iii) Each county shall comply with the notice and hearing requirements and receive the
             127      protections of Subsections 17-27-103 (2) and 17-27-402 (2).
             128          (iv) Each special district shall comply with the notice and hearing requirements and
             129      receive the protections of Section 17A-1-203 .
             130          (6) Nothing in this chapter may be construed to repeal or otherwise eliminate any impact
             131      fee in effect on the effective date of this act that is pledged as a source of revenues to pay bonded
             132      indebtedness that was incurred before the effective date of this act.
             133          Section 2. Section 11-36-202 is amended to read:
             134           11-36-202. Impact fees -- Enactment -- Required provisions.
             135          (1) (a) Each local political subdivision wishing to impose impact fees shall pass an impact
             136      fee enactment.
             137          (b) The impact fee imposed by that enactment may not exceed the highest fee justified by
             138      the impact fee analysis performed pursuant to Section 11-36-201 .
             139          (c) In calculating the impact fee, each local political subdivision may include:
             140          (i) the construction contract price;
             141          (ii) the cost of acquiring land, improvements, materials, and fixtures;
             142          (iii) the cost for planning, surveying, and engineering fees for services provided for and
             143      directly related to the construction of the system improvements; and
             144          (iv) debt service charges, if the political subdivision might use impact fees as a revenue
             145      stream to pay the principal and interest on bonds, notes, or other obligations issued to finance the
             146      costs of the system improvements.
             147          (d) In enacting an impact fee enactment:
             148          (i) municipalities shall:
             149          (A) make a copy of the impact fee enactment available to the public at not cost at least 14
             150      days before the date of the public hearing; and
             151          (B) comply with the notice and hearing requirements of, and receive the protections of,


             152      Subsections 10-9-103 (2) and 10-9-802 (2);
             153          (ii) counties shall:
             154          (A) make a copy of the impact fee enactment available to the public at not cost at least 14
             155      days before the date of the public hearing; and
             156          (B) comply with the notice and hearing requirements of, and receive the protections of,
             157      Subsections 17-27-103 (2) and 17-27-802 (2); and
             158          (iii) special districts shall:
             159          (A) make a copy of the impact fee enactment available to the public at not cost at least
             160      14 days before the date of the public hearing; and
             161          (B) comply with the notice and hearing requirements of, and receive the protections of,
             162      Section 17A-1-203 .
             163          (e) Nothing contained in Subsection (1)(d) or in the subsections referenced in Subsections
             164      (d)(i)(B) and (ii)(B) may be construed to require involvement by a planning commission in the
             165      impact fee enactment process.
             166          (f) A local political subdivision may not prepare, consider, or adopt an impact fee
             167      enactment until 30 days after adoption of the written analysis required under Subsection
             168      11-36-201 (5).
             169          (2) The local political subdivision shall ensure that the impact fee enactment contains:
             170          (a) a provision establishing one or more service areas within which it shall calculate and
             171      impose impact fees for various land use categories;
             172          (b) either:
             173          (i) a schedule of impact fees for each type of development activity that specifies the
             174      amount of the impact fee to be imposed for each type of system improvement; or
             175          (ii) the formula that the local political subdivision will use to calculate each impact fee;
             176          (c) a provision authorizing the local political subdivision to adjust the standard impact fee
             177      at the time the fee is charged to:
             178          (i) respond to unusual circumstances in specific cases; and
             179          (ii) ensure that the impact fees are imposed fairly; and
             180          (d) a provision governing calculation of the amount of the impact fee to be imposed on a
             181      particular development that permits adjustment of the amount of the fee based upon studies and
             182      data submitted by the developer.


             183          (3) The local political subdivision may include a provision in the impact fee enactment
             184      that:
             185          (a) exempts low income housing and other development activities with broad public
             186      purposes from impact fees and establishes one or more sources of funds other than impact fees to
             187      pay for that development activity; and
             188          (b) imposes an impact fee for public facility costs previously incurred by a local political
             189      subdivision to the extent that new growth and development will be served by the previously
             190      constructed improvement[; and (c) allows].
             191          (4) Each impact fee enactment shall include a provision that gives a fair market value
             192      credit against impact fees for any dedication of land for, improvement to, or new construction of,
             193      any system improvements provided by the developer if the facilities:
             194          [(i)] (a) are identified in the capital facilities plan; and
             195          [(ii)] (b) are required by the local political subdivision as a condition of approving the
             196      development activity.
             197          [(4) Except as provided in Subsection (3)(b), the]
             198          (5) A local political subdivision may not impose an impact fee to cure deficiencies in
             199      public facilities serving existing development.
             200          [(5)] (6) Notwithstanding the requirements and prohibitions of this chapter, a local
             201      political subdivision may impose and assess an impact fee for environmental mitigation when:
             202          (a) the local political subdivision has formally agreed to fund a Habitat Conservation Plan
             203      to resolve conflicts with the Endangered Species Act of 1973, 16 U.S.C. Sec 1531, et seq. or other
             204      state or federal environmental law or regulation; [and]
             205          (b) the impact fee bears a reasonable relationship to the environmental mitigation required
             206      by the Habitat Conservation Plan; and
             207          (c) the legislative body of the local political subdivision adopts an ordinance or resolution:
             208          (i) declaring that an impact fee is required to finance the Habitat Conservation Plan;
             209          (ii) establishing periodic sunset dates for the impact fee; and
             210          (iii) requiring the legislative body to:
             211          (A) review the impact fee on those sunset dates;
             212          (B) determine whether or not the impact fee is still required to finance the Habitat
             213      Conservation Plan; and


             214          (C) affirmatively reauthorize the impact fee if the legislative body finds that the impact
             215      fee must remain in effect.
             216          [(6)] (7) Each political subdivision shall ensure that any existing impact fee for
             217      environmental mitigation meets the requirements of Subsection (5) by July 1, 1995.
             218          [(7)] (8) Notwithstanding any other provision of this chapter, municipalities imposing
             219      impact fees to fund fire trucks as of the effective date of this act may impose impact fees for fire
             220      trucks until July 1, 1997.
             221          [(8)] (9) Notwithstanding any other provision of this chapter, a local political subdivision
             222      may impose and collect impact fees on behalf of a school district if authorized by Section
             223      53A-20-100.5 .
             224          Section 3. Section 11-36-401 is amended to read:
             225           11-36-401. Impact fees -- Challenges -- Appeals.
             226          (1) Any person or entity residing in or owning property within a service area, and any
             227      organization, association, or corporation representing the interests of persons or entities owning
             228      property within a service area, may file a declaratory judgment action challenging the validity of
             229      the fee.
             230          (2) (a) Any person or entity required to pay an impact fee who believes the fee does not
             231      meet the requirements of law may file a written request for information with the local political
             232      subdivision who established the fee.
             233          (b) Within two weeks of the receipt of the request for information, the local political
             234      subdivision shall at no cost provide the person or entity with the written analysis required by
             235      Section 11-36-201 , the capital facilities plan, and with any other relevant information relating to
             236      the impact fee.
             237          [(3) Within 30 days after paying an impact fee, any person or entity who has paid the fee
             238      and wishes to challenge the fee shall:]
             239          [(a) file a written request for information and pursue administrative remedies, if the local
             240      political subdivision has adopted an ordinance establishing an administrative appeals procedure;
             241      or]
             242          [(b) file an action challenging the impact fees with the district court, if the local political
             243      subdivision has not adopted an ordinance establishing an administrative appeals procedure.]
             244          [(4) (a) Any local political subdivision may establish, by ordinance, an administrative


             245      appeals procedure to consider and decide challenges to impact fees.]
             246          [(b) If the local political subdivision establishes an administrative appeals procedure, the
             247      local political subdivision shall ensure that the procedure includes a requirement that the local
             248      political subdivision make its decision no later than 30 days after the date the challenge to the
             249      impact fee is filed.]
             250          [(c) A person or entity who has failed to comply with the administrative remedies
             251      established by this section may not file or join an action challenging the validity of any impact fee.]
             252          [(5) (a) If the local political subdivision establishes an administrative appeals procedure,
             253      within 90 days of a decision upholding an impact fee by a local political subdivision or within 120
             254      days after the date the challenge to the impact fee was filed, whichever is earlier, any party to the
             255      administrative action who is adversely affected by the local political subdivision's decision may
             256      petition the district court for a review of the decision.]
             257          [(b) (i) The local political subdivision shall transmit to the reviewing court the record of
             258      its proceedings including its minutes, findings, orders and, if available, a true and correct transcript
             259      of its proceedings.]
             260          [(ii) If the proceeding was tape recorded, a transcript of that tape recording is a true and
             261      correct transcript for purposes of Subsection (b).]
             262          [(c) (i) If there is a record:]
             263          [(A) the district court's review is limited to the record provided by the local political
             264      subdivision; and]
             265          [(B) the court may not accept or consider any evidence outside the local political
             266      subdivision's record unless that evidence was offered to the local political subdivision and the
             267      court determines that it was improperly excluded by the local political subdivision.]
             268          [(ii) If there is an inadequate record, the court may call witnesses and take evidence.]
             269          [(d) The court shall affirm the decision of the local political subdivision if the decision is
             270      supported by substantial evidence in the record.]
             271          (3) A person or entity may file an action in district court challenging an impact fee as not
             272      meeting all the requirements of this chapter if the person or entity:
             273          (a) resides in, owns, or has an interest in property within the service area affected by the
             274      impact fee; or
             275          (b) is required to pay the impact fee.


             276          (4) In an action under Subsection (3) or in an arbitration proceeding challenging the
             277      validity of an impact fee:
             278          (a) no presumption of validity attaches to the actions of the local political subdivision; and
             279          (b) the local political subdivision bears the burden of demonstrating that the fee is an
             280      equitable allocation of the costs borne by new and existing development, as required under
             281      Subsection 11-36-201 (4).
             282          [(6)] (5) The judge may award reasonable attorneys' fees and costs to the prevailing party
             283      in any action brought under this section.
             284          [(7)] (6) Nothing in this chapter may be construed as restricting or limiting any rights to
             285      challenge impact fees that were paid before the effective date of this [act] chapter.




Legislative Review Note
    as of 1-25-99 6:47 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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