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First Substitute H.B. 114

Representative Gerry A. Adair proposes to substitute the following bill:


             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      ENACTS:
             14          11-36-103, Utah Code Annotated 1953
             15      Be it enacted by the Legislature of the state of Utah:
             16          Section 1. Section 11-36-103 is enacted to read:
             17          11-36-103. Allowable fees for providing documents.
             18          If a provision of this chapter allows or requires a local political subdivision to provide or
             19      make available a document to the public, the local political subdivision may charge a fee, as
             20      provided in Section 63-2-203 , for providing or making available that document.
             21          Section 2. Section 11-36-201 is amended to read:
             22           11-36-201. Impact fees -- Analysis -- Capital facilities plan -- Exemptions.
             23          (1) (a) Each local political subdivision shall comply with the requirements of this chapter
             24      before establishing or modifying any impact fee.
             25          (b) A local political subdivision may not:


             26          (i) establish any new impact fees that are not authorized by this chapter; or
             27          (ii) impose or charge any other fees as a condition of development approval unless those
             28      fees are a reasonable charge for the service provided.
             29          (c) Notwithstanding any other requirements of this chapter, each local political subdivision
             30      shall ensure that each existing impact fee that is charged for any public facility not authorized by
             31      Subsection 11-36-102 (11) is repealed by July 1, 1995.
             32          (d) (i) Existing impact fees for public facilities authorized in Subsection 11-36-102 (11)
             33      that are charged by local political subdivisions need not comply with the requirements of this
             34      chapter until July 1, 1997.
             35          (ii) By July 1, 1997, each local political subdivision shall:
             36          (A) review any impact fees in existence as of the effective date of this act, and prepare and
             37      approve the analysis required by this section for each of those impact fees; and
             38          (B) ensure that the impact fees comply with the requirements of this chapter.
             39          (2) (a) Before imposing impact fees, each local political subdivision shall prepare a capital
             40      facilities plan.
             41          (b) The plan shall [identify]:
             42          (i) include an inventory of all existing public facilities;
             43          [(i)] (ii) identify demands placed upon existing public facilities by new development
             44      activity; [and]
             45          [(ii)] (iii) identify the proposed means by which the local political subdivision will meet
             46      those demands; and
             47          (iv) include a detailed estimate of the capital costs for any proposed system improvements.
             48          (c) Municipalities and counties need not prepare a separate capital facilities plan if the
             49      general plan required by Sections 10-9-301 and 17-27-301 contains the elements required by this
             50      subsection.
             51          (d) (i) If a local political subdivision prepares an independent capital facilities plan rather
             52      than including a capital facilities element in the general plan, the local political subdivision
             53      shall[,]:
             54          (A) before adopting the capital facilities plan, give public notice of the plan according to
             55      this [subsection, make a copy of the plan available to the public] Subsection (2)(d);
             56          (B) at least 14 days before the date of the public hearing[,]:


             57          (I) make a copy of the plan, together with a summary easily understood by the general
             58      public, available to the public; and
             59          (II) place a copy of the plan and summary in each public library within the local political
             60      subdivision; and
             61          (C) hold a public hearing to hear public comment on the plan.
             62          (ii) Municipalities shall comply with the notice and hearing requirements of, and receive
             63      the protections of, Subsections 10-9-103 (2) and 10-9-402 (2).
             64          (iii) Counties shall comply with the notice and hearing requirements of, and receive the
             65      protections of, Subsections 17-27-103 (2) and 17-27-402 (2).
             66          (iv) Special districts shall comply with the notice and hearing requirements of, and receive
             67      the protections of, Section 17A-1-203 .
             68          (v) Nothing contained in Subsection (2)(d) or in the subsections referenced in Subsections
             69      (2)(d)(ii) and (iii) may be construed to require involvement by a planning commission in the
             70      capital facilities planning process.
             71          (e) Local political subdivisions with a population or serving a population of less than 5000
             72      as of the last federal census need not comply with the capital facilities plan requirements of this
             73      part, but shall ensure that the impact fees imposed by them are based upon a reasonable plan.
             74          (3) In preparing the plan, each local political subdivision shall [generally]:
             75          (a) consider all revenue sources, including impact fees, to finance the impacts on system
             76      improvements; and
             77          (b) specifically explain the effect that other revenue sources would have on the average
             78      household if the other revenue sources were used instead of impact fees.
             79          (4) A local political subdivision may only impose impact fees on development activities
             80      when its plan for financing system improvements establishes that impact fees are necessary to
             81      achieve an equitable allocation to the costs borne in the past and to be borne in the future, in
             82      comparison to the benefits already received and yet to be received.
             83          (5) (a) Each local political subdivision imposing impact fees shall prepare a written
             84      analysis of each impact fee that:
             85          (i) identifies the impact on system improvements required by the development activity;
             86          (ii) demonstrates how those impacts on system improvements are reasonably related to the
             87      development activity;


             88          (iii) estimates the proportionate share of the costs of impacts on system improvements
             89      that are reasonably related to the new development activity; and
             90          (iv) based upon those factors and the requirements of this chapter, identifies how the
             91      impact fee was calculated.
             92          (b) In establishing that impact fees are necessary to achieve an equitable allocation to the
             93      costs borne in the past and to be borne in the future, in comparison to the benefits already received
             94      and yet to be received, and in analyzing whether or not the proportionate share of the costs of
             95      public facilities are reasonably related to the new development activity, the local political
             96      subdivision shall identify[, if applicable]:
             97          (i) the original cost of all existing public facilities;
             98          (ii) the manner of financing existing public facilities, such as user charges, special
             99      assessments, bonded indebtedness, general taxes, or federal grants;
             100          (iii) the relative extent to which the newly developed properties and the other properties
             101      in the municipality have already contributed to the cost of existing public facilities, by such means
             102      as user charges, special assessments, or payment from the proceeds of general taxes;
             103          (iv) the relative extent to which the newly developed properties and the other properties
             104      in the municipality will contribute to the cost of existing public facilities in the future;
             105          (v) the extent to which the newly developed properties are entitled to a credit because the
             106      municipality is requiring their developers or owners, by contractual arrangement or otherwise, to
             107      provide common facilities, inside or outside the proposed development, that have been provided
             108      by the municipality and financed through general taxation or other means, apart from user charges,
             109      in other parts of the municipality;
             110          (vi) extraordinary costs, if any, in servicing the newly developed properties; and
             111          (vii) the time-price differential inherent in fair comparisons of amounts paid at different
             112      times.
             113          (c) In identifying the items in Subsection (5)(b), each local political subdivision shall, in
             114      its written analysis, explain in detail the information on which the local political subdivision bases
             115      its determination of the equitable allocation of the costs borne by existing and new development
             116      in comparison to the benefits already received and yet to be received by both.
             117          (d) A local political subdivision may not adopt an impact fee enactment if any of the items
             118      in Subsection (5)(b) is not expressly identified or if the explanation required under Subsection


             119      (5)(c) is not provided for any of those items.
             120          (e) A local political subdivision may not prepare, consider, or adopt a written analysis
             121      required under this Subsection (5) until 60 days after adoption of a capital facilities plan.
             122          (f) (i) Before adopting a written analysis under this Subsection (5), each local political
             123      subdivision shall:
             124          (A) give public notice of the written analysis according to this Subsection (5)(f);
             125          (B) at least 14 days before the date of the public hearing:
             126          (I) make a copy of the written analysis, with a summary easily understood by the general
             127      public, available to the public; and
             128          (II) place a copy of the written analysis and summary in each public library within the local
             129      political subdivision; and
             130          (C) hold a public hearing to obtain public comment on the analysis.
             131          (ii) Each municipality shall comply with the notice and hearing requirements and receive
             132      the protections of Subsections 10-9-103 (2) and 10-9-402 (2).
             133          (iii) Each county shall comply with the notice and hearing requirements and receive the
             134      protections of Subsections 17-27-103 (2) and 17-27-402 (2).
             135          (iv) Each special district shall comply with the notice and hearing requirements and
             136      receive the protections of Section 17A-1-203 .
             137          (6) Nothing in this chapter may be construed to repeal or otherwise eliminate any impact
             138      fee in effect on the effective date of this act that is pledged as a source of revenues to pay bonded
             139      indebtedness that was incurred before the effective date of this act.
             140          Section 3. Section 11-36-202 is amended to read:
             141           11-36-202. Impact fees -- Enactment -- Required provisions.
             142          (1) (a) Each local political subdivision wishing to impose impact fees shall pass an impact
             143      fee enactment.
             144          (b) The impact fee imposed by that enactment may not exceed the highest fee justified by
             145      the impact fee analysis performed pursuant to Section 11-36-201 .
             146          (c) In calculating the impact fee, each local political subdivision may include:
             147          (i) the construction contract price;
             148          (ii) the cost of acquiring land, improvements, materials, and fixtures;
             149          (iii) the cost for planning, surveying, and engineering fees for services provided for and


             150      directly related to the construction of the system improvements; and
             151          (iv) debt service charges, if the political subdivision might use impact fees as a revenue
             152      stream to pay the principal and interest on bonds, notes, or other obligations issued to finance the
             153      costs of the system improvements.
             154          (d) In enacting an impact fee enactment:
             155          (i) municipalities shall:
             156          (A) make a copy of the impact fee enactment available to the public at least 14 days before
             157      the date of the public hearing; and
             158          (B) comply with the notice and hearing requirements of, and receive the protections of,
             159      Subsections 10-9-103 (2) and 10-9-802 (2);
             160          (ii) counties shall:
             161          (A) make a copy of the impact fee enactment available to the public at least 14 days before
             162      the date of the public hearing; and
             163          (B) comply with the notice and hearing requirements of, and receive the protections of,
             164      Subsections 17-27-103 (2) and 17-27-802 (2); and
             165          (iii) special districts shall:
             166          (A) make a copy of the impact fee enactment available to the public at least 14 days before
             167      the date of the public hearing; and
             168          (B) comply with the notice and hearing requirements of, and receive the protections of,
             169      Section 17A-1-203 .
             170          (e) Nothing contained in Subsection (1)(d) or in the subsections referenced in Subsections
             171      (d)(i)(B) and (ii)(B) may be construed to require involvement by a planning commission in the
             172      impact fee enactment process.
             173          (f) A local political subdivision may not prepare, consider, or adopt an impact fee
             174      enactment until 30 days after adoption of the written analysis required under Subsection
             175      11-36-201 (5).
             176          (2) The local political subdivision shall ensure that the impact fee enactment contains:
             177          (a) a provision establishing one or more service areas within which it shall calculate and
             178      impose impact fees for various land use categories;
             179          (b) either:
             180          (i) a schedule of impact fees for each type of development activity that specifies the


             181      amount of the impact fee to be imposed for each type of system improvement; or
             182          (ii) the formula that the local political subdivision will use to calculate each impact fee;
             183          (c) a provision authorizing the local political subdivision to adjust the standard impact fee
             184      at the time the fee is charged to:
             185          (i) respond to unusual circumstances in specific cases; and
             186          (ii) ensure that the impact fees are imposed fairly; and
             187          (d) a provision governing calculation of the amount of the impact fee to be imposed on a
             188      particular development that permits adjustment of the amount of the fee based upon studies and
             189      data submitted by the developer.
             190          (3) The local political subdivision may include a provision in the impact fee enactment
             191      that:
             192          (a) exempts low income housing and other development activities with broad public
             193      purposes from impact fees and establishes one or more sources of funds other than impact fees to
             194      pay for that development activity; and
             195          (b) imposes an impact fee for public facility costs previously incurred by a local political
             196      subdivision to the extent that new growth and development will be served by the previously
             197      constructed improvement[; and (c) allows].
             198          (4) Each impact fee enactment shall include a provision that gives a fair market value
             199      credit against impact fees for any dedication of land for, improvement to, or new construction of,
             200      any system improvements provided by the developer if the facilities:
             201          [(i)] (a) are identified in the capital facilities plan; and
             202          [(ii)] (b) are required by the local political subdivision as a condition of approving the
             203      development activity.
             204          [(4) Except as provided in Subsection (3)(b), the]
             205          (5) A local political subdivision may not impose an impact fee to cure deficiencies in
             206      public facilities serving existing development.
             207          [(5)] (6) Notwithstanding the requirements and prohibitions of this chapter, a local
             208      political subdivision may impose and assess an impact fee for environmental mitigation when:
             209          (a) the local political subdivision has formally agreed to fund a Habitat Conservation Plan
             210      to resolve conflicts with the Endangered Species Act of 1973, 16 U.S.C. Sec 1531, et seq. or other
             211      state or federal environmental law or regulation; [and]


             212          (b) the impact fee bears a reasonable relationship to the environmental mitigation required
             213      by the Habitat Conservation Plan; and
             214          (c) the legislative body of the local political subdivision adopts an ordinance or resolution:
             215          (i) declaring that an impact fee is required to finance the Habitat Conservation Plan;
             216          (ii) establishing periodic sunset dates for the impact fee; and
             217          (iii) requiring the legislative body to:
             218          (A) review the impact fee on those sunset dates;
             219          (B) determine whether or not the impact fee is still required to finance the Habitat
             220      Conservation Plan; and
             221          (C) affirmatively reauthorize the impact fee if the legislative body finds that the impact
             222      fee must remain in effect.
             223          [(6)] (7) Each political subdivision shall ensure that any existing impact fee for
             224      environmental mitigation meets the requirements of Subsection (5) by July 1, 1995.
             225          [(7)] (8) Notwithstanding any other provision of this chapter, municipalities imposing
             226      impact fees to fund fire trucks as of the effective date of this act may impose impact fees for fire
             227      trucks until July 1, 1997.
             228          [(8)] (9) Notwithstanding any other provision of this chapter, a local political subdivision
             229      may impose and collect impact fees on behalf of a school district if authorized by Section
             230      53A-20-100.5 .
             231          Section 4. Section 11-36-401 is amended to read:
             232           11-36-401. Impact fees -- Challenges -- Appeals.
             233          (1) Any person or entity residing in or owning property within a service area, and any
             234      organization, association, or corporation representing the interests of persons or entities owning
             235      property within a service area, may file a declaratory judgment action challenging the validity of
             236      the fee.
             237          (2) (a) Any person or entity required to pay an impact fee who believes the fee does not
             238      meet the requirements of law may file a written request for information with the local political
             239      subdivision who established the fee.
             240          (b) Within two weeks of the receipt of the request for information, the local political
             241      subdivision shall provide the person or entity with the written analysis required by Section
             242      11-36-201 , the capital facilities plan, and with any other relevant information relating to the impact


             243      fee.
             244          [(3) Within 30 days after paying an impact fee, any person or entity who has paid the fee
             245      and wishes to challenge the fee shall:]
             246          [(a) file a written request for information and pursue administrative remedies, if the local
             247      political subdivision has adopted an ordinance establishing an administrative appeals procedure;
             248      or]
             249          [(b) file an action challenging the impact fees with the district court, if the local political
             250      subdivision has not adopted an ordinance establishing an administrative appeals procedure.]
             251          [(4) (a) Any local political subdivision may establish, by ordinance, an administrative
             252      appeals procedure to consider and decide challenges to impact fees.]
             253          [(b) If the local political subdivision establishes an administrative appeals procedure, the
             254      local political subdivision shall ensure that the procedure includes a requirement that the local
             255      political subdivision make its decision no later than 30 days after the date the challenge to the
             256      impact fee is filed.]
             257          [(c) A person or entity who has failed to comply with the administrative remedies
             258      established by this section may not file or join an action challenging the validity of any impact fee.]
             259          [(5) (a) If the local political subdivision establishes an administrative appeals procedure,
             260      within 90 days of a decision upholding an impact fee by a local political subdivision or within 120
             261      days after the date the challenge to the impact fee was filed, whichever is earlier, any party to the
             262      administrative action who is adversely affected by the local political subdivision's decision may
             263      petition the district court for a review of the decision.]
             264          [(b) (i) The local political subdivision shall transmit to the reviewing court the record of
             265      its proceedings including its minutes, findings, orders and, if available, a true and correct transcript
             266      of its proceedings.]
             267          [(ii) If the proceeding was tape recorded, a transcript of that tape recording is a true and
             268      correct transcript for purposes of Subsection (b).]
             269          [(c) (i) If there is a record:]
             270          [(A) the district court's review is limited to the record provided by the local political
             271      subdivision; and]
             272          [(B) the court may not accept or consider any evidence outside the local political
             273      subdivision's record unless that evidence was offered to the local political subdivision and the


             274      court determines that it was improperly excluded by the local political subdivision.]
             275          [(ii) If there is an inadequate record, the court may call witnesses and take evidence.]
             276          [(d) The court shall affirm the decision of the local political subdivision if the decision is
             277      supported by substantial evidence in the record.]
             278          (3) A person or entity may file an action in district court challenging an impact fee as not
             279      meeting all the requirements of this chapter if the person or entity:
             280          (a) resides in, owns, or has an interest in property within the service area affected by the
             281      impact fee; or
             282          (b) is required to pay the impact fee.
             283          (4) In an action under Subsection (3) or in an arbitration proceeding challenging the
             284      validity of an impact fee, the local political subdivision bears the burden of demonstrating that the
             285      fee is an equitable allocation of the costs borne by new and existing development, as required
             286      under Subsection 11-36-201 (4).
             287          [(6)] (5) The judge may award reasonable attorneys' fees and costs to the prevailing party
             288      in any action brought under this section.
             289          [(7)] (6) Nothing in this chapter may be construed as restricting or limiting any rights to
             290      challenge impact fees that were paid before the effective date of this [act] chapter.


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