Wednesday, May 27, 2009

AZ state legislature is tackling 'impact fees'

There is a proposed amendment to SB 1035 that seems to be adding and editing quite a bit on what municipalities can or cannot do regarding development fees -- otherwise known as 'impact fees'. Yes... a touchy subject here in Kingman for the last few years, but it has been quiet on that front lately.

Click the link above to see the entire document. I just gazed at it quickly for the last five minutes but I thought I'd copy a few bits below (all added emphasis mine)...

Sec. 3. Section 9-463.05, Arizona Revised Statutes, is amended to read:

9-463.05. Development fees; imposition by cities and towns; infrastructure improvements plan; annual report; limitation on actions; definitions

A. A municipality may assess development fees to offset costs to the municipality associated with providing necessary public services to a development. COSTS SHALL ONLY INCLUDE the costs of infrastructure, improvements, real property, engineering and architectural services, AND financing costs.

B. Development fees assessed by a municipality under this section MUST MEET the following requirements:

1. Development fees shall result in a beneficial use to the development.

2. The amount of the fee must be reasonably related and reasonably attributable to the development’s share of infrastructure improvements made necessary by the development.

3. The development fee shall not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in providing necessary services to development.

4. Costs for correction of existing defects in a public facility may not be included in the impact fee.

5. Costs for facilities made necessary by a development shall be based on the same level of service provided to existing residents in the municipality. to the extent that the infrastructure improvement plan requires facilities to be created or modified to improve the level of service provided to existing residents in the municipality, the costs of new or modified facilities shall be apportioned commensurately among development and existing residents.

6. The municipality shall calculate the development fee based on the infrastructure improvements plan, which must be adopted before the commencement of the development fee study.

Items 2 through 6 of subsection B are all proposed additions to this section. I cleaned up the wording in subsections A and B, be sure to click on the link to read how it is offered on the format document.

Skipping ahead to something else...

12. This section does not prohibit the municipality from supporting projects in the infrastructure improvements plan in whole or in part with revenues other than impact fees. A municipality may waive impact fees in whole or in part for a particular development but to the extent that it does so, it must provide that the amount of funds that would have been collected through the waived impact fee shall be replaced with other specified revenues.

Again, so far I've only skimmed through this document but this added item (item 12 under subsection B) is interesting to me so far.

This next one is even better...

K. Notwithstanding any other law, beginning June 1, 2009 through May 31, 2012, a municipality shall not impose or assess any development fees pursuant to this section. Beginning June 1, 2012, a municipality may impose a development fee or modify an existing development fee pursuant to this section.

I'm no legislator or anything, but this looks like a moratorium on 'impact fees' for the time period described above. Get your preliminary plats ready!!

Here is another...

Sec. 5. Title 9, chapter 7, article 1, Arizona Revised Statutes, is amended by adding section 9-805, to read:

9-805. Building code moratorium on residential and commercial buildings

Beginning June 1, 2009 through May 31, 2012, any new or modified residential or commercial building code or other related code that is adopted by a municipality does not apply to a residential or commercial building that received a final site plan or subdivision plat, planned area development or similar approval by a municipality before May 1, 2009. This section does not prohibit any code changes to the extent and duration required to comply with conditions for federal stimulus funding.

Looks like somebody has been successful with their lobbying attempts lately. Yet I think that this is probably a good deal. Many developments have been put on hold because of the economy and it is possible that a municipality could change codes and ordinances in the next few years that could be quite costly to developers to abide by... ultimately raising costs on the consumer.

Unless of course there is federal stimulus money on the line for the state... that is.

Maybe this is why it has been quite on the local 'impact fee' resistance scene lately. To me, it looks like these changes favor the development community a bit over the local municipality.

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