2016 -- S 2575

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LC004783

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TOWNS AND CITIES -- RHODE ISLAND DEVELOPMENT IMPACT FEE

ACT

     Introduced By: Senators McCaffrey, and Lombardi

     Date Introduced: February 25, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 45-22.4-4, 45-22.4-5 and 45-22.4-6 of the General Laws in

Chapter 45-22.4 entitled "Rhode Island Development Impact Fee Act" are hereby amended to

read as follows:

     45-22.4-4. Calculation of impact fees. -- (a) The governmental entity considering the

adoption of impact fees shall conduct a needs assessment for the type of public facility or public

facilities for which impact fees are to be levied. The needs assessment shall identify levels of

service standards, projected public facilities capital improvements needs, and distinguish existing

needs and deficiencies from future needs. The findings of this document shall be adopted by the

local governmental entity. In order for a municipality to continue assessing and collecting impact

fees, a needs assessment shall be conducted every five (5) years.

      (b) The data sources and methodology upon which needs assessments and impact fees

are based shall be made available to the public upon request.

      (c) The amount of each impact fee imposed shall be based upon actual cost of public

facility expansion or improvements, or reasonable estimates of the cost, to be incurred by the

governmental entity as a result of new development, as set forth in the needs assessment. The

calculation of each impact fee shall be in accordance with generally accepted accounting

principles.

      (d) An impact fee shall meet the following requirements:

      (1) The amount of the fee must be reasonably related to or reasonably attributable to the

development's share of the cost of infrastructure improvements made necessary by the

development; and

      (2) The impact fees imposed must not exceed a proportionate share of the costs incurred

or to be incurred by the governmental entity in accommodating the development. The following

factors shall be considered in determining a proportionate share of public facilities capital

improvement costs:

      (i) The need for public facilities' capital improvements required to serve new

development, based on a capital improvements program that shows deficiencies in capital

facilities serving existing development, and the means, other than impact fees, by which any

existing deficiencies will be eliminated within a reasonable period of time, and that shows

additional demands anticipated to be placed on specified capital facilities by new development;

and

      (ii) The extent to which new development is required to contribute to the cost of system

improvements in the future. ; and

     (iii) No impact fee portion attributable to schools and school facilities shall be assessed,

imposed or collected when a city or town has declining school enrollment since the last needs

assessment was performed in accordance with §45-22.4-4(a), or when that municipality has

excess student capacity.

     45-22.4-5. Collection and expenditure of impact fees. -- (a) The collection and

expenditure of impact fees must be reasonably related to the benefits accruing to the development

paying the fees. The ordinance may shall consider the following requirements:

      (1) Upon collection, impact fees must be deposited in a special proprietary fund, which

shall be invested with all interest accruing to the trust fund;

      (2) Within eight (8) years of the date of collection, impact fees shall be expended or

encumbered for the construction of public facilities' capital improvements of reasonable benefit to

the development paying the fees and that are consistent with the capital improvement program;

      (3) Where the expenditure or encumbrance of fees is not feasible within eight (8) years,

the governmental entity may retain impact fees for a longer period of time if there are compelling

reasons for the longer period. The governing body shall identify, in writing, the compelling

reasons for retaining impact fees for a longer period of time over eight (8) years. In no case shall

impact fees be retained longer than twelve (12) ten (10) years.

      (b) All impact fees imposed pursuant to the authority granted in this chapter shall be

assessed upon the issuance of a building permit or other appropriate permission to proceed with

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development and shall be collected in full upon the issuance of the certificate of occupancy or

other final action authorizing the intended use of a structure. No impact fees shall be collected for

development property as defined in §45-5-12(a)(6), until such time as the subject property no

longer qualifies as development property.

      (c) A governmental entity may recoup costs of excess capacity in existing capital

facilities, where the excess capacity has been provided in anticipation of the needs of new

development, by requiring impact fees for that portion of the facilities constructed for future

users. The need to recoup costs for excess capacity must have been documented by a

preconstruction assessment that demonstrated the need for the excess capacity. Nothing contained

in this chapter shall prevent a municipality from continuing to assess an impact fee that recoups

costs for excess capacity in an existing facility without the preconstruction assessment so long as

the impact fee was enacted at least ninety (90) days prior to July 22, 2000 and is in compliance

with this chapter in all other respects pursuant to § 45-22.4-7. The fees imposed to recoup the

costs to provide the excess capacity must be based on the governmental entity's actual cost of

acquiring, constructing, or upgrading the facility and must be no more than a proportionate share

of the costs to provide the excess capacity. That portion of an impact fee deemed recoupment is

exempted from provisions of § 45-22.4-5(a)(2).

      (d) Governmental entities may accept the dedication of land or the construction of public

facilities in lieu of payment of impact fees provided that:

      (1) The need for the dedication or construction is clearly documented in the community's

capital improvement program or comprehensive plan;

      (2) The land proposed for dedication for the facilities to be constructed are determined to

be appropriate for the proposed use by the local governmental entity;

      (3) Formulas and/or procedures for determining the worth of proposed dedications or

constructions are established.

      (e) Exemptions: Impact fees shall not be imposed for remodeling, rehabilitation, or other

improvements to an existing structure, or rebuilding a damaged structure, unless there is an

increase in the number of dwelling units or any other measurable unit for which an impact fee is

collected. Impact fees may be imposed when property which is owned or controlled by federal or

state government is converted to private ownership or control.

      (1) Impact fees shall not be imposed for remodeling, rehabilitation, or other

improvements to an existing structure, or rebuilding a damaged structure, unless there is an

increase in the number of dwelling units or any other measurable unit for which an impact fee is

collected. Impact fees may be imposed when property which is owned or controlled by federal or

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state government is converted to private ownership or control. ;

     (2) Impact fees shall not be imposed for low and moderate income housing units;

     (3) That portion of impact fees attributable to schools and school facilities shall not be

imposed on age-restricted units;

     (4) To the extent that a portion of the impact fee is not attributable to a new development,

that portion shall be waived; and

     (5) Nothing in this chapter shall prevent a municipality from granting any exemption(s)

which it deems appropriate.

     45-22.4-6. Refund of impact fees. -- (a) If impact fees are not expended or encumbered

within the period established in § 45-22.4-5, the governmental entity shall refund to the fee payer

or his or her successors the amount of the fee paid and accrued interest. The governmental entity

shall send the refund to the fee payer at the last known address by certified mail within one year

of the date on which the right to claim refund arises. Should the mailing of the fee be returned,

the municipality shall make every effort to obtain a new address for the fee payer, including a

search of the public records, secretary of state's database, and the database for the contractors'

registration board. All refunds due and not claimed within one year shall be retained by the

municipality forwarded to the state treasurer's office for inclusion in the unclaimed property fund.

      (b) When a governmental entity seeks to terminate any or all impact fee requirements, all

unexpended or unencumbered funds shall be refunded as provided above. Upon the finding that

any or all fee requirements are to be terminated, the governmental entity shall place a notice of

termination and availability of refunds in a newspaper of general circulation in the community at

least two (2) times. All funds available for refund shall be retained for a period of one year. At the

end of one year, any remaining funds may be transferred to the general fund and used for any

public purpose. A governmental entity is released from this notice requirement if there are no

unexpended or unencumbered balances within a fund or funds being terminated. All refunds not

claimed within one year shall be forwarded to the state treasurer's office for inclusion in the

unclaimed property fund.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- RHODE ISLAND DEVELOPMENT IMPACT FEE

ACT

***

     This act would amend provisions of the Rhode Island Development Impact Fee Act

regarding the need and basis for impact fees, the need for impact fees for new schools, the need

for impact fees for low, moderate and age restricted housing, and how municipalities manage

impact fee accounts.

     This act would take effect upon passage.

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