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:

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

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

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read as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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principles.

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

 

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

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

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development; and

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

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

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

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improvement costs:

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

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

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

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

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

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and

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

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improvements in the future. ; and

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

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

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

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excess student capacity.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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

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

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

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longer qualifies as development property.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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facilities in lieu of payment of impact fees provided that:

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

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capital improvement program or comprehensive plan;

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

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

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

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constructions are established.

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

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

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

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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.

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

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

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

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

 

LC004783 - Page 3 of 5

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state government is converted to private ownership or control. ;

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

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

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imposed on age-restricted units;

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

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that portion shall be waived; and

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

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which it deems appropriate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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unclaimed property fund.

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     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

***

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

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

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

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impact fee accounts.

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     This act would take effect upon passage.

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LC004783

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