2000-H 7308A
Enacted 7/22/2000

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Introduced By:  Representatives S. Anderson and Lanzi Date Introduced:   2000 February 2, 2000

It is enacted by the General Assembly as follows:

SECTION 1. Title 45 of the General Laws entitled "Towns and Cities" is hereby amended by adding thereto the following chapter:

CHAPTER 45-22.4

45-22.4-1. Title. -- Chapter 22.4 of this title shall be known as the "Rhode Island Development Impact Fee Act ".

45-22.4-2. Legislative findings and intent. -- (a) Whereas, the General Assembly finds that an equitable program is needed for the planning and financing of public facilities to serve new growth and development in the cities and towns in order to protect the public health, safety and general welfare of the citizens of this state.

(b) Whereas, it is therefore the public policy of the state and in the public interest that cities and towns are authorized to assess, impose, levy and collect fees defined herein as impact fees for all new development within their jurisdictional limits.

(c) Whereas, it is the intent of the General Assembly by enactment of this act to:

(1) ensure that adequate public facilities are available to serve new growth and development;

(2) ensure that new growth and development does not place an undue financial burden upon existing taxpayers;

(3) promote orderly growth and development by establishing uniform standards for local governments to require that those who benefit from new growth and development pay a proportionate fair share of the cost of new and/or upgraded public facilities needed to serve that new growth and development;

(4) establish standards for the adoption of development impact fee ordinances by governmental entities;

(5) empower governmental entities which are authorized to adopt ordinances to impose development impact fees.

45-22.4-3. Definitions. -- As used in this chapter, the following words shall have the meanings stated herein.

(1) "Capital improvements" shall mean improvements with a useful life of ten (10) years or more, which increases or improves the service capacity of a public facility.

(2) "Capital improvement program" shall mean that component of a municipal budget that sets out the need for public facility capital improvements, the costs of such improvements, and proposed funding sources. A capital improvement program must cover at least a five (5) year period and should be reviewed at least every five (5) years.

(3) "Developer" shall mean a person or legal entity undertaking development.

(4) "Governmental entity" shall mean a unit of local government.

(5) "Impact fee" shall mean the charge imposed upon new development by a governmental entity to fund all or a portion of the public facility's capital improvements affected by the new development from which it is collected.

(6) "Proportionate share" shall mean that portion of the cost of system improvements which reasonably relates to the service demands and needs of the project.

(7) "Public facilities" shall mean:

(i) water supply production, treatment, storage, and distribution facilities;

(ii) wastewater and solid waste collection, treatment and disposal facilities;

(iii) roads, streets and bridges, including rights-of-way, traffic signals, landscaping and local components of state and federal highways;

(iv) storm water collection, retention, detention, treatment, and disposal facilities, flood control facilities, bank and shore projections, and enhancement improvements;

(v) parks, open space areas and recreation facilities;

(vi) police, emergency medical, rescue and fire protection facilities;

(vii) public schools and libraries; and

(viii) other public facilities consistent with a community's capital improvement program.

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.

(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 thereof, to be incurred by the governmental entity as a result of new development. 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.

(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.

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

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 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 such longer period. In no case shall impact fees be retained longer than twelve (12) years.

(b) All impact fees imposed pursuant to the authority granted herein shall be assessed upon the issuance of a building permit or other appropriate permission to proceed with development and collected in full upon to the issuance of certificate of occupancy or other final action authorizing the intended use of a structure. Nothing contained herein shall prevent a municipality from continuing to assess and/or collect an impact fee at an earlier time so long as such municipality does so pursuant to an ordinance enacted at least ninety (90) days prior to the effective date of this chapter.

(c) A governmental entity may recoup costs of excess capacity in existing capital facilities, where such 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 such excess capacity. Nothing contained herein shall prevent a municipality from continuing to assess an impact fee that recoups costs for excess capacity in an existing facility without such preconstruction assessment so long as such impact fee was enacted at least ninety (90) days prior to the effective date of this chapter and is in compliance with this chapter in all other respects pursuant to section 7 of this chapter. The fees imposed to recoup such costs to provide such 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 such costs to provide such excess capacity. That portion of an impact fee deemed recoupment is exempted from provisions of section 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.

Nothing herein shall prevent a municipality from granting any exemption(s) which it deems appropriate.

45-24.4-6. Refund of impact fees. -- (a) If impact fees are not expended or encumbered within the period established in section 5 of this act, the governmental entity shall refund to the fee payer or his/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 (1) year of the date on which the right to claim refund arises. All refunds due and not claimed within one year shall be retained by the municipality.

(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 (1) year. At the end of one (1) 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.

45-22.4-7. Compliance. - No later than two (2) years after the effective date of this chapter, governmental entities shall conform all impact fee ordinances existing on the effective date of this act, to the provisions of this chapter.

45-22.4-8. Adoption of impact fees. -- Impact fees shall be adopted by ordinance and the adoption of an impact fee ordinance or amendment thereto shall be by affirmative vote of not less than a majority of the total membership of the governing body in attendance at said meeting, in the manner prescribed by law.

45-22.4-9. Severablility. -- If any portion of this chapter or any rule, regulation, or determination made thereunder, or the application thereof to any person, agency, or circumstances, is held invalid by a court of competent jurisdiction, the remainder of this chapter, rule, regulation, or determination and the application of such provisions to other persons, agencies or circumstances shall not be affected thereby. The invalidity of any section or sections, or parts of any section or sections of this chapter shall not affect the validity of the remainder of this chapter.

SECTION 2. This act shall take effect upon passage.

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