HB1193: Chesapeake Bay Preservation; grants impact fee authority to localities with designated areas.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 10.1-2109.1 as follows:
§ 10.1-2109.1. Impact fees.
A. This section shall apply to any locality that has designated Chesapeake Bay Preservation areas pursuant to § 10.1-2109.
B. As used in this section, unless the context requires a different meaning:
"Cost" includes, in addition to all labor, materials, machinery and equipment for construction, (i) acquisition of land, rights-of-way, property rights, easements and interests, including the costs of moving or relocating utilities, (ii) demolition or removal of any structure on land so acquired, including acquisition of land to which such structure may be moved, (iii) survey, engineering, and architectural expenses, (iv) legal, administrative, and other related expenses, and (v) interest charges and other financing costs if impact fees are used for the payment of principal and interest on bonds, notes or other obligations issued by the locality to finance the public facility.
"Impact fee" means a charge or assessment imposed against new development in order to generate revenue to fund or recover the costs of reasonable public facilities necessitated by and attributable to the new development. Impact fees may not be assessed and imposed for public facility repair, operation and maintenance, nor to expand existing public facilities to meet demand that existed prior to the new development.
"Impact fee service area" means land designated by ordinance within a locality, having clearly defined boundaries and clearly related public facility needs and within which development is to be subject to the assessment of impact fees.
"Public facility" means a public safety facility improvement, road improvement or school facility improvement.
"Public safety facility improvement" includes construction of new public safety facilities or improvement of existing facilities to meet the increased demand attributable in substantial part to new development.
"Road improvement" includes construction of new roads or improvement or expansion of existing roads, as required by applicable construction standards of the Virginia Department of Transportation to meet increased demand attributable to new development. Road improvements do not include on-site construction of roads that a developer may be required to provide pursuant to §§ 15.2-2241 through 15.2-2245.
"School facility improvement" includes construction of new school facilities or improvement or expansion of existing facilities to meet the increased demand attributable in substantial part to new development.
C. Any applicable locality may, by ordinance pursuant to the procedures and requirements of this section, assess and impose impact fees on new development to pay all or a part of the cost of public facilities attributable in substantial part to the new development.
Prior to the adoption of the ordinance, a locality shall establish an impact fee advisory committee. The committee shall be composed of not less than five nor more than 10 members appointed by the governing body of the locality, and at least 40 percent of the membership shall be representatives from the development, building or real estate industries. The planning commission or other existing committee that meets the membership requirements may serve as the impact fee advisory committee. The committee shall serve in an advisory capacity to assist and advise the governing body of the locality with regard to the ordinance. No action of the committee shall be considered a necessary prerequisite for any action taken by the locality in regard to the adoption of an ordinance.
D. The locality shall delineate one or more impact fee service areas within its jurisdiction. Impact fees collected from new development within an impact fee service area shall be expended for public facilities within that impact fee service area. An impact fee service area may encompass more than one public facility project.
E. Prior to adopting a system of impact fees, the locality shall conduct an assessment of public facility improvement needs within an impact fee service area and in the locality and shall adopt a public facility improvements plan for the area showing the new public safety facilities, roads, or schools proposed to be constructed and the existing public safety facilities, roads, or schools to be improved or expanded and the schedule for undertaking such construction, improvement or expansion. The improvements plan shall be adopted as an amendment to the required comprehensive plan and shall be incorporated into the capital improvements program or, in the case of the counties where applicable, the six-year plan for secondary road construction pursuant to § 33.1-70.01.
The locality shall adopt the improvements plan after holding a duly advertised public hearing. The public hearing notice shall identify the impact fee service area or areas to be designated, and shall include a summary of the needs assessment and the assumptions upon which the assessment is based, the proposed amount of the impact fee, and information as to how a copy of the complete study may be examined. A copy of the complete study shall be available for public inspection and copying at reasonable times prior to the public hearing.
The locality at a minimum shall include the following items in assessing public facility needs and preparing an improvements plan:
1. An analysis of the existing capacity, current usage and existing commitments to future usage of existing public facilities, as indicated by (i) current valid building permits outstanding, (ii) approved conditional rezonings, special exceptions, and special use permits, and (iii) approved site plans and subdivision plats. If the current usage and commitments exceed the existing capacity of the public facilities, the locality also shall determine the costs of improving the public facilities to meet the demand. The analysis shall include a plan to fund the current usages and commitments that exceed the existing capacity of the public facilities.
2. The projected need for and costs of construction of new public facilities or expansion of existing public facilities attributable in whole or in part to projected new development. Public facility needs shall be projected for the impact fee service area when fully developed in accord with the comprehensive plan and, if full development is projected to occur more than 10 years in the future, at the end of a 10-year period. The assumptions with regard to land uses, densities, intensities, and population upon which public facility projections are based shall be presented.
3. The total number of new service units projected for the impact fee service area when fully developed and, if full development is projected to occur more than 10 years in the future, at the end of a 10-year period. For road improvements, a "service unit" is a standardized measure of traffic use or generation, based upon the ITE manual (published by the Institute of Transportation Engineers) or locally conducted trip generation studies. For public safety facilities and school facilities, a "service unit" is a standardized measure of facility use or demand. The locality shall develop a table or method for attributing service units to various types of development and land use, including but not limited to residential, commercial and industrial uses.
F. After adoption of an improvement program, the locality may adopt an ordinance establishing a system of impact fees to fund or recapture all or any part of the cost of providing reasonable public facilities required by new development. The ordinance shall set forth the schedule of impact fees.
G. The amount of impact fees to be imposed on a specific development or subdivision shall be determined before or at the time the site plan or subdivision is approved. The ordinance shall specify that the fee is to be collected at the time of the issuance of a certificate of occupancy. The ordinance shall provide that fees (i) may be paid in lump sum or (ii) be paid on installment at a reasonable rate of interest for a fixed number of years. The locality by ordinance may provide for negotiated agreements with the owner of the property as to the time and method of paying the impact fees.
The maximum impact fee to be imposed shall be determined (i) by dividing projected improvement costs in the service area when fully developed by the number of projected service units when fully developed, or (ii) for a reasonable period of time, but not less than 10 years, by dividing the projected costs necessitated by development in the next 10 years by the service units projected to be created in the next 10 years.
The ordinance shall provide for appeals from administrative determinations, regarding the impact fees to be imposed, to the governing body or such other body as designated in the ordinance. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.
H. 1. The provisions of this subdivision apply to any credits to be applied against impact fees for road improvements. The value of any dedication, contribution or construction from the developer for off-site road improvements within the impact fee service area shall be treated as a credit against the impact fees imposed on the developer's project. The locality may by ordinance provide for credits for approved on-site improvements in excess of those required by the development.
The locality also shall calculate and credit against impact fees the extent to which (i) developments have already contributed to the cost of existing roads which will serve the development, (ii) new development will contribute to the cost of existing roads, and (iii) new development will contribute to the cost of road improvements in the future other than through impact fees.
2. The provisions of this subdivision apply to any credits to be applied against impact fees for public safety facilities and school facilities. The value of any dedication, contribution, or construction from the developer for public safety facility improvements and school facility improvements within the service area shall be treated as a credit against the impact fee calculated pursuant to § 15.2-2323.
The locality shall also calculate and credit against impact fees (i) the extent to which developments have already contributed to the cost of existing public safety facilities and school facilities which will serve the development, (ii) the extent to which the new development will contribute to the cost of existing public safety facilities and school facilities, and (iii) the extent to which new development will contribute to the cost of public safety facilities and school facility improvements in the future other than through impact fees.
I. The locality shall update the needs assessment and the assumptions and projections at least once every two years. The improvements plan shall be updated at least every two years to reflect current assumptions and projections. The impact fee schedule may be amended to reflect any substantial changes in such assumptions and projections.
J. A separate improvement account shall be established for the impact fee service area and all funds collected through impact fees shall be deposited in the interest-bearing account. Interest earned on deposits shall become funds of the account. The expenditure of funds from the account shall be only for public facilities within the impact fee service area as set out in the improvements plan for the impact fee service area.
K. The locality shall refund any impact fee or portion thereof for which construction of a project is not completed within a reasonable period of time, not to exceed 15 years.
Upon completion of a project, the locality shall recalculate the impact fee based on the actual cost of the improvement. The locality shall refund the difference if the impact fee paid exceeds actual cost by more than 15 percent. Refunds shall be made to the record owner of the property at the time the refund is made.