SB768: Conditional zoning; replaces cash proffer system with system of impact fees.


SENATE BILL NO. 768
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the House Committee on Rules
on February 28, 2008)
(Patron Prior to Substitute--Senator Watkins)
A BILL to amend and reenact §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 15.2-2323.1, relating to conditional zoning; impact fees.

Be it enacted by the General Assembly of Virginia:

1.  That §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 15.2-2323.1 as follows:

§ 15.2-2297. Same; conditions as part of a rezoning or amendment to zoning map.

A. A zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map; provided that (i) the rezoning itself must give rise for the need for the conditions; (ii) the conditions shall have a reasonable relation to the rezoning; (iii) the conditions shall not include a cash contribution to the locality; (iv) the conditions shall not include mandatory dedication of real or personal property for open space, parks, schools, fire departments or other public facilities not otherwise provided for in § 15.2-2241; (v) the conditions shall not include a requirement that the applicant create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation; (vi) the conditions shall not include payment for or construction of off-site improvements except those provided for in § 15.2-2241; (vii) no condition shall be proffered that is not related to the physical development or physical operation of the property; and (viii) all such conditions shall be in conformity with the comprehensive plan as defined in § 15.2-2223. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions. However, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendments to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property.

Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable, non-cash (i) proffers for on-site conditions for the new development; (ii) off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.

G. Beginning July 1, 2008 and until July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.  Subsections E, F, and G shall not apply to any development on sites containing five acres or less.

§ 15.2-2298. Same; additional conditions as a part of rezoning or zoning map amendment in certain high-growth localities.

A. Except for those localities to which § 15.2-2303 is applicable, this section shall apply to (i) any locality which has had population growth of 5% or more from the next-to-latest to latest decennial census year, based on population reported by the United States Bureau of the Census; (ii) any city adjoining such city or county; (iii) any towns located within such county; and (iv) any county contiguous with at least three such counties, and any town located in that county. However, any such locality may by ordinance choose to utilize the conditional zoning authority granted under § 15.2-2303 rather than this section.

In any such locality, notwithstanding any contrary provisions of § 15.2-2297, a zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map, provided that (i) the rezoning itself gives rise to the need for the conditions; (ii) the conditions have a reasonable relation to the rezoning; and (iii) all conditions are in conformity with the comprehensive plan as defined in § 15.2-2223.

Reasonable conditions may include the payment of cash for any off-site road improvement or any off-site transportation improvement that is adopted as an amendment to the required comprehensive plan and incorporated into the capital improvements program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. For purposes of this section, "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. For purposes of this section, "transportation improvement" means any real or personal property acquired, constructed, improved, or used for constructing, improving, or operating any (i) public mass transit system or (ii) highway, or portion or interchange thereof, including parking facilities located within a district created pursuant to this title. Such improvements shall include, without limitation, public mass transit systems, public highways, and all buildings, structures, approaches, and facilities thereof and appurtenances thereto, rights-of-way, bridges, tunnels, stations, terminals, and all related equipment and fixtures.

Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions; however, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

No proffer shall be accepted by a locality unless it has adopted a capital improvement program pursuant to § 15.2-2239 or local charter. In the event proffered conditions include the dedication of real property or payment of cash, the property shall not transfer and the payment of cash shall not be made until the facilities for which the property is dedicated or cash is tendered are included in the capital improvement program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. If proffered conditions include the dedication of real property or the payment of cash, the proffered conditions shall provide for the disposition of the property or cash payment in the event the property or cash payment is not used for the purpose for which proffered.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to the property, shall be effective with respect to the property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B above, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable, non-cash (i) proffers for on-site conditions for the new development; (ii) off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.  

G. Beginning July 1, 2008 and until July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.  Subsections E, F, and G shall not apply to any development on sites containing five acres or less.

§ 15.2-2303. Conditional zoning in certain localities.

A. A zoning ordinance may include reasonable regulations and provisions for conditional zoning as defined in § 15.2-2201 and for the adoption, in counties, or towns therein which have planning commissions, wherein the urban county executive form of government is in effect, or in a city adjacent to or completely surrounded by such a county, or in a county contiguous to any such county, or in a city adjacent to or completely surrounded by such a contiguous county, or in any town within such contiguous county, and in the counties east of the Chesapeake Bay as a part of an amendment to the zoning map of reasonable conditions, in addition to the regulations provided for the zoning district by the ordinance, when such conditions shall have been proffered in writing, in advance of the public hearing before the governing body required by § 15.2-2285 by the owner of the property which is the subject of the proposed zoning map amendment. Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, such conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by such conditions. However, such conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. Such notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement such proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subdivision shall acquire no rights pursuant to this section.

D. Subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

E. Nothing in this section shall be construed to affect or impair the authority of a governing body to (i) accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or (ii) accept or impose valid conditions pursuant to provision 3 of § 15.2-2286, provision 5 of § 15.2-2242, or other provision of law.

F. In addition to the powers granted by the preceding subsections, a zoning ordinance may include reasonable regulations to implement, in whole or in part, the provisions of §§ 15.2-2296 through 15.2-2302.

G. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable, non-cash (i) proffers for on-site conditions for the new development; (ii) off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is  necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

H. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.

I. Beginning July 1, 2008 and until July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.  Subsections G, H, and I shall not apply to any development on sites containing five acres or less.

§ 15.2-2303.1. Development agreements in certain counties.

A. In order to promote the public health, safety and welfare and to encourage economic development consistent with careful planning, New Kent County may include in its zoning ordinance provisions for the governing body to enter into binding development agreements with any persons owning legal or equitable interests in real property in the county if the property to be developed contains at least one thousand acres.

B. Any such agreements shall be for the purpose of stimulating and facilitating economic growth in the county; shall not be inconsistent with the comprehensive plan at the time of the agreement's adoption, except as may have been authorized by existing zoning ordinances; and shall not authorize any use or condition inconsistent with the zoning ordinance or other ordinances in effect at the time the agreement is made, except as may be authorized by a variance, special exception or similar authorization. The agreement shall be authorized by ordinance, shall be for a term not to exceed fifteen years, and may be renewed by mutual agreement of the parties for successive terms of not more than ten years each. It may provide, among other things, for uses; the density or intensity of uses; the maximum height, size, setback and/or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use matters. It may authorize the property owner to transfer to the county land, public improvements, money or anything of value to further the purposes of the agreement or other public purposes set forth in the county's comprehensive plan, but not as a condition to obtaining any permitted use or zoning. The development agreement shall not run with the land except to the extent provided therein, and the agreement may be amended or canceled in whole or in part by the mutual consent of the parties thereto or their successors in interest and assigns.

C. If, pursuant to the agreement, a property owner who is a party thereto and is not in breach thereof, (i) dedicates or is required to dedicate real property to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, (ii) makes or is required to make cash payments to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, or (iii) makes or is required to make public improvements for the county, the Commonwealth or any other political subdivision or for the federal government or any agency thereof, such dedication, payment or construction therefor shall vest the property owner's rights under the agreement. If a property owner's rights have vested, neither any amendment to the zoning map for the subject property nor any amendment to the text of the zoning ordinance with respect to the zoning district applicable to the property which eliminates or restricts, reduces, or modifies the use; the density or intensity of uses; the maximum height, size, setback or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use or other matters provided for in such agreement shall be effective with respect to such property during the term of the agreement unless there has been a mistake, fraud or change in circumstances substantially affecting the public health, safety or welfare.

D. Nothing in this section shall be construed to preclude, limit or alter the vesting of rights in accordance with existing law; authorize the impairment of such rights; or invalidate any similar agreements entered into pursuant to existing law.

E. The provisions of this section authorizing cash payments shall not apply to the residential portion of any development agreement entered into after July 1, 2009.

Article 8.
RoadPublic Facility Impact Fees.

§ 15.2-2317. Applicability of article.

This article shall apply to any locality city, any county enumerated in § 15.2-4831 or 33.1-391.7, any town within such county, any county that had the authority to accept proffers prior to July 1, 2009, and to any county that has adopted zoning pursuant to Article 7 (§ 15.2-2280 et seq.) of Chapter 22 of Title 15.2 and that (i) has a population of at least 20,000 and has a population growth rate of at least 5%percent or (ii) has population growth of 15% or more, and to any town within such county. For the purposes of this section, population growth shall be the difference in population from the next-to-latest to the latest decennial census year, based on population reported by the United States Bureau of the Census.

§ 15.2-2318. Definitions.

As used in this article, unless the context requires a different meaning:

"Cost" includes, in addition to means the actual charges to be paid by or on behalf of the locality for: (i) all labor, materials, machinery and equipment for construction, (i)(ii) the acquisition of land, rights-of-way, property rights, easements and interests, including the costs of moving or relocating utilities, (ii)(iii) demolition or removal of any structure on land so acquired, including acquisition of land to which such structure may be moved, (iii)(iv) survey, engineering, consulting, and architectural expenses, (iv)(v) legal, administrative, and other related expenses, and (v)(vi) 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 road improvement public facility improvements.

“Designated transportation improvement” means a public road or transportation improvement designated on any adopted local, state or federal transportation plan including the locality’s capital improvements program, the locality’s comprehensive plan, the locality’s six-year improvement plan, the six-year improvement plan of the Virginia Department of Transportation or transportation plan of a regional transportation authority.

"Impact fee" means a charge or assessment imposed against new development in order to generate revenue to fund or recover the costs of reasonable road public facility improvements benefiting necessitated by and attributable to providing public facilities to the new development. Impact fees may not be assessed and imposed for road public facilities repair, operation and maintenance, nor to meet demand which existed prior to the new development.

"Impact fee service area" means an a geographic area designated within by an ordinance on the zoning map of a locality and reflected on the comprehensive plan of a such locality having, which has clearly defined boundaries and clearly related traffic public facility needs that have a rational and reasonable relationship to projected new development and within which development is to be subject to the assessment of impact fees.

“New development” means any new construction or building expansion that (i) for residential development, results in one or more additional residential dwelling units or (ii) for non-residential development, results in an increase of gross square footage.

“On-site” means within the boundaries of the property to be developed.

“Public facilities” means public roads, public safety facilities, or public school facilities.

“Public facility improvement” means public road improvement, public safety facility improvement, or public school facility improvement.

"RoadPublic road improvement" includesmeans (i) construction of new roads or; (ii) improvement or expansion of existing roads and related appurtenances as required by applicable standards of the Virginia Department of Transportation, or the applicable standards of a locality with road maintenance responsibilities; and (iii) construction, improvement, or expansion of all buildings, structures, parking, and other facilities related to transit, to meet increased demand necessitated by and attributable to new development. Road improvements do not include on-site construction of roads which a developer may be required to provide pursuant to §§ 15.2-2241 through 15.2-2245.

“Public safety facility improvement” means construction of new law-enforcement, fire, emergency medical, and rescue facilities or expansion of existing public safety facilities, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within a designated impact fee service area.

“Public school facility improvement” means construction of new primary and secondary public schools or expansion of existing primary and secondary public schools, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within the designated impact fee service area.

§ 15.2-2319. Authority to assess and impose impact fees.

A. Any applicable locality may, by ordinance pursuant to the procedures and requirements of this article, assess and impose impact fees on new residential and nonresidential development to pay all or a part of the cost of reasonable road public facility improvements that benefit are necessitated by and attributable to the new development.

B. 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 ten members appointed by the governing body of the locality and at least forty percent of the membership shall be representatives from the development, building construction, or real estate industries who have been actively engaged in development, construction, or real estate for the past five years. 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 preparation of 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.

C. A locality shall exempt nonresidential development from the imposition of public school facility impact fees. A locality may reduce or waive any impact fee for all or part of a nonresidential development if the project is projected to create significant economic development and employment growth in the impact fee service area, or if the project is in a designated enterprise zone, as provided under applicable state or local law.

D. A locality may reduce or waive any impact fee authorized by this article in urban development areas established pursuant to § 15.2-2223.1.

E. No locality shall impose any impact fee authorized by this article on any unitsubject to an affordable dwelling unit program established pursuant to § 15.2-735.2, 15.2-2304, or 15.2-2305; on any rental housing that qualifies for federal low-income tax credit; or on any housing that qualifies as affordable within a locality under the guidelines included in the definition of affordable housing in § 15.2-2201.

F. A locality may exempt or reduce from impact fees any property that, once developed, will be exempt from real property taxes, if the locality determines that the property's use will not contribute significantly to the use of the public facilities of the locality.

§ 15.2-2320. Impact fee service areas to be established.

A. The locality shall delineate by ordinance on the zoning map one or more impact fee service areas within its comprehensive plan; however, no locality shall designate the entire locality as a single impact fee service area.

B. Prior to establishing any impact fee service area, the locality shall provide written notice to all owners of unimproved property located within the impact fee service area in a manner consistent with the requirements of subsection B of § 15.2-2204.

C. Impact fees collected from new development within an impact fee service area shall be expended only for road public facility improvements benefiting that impact fee service area. An impact fee service area may encompass more than one road public facility improvement project. A locality may exclude urban development areas designated pursuant to § 15.2-2223.1 from impact fee service areas.

§ 15.2-2321. Adoption of public road, public school facilities, and public safety facility improvements program.

A. Prior to adopting a system of impact fees, the locality shall conduct an assessment of road public facility improvement needs benefiting an impact fee service area and shall adopt a public road, improvements plan public school facility, or public safety facility improvements plans for the area showing the new roads public facilities proposed to be constructed and the existing roads public facilities to be improved or expanded and the schedule for undertaking such construction, improvement or expansion. The road public facility improvements plan plans shall be adopted as an amendment amendments to the required comprehensive plan and shall be incorporated into the capital improvements program or, in the case of the counties where. Where applicable, the road improvement plan shall be incorporated into the six-year plan for secondary road construction pursuant to § 33.1-70.01.

B. The locality shall adopt the road public facility improvements plan plans 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 least 30 days prior to the public hearing.

C. The locality at a minimum shall include the following items in assessing road public facility improvement needs and preparing a road public facility improvements plan plans:

1. An analysis of the existing capacity, current usage and existing commitments to future usage of existing roads public facilities, as indicated by (i) both current and projected service levels, (ii) current valid building permits outstanding, and (iii) approved and pending site plans and subdivision plats, and (iv) approved conditional zonings, special exceptions, and special use permits. If the current usage and commitments exceed the existing capacity of the roads public facilities, the locality also shall determine the costs of improving the roads public facilities to meet the demand and shall identify any funding for such costs from sources other than impact fees. If the projected service levels exceed current service levels for the impact fee service area, the locality shall determine the costs of increasing the current service levels to the projected levels in the absence of new development and shall identify any funding for such costs from sources other than impact fees. The analysis shall include any off-site road public facility improvements, or cash payments for road public facility improvements accepted by the locality and shall include a plan to fund the current usages and commitments that exceed the existing capacity of the roads public facilities.

2. The projected need for and costs of construction of new roads or improvement public facilities or expansion of existing roads public facilities necessitated by and attributable in whole or in part to projected new development. RoadPublic facility improvement 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 20 years in the future, at the end of a 20-year period. The assumptions with regard to land uses, densities, intensities, and population upon which road public facility improvement projections are based shall be presented.

3. An assessment of (i) such future revenues as shall be generated by the new development towards public facilities improvement within the impact fee service area and (ii) such funds as have been committed from the federal, state, or local government specifically to provide or pay for the public facilities for which the impact fees are to be imposed. The locality also shall consider the extent to which (a) other developments have already contributed to the cost of existing public roads, public school facilities, and public safety facilities, which will benefit new development, (b) new development will contribute to the cost of existing public roads, public school facilities, and public safety facilities, and (c) new development will contribute to the cost of public road, public school facilities, and public safety facilities improvements in the future other than through impact fees, including any special taxing districts, special assessments, or community development authorities.

34. The total number of new public facility service units projected for the impact fee service area when fully developed and, if full development is projected to occur more than 20 years in the future, at the end of a 20-year period. As used in this section, a service unit is a standardized measure of use or generation attributable to an individual unit of new development. 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.

D. A road "service unit" is a standardized measure of traffic use or generation. 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. The table and its costs shall be established by the locality based upon the ITE manual (published by the Institute of Transportation Engineers) or locally conducted trip generation studies, and consistent with the traffic analysis standards adopted pursuant to § 15.2-2222.1.

E. A public school facility “service unit” is the estimated average number of elementary, middle, and high school pupils generated by each type (single-family detached, single-family attached, and multifamily) of dwelling unit on a localitywide basis. 

The need for new or expanded public school facilities within an impact fee service area shall be established by determining (i) the appropriate enrollment-to-capacity levels for elementary, middle, and high schools, (ii) the current available capacity of the existing elementary, middle, and high schools, (iii) the impact of a new development, on a service unit basis, on the capacity of existing elementary, middle, and high schools, and (iv) the elementary, middle, and high schools necessary to meet the projected increase in demand necessitated by and directly attributable to new residential development within the impact fee service area.  

The enrollment-to-capacity level for each elementary, middle, and high school established within an impact fee service area shall be consistent with existing enrollment-to-capacity levels and the enrollment-to-capacity level established for the locality as a whole. If the projected enrollment-to-capacity levels provide a greater level of service than existing enrollment-to-capacity levels for the impact fee service area, the locality shall determine the costs of adjusting the existing levels to the projected levels in the absence of new development and shall identify funding for such costs from sources other than impact fees.

The locality shall determine the individual public school facility service unit cost within an impact fee service area by dividing the total site cost and facility cost by the student capacity of each public school facility necessitated by and directly attributable to a new residential development. The calculation shall include a credit for each service unit for each type of dwelling unit equal to the pro rata share of total dollars received from the state for public school facility construction or expansion and a credit for the percentage of annual real estate tax paid by the owner to the locality that the locality dedicates to public school facilities capital improvements and public school facility debt service for each of the next 20 years after a certificate of occupancy has been issued.

F. The locality shall determine the individual public safety facility service unit cost within an impact fee service area by (i) determining the percentages of calls for public safety service made from residential units and from nonresidential properties; (ii) determining the costs of projected public safety facilities attributable to residential units and to nonresidential units by multiplying the total costs by such percentages; and (iii) dividing the percentage costs by the number of residential units and by the total nonresidential building square feet.  

§ 15.2-2322. Adoption of impact fee and schedule.

After adoption of a road public facility improvement program programs, 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 road public facility improvements benefiting necessitated by and attributable to new development in the designated impact fee service area as calculated pursuant to subsection C of § 15.2-2321. The ordinance shall set forth the schedule of impact fees. The public road, public school, or public safety facility impact fees to be imposed shall be determined by adding the unit cost for public roads, public school facilities, or public safety facilities to establish a public facilities unit cost.

§ 15.2-2323. Impact fees assessed and imposed on non-residential development.

A. Impact fees may be assessed and imposed on all new non-residential development except those site plans recorded prior to July 1, 2008. The amount of impact fees to be imposed assessed on a specific development or subdivision shall be determined before or at the time of the final approval of the site plan or subdivision is approved. The ordinance shall specify that the impact fee assessed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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 road improvement costs in the impact fee 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 ten years, by dividing the projected costs necessitated by development in the next ten years by the service units projected to be created in the next ten 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

B. Subject to the provisions of this subsection, the maximum impact fee assessed on non-residential development shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

The sum total of public facility impact fees shall not exceed the maximum amounts enumerated in this subsection; provided, however, that beginning July 1, 2009, the locality may adjust the maximum impact fee by (i) a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index, or (ii) one and one-half percent, whichever is lower. 

§ 15.2-2323.1. Impact fees assessed and imposed on residential development.

A. Impact fees may be assessed and imposed on all new residential development or subdivisions except those residential subdivisions recorded and site plans approved during the three years preceding the date of adoption of an impact fee ordinance. The amount of impact fees to be assessed on a specific new development or subdivision shall be determined at the time of the final approval of the subdivision, or, for a new development or subdivision recorded prior to three years preceding the adoption date, at the time of the issuance of a building permit for that subdivision.  For new development to be constructed in more than one phase, the amount of impact fees to be assessed shall be determined for each phase of development at the time of the final approval of each phase of the subdivision. The ordinance shall specify that the impact fee assessed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

B. Subject to the provisions of this subsection, the maximum impact fee assessed on residential development prior to July 1, 2012, shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be $12,500 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be $7,500 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

The sum total of public facility impact fees assessed prior to July 1, 2012, shall not exceed the maximum amounts enumerated in this subsection; provided, however, that beginning July 1, 2009, and until July 1, 2012, the locality may adjust the maximum impact fee by a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index. 

C. On and after July 1, 2012, the maximum impact fee assessed and imposed by a locality on residential development shall not exceed two percent of the average sale price of newly constructed homes in that locality for the previous calendar year, as calculated and reported by the Weldon Cooper Center for Public Service of the University of Virginia.

§ 15.2-2324. Credits against impact fee.

The market value of any land dedication, cash contribution or construction from provided by the developer for off-site all on-site (i) public school facility improvements, (ii) public safety facility improvements, and (iii) public road or other transportation improvements that are designated benefiting the impact fee service area transportation improvements, shall be treated as a credit against the impact fees imposed on the developer's project. The locality shall treat as a credit against the impact fee imposed upon a new development the market value of any off-site transportation dedication, contribution, or construction, whether it is a condition of a rezoning or otherwise committed to the locality. The locality may by ordinance provide for credits for approved on-site transportation improvements in excess of those required by the development. improvements or cash contributions for off-site improvements provided by the developer not necessitated by or attributable to the new development.  No credit shall be given for the market value of any bonuses granted pursuant to incentive zoning as defined in § 15.2-2201, or for public improvements required to be provided by ordinance adopted pursuant to § 15.2-2241 or § 15.2-2242.  Market value may be negotiated and agreed to between the applicant and the locality.  In the event of the parties cannot agree as to market value, the applicant and the locality may agree to obtain an appraisal of the market value of such improvements.   Market value shall be determined at the time of approval of any conditional zoning application by the locality, or in an application made for other new development, at the time of the approval of any subdivision or site plan.

The locality also shall calculate and credit against impact fees the extent to which (i) other developments have already contributed to the cost of existing roads which will benefit 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, including any special taxing districts, special assessments, or community development authorities.

§ 15.2-2325. Updating plan and amending impact fee.

The locality shall update the needs assessment and the assumptions and projections at least once every two five years. The road public facility improvement plan shall be updated at least every two five years to reflect current assumptions and projections. The impact fee schedule may be amended to reflect any substantial changes in such assumptions and projections. Any impact fees not yet paid shall be assessed at the updated rate.

§ 15.2-2326. Use of proceeds.

A. A separateSeparate public road, public school facility, and public safety facility improvement account accounts shall be established for the each impact fee service area established by the locality, and all funds collected through impact fees shall be deposited in the such separate interest-bearing account accounts. Interest earned on deposits shall become funds of the account. The expenditure of funds from the account accounts shall be only for public road, public school facility, and public safety facility improvements benefiting the impact fee service area as set out in the road public facility improvement plan for the impact fee service area. The expenditure of funds from the public school facility accounts shall be only for public school facility improvements benefiting the impact fee service area or any school district whose boundaries are within or adjacent to the impact fee service area. The governing body of any county that has adopted an ordinance pursuant to § 15.2-2322 may enter into one or more agreements with the governing body of any town within such county that has also adopted an ordinance pursuant to § 15.2-2322 to provide for the transfer or sharing of revenues from impact fees for public facility improvements consistent with this section. Any funds collected through impact fees may be used by a locality to meet matching requirements for any state or federal funding.

B. The governing body of any locality imposing impact fees pursuant to the authority granted under this article shall within three months of the close of each fiscal year, beginning in fiscal year 2009 and for each fiscal year thereafter, report to the Commission on Local Government the following information for public road, public school facility, and public safety facility improvements for the preceding fiscal year:

1. The aggregate dollar amount of impact fees collected by the locality in each impact fee service area and for each improvement category;

2. The aggregate dollar amount expended in the impact fee service area in each improvement category;

3. The total dollar amount of impact fees collected and expended by the locality in each impact fee service area for all years to date; and

4. The total dollar amount expended by the locality to increase capacity to meet existing commitments or increase existing service levels pursuant to § 15.2-2321.1 as well as the funding sources and the amounts from each source. 

C. The governing body of any locality eligible to collect impact fees pursuant to authority granted under this article but that did not collect any impact fees during the preceding fiscal year shall within three months of the close of each fiscal year, beginning in 2009 and for each fiscal year thereafter, so notify the Commission on Local Government.

D. The Commission on Local Government shall by November 30, 2009, and by November 30 of each fiscal year thereafter, prepare and make available to the public and the chairmen of the Senate Local Government Committee and the House Counties, Cities and Towns Committee an annual report containing the information made available to it pursuant to subsections B and C.

§ 15.2-2327. Refund of impact fees.

The locality shall refund any impact fee or portion thereof for which construction of a assessed and paid for a public facility improvement project is not completed for which property has not been acquired and design had not been completed within a reasonable period of time, not to exceed fifteen years. In the event that road impact fees are not committed to road improvements benefiting the impact fee service area within seven years from the date of collection, the locality may commit any such impact fees to the secondary or urban system construction program of that locality for road improvements that benefit the impact fee service area.

Upon completion of a public facility improvement project, the locality shall recalculate the impact fee based on the actual cost of the improvement. It shall refund the difference if the impact fee paid exceeds actual cost by more than fifteen percent. Refunds shall be made to the record owner of the property at the time the refund is made.

2. That the provisions of this act shall not impair any proffer or proffered condition amendment accepted by a locality, nor any agreement entered into under § 15.2-2303.1 of the Code of Virginia, pursuant to authority granted prior the effective date of this Act.

3.  That the provisions of this act amending §§ 15.2-2297, 15.2-2298, 15.2-2303, and 15.2-2303.1 of the Code of Virginia shall not apply to any urban development area created prior to July 1, 2011, pursuant to § 15.2-2223.1 of the Code of Virginia by any county having the urban county executive form of government.


SENATE BILL NO. 768
FLOOR AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by Senator Watkins)
(Patron Prior to Substitute--Senator Watkins)
Senate Amendments in [ ] -- February 12, 2008
A BILL to amend and reenact §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 15.2-2323.1, relating to conditional zoning; impact fees.

Be it enacted by the General Assembly of Virginia:

1.  That §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 15.2-2323.1 as follows:

§ 15.2-2297. Same; conditions as part of a rezoning or amendment to zoning map.

A. A zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map; provided that (i) the rezoning itself must give rise for the need for the conditions; (ii) the conditions shall have a reasonable relation to the rezoning; (iii) the conditions shall not include a cash contribution to the locality; (iv) the conditions shall not include mandatory dedication of real or personal property for open space, parks, schools, fire departments or other public facilities not otherwise provided for in § 15.2-2241; (v) the conditions shall not include a requirement that the applicant create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation; (vi) the conditions shall not include payment for or construction of off-site improvements except those provided for in § 15.2-2241; (vii) no condition shall be proffered that is not related to the physical development or physical operation of the property; and (viii) all such conditions shall be in conformity with the comprehensive plan as defined in § 15.2-2223. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions. However, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendments to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property.

Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable (i) non-cash proffers for on-site conditions for the new development; (ii) non-cash, off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.

G. Prior to July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.  [ Subsections E, F, and G shall not apply to any development on sites containing five acres or less, or five parcels or less.  ]

§ 15.2-2298. Same; additional conditions as a part of rezoning or zoning map amendment in certain high-growth localities.

A. Except for those localities to which § 15.2-2303 is applicable, this section shall apply to (i) any locality which has had population growth of 5% or more from the next-to-latest to latest decennial census year, based on population reported by the United States Bureau of the Census; (ii) any city adjoining such city or county; (iii) any towns located within such county; and (iv) any county contiguous with at least three such counties, and any town located in that county. However, any such locality may by ordinance choose to utilize the conditional zoning authority granted under § 15.2-2303 rather than this section.

In any such locality, notwithstanding any contrary provisions of § 15.2-2297, a zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map, provided that (i) the rezoning itself gives rise to the need for the conditions; (ii) the conditions have a reasonable relation to the rezoning; and (iii) all conditions are in conformity with the comprehensive plan as defined in § 15.2-2223.

Reasonable conditions may include the payment of cash for any off-site road improvement or any off-site transportation improvement that is adopted as an amendment to the required comprehensive plan and incorporated into the capital improvements program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. For purposes of this section, "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. For purposes of this section, "transportation improvement" means any real or personal property acquired, constructed, improved, or used for constructing, improving, or operating any (i) public mass transit system or (ii) highway, or portion or interchange thereof, including parking facilities located within a district created pursuant to this title. Such improvements shall include, without limitation, public mass transit systems, public highways, and all buildings, structures, approaches, and facilities thereof and appurtenances thereto, rights-of-way, bridges, tunnels, stations, terminals, and all related equipment and fixtures.

Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions; however, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

No proffer shall be accepted by a locality unless it has adopted a capital improvement program pursuant to § 15.2-2239 or local charter. In the event proffered conditions include the dedication of real property or payment of cash, the property shall not transfer and the payment of cash shall not be made until the facilities for which the property is dedicated or cash is tendered are included in the capital improvement program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. If proffered conditions include the dedication of real property or the payment of cash, the proffered conditions shall provide for the disposition of the property or cash payment in the event the property or cash payment is not used for the purpose for which proffered.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to the property, shall be effective with respect to the property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B above, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable (i) non-cash proffers for on-site conditions for the new development; (ii) non-cash, off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.  

G. Prior to July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.  [ Subsections E, F, and G shall not apply to any development on sites containing five acres or less, or five parcels or less.  ]

§ 15.2-2303. Conditional zoning in certain localities.

A. A zoning ordinance may include reasonable regulations and provisions for conditional zoning as defined in § 15.2-2201 and for the adoption, in counties, or towns therein which have planning commissions, wherein the urban county executive form of government is in effect, or in a city adjacent to or completely surrounded by such a county, or in a county contiguous to any such county, or in a city adjacent to or completely surrounded by such a contiguous county, or in any town within such contiguous county, and in the counties east of the Chesapeake Bay as a part of an amendment to the zoning map of reasonable conditions, in addition to the regulations provided for the zoning district by the ordinance, when such conditions shall have been proffered in writing, in advance of the public hearing before the governing body required by § 15.2-2285 by the owner of the property which is the subject of the proposed zoning map amendment. Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, such conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by such conditions. However, such conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. Such notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement such proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subdivision shall acquire no rights pursuant to this section.

D. Subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

E. Nothing in this section shall be construed to affect or impair the authority of a governing body to (i) accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or (ii) accept or impose valid conditions pursuant to provision 3 of § 15.2-2286, provision 5 of § 15.2-2242, or other provision of law.

F. In addition to the powers granted by the preceding subsections, a zoning ordinance may include reasonable regulations to implement, in whole or in part, the provisions of §§ 15.2-2296 through 15.2-2302.

G. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable (i) non-cash proffers for on-site conditions for the new development; (ii) non-cash, off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is  necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

H. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.

I. Prior to July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.  [ Subsections E, F, and G shall not apply to any development on sites containing five acres or less, or five parcels or less.  ]

§ 15.2-2303.1. Development agreements in certain counties.

A. In order to promote the public health, safety and welfare and to encourage economic development consistent with careful planning, New Kent County may include in its zoning ordinance provisions for the governing body to enter into binding development agreements with any persons owning legal or equitable interests in real property in the county if the property to be developed contains at least one thousand acres.

B. Any such agreements shall be for the purpose of stimulating and facilitating economic growth in the county; shall not be inconsistent with the comprehensive plan at the time of the agreement's adoption, except as may have been authorized by existing zoning ordinances; and shall not authorize any use or condition inconsistent with the zoning ordinance or other ordinances in effect at the time the agreement is made, except as may be authorized by a variance, special exception or similar authorization. The agreement shall be authorized by ordinance, shall be for a term not to exceed fifteen years, and may be renewed by mutual agreement of the parties for successive terms of not more than ten years each. It may provide, among other things, for uses; the density or intensity of uses; the maximum height, size, setback and/or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use matters. It may authorize the property owner to transfer to the county land, public improvements, money or anything of value to further the purposes of the agreement or other public purposes set forth in the county's comprehensive plan, but not as a condition to obtaining any permitted use or zoning. The development agreement shall not run with the land except to the extent provided therein, and the agreement may be amended or canceled in whole or in part by the mutual consent of the parties thereto or their successors in interest and assigns.

C. If, pursuant to the agreement, a property owner who is a party thereto and is not in breach thereof, (i) dedicates or is required to dedicate real property to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, (ii) makes or is required to make cash payments to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, or (iii) makes or is required to make public improvements for the county, the Commonwealth or any other political subdivision or for the federal government or any agency thereof, such dedication, payment or construction therefor shall vest the property owner's rights under the agreement. If a property owner's rights have vested, neither any amendment to the zoning map for the subject property nor any amendment to the text of the zoning ordinance with respect to the zoning district applicable to the property which eliminates or restricts, reduces, or modifies the use; the density or intensity of uses; the maximum height, size, setback or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use or other matters provided for in such agreement shall be effective with respect to such property during the term of the agreement unless there has been a mistake, fraud or change in circumstances substantially affecting the public health, safety or welfare.

D. Nothing in this section shall be construed to preclude, limit or alter the vesting of rights in accordance with existing law; authorize the impairment of such rights; or invalidate any similar agreements entered into pursuant to existing law.

E. The provisions of this section authorizing cash payments shall not apply to the residential portion of any development agreement entered into after July 1, 2009.

Article 8.
RoadPublic Facility Impact Fees.

§ 15.2-2317. Applicability of article.

This article shall apply to any locality city, any county enumerated in § 15.2-4831 or 33.1-391.7, any town within such county, any county that had the authority to accept proffers prior to July 1, 2009, and to any county that has adopted zoning pursuant to Article 7 (§ 15.2-2280 et seq.) of Chapter 22 of Title 15.2 and that (i) has a population of at least 20,000 and has a population growth rate of at least 5%percent or (ii) has population growth of 15% or more, and to any town within such county. For the purposes of this section, population growth shall be the difference in population from the next-to-latest to the latest decennial census year, based on population reported by the United States Bureau of the Census.

§ 15.2-2318. Definitions.

As used in this article, unless the context requires a different meaning:

"Cost" includes, in addition to means the actual charges to be paid by or on behalf of the locality for: (i) all labor, materials, machinery and equipment for construction, (i)(ii) the acquisition of land, rights-of-way, property rights, easements and interests, including the costs of moving or relocating utilities, (ii)(iii) demolition or removal of any structure on land so acquired, including acquisition of land to which such structure may be moved, (iii)(iv) survey, engineering, consulting, and architectural expenses, (iv)(v) legal, administrative, and other related expenses, and (v)(vi) 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 road improvement public facility improvements.

"Impact fee" means a charge or assessment imposed against new development in order to generate revenue to fund or recover the costs of reasonable road public facility improvements benefiting necessitated by and attributable to providing public facilities to the new development. Impact fees may not be assessed and imposed for road public facilities repair, operation and maintenance, nor to meet demand which existed prior to the new development.

"Impact fee service area" means an a geographic area designated within by an ordinance on the zoning map of a locality and reflected on the comprehensive plan of a such locality having, which has clearly defined boundaries and clearly related traffic public facility needs that have a rational and reasonable relationship to projected new development and within which development is to be subject to the assessment of impact fees.

“New development” means any new construction or building expansion that (i) for residential development, results in one or more additional residential dwelling units or (ii) for non-residential development, results in an increase of gross square footage.

“On-site” means within the boundaries of the property to be developed.

“Public facilities” means public roads, public safety facilities, or public school facilities.

“Public facility improvement” means public road improvement, public safety facility improvement, or public school facility improvement.

"RoadPublic road improvement" includesmeans (i) construction of new roads or; (ii) improvement or expansion of existing roads and related appurtenances as required by applicable standards of the Virginia Department of Transportation, or the applicable standards of a locality with road maintenance responsibilities; and (iii) construction, improvement, or expansion of all buildings, structures, parking, and other facilities related to transit, to meet increased demand necessitated by and attributable to new development. Road improvements do not include on-site construction of roads which a developer may be required to provide pursuant to §§ 15.2-2241 through 15.2-2245.

“Public safety facility improvement” means construction of new law-enforcement, fire, emergency medical, and rescue facilities or expansion of existing public safety facilities, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within a designated impact fee service area.

“Public school facility improvement” means construction of new primary and secondary public schools or expansion of existing primary and secondary public schools, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within the designated impact fee service area.

§ 15.2-2319. Authority to assess and impose impact fees.

A. Any applicable locality may, by ordinance pursuant to the procedures and requirements of this article, assess and impose impact fees on new residential, commercial, and industrial development to pay all or a part of the cost of reasonable road public facility improvements that benefit are necessitated by and attributable to the new development.

B. 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 ten members appointed by the governing body of the locality and at least forty percent of the membership shall be representatives from the development, building construction, or real estate industries who have been actively engaged in development, construction, or real estate for the past five years. 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 preparation of 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.

C. A locality shall exempt commercial and industrial development from the imposition of public school facility impact fees. A locality may reduce or waive any impact fee for all or part of an industrial development if the project is projected to create significant economic development and employment growth in the impact fee service area.

D. A locality may reduce or waive any impact fee authorized by this article in urban development areas established pursuant to § 15.2-2223.1.

E. No locality shall impose any impact fee authorized by this article on any unitsubject to an affordable dwelling unit program established pursuant to § 15.2-735.2, 15.2-2304, or 15.2-2305; on any rental housing that qualifies for federal low-income tax credit; or on any housing that qualifies as affordable within a locality under the guidelines included in the definition of affordable housing in § 15.2-2201.

F. A locality may exempt from impact fees any property that, once developed, will be exempt from real property taxes, if the locality determines that the property's use will not contribute significantly to the use of the public facilities of the locality.

§ 15.2-2320. Impact fee service areas to be established.

A. The locality shall delineate by ordinance on the zoning map one or more impact fee service areas within its comprehensive plan; however, no locality shall designate the entire locality as a single impact fee service area.

B. Prior to establishing any impact fee service area, the locality shall provide written notice to all owners of unimproved property located within the impact fee service area in a manner consistent with the requirements of subsection B of § 15.2-2204.

C. Impact fees collected from new development within an impact fee service area shall be expended only for road public facility improvements benefiting that impact fee service area. An impact fee service area may encompass more than one road public facility improvement project. A locality may exclude urban development areas designated pursuant to § 15.2-2223.1 from impact fee service areas.

§ 15.2-2321. Adoption of public road, public school facilities, and public safety facility improvements program.

A. Prior to adopting a system of impact fees, the locality shall conduct an assessment of road public facility improvement needs benefiting an impact fee service area and shall adopt a public road, improvements plan public school facility, or public safety facility improvements plans for the area showing the new roads public facilities proposed to be constructed and the existing roads public facilities to be improved or expanded and the schedule for undertaking such construction, improvement or expansion. The road public facility improvements plan plans shall be adopted as an amendment amendments to the required comprehensive plan and shall be incorporated into the capital improvements program or, in the case of the counties where. Where applicable, the road improvement plan shall be incorporated into the six-year plan for secondary road construction pursuant to § 33.1-70.01.

B. The locality shall adopt the road public facility improvements plan plans 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 least 30 days prior to the public hearing.

C. The locality at a minimum shall include the following items in assessing road public facility improvement needs and preparing a road public facility improvements plan plans:

1. An analysis of the existing capacity, current usage and existing commitments to future usage of existing roads public facilities, as indicated by (i) both current and projected service levels, (ii) current valid building permits outstanding, and (iii) approved and pending site plans and subdivision plats, and (iv) approved conditional zonings, special exceptions, and special use permits. If the current usage and commitments exceed the existing capacity of the roads public facilities, the locality also shall determine the costs of improving the roads public facilities to meet the demand and shall identify funding for such costs from sources other than impact fees. If the projected service levels exceed current service levels for the impact fee service area, the locality shall determine the costs of increasing the current service levels to the projected levels in the absence of new development and shall identify funding for such costs from sources other than impact fees. The analysis shall include any off-site road public facility improvements, or cash payments for road public facility improvements accepted by the locality and shall include a plan to fund the current usages and commitments that exceed the existing capacity of the roads public facilities.

2. The projected need for and costs of construction of new roads or improvement public facilities or expansion of existing roads public facilities necessitated by and attributable in whole or in part to projected new development. RoadPublic facility improvement 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 20 years in the future, at the end of a 20-year period. The assumptions with regard to land uses, densities, intensities, and population upon which road public facility improvement projections are based shall be presented.

3. An assessment of (i) such future revenues as shall be generated by the new development towards public facilities improvement within the impact fee service area and (ii) such funds as have been committed from the federal, state, or local government specifically to provide or pay for the public facilities for which the impact fees are to be imposed. The locality also shall consider the extent to which (a) other developments have already contributed to the cost of existing public roads, public school facilities, and public safety facilities, which will benefit new development, (b) new development will contribute to the cost of existing public roads, public school facilities, and public safety facilities, and (c) new development will contribute to the cost of public road, public school facilities, and public safety facilities improvements in the future other than through impact fees, including any special taxing districts, special assessments, or community development authorities.

34. The total number of new public facility service units projected for the impact fee service area when fully developed and, if full development is projected to occur more than 20 years in the future, at the end of a 20-year period. As used in this section, a service unit is a standardized measure of use or generation attributable to an individual unit of new development. 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.

D. A road "service unit" is a standardized measure of traffic use or generation. 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. The table and its costs shall be established by the locality based upon the ITE manual (published by the Institute of Transportation Engineers) or locally conducted trip generation studies, and consistent with the traffic analysis standards adopted pursuant to § 15.2-2222.1.

E. A public school facility “service unit” is the estimated average number of elementary, middle, and high school pupils generated by each type (single-family detached, single-family attached, and multifamily) of dwelling unit on a localitywide basis. 

The need for new or expanded public school facilities within an impact fee service area shall be established by determining (i) the appropriate enrollment-to-capacity levels for elementary, middle, and high schools, (ii) the current available capacity of the existing elementary, middle, and high schools, (iii) the impact of a new development, on a service unit basis, on the capacity of existing elementary, middle, and high schools, and (iv) the elementary, middle, and high schools necessary to meet the projected increase in demand necessitated by and directly attributable to new residential development within the impact fee service area.  

The enrollment-to-capacity level for each elementary, middle, and high school established within an impact fee service area shall be consistent with existing enrollment-to-capacity levels and the enrollment-to-capacity level established for the locality as a whole. If the projected enrollment-to-capacity levels provide a greater level of service than existing enrollment-to-capacity levels for the impact fee service area, the locality shall determine the costs of adjusting the existing levels to the projected levels in the absence of new development and shall identify funding for such costs from sources other than impact fees.

The locality shall determine the individual public school facility service unit cost within an impact fee service area by dividing the total site cost and facility cost by the student capacity of each public school facility necessitated by and directly attributable to a new residential development. The calculation shall include a credit for each service unit for each type of dwelling unit equal to the pro rata share of total dollars received from the state for public school facility construction or expansion and a credit for the percentage of annual real estate tax paid by the owner to the locality that the locality dedicates to public school facilities capital improvements and public school facility debt service for each of the next 20 years after a certificate of occupancy has been issued.

F. The locality shall determine the individual public safety facility service unit cost within an impact fee service area by (i) determining the percentages of calls for public safety service made from residential units and from nonresidential properties; (ii) determining the costs of projected public safety facilities attributable to residential units and to nonresidential units by multiplying the total costs by such percentages; and (iii) dividing the percentage costs by the number of residential units and by the total nonresidential building square feet.  

§ 15.2-2322. Adoption of impact fee and schedule.

After adoption of a road public facility improvement program programs, 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 road public facility improvements benefiting necessitated by and attributable to new development in the designated impact fee service area as calculated pursuant to subsection C of § 15.2-2321. The ordinance shall set forth the schedule of impact fees. The public road, public school, or public safety facility impact fees to be imposed shall be determined by adding the unit cost for public roads, public school facilities, or public safety facilities to establish a public facilities unit cost.

§ 15.2-2323. Impact fees assessed and imposed on non-residential development.

A. Impact fees may be assessed and imposed on all new non-residential development except those site plans recorded prior to July 1, 2008. The amount of impact fees to be imposed assessed on a specific development or subdivision shall be determined before or at the time of the final approval of the site plan or subdivision is approved. The ordinance shall specify that the impact fee assessed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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 road improvement costs in the impact fee 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 ten years, by dividing the projected costs necessitated by development in the next ten years by the service units projected to be created in the next ten 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

B. Subject to the provisions of this subsection, the maximum impact fee assessed on non-residential development shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

The sum total of public facility impact fees shall not exceed the maximum amounts enumerated in this subsection; provided, however, that beginning July 1, 2009, the locality may adjust the maximum impact fee by (i) a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index, or (ii) one and one-half percent, whichever is lower. 

§ 15.2-2323.1. Impact fees assessed and imposed on residential development.

A. Impact fees may be assessed and imposed on all new residential development or subdivisions except those subdivisions and site plans recorded on or after July 1, 2003, but prior to July 1, 2008. The amount of impact fees to be assessed on a specific new development or subdivision shall be determined at the time of the final approval of the subdivision, or, for a new development or subdivision recorded prior to July 1, 2003, at the time of the issuance of a building permit for that subdivision.  For new development to be constructed in more than one phase, the amount of impact fees to be assessed shall be determined for each phase of development at the time of the final approval of each phase of the subdivision. The ordinance shall specify that the impact fee assessed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

B. Subject to the provisions of this subsection, the maximum impact fee assessed on residential development prior to July 1, 2012, shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be $12,500 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be $7,500 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

The sum total of public facility impact fees assessed prior to July 1, 2012, shall not exceed the maximum amounts enumerated in this subsection; provided, however, that beginning July 1, 2009, and until July 1, 2012, the locality may adjust the maximum impact fee by (i) a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index, or (ii) one and one-half percent, whichever is lower. 

C. On and after July 1, 2012, the maximum impact fee assessed and imposed by a locality on residential development shall not exceed two percent of the average sale price of newly constructed homes in that locality for the previous calendar year, as calculated and reported by the Weldon Cooper Center for Public Service of the University of Virginia.

§ 15.2-2324. Credits against impact fee.

The market value of any land dedication, cash contribution or construction from provided by the developer for off-site all on-site (i) public school facility improvements, (ii) public safety facility improvements, and (iii) public road or other transportation improvements designated on any local, state or federal transportation plan including the locality's capital improvements program, the locality’s comprehensive plan, the locality's six-year improvement plan, the six-year improvement plan of the Virginia Department of Transportation or transportation plan of a regional transportation authority benefiting the impact fee service area shall be treated as a credit against the impact fees imposed on the developer's project. The locality shall treat as a credit against the impact fee imposed upon a new development any off-site transportation public facility improvement, land dedication, cash contribution, or construction, whether it is a condition of a rezoning or otherwise committed to the localityprovided by the developer. The locality may by ordinance provide for credits for approved on-site transportation improvements in excess of those required by the development.Market value shall be determined at the time of dedication, contribution, or construction.

The locality also shall calculate and credit against impact fees the extent to which (i) other developments have already contributed to the cost of existing roads which will benefit 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, including any special taxing districts, special assessments, or community development authorities.

§ 15.2-2325. Updating plan and amending impact fee.

The locality shall update the needs assessment and the assumptions and projections at least once every two five years. The road public facility improvement plan shall be updated at least every two five years to reflect current assumptions and projections. The impact fee schedule may be amended to reflect any substantial changes in such assumptions and projections. Any impact fees not yet paid shall be assessed at the updated rate.

§ 15.2-2326. Use of proceeds.

A. A separateSeparate public road, public school facility, and public safety facility improvement account accounts shall be established for the each impact fee service area established by the locality, and all funds collected through impact fees shall be deposited in the such separate interest-bearing account accounts. Interest earned on deposits shall become funds of the account. The expenditure of funds from the account accounts shall be only for public road, public school facility, and public safety facility improvements benefiting the impact fee service area as set out in the road public facility improvement plan for the impact fee service area. The expenditure of funds from the public school facility accounts shall be only for public school facility improvements benefiting the impact fee service area or any school district whose boundaries are within or adjacent to the impact fee service area. The governing body of any county that has adopted an ordinance pursuant to § 15.2-2322 may enter into one or more agreements with the governing body of any town within such county that has also adopted an ordinance pursuant to § 15.2-2322 to provide for the transfer or sharing of revenues from impact fees for public facility improvements consistent with this section. Any funds collected through impact fees may be used by a locality to meet matching requirements for any state or federal funding.

B. The governing body of any locality imposing impact fees pursuant to the authority granted under this article shall within three months of the close of each fiscal year, beginning in fiscal year 2009 and for each fiscal year thereafter, report to the Commission on Local Government the following information for public road, public school facility, and public safety facility improvements for the preceding fiscal year:

1. The aggregate dollar amount of impact fees collected by the locality in each impact fee service area and for each improvement category;

2. The aggregate dollar amount expended in the impact fee service area in each improvement category;

3. The total dollar amount of impact fees collected and expended by the locality in each impact fee service area for all years to date; and

4. The total dollar amount expended by the locality to increase capacity to meet existing commitments or increase existing service levels pursuant to § 15.2-2321.1 as well as the funding sources and the amounts from each source. 

C. The governing body of any locality eligible to collect impact fees pursuant to authority granted under this article but that did not collect any impact fees during the preceding fiscal year shall within three months of the close of each fiscal year, beginning in 2009 and for each fiscal year thereafter, so notify the Commission on Local Government.

D. The Commission on Local Government shall by November 30, 2009, and by November 30 of each fiscal year thereafter, prepare and make available to the public and the chairmen of the Senate Local Government Committee and the House Counties, Cities and Towns Committee an annual report containing the information made available to it pursuant to subsections B and C.

§ 15.2-2327. Refund of impact fees.

The locality shall refund any impact fee or portion thereof for which construction of a public facility improvement project is not completed has not commenced within a reasonable period of time, not to exceed fifteen years. In the event that road impact fees are not committed to road improvements benefiting the impact fee service area within seven years from the date of collection, the locality may commit any such impact fees to the secondary or urban system construction program of that locality for road improvements that benefit the impact fee service area.

Upon completion of a public facility improvement project, the locality shall recalculate the impact fee based on the actual cost of the improvement. It shall refund the difference if the impact fee paid exceeds actual cost by more than fifteen percent. Refunds shall be made to the record owner of the property at the time the refund is made.

2. That the provisions of this act shall not impair any proffer or proffered condition amendment accepted by a locality, nor any agreement entered into under § 15.2-2303.1 of the Code of Virginia, pursuant to authority granted prior the effective date of this Act.

3.  That the provisions of this act amending §§ 15.2-2297, 15.2-2298, 15.2-2303, and 15.2-2303.1 of the Code of Virginia shall not apply to any urban development area created prior to July 1, 2009, pursuant to § 15.2-2223.1 of the Code of Virginia by any county having the urban county executive form of government.


SENATE BILL NO. 768
FLOOR AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by Senator Watkins
on February 11, 2008)
(Patron Prior to Substitute--Senator Watkins)
A BILL to amend and reenact §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 15.2-2323.1, relating to conditional zoning; impact fees.

Be it enacted by the General Assembly of Virginia:

1.  That §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 15.2-2323.1 as follows:

§ 15.2-2297. Same; conditions as part of a rezoning or amendment to zoning map.

A. A zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map; provided that (i) the rezoning itself must give rise for the need for the conditions; (ii) the conditions shall have a reasonable relation to the rezoning; (iii) the conditions shall not include a cash contribution to the locality; (iv) the conditions shall not include mandatory dedication of real or personal property for open space, parks, schools, fire departments or other public facilities not otherwise provided for in § 15.2-2241; (v) the conditions shall not include a requirement that the applicant create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation; (vi) the conditions shall not include payment for or construction of off-site improvements except those provided for in § 15.2-2241; (vii) no condition shall be proffered that is not related to the physical development or physical operation of the property; and (viii) all such conditions shall be in conformity with the comprehensive plan as defined in § 15.2-2223. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions. However, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendments to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property.

Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable (i) non-cash proffers for on-site conditions for the new development; (ii) non-cash, off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.

G. Prior to July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.

§ 15.2-2298. Same; additional conditions as a part of rezoning or zoning map amendment in certain high-growth localities.

A. Except for those localities to which § 15.2-2303 is applicable, this section shall apply to (i) any locality which has had population growth of 5% or more from the next-to-latest to latest decennial census year, based on population reported by the United States Bureau of the Census; (ii) any city adjoining such city or county; (iii) any towns located within such county; and (iv) any county contiguous with at least three such counties, and any town located in that county. However, any such locality may by ordinance choose to utilize the conditional zoning authority granted under § 15.2-2303 rather than this section.

In any such locality, notwithstanding any contrary provisions of § 15.2-2297, a zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map, provided that (i) the rezoning itself gives rise to the need for the conditions; (ii) the conditions have a reasonable relation to the rezoning; and (iii) all conditions are in conformity with the comprehensive plan as defined in § 15.2-2223.

Reasonable conditions may include the payment of cash for any off-site road improvement or any off-site transportation improvement that is adopted as an amendment to the required comprehensive plan and incorporated into the capital improvements program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. For purposes of this section, "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. For purposes of this section, "transportation improvement" means any real or personal property acquired, constructed, improved, or used for constructing, improving, or operating any (i) public mass transit system or (ii) highway, or portion or interchange thereof, including parking facilities located within a district created pursuant to this title. Such improvements shall include, without limitation, public mass transit systems, public highways, and all buildings, structures, approaches, and facilities thereof and appurtenances thereto, rights-of-way, bridges, tunnels, stations, terminals, and all related equipment and fixtures.

Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions; however, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

No proffer shall be accepted by a locality unless it has adopted a capital improvement program pursuant to § 15.2-2239 or local charter. In the event proffered conditions include the dedication of real property or payment of cash, the property shall not transfer and the payment of cash shall not be made until the facilities for which the property is dedicated or cash is tendered are included in the capital improvement program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. If proffered conditions include the dedication of real property or the payment of cash, the proffered conditions shall provide for the disposition of the property or cash payment in the event the property or cash payment is not used for the purpose for which proffered.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to the property, shall be effective with respect to the property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B above, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable (i) non-cash proffers for on-site conditions for the new development; (ii) non-cash, off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.  

G. Prior to July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.

§ 15.2-2303. Conditional zoning in certain localities.

A. A zoning ordinance may include reasonable regulations and provisions for conditional zoning as defined in § 15.2-2201 and for the adoption, in counties, or towns therein which have planning commissions, wherein the urban county executive form of government is in effect, or in a city adjacent to or completely surrounded by such a county, or in a county contiguous to any such county, or in a city adjacent to or completely surrounded by such a contiguous county, or in any town within such contiguous county, and in the counties east of the Chesapeake Bay as a part of an amendment to the zoning map of reasonable conditions, in addition to the regulations provided for the zoning district by the ordinance, when such conditions shall have been proffered in writing, in advance of the public hearing before the governing body required by § 15.2-2285 by the owner of the property which is the subject of the proposed zoning map amendment. Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, such conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by such conditions. However, such conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. Such notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement such proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subdivision shall acquire no rights pursuant to this section.

D. Subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

E. Nothing in this section shall be construed to affect or impair the authority of a governing body to (i) accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or (ii) accept or impose valid conditions pursuant to provision 3 of § 15.2-2286, provision 5 of § 15.2-2242, or other provision of law.

F. In addition to the powers granted by the preceding subsections, a zoning ordinance may include reasonable regulations to implement, in whole or in part, the provisions of §§ 15.2-2296 through 15.2-2302.

G. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development or the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable (i) non-cash proffers for on-site conditions for the new development; (ii) non-cash, off-site proffers for a public facility that is not the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is  necessitated by and attributable to the new development, as a condition for rezoning for residential development or the residential portion of any mixed-use development; and (iii) conditions to implement incentive zoning as defined in § 15.2-2201. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

H. Notwithstanding any other provision of law, no locality shall, on or after July 1, 2009, accept the dedication of cash as a proffered condition for rezoning for residential development or the residential portion of any mixed-use development.

I. Prior to July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the adjustment of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.

§ 15.2-2303.1. Development agreements in certain counties.

A. In order to promote the public health, safety and welfare and to encourage economic development consistent with careful planning, New Kent County may include in its zoning ordinance provisions for the governing body to enter into binding development agreements with any persons owning legal or equitable interests in real property in the county if the property to be developed contains at least one thousand acres.

B. Any such agreements shall be for the purpose of stimulating and facilitating economic growth in the county; shall not be inconsistent with the comprehensive plan at the time of the agreement's adoption, except as may have been authorized by existing zoning ordinances; and shall not authorize any use or condition inconsistent with the zoning ordinance or other ordinances in effect at the time the agreement is made, except as may be authorized by a variance, special exception or similar authorization. The agreement shall be authorized by ordinance, shall be for a term not to exceed fifteen years, and may be renewed by mutual agreement of the parties for successive terms of not more than ten years each. It may provide, among other things, for uses; the density or intensity of uses; the maximum height, size, setback and/or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use matters. It may authorize the property owner to transfer to the county land, public improvements, money or anything of value to further the purposes of the agreement or other public purposes set forth in the county's comprehensive plan, but not as a condition to obtaining any permitted use or zoning. The development agreement shall not run with the land except to the extent provided therein, and the agreement may be amended or canceled in whole or in part by the mutual consent of the parties thereto or their successors in interest and assigns.

C. If, pursuant to the agreement, a property owner who is a party thereto and is not in breach thereof, (i) dedicates or is required to dedicate real property to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, (ii) makes or is required to make cash payments to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, or (iii) makes or is required to make public improvements for the county, the Commonwealth or any other political subdivision or for the federal government or any agency thereof, such dedication, payment or construction therefor shall vest the property owner's rights under the agreement. If a property owner's rights have vested, neither any amendment to the zoning map for the subject property nor any amendment to the text of the zoning ordinance with respect to the zoning district applicable to the property which eliminates or restricts, reduces, or modifies the use; the density or intensity of uses; the maximum height, size, setback or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use or other matters provided for in such agreement shall be effective with respect to such property during the term of the agreement unless there has been a mistake, fraud or change in circumstances substantially affecting the public health, safety or welfare.

D. Nothing in this section shall be construed to preclude, limit or alter the vesting of rights in accordance with existing law; authorize the impairment of such rights; or invalidate any similar agreements entered into pursuant to existing law.

E. The provisions of this section authorizing cash payments shall not apply to the residential portion of any development agreement entered into after July 1, 2009.

Article 8.
RoadPublic Facility Impact Fees.

§ 15.2-2317. Applicability of article.

This article shall apply to any locality city, any county enumerated in § 15.2-4831 or 33.1-391.7, any town within such county, any county that had the authority to accept proffers prior to July 1, 2009, and to any county that has adopted zoning pursuant to Article 7 (§ 15.2-2280 et seq.) of Chapter 22 of Title 15.2 and that (i) has a population of at least 20,000 and has a population growth rate of at least 5%percent or (ii) has population growth of 15% or more, and to any town within such county. For the purposes of this section, population growth shall be the difference in population from the next-to-latest to the latest decennial census year, based on population reported by the United States Bureau of the Census.

§ 15.2-2318. Definitions.

As used in this article, unless the context requires a different meaning:

"Cost" includes, in addition to means the actual charges to be paid by or on behalf of the locality for: (i) all labor, materials, machinery and equipment for construction, (i)(ii) the acquisition of land, rights-of-way, property rights, easements and interests, including the costs of moving or relocating utilities, (ii)(iii) demolition or removal of any structure on land so acquired, including acquisition of land to which such structure may be moved, (iii)(iv) survey, engineering, consulting, and architectural expenses, (iv)(v) legal, administrative, and other related expenses, and (v)(vi) 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 road improvement public facility improvements.

"Impact fee" means a charge or assessment imposed against new development in order to generate revenue to fund or recover the costs of reasonable road public facility improvements benefiting necessitated by and attributable to providing public facilities to the new development. Impact fees may not be assessed and imposed for road public facilities repair, operation and maintenance, nor to meet demand which existed prior to the new development.

"Impact fee service area" means an a geographic area designated within by an ordinance on the zoning map of a locality and reflected on the comprehensive plan of a such locality having, which has clearly defined boundaries and clearly related traffic public facility needs that have a rational and reasonable relationship to projected new development and within which development is to be subject to the assessment of impact fees.

“New development” means any new construction or building expansion that (i) for residential development, results in one or more additional residential dwelling units or (ii) for non-residential development, results in an increase of gross square footage.

“On-site” means within the boundaries of the property to be developed.

“Public facilities” means public roads, public safety facilities, or public school facilities.

“Public facility improvement” means public road improvement, public safety facility improvement, or public school facility improvement.

"RoadPublic road improvement" includesmeans (i) construction of new roads or; (ii) improvement or expansion of existing roads and related appurtenances as required by applicable standards of the Virginia Department of Transportation, or the applicable standards of a locality with road maintenance responsibilities; and (iii) construction, improvement, or expansion of all buildings, structures, parking, and other facilities related to transit, to meet increased demand necessitated by and attributable to new development. Road improvements do not include on-site construction of roads which a developer may be required to provide pursuant to §§ 15.2-2241 through 15.2-2245.

“Public safety facility improvement” means construction of new law-enforcement, fire, emergency medical, and rescue facilities or expansion of existing public safety facilities, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within a designated impact fee service area.

“Public school facility improvement” means construction of new primary and secondary public schools or expansion of existing primary and secondary public schools, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within the designated impact fee service area.

§ 15.2-2319. Authority to assess and impose impact fees.

A. Any applicable locality may, by ordinance pursuant to the procedures and requirements of this article, assess and impose impact fees on new residential, commercial, and industrial development to pay all or a part of the cost of reasonable road public facility improvements that benefit are necessitated by and attributable to the new development.

B. 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 ten members appointed by the governing body of the locality and at least forty percent of the membership shall be representatives from the development, building construction, or real estate industries who have been actively engaged in development, construction, or real estate for the past five years. 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 preparation of 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.

C. A locality shall exempt commercial and industrial development from the imposition of public school facility impact fees. A locality may reduce or waive any impact fee for all or part of an industrial development if the project is projected to create significant economic development and employment growth in the impact fee service area.

D. A locality may reduce or waive any impact fee authorized by this article in urban development areas established pursuant to § 15.2-2223.1.

E. No locality shall impose any impact fee authorized by this article on any unitsubject to an affordable dwelling unit program established pursuant to § 15.2-735.2, 15.2-2304, or 15.2-2305; on any rental housing that qualifies for federal low-income tax credit; or on any housing that qualifies as affordable within a locality under the guidelines included in the definition of affordable housing in § 15.2-2201.

F. A locality may exempt from impact fees any property that, once developed, will be exempt from real property taxes, if the locality determines that the property's use will not contribute significantly to the use of the public facilities of the locality.

§ 15.2-2320. Impact fee service areas to be established.

A. The locality shall delineate by ordinance on the zoning map one or more impact fee service areas within its comprehensive plan; however, no locality shall designate the entire locality as a single impact fee service area.

B. Prior to establishing any impact fee service area, the locality shall provide written notice to all owners of unimproved property located within the impact fee service area in a manner consistent with the requirements of subsection B of § 15.2-2204.

C. Impact fees collected from new development within an impact fee service area shall be expended only for road public facility improvements benefiting that impact fee service area. An impact fee service area may encompass more than one road public facility improvement project. A locality may exclude urban development areas designated pursuant to § 15.2-2223.1 from impact fee service areas.

§ 15.2-2321. Adoption of public road, public school facilities, and public safety facility improvements program.

A. Prior to adopting a system of impact fees, the locality shall conduct an assessment of road public facility improvement needs benefiting an impact fee service area and shall adopt a public road, improvements plan public school facility, or public safety facility improvements plans for the area showing the new roads public facilities proposed to be constructed and the existing roads public facilities to be improved or expanded and the schedule for undertaking such construction, improvement or expansion. The road public facility improvements plan plans shall be adopted as an amendment amendments to the required comprehensive plan and shall be incorporated into the capital improvements program or, in the case of the counties where. Where applicable, the road improvement plan shall be incorporated into the six-year plan for secondary road construction pursuant to § 33.1-70.01.

B. The locality shall adopt the road public facility improvements plan plans 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 least 30 days prior to the public hearing.

C. The locality at a minimum shall include the following items in assessing road public facility improvement needs and preparing a road public facility improvements plan plans:

1. An analysis of the existing capacity, current usage and existing commitments to future usage of existing roads public facilities, as indicated by (i) both current and projected service levels, (ii) current valid building permits outstanding, and (iii) approved and pending site plans and subdivision plats, and (iv) approved conditional zonings, special exceptions, and special use permits. If the current usage and commitments exceed the existing capacity of the roads public facilities, the locality also shall determine the costs of improving the roads public facilities to meet the demand and shall identify funding for such costs from sources other than impact fees. If the projected service levels exceed current service levels for the impact fee service area, the locality shall determine the costs of increasing the current service levels to the projected levels in the absence of new development and shall identify funding for such costs from sources other than impact fees. The analysis shall include any off-site road public facility improvements, or cash payments for road public facility improvements accepted by the locality and shall include a plan to fund the current usages and commitments that exceed the existing capacity of the roads public facilities.

2. The projected need for and costs of construction of new roads or improvement public facilities or expansion of existing roads public facilities necessitated by and attributable in whole or in part to projected new development. RoadPublic facility improvement 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 20 years in the future, at the end of a 20-year period. The assumptions with regard to land uses, densities, intensities, and population upon which road public facility improvement projections are based shall be presented.

3. An assessment of (i) such future revenues as shall be generated by the new development towards public facilities improvement within the impact fee service area and (ii) such funds as have been committed from the federal, state, or local government specifically to provide or pay for the public facilities for which the impact fees are to be imposed. The locality also shall consider the extent to which (a) other developments have already contributed to the cost of existing public roads, public school facilities, and public safety facilities, which will benefit new development, (b) new development will contribute to the cost of existing public roads, public school facilities, and public safety facilities, and (c) new development will contribute to the cost of public road, public school facilities, and public safety facilities improvements in the future other than through impact fees, including any special taxing districts, special assessments, or community development authorities.

34. The total number of new public facility service units projected for the impact fee service area when fully developed and, if full development is projected to occur more than 20 years in the future, at the end of a 20-year period. As used in this section, a service unit is a standardized measure of use or generation attributable to an individual unit of new development. 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.

D. A road "service unit" is a standardized measure of traffic use or generation. 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. The table and its costs shall be established by the locality based upon the ITE manual (published by the Institute of Transportation Engineers) or locally conducted trip generation studies, and consistent with the traffic analysis standards adopted pursuant to § 15.2-2222.1.

E. A public school facility “service unit” is the estimated average number of elementary, middle, and high school pupils generated by each type (single-family detached, single-family attached, and multifamily) of dwelling unit on a localitywide basis. 

The need for new or expanded public school facilities within an impact fee service area shall be established by determining (i) the appropriate enrollment-to-capacity levels for elementary, middle, and high schools, (ii) the current available capacity of the existing elementary, middle, and high schools, (iii) the impact of a new development, on a service unit basis, on the capacity of existing elementary, middle, and high schools, and (iv) the elementary, middle, and high schools necessary to meet the projected increase in demand necessitated by and directly attributable to new residential development within the impact fee service area.  

The enrollment-to-capacity level for each elementary, middle, and high school established within an impact fee service area shall be consistent with existing enrollment-to-capacity levels and the enrollment-to-capacity level established for the locality as a whole. If the projected enrollment-to-capacity levels provide a greater level of service than existing enrollment-to-capacity levels for the impact fee service area, the locality shall determine the costs of adjusting the existing levels to the projected levels in the absence of new development and shall identify funding for such costs from sources other than impact fees.

The locality shall determine the individual public school facility service unit cost within an impact fee service area by dividing the total site cost and facility cost by the student capacity of each public school facility necessitated by and directly attributable to a new residential development. The calculation shall include a credit for each service unit for each type of dwelling unit equal to the pro rata share of total dollars received from the state for public school facility construction or expansion and a credit for the percentage of annual real estate tax paid by the owner to the locality that the locality dedicates to public school facilities capital improvements and public school facility debt service for each of the next 20 years after a certificate of occupancy has been issued.

F. The locality shall determine the individual public safety facility service unit cost within an impact fee service area by (i) determining the percentages of calls for public safety service made from residential units and from nonresidential properties; (ii) determining the costs of projected public safety facilities attributable to residential units and to nonresidential units by multiplying the total costs by such percentages; and (iii) dividing the percentage costs by the number of residential units and by the total nonresidential building square feet.  

§ 15.2-2322. Adoption of impact fee and schedule.

After adoption of a road public facility improvement program programs, 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 road public facility improvements benefiting necessitated by and attributable to new development in the designated impact fee service area as calculated pursuant to subsection C of § 15.2-2321. The ordinance shall set forth the schedule of impact fees. The public road, public school, or public safety facility impact fees to be imposed shall be determined by adding the unit cost for public roads, public school facilities, or public safety facilities to establish a public facilities unit cost.

§ 15.2-2323. Impact fees assessed and imposed on non-residential development.

A. Impact fees may be assessed and imposed on all new non-residential development except those site plans recorded prior to July 1, 2008. The amount of impact fees to be imposed assessed on a specific development or subdivision shall be determined before or at the time of the final approval of the site plan or subdivision is approved. The ordinance shall specify that the impact fee assessed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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 road improvement costs in the impact fee 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 ten years, by dividing the projected costs necessitated by development in the next ten years by the service units projected to be created in the next ten 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

B. Subject to the provisions of this subsection, the maximum impact fee assessed on non-residential development shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

The sum total of public facility impact fees shall not exceed the maximum amounts enumerated in this subsection; provided, however, that beginning July 1, 2009, the locality may adjust the maximum impact fee by (i) a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index, or (ii) one and one-half percent, whichever is lower. 

§ 15.2-2323.1. Impact fees assessed and imposed on residential development.

A. Impact fees may be assessed and imposed on all new residential development or subdivisions except those subdivisions and site plans recorded on or after July 1, 2003, but prior to July 1, 2008. The amount of impact fees to be assessed on a specific new development or subdivision shall be determined at the time of the final approval of the subdivision, or, for a new development or subdivision recorded prior to July 1, 2003, at the time of the issuance of a building permit for that subdivision.  For new development to be constructed in more than one phase, the amount of impact fees to be assessed shall be determined for each phase of development at the time of the final approval of each phase of the subdivision. The ordinance shall specify that the impact fee assessed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

B. Subject to the provisions of this subsection, the maximum impact fee assessed on residential development prior to July 1, 2012, shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be $12,500 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvements shall be $7,500 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

The sum total of public facility impact fees assessed prior to July 1, 2012, shall not exceed the maximum amounts enumerated in this subsection; provided, however, that beginning July 1, 2009, and until July 1, 2012, the locality may adjust the maximum impact fee by (i) a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index, or (ii) one and one-half percent, whichever is lower. 

C. On and after July 1, 2012, the maximum impact fee assessed and imposed by a locality on residential development shall not exceed two percent of the average sale price of newly constructed homes in that locality for the previous calendar year, as calculated and reported by the Weldon Cooper Center for Public Service of the University of Virginia.

§ 15.2-2324. Credits against impact fee.

The market value of any land dedication, cash contribution or construction from provided by the developer for off-site all on-site (i) public school facility improvements, (ii) public safety facility improvements, and (iii) public road or other transportation improvements designated on any local, state or federal transportation plan including the locality's capital improvements program, the locality’s comprehensive plan, the locality's six-year improvement plan, the six-year improvement plan of the Virginia Department of Transportation or transportation plan of a regional transportation authority benefiting the impact fee service area shall be treated as a credit against the impact fees imposed on the developer's project. The locality shall treat as a credit against the impact fee imposed upon a new development any off-site transportation public facility improvement, land dedication, cash contribution, or construction, whether it is a condition of a rezoning or otherwise committed to the localityprovided by the developer. The locality may by ordinance provide for credits for approved on-site transportation improvements in excess of those required by the development.Market value shall be determined at the time of dedication, contribution, or construction.

The locality also shall calculate and credit against impact fees the extent to which (i) other developments have already contributed to the cost of existing roads which will benefit 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, including any special taxing districts, special assessments, or community development authorities.

§ 15.2-2325. Updating plan and amending impact fee.

The locality shall update the needs assessment and the assumptions and projections at least once every two five years. The road public facility improvement plan shall be updated at least every two five years to reflect current assumptions and projections. The impact fee schedule may be amended to reflect any substantial changes in such assumptions and projections. Any impact fees not yet paid shall be assessed at the updated rate.

§ 15.2-2326. Use of proceeds.

A. A separateSeparate public road, public school facility, and public safety facility improvement account accounts shall be established for the each impact fee service area established by the locality, and all funds collected through impact fees shall be deposited in the such separate interest-bearing account accounts. Interest earned on deposits shall become funds of the account. The expenditure of funds from the account accounts shall be only for public road, public school facility, and public safety facility improvements benefiting the impact fee service area as set out in the road public facility improvement plan for the impact fee service area. The expenditure of funds from the public school facility accounts shall be only for public school facility improvements benefiting the impact fee service area or any school district whose boundaries are within or adjacent to the impact fee service area. The governing body of any county that has adopted an ordinance pursuant to § 15.2-2322 may enter into one or more agreements with the governing body of any town within such county that has also adopted an ordinance pursuant to § 15.2-2322 to provide for the transfer or sharing of revenues from impact fees for public facility improvements consistent with this section. Any funds collected through impact fees may be used by a locality to meet matching requirements for any state or federal funding.

B. The governing body of any locality imposing impact fees pursuant to the authority granted under this article shall within three months of the close of each fiscal year, beginning in fiscal year 2009 and for each fiscal year thereafter, report to the Commission on Local Government the following information for public road, public school facility, and public safety facility improvements for the preceding fiscal year:

1. The aggregate dollar amount of impact fees collected by the locality in each impact fee service area and for each improvement category;

2. The aggregate dollar amount expended in the impact fee service area in each improvement category;

3. The total dollar amount of impact fees collected and expended by the locality in each impact fee service area for all years to date; and

4. The total dollar amount expended by the locality to increase capacity to meet existing commitments or increase existing service levels pursuant to § 15.2-2321.1 as well as the funding sources and the amounts from each source. 

C. The governing body of any locality eligible to collect impact fees pursuant to authority granted under this article but that did not collect any impact fees during the preceding fiscal year shall within three months of the close of each fiscal year, beginning in 2009 and for each fiscal year thereafter, so notify the Commission on Local Government.

D. The Commission on Local Government shall by November 30, 2009, and by November 30 of each fiscal year thereafter, prepare and make available to the public and the chairmen of the Senate Local Government Committee and the House Counties, Cities and Towns Committee an annual report containing the information made available to it pursuant to subsections B and C.

§ 15.2-2327. Refund of impact fees.

The locality shall refund any impact fee or portion thereof for which construction of a public facility improvement project is not completed has not commenced within a reasonable period of time, not to exceed fifteen years. In the event that road impact fees are not committed to road improvements benefiting the impact fee service area within seven years from the date of collection, the locality may commit any such impact fees to the secondary or urban system construction program of that locality for road improvements that benefit the impact fee service area.

Upon completion of a public facility improvement project, the locality shall recalculate the impact fee based on the actual cost of the improvement. It shall refund the difference if the impact fee paid exceeds actual cost by more than fifteen percent. Refunds shall be made to the record owner of the property at the time the refund is made.

2. That the provisions of this act shall not impair any proffer or proffered condition amendment accepted by a locality, nor any agreement entered into under § 15.2-2303.1 of the Code of Virginia, pursuant to authority granted prior the effective date of this Act.

3.  That the provisions of this act amending §§ 15.2-2297, 15.2-2298, 15.2-2303, and 15.2-2303.1 of the Code of Virginia shall not apply to any urban development area created prior to July 1, 2009, pursuant to § 15.2-2223.1 of the Code of Virginia by any county having the urban county executive form of government.


SENATE BILL NO. 768
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the Senate Committee on Local Government
on January 29, 2008)
(Patron Prior to Substitute—Senator Watkins)
A BILL to amend and reenact §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 15.2-2322.1 and by adding in Article 8 of Chapter 22 of Title 15.2 a section numbered 15.2-2327.1, relating to conditional zoning; impact fees.

Be it enacted by the General Assembly of Virginia:

1.  That §§ 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, and 15.2-2317 through 15.2-2327 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 15.2-2322.1 and by adding in Article 8 of Chapter 22 of Title 15.2 a section numbered 15.2-2327.1 as follows:

§ 15.2-2297. Same; conditions as part of a rezoning or amendment to zoning map.

A. A zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map; provided that (i) the rezoning itself must give rise for the need for the conditions; (ii) the conditions shall have a reasonable relation to the rezoning; (iii) the conditions shall not include a cash contribution to the locality; (iv) the conditions shall not include mandatory dedication of real or personal property for open space, parks, schools, fire departments or other public facilities not otherwise provided for in § 15.2-2241; (v) the conditions shall not include a requirement that the applicant create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation; (vi) the conditions shall not include payment for or construction of off-site improvements except those provided for in § 15.2-2241; (vii) no condition shall be proffered that is not related to the physical development or physical operation of the property; and (viii) all such conditions shall be in conformity with the comprehensive plan as defined in § 15.2-2223. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions. However, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendments to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property.

Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development and the residential portion of any mixed-use development made on or after July 1, 2009, shall be limited to reasonable non-cash, on-site conditions necessitated by and attributable to the new development resulting from the rezoning. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall accept (i) a cash proffer as a condition for rezoning proffered on or after July 1, 2009 as a condition for rezoning for residential development and the residential portion of any mixed-use development or (ii) an off-site proffer on or after July 1, 2009, for a public facility that is the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is not necessitated by and attributable to the new development, as a condition for rezoning for residential development and the residential portion of any mixed-use development.

G. Between July 1, 2008, and July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the automatic reduction of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their retroactive application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.

§ 15.2-2298. Same; additional conditions as a part of rezoning or zoning map amendment in certain high-growth localities.

A. Except for those localities to which § 15.2-2303 is applicable, this section shall apply to (i) any locality which has had population growth of 5% or more from the next-to-latest to latest decennial census year, based on population reported by the United States Bureau of the Census; (ii) any city adjoining such city or county; (iii) any towns located within such county; and (iv) any county contiguous with at least three such counties, and any town located in that county. However, any such locality may by ordinance choose to utilize the conditional zoning authority granted under § 15.2-2303 rather than this section.

In any such locality, notwithstanding any contrary provisions of § 15.2-2297, a zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map, provided that (i) the rezoning itself gives rise to the need for the conditions; (ii) the conditions have a reasonable relation to the rezoning; and (iii) all conditions are in conformity with the comprehensive plan as defined in § 15.2-2223.

Reasonable conditions may include the payment of cash for any off-site road improvement or any off-site transportation improvement that is adopted as an amendment to the required comprehensive plan and incorporated into the capital improvements program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. For purposes of this section, "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. For purposes of this section, "transportation improvement" means any real or personal property acquired, constructed, improved, or used for constructing, improving, or operating any (i) public mass transit system or (ii) highway, or portion or interchange thereof, including parking facilities located within a district created pursuant to this title. Such improvements shall include, without limitation, public mass transit systems, public highways, and all buildings, structures, approaches, and facilities thereof and appurtenances thereto, rights-of-way, bridges, tunnels, stations, terminals, and all related equipment and fixtures.

Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions; however, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

No proffer shall be accepted by a locality unless it has adopted a capital improvement program pursuant to § 15.2-2239 or local charter. In the event proffered conditions include the dedication of real property or payment of cash, the property shall not transfer and the payment of cash shall not be made until the facilities for which the property is dedicated or cash is tendered are included in the capital improvement program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. If proffered conditions include the dedication of real property or the payment of cash, the proffered conditions shall provide for the disposition of the property or cash payment in the event the property or cash payment is not used for the purpose for which proffered.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to the property, shall be effective with respect to the property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B above, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development and the residential portion of any mixed-use development made on or after January 1, 2009, shall be limited to reasonable non-cash, on-site conditions necessitated by and attributable to the new development resulting from the rezoning. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F. Notwithstanding any other provision of law, no locality shall accept (i) a cash proffer as a condition for rezoning proffered on or after July 1, 2009, as a condition for rezoning for residential development and the residential portion of any mixed-use development or (ii) an off-site proffer on or after July 1, 2009, for a public facility that is the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is not necessitated by and attributable to the new development, as a condition for rezoning for residential development and the residential portion of any mixed-use development.  

G. Between July 1, 2008, and July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the automatic reduction of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their retroactive application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.

§ 15.2-2303. Conditional zoning in certain localities.

A. A zoning ordinance may include reasonable regulations and provisions for conditional zoning as defined in § 15.2-2201 and for the adoption, in counties, or towns therein which have planning commissions, wherein the urban county executive form of government is in effect, or in a city adjacent to or completely surrounded by such a county, or in a county contiguous to any such county, or in a city adjacent to or completely surrounded by such a contiguous county, or in any town within such contiguous county, and in the counties east of the Chesapeake Bay as a part of an amendment to the zoning map of reasonable conditions, in addition to the regulations provided for the zoning district by the ordinance, when such conditions shall have been proffered in writing, in advance of the public hearing before the governing body required by § 15.2-2285 by the owner of the property which is the subject of the proposed zoning map amendment. Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, such conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by such conditions. However, such conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. Such notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement such proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subdivision shall acquire no rights pursuant to this section.

D. Subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

E. Nothing in this section shall be construed to affect or impair the authority of a governing body to (i) accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or (ii) accept or impose valid conditions pursuant to provision 3 of § 15.2-2286, provision 5 of § 15.2-2242, or other provision of law.

F. In addition to the powers granted by the preceding subsections, a zoning ordinance may include reasonable regulations to implement, in whole or in part, the provisions of §§ 15.2-2296 through 15.2-2302.

G. A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development and the residential portion of any mixed-use development made on or after January 1, 2009, shall be limited to reasonable non-cash, on-site conditions necessitated by and attributable to the new development resulting from the rezoning. As used in this section “on-site” means within the property that is the subject of the rezoning petition.

H. Notwithstanding any other provision of law, no locality shall accept (i) a cash proffer as a condition for rezoning proffered on or after July 1, 2009, as a condition for rezoning for residential development and the residential portion of any mixed-use development or (ii) an off-site proffer on or after July 1, 2009, for a public facility that is the subject of a public facilities improvements plan pursuant to § 15.2-2321, or any other proffered condition that is not necessitated by and attributable to the new development as a condition for rezoning for residential development and the residential portion of any mixed-use development.

I. Between July 1, 2008, and July 1, 2009, an applicant may proffer, and a locality may accept, cash payments in accordance with existing law, but any such proffer shall provide for the automatic reduction of such cash payments following the locality’s adoption of impact fees pursuant to Article 8 (§ 15.2-2317 et seq.) of Chapter 22. Any locality adopting such impact fees shall also provide for their retroactive application to any by-right development for which no preliminary subdivision plat or site plan had been filed as of February 1, 2008.

§ 15.2-2303.1. Development agreements in certain counties.

A. In order to promote the public health, safety and welfare and to encourage economic development consistent with careful planning, New Kent County may include in its zoning ordinance provisions for the governing body to enter into binding development agreements with any persons owning legal or equitable interests in real property in the county if the property to be developed contains at least one thousand acres.

B. Any such agreements shall be for the purpose of stimulating and facilitating economic growth in the county; shall not be inconsistent with the comprehensive plan at the time of the agreement's adoption, except as may have been authorized by existing zoning ordinances; and shall not authorize any use or condition inconsistent with the zoning ordinance or other ordinances in effect at the time the agreement is made, except as may be authorized by a variance, special exception or similar authorization. The agreement shall be authorized by ordinance, shall be for a term not to exceed fifteen years, and may be renewed by mutual agreement of the parties for successive terms of not more than ten years each. It may provide, among other things, for uses; the density or intensity of uses; the maximum height, size, setback and/or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use matters. It may authorize the property owner to transfer to the county land, public improvements, money or anything of value to further the purposes of the agreement or other public purposes set forth in the county's comprehensive plan, but not as a condition to obtaining any permitted use or zoning. The development agreement shall not run with the land except to the extent provided therein, and the agreement may be amended or canceled in whole or in part by the mutual consent of the parties thereto or their successors in interest and assigns.

C. If, pursuant to the agreement, a property owner who is a party thereto and is not in breach thereof, (i) dedicates or is required to dedicate real property to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, (ii) makes or is required to make cash payments to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, or (iii) makes or is required to make public improvements for the county, the Commonwealth or any other political subdivision or for the federal government or any agency thereof, such dedication, payment or construction therefor shall vest the property owner's rights under the agreement. If a property owner's rights have vested, neither any amendment to the zoning map for the subject property nor any amendment to the text of the zoning ordinance with respect to the zoning district applicable to the property which eliminates or restricts, reduces, or modifies the use; the density or intensity of uses; the maximum height, size, setback or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use or other matters provided for in such agreement shall be effective with respect to such property during the term of the agreement unless there has been a mistake, fraud or change in circumstances substantially affecting the public health, safety or welfare.

D. Nothing in this section shall be construed to preclude, limit or alter the vesting of rights in accordance with existing law; authorize the impairment of such rights; or invalidate any similar agreements entered into pursuant to existing law.

E. The provisions of this section authorizing cash payments shall not apply to the residential portion of any development agreement entered into.

Article 8.
RoadPublic Facility Impact Fees.

§ 15.2-2317. Applicability of article.

This article shall apply to any locality city, any county enumerated in § 15.2-4831 or 33.1-391.7 and any town therein, and any county that has adopted zoning pursuant to Article 7 (§ 15.2-2280 et seq.) of Chapter 22 of Title 15.2 and that (i) has a population of at least 20,000 and has a population growth rate of at least 5%percent or (ii) has population growth of 15% percent or more, and to any town within such county. For the purposes of this section, population growth shall be the difference in population from the next-to-latest to the latest decennial census year, based on population reported by the United States Bureau of the Census.

§ 15.2-2318. Definitions.

As used in this article, unless the context requires a different meaning:

"Cost" includes, in addition to means the actual charges to be paid by or on behalf of the locality for: (i) all labor, materials, machinery and equipment for construction, (i)(ii) the acquisition of land, rights-of-way, property rights, easements and interests, including the costs of moving or relocating utilities, (ii)(iii) demolition or removal of any structure on land so acquired, including acquisition of land to which such structure may be moved, (iii)(iv) survey, engineering, and architectural expenses, (iv)(v) legal, administrative, and other related expenses, and (v)(vi) 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 road improvement public facility improvements.

"Impact fee" means a charge or assessment imposed against new development in order to generate revenue to fund or recover the costs of reasonable road public facility improvements benefiting necessitated by and attributable to providing public facilities to the new development at service levels consistent with those currently experienced within the locality. Impact fees may not be assessed and imposed for road public facilities repair, operation and maintenance, nor to meet demand which existed prior to the new development.

"Impact fee service area" means an a geographic area designated within by an ordinance on the zoning map of a locality and reflected on the comprehensive plan of a such locality having, which has clearly defined boundaries and clearly related traffic public facility needs that have a rational and reasonable relationship to projected new development and within which development is to be subject to the assessment of impact fees.

“On-site” means within the boundaries of the property to be developed.

“Public facilities” means public roads, public safety facilities, or public school facilities.

“Public facility improvement” means public road improvement, public safety facility improvement, or public school facility improvement.

"RoadPublic road improvement" includesmeans construction of new roads or improvement or expansion of existing roads and related appurtenances as required by applicable standards of the Virginia Department of Transportation, or the applicable standards of a locality with road maintenance responsibilities, to meet increased demand necessitated by and attributable to new development. Road improvements do not include on-site construction of roads which a developer may be required to provide pursuant to §§ 15.2-2241 through 15.2-2245.

“Public safety facility improvement” means construction of new law-enforcement, fire, emergency medical, and rescue facilities or expansion of existing public safety facilities, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within a designated impact fee service area.

“Public school facility improvement” means construction of new primary and secondary public schools or expansion of existing primary and secondary public schools, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within the designated impact fee service area.

§ 15.2-2319. Authority to assess and impose impact fees.

A. Any applicable locality may, by ordinance pursuant to the procedures and requirements of this article, assess and impose impact fees on new residential, commercial, and industrial development to pay all or a part of the cost of reasonable road public facility improvements that benefit are necessitated by and attributable to the new development.

B. 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 ten members appointed by the governing body of the locality and at least forty percent of the membership shall be representatives from the development, building construction, or real estate industries who have been actively engaged in development, construction, or real estate for the past five years. 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 preparation of 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.

C. A locality shall exempt commercial and industrial development from the imposition of public school facility impact fees.

D. A locality may reduce or waive any impact fee authorized by this article in urban development areas established pursuant to § 15.2-2223.1.

E. No locality shall impose any impact fee authorized by this article on any unit subject to an affordable dwelling unit program established pursuant to § 15.2-2304 or 15.2-2305, or on any development constructed pursuant to § 8 of the federal Housing and Community Development Act of 1974, as amended.

§ 15.2-2320. Impact fee service areas to be established.

A. The locality shall delineate by ordinance on the zoning map one or more impact fee service areas within its comprehensive plan; however, no locality shall designate the entire locality as a single impact fee service area.

B. Prior to establishing any impact fee service area, the locality shall provide written notice to the affected property owners in a manner consistent with the requirements of subsection B of § 15.2-2204.

C. Impact fees collected from new development within an impact fee service area shall be expended only for road public facility improvements benefiting that impact fee service area. An impact fee service area may encompass more than one road public facility improvement project. A locality may exclude urban development areas designated pursuant to § 15.2-2223.1 from impact fee service areas.

§ 15.2-2321. Adoption of public road, public school facilities, and public safety facility improvements program.

A. Prior to adopting a system of impact fees, the locality shall conduct an assessment of road public facility improvement needs benefiting an impact fee service area and shall adopt a public road, improvements plan public school facility, and public safety facility improvements plans for the area showing the new roads public facilities proposed to be constructed and the existing roads public facilities to be improved or expanded and the schedule for undertaking such construction, improvement or expansion. The road public facility improvements plan plans shall be adopted as an amendment amendments to the required comprehensive plan and shall be incorporated into the capital improvements program or, in the case of the counties where. Where applicable, the road improvement plan shall be incorporated into the six-year plan for secondary road construction pursuant to § 33.1-70.01.

B. The locality shall adopt the road public facility improvements plan plans 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 least 60 days prior to the public hearing.

C. The locality at a minimum shall include the following items in assessing road public facility improvement needs and preparing a road public facility improvements plan plans:

1. An analysis of the existing capacity, current usage and existing commitments to future usage of existing roads public facilities, as indicated by (i) both current and projected service levels, (ii) current valid building permits outstanding, and (iii) approved and pending site plans and subdivision plats, and (iv) approved conditional zonings, special exceptions, and special use permits. If the current usage and commitments exceed the existing capacity of the roads public facilities, the locality also shall determine the costs of improving the roads public facilities to meet the demand and shall identify funding for such costs from sources other than impact fees. If the projected service levels exceed current service levels, the locality shall determine the costs of increasing the current service levels to the projected levels in the absence of new development and shall identify funding for such costs from sources other than impact fees. The analysis shall include any off-site road public facility improvements, or cash payments for road public facility improvements accepted by the locality pursuant to authority granted prior to January 1, 2009, and shall include a plan to fund the current usages and commitments that exceed the existing capacity of the roads public facilities.

2. The projected need for and costs of construction of new roads or improvement public facilities or expansion of existing roads public facilities necessitated by and attributable in whole or in part to projected new development. RoadPublic facility improvement 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 20 years in the future, at the end of a 20-year period. The assumptions with regard to land uses, densities, intensities, and population upon which road improvement projections are based shall be presented.

3. An assessment of (i) such future revenues as shall be generated by the new development towards public facilities improvement within the impact fee service area and (ii) such funds as shall be received from the federal, state, or local government specifically to provide or pay for the public facilities for which the impact fees are to be imposed. The locality also shall consider the extent to which (a) other developments have already contributed to the cost of existing public roads, public school facilities, and public safety facilities, which will benefit new development, (b) new development will contribute to the cost of existing public roads, public school facilities, and public safety facilities, and (c) new development will contribute to the cost of public road, public school facilities, and public safety facilities improvements in the future other than through impact fees, including any special taxing districts, special assessments, or community development authorities.

34. The total number of new public facility service units projected for the impact fee service area when fully developed and, if full development is projected to occur more than 20 years in the future, at the end of a 20-year period. As used in this section, a service unit is a standardized measure of use or generation attributable to an individual unit of new development. 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.

D. A road "service unit" is a standardized measure of traffic use or generation. 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. The table shall be established by the locality based upon the ITE manual (published by the Institute of Transportation Engineers) or locally conducted trip generation studies, and consistent with the traffic analysis standards adopted pursuant to § 15.2-2222.1.

E. A public school facility “service unit” is the estimated average number of elementary, middle, and high school pupils generated by each type (single-family detached, single-family attached, and multifamily) of dwelling unit on a county-wide basis. 

The need for new or expanded public school facilities within an impact fee service area shall be established by determining (i) the appropriate enrollment-to-capacity levels for elementary, middle, and high schools, (ii) the current available capacity of the existing elementary, middle, and high schools, (iii) the impact of a new development, on a service unit basis, on the capacity of existing elementary, middle, and high schools, and (iv) the elementary, middle, and high schools necessary to meet the projected increase in demand necessitated by and directly attributable to new residential development within the impact fee service area.  

The enrollment-to-capacity level for each elementary, middle, and high school established within an impact service area shall be consistent with existing enrollment-to-capacity levels and the enrollment-to-capacity level established for the locality as a whole.

The locality shall determine the individual public school facility service unit cost within an impact fee service area by dividing the total site cost and facility cost by the student capacity of each public school facility necessitated by and directly attributable to a new residential development. The calculation shall include a credit for each service unit for each type of dwelling unit equal to the pro rata share of total dollars received from the state for public school facility construction or expansion and a credit for the percentage of annual real estate tax paid by the owner to the locality that the locality dedicates to public school facilities capital improvements and public school facility debt service for each of the next 20 years after a certificate of occupancy has been issued.

F. Public safety “service units” shall be established by (i) allocating the number of existing public safety facilities between residential and nonresidential uses in proportion to historical telephone records of calls for public safety service, (ii) dividing the residential proportion of public safety facilities by the residential population served to determine a “residential service unit,” and (iii) dividing the nonresidential proportion of public safety facilities by the total nonresidential building square feet served to determine a “nonresidential service unit.”  

§ 15.2-2322. Adoption of impact fee and schedule.

A. After adoption of a road public facility improvement program programs, 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 road public facility improvements benefiting necessitated by and attributable to new development in the designated impact fee service area. The ordinance shall set forth the schedule of impact fees.

B. The public road, public school, and public safety facility impact fees to be imposed shall be determined (i) by dividing projected public road, public school, and public safety facility construction or expansion costs in the impact fee service area when fully developed by the number of projected public road, public school, and public safety facility service units when fully developed, or (ii) for a reasonable period of time, but not less than 10 years, by dividing the projected public road, public school, or public safety facility construction or expansion costs necessitated by and attributable to development in the next 10 years by the public road, public school, and public safety facility service units projected to be created in the next 10 years.

§ 15.2-2322.1. Maximum impact fees to be imposed by localities.

A. The sum total of public facility impact fees assessed shall not exceed the maximum amounts as enumerated in subsections B and C; provided, however, that beginning January 1, 2009, and annually thereafter, the locality may adjust the maximum impact fee by a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index. 

B. Except as provided for in subsection A, the maximum impact fee assessed on residential development shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be $8,000 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be $5,000 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

C. Except as provided for in subsection A, the maximum impact fee assessed on commercial or industrial development shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be as follows:

a. For office use, $3/gross square foot;

b. For retail use, $4/gross square foot;

c. For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

§ 15.2-2323. When impact fees assessed and imposed.

Impact fees may be assessed and imposed on all new development or subdivisions except those subdivisions and site plans recorded prior to January 1, 2009; however, impact fees may be assessed and imposed on any subdivision recorded prior to January 1, 2009, that has not vested pursuant to § 15.2-2307. The amount of impact fees to be imposed assessed on a specific development or subdivision shall be determined before or at the time of the final approval of the site plan or subdivision is approved. The ordinance shall specify that the impact fee assessed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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 road improvement costs in the impact fee 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 ten years, by dividing the projected costs necessitated by development in the next ten years by the service units projected to be created in the next ten 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

§ 15.2-2324. Credits against impact fee.

The market value of any land dedication, cash contribution or construction from provided by the developer for off-site all on-site (i) public school facility improvements, (ii) public safety facility improvements, and (iii) public road or other transportation improvements designated on any local, state or federal transportation plan including the locality's capital improvements program, the locality’s comprehensive plan, the locality's six-year improvement plan, the six-year improvement plan of the Virginia Department of Transportation or transportation plan of a regional transportation authority benefiting the impact fee service area shall be treated as a credit against the impact fees imposed on the developer's project. The locality shall treat as a credit against the impact fee imposed upon a development any off-site transportation public facility improvement, land dedication, cash contribution, or construction, whether it is a condition of a rezoning or otherwise committed to the localityprovided by the developer. The locality may by ordinance provide for credits for approved on-site transportation improvements in excess of those required by the development.Market value shall be determined at the time of dedication, contribution, or construction.

The locality also shall calculate and credit against impact fees the extent to which (i) other developments have already contributed to the cost of existing roads which will benefit 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, including any special taxing districts, special assessments, or community development authorities.

§ 15.2-2325. Updating plan and amending impact fee.

The locality shall update the needs assessment and the assumptions and projections at least once every two years. The road public facility improvement plan shall be updated at least every two five years to reflect current assumptions and projections. The impact fee schedule may be amended to reflect any substantial changes in such assumptions and projections. Any impact fees not yet paid shall be assessed at the updated rate.

§ 15.2-2326. Use of proceeds.

A. A separateSeparate public road, public school facility, and public safety facility improvement account accounts shall be established for the each impact fee service area, and all funds collected through impact fees shall be deposited in the such separate interest-bearing account accounts. Interest earned on deposits shall become funds of the account. The expenditure of funds from the account accounts shall be only for public road, public school facility, and public safety facility improvements benefiting the impact fee service area as set out in the road public facility improvement plan for the impact fee service area.

B. The governing body of any locality imposing impact fees pursuant to the authority granted under this article shall within three months of the close of each fiscal year, beginning in fiscal year 2009 and for each fiscal year thereafter, report to the Commission on Local Government the following information for public road, public school facility, and public safety facility improvements for the preceding fiscal year:

1. The aggregate dollar amount of impact fees collected by the locality in each impact fee service area and for each improvement category;

2. The estimated aggregate dollar amount of impact service fees the locality expects to collect in the coming fiscal year for each improvement category;

3. The aggregate dollar amount expended in the impact fee service area in each improvement category;

4. The total dollar amount of impact fees collected and expended by the locality in each impact fee service area for all years to date; and

5. The total dollar amount expended by the locality to increase capacity to meet existing commitments or increase existing service levels pursuant to § 15.2-2321.1 as well as the funding sources and the amounts from each source. 

C. The governing body of any locality eligible to collect impact service fees pursuant to authority granted under this article but that did not collect any impact service fees during the preceding fiscal year shall within three months of the close of each fiscal year, beginning in 2009 and for each fiscal year thereafter, so notify the Commission on Local Government.

D. The Commission on Local Government shall by November 30, 2009, and by November 30 of each fiscal year thereafter, prepare and make available to the public and the chairmen of the Senate Local Government Committee and the House Counties, Cities and Towns Committee an annual report containing the information made available to it pursuant to subsections B and C.

§ 15.2-2327. Refund of impact fees.

The locality shall refund any impact fee or portion thereof for which construction of a public facility improvement project is not completed within a reasonable period of time, not to exceed fifteen years. In the event that impact fees are not committed to road improvements benefiting the impact fee service area within seven years from the date of collection, the locality may commit any such impact fees to the secondary or urban system construction program of that locality for road improvements that benefit the impact fee service area.

Upon completion of a public facility improvement project, the locality shall recalculate the impact fee based on the actual cost of the improvement. It shall refund the difference if the impact fee paid exceeds actual cost by more than fifteen percent. Refunds shall be made to the record owner of the property at the time the refund is made.

§ 15.2-2327.1. Severability.

If any provision of this article is held invalid, such adjudication shall not affect, impair, or invalidate the remaining provisions thereof, but shall be confined in its operation to the specific provisions held invalid, and to this end the provisions of this article are severable.

2. That the provisions of this Act shall not impair any proffer or proffered condition amendment accepted by a locality, nor any agreement entered into under § 15.2-2303.1 of the Code of Virginia, pursuant to authority granted prior the effective date of this Act.

SENATE BILL NO. 768

Offered January 18, 2008
A BILL to amend and reenact §§ 15.2-975, 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, 15.2-2303.2, 15.2-2303.3, 15.2-2317, 15.2-2318, 15.2-2319, 15.2-2320, 15.2-2321, 15.2-2322, 15.2-2323, 15.2-2324, 15.2-2325, 15.2-2326, and 15.2-2327 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 15.2-2322.1, by adding in Article 8 of Chapter 22 of Title 15.2 a section numbered 15.2-2327.1, and by adding a section numbered 58.1-802.2, relating to conditional zoning; impact fees.
Patrons-- Watkins; Delegates: Hall and Hull

Referred to Committee on Local Government

Be it enacted by the General Assembly of Virginia:

1.  That §§ 15.2-975, 15.2-2297, 15.2-2298, 15.2-2303, 15.2-2303.1, 15.2-2303.2, 15.2-2303.3, 15.2-2317, 15.2-2318, 15.2-2319, 15.2-2320, 15.2-2321, 15.2-2322, 15.2-2323, 15.2-2324, 15.2-2325, 15.2-2326, and 15.2-2327 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 15.2-2322.1, by adding in Article 8 of Chapter 22 of Title 15.2 a section numbered 15.2-2327.1, and by adding a section numbered 58.1-802.2 as follows:

§ 15.2-975. Use of cash proffers.

Localities which are that prior to January 1, 2009, were authorized to accept voluntary cash proffers may also issue bonds under the provisions of the Public Finance Act and other applicable law including local charters, to finance improvements contained in the construction improvement program, to the extent that the costs of such improvements have been pledged by landowners as voluntary cash proffers. Authorized localities may pledge the proceeds of such proffers as a specific undertaking from which revenue is derived pursuant to Article VII, Section 10 (a) (3) of the Constitution of Virginia. The use of pledged cash proffers to finance improvements shall be limited to the improvements or class of improvements for which the proffer was originally pledged, and all or any part of the total amount pledged through the conditional zoning process may be further pledged by the locality to support repayment of any such debt.

§ 15.2-2297. Same; conditions as part of a rezoning or amendment to zoning map.

A. A zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map; provided that (i) the rezoning itself must give rise for the need for the conditions; (ii) the conditions shall have a reasonable relation to the rezoning; (iii) the conditions shall not include a cash contribution to the locality; (iv) the conditions shall not include mandatory dedication of real or personal property for open space, parks, schools, fire departments or other public facilities not otherwise provided for in § 15.2-2241; (v) the conditions shall not include a requirement that the applicant create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation; (vi) the conditions shall not include payment for or construction of off-site improvements except those provided for in § 15.2-2241; (vii) no condition shall be proffered that is not related to the physical development or physical operation of the property; and (viii) all such conditions shall be in conformity with the comprehensive plan as defined in § 15.2-2223. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions. However, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendments to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property.

Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E.  A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development and the residential portion of any mixed-use development made on or after January 1, 2009, shall be limited to reasonable non-cash, on-site conditions necessitated by and attributable to the new development resulting from the rezoning.  As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F.  Notwithstanding any other provision of law, no locality shall accept (i) a cash proffer as a condition for rezoning proffered on or after January 1, 2009, or (ii) an off-site proffer as a condition for rezoning for residential development and the residential portion of any mixed-use development proffered on or after January 1, 2009.  No locality shall accept any off-site proffer as a condition for rezoning for nonresidential development and the nonresidential portion of any mixed-use development unless the proffered condition is limited to transportation improvements.

§ 15.2-2298. Same; additional conditions as a part of rezoning or zoning map amendment in certain high-growth localities.

A. Except for those localities to which § 15.2-2303 is applicable, this section shall apply to (i) any locality which has had population growth of 5% or more from the next-to-latest to latest decennial census year, based on population reported by the United States Bureau of the Census; (ii) any city adjoining such city or county; (iii) any towns located within such county; and (iv) any county contiguous with at least three such counties, and any town located in that county. However, any such locality may by ordinance choose to utilize the conditional zoning authority granted under § 15.2-2303 rather than this section.

In any such locality, notwithstanding any contrary provisions of § 15.2-2297, a zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to the regulations provided for the zoning district or zone by the ordinance, as a part of a rezoning or amendment to a zoning map, provided that (i) the rezoning itself gives rise to the need for the conditions; (ii) the conditions have a reasonable relation to the rezoning; and (iii) all conditions are in conformity with the comprehensive plan as defined in § 15.2-2223.

Reasonable conditions may include the payment of cash for any off-site road improvement or any off-site transportation improvement that is adopted as an amendment to the required comprehensive plan and incorporated into the capital improvements program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. For purposes of this section, "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. For purposes of this section, "transportation improvement" means any real or personal property acquired, constructed, improved, or used for constructing, improving, or operating any (i) public mass transit system or (ii) highway, or portion or interchange thereof, including parking facilities located within a district created pursuant to this title. Such improvements shall include, without limitation, public mass transit systems, public highways, and all buildings, structures, approaches, and facilities thereof and appurtenances thereto, rights-of-way, bridges, tunnels, stations, terminals, and all related equipment and fixtures.

Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, the conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by the conditions; however, the conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

No proffer shall be accepted by a locality unless it has adopted a capital improvement program pursuant to § 15.2-2239 or local charter. In the event proffered conditions include the dedication of real property or payment of cash, the property shall not transfer and the payment of cash shall not be made until the facilities for which the property is dedicated or cash is tendered are included in the capital improvement program, provided that nothing herein shall prevent a locality from accepting proffered conditions which are not normally included in a capital improvement program. If proffered conditions include the dedication of real property or the payment of cash, the proffered conditions shall provide for the disposition of the property or cash payment in the event the property or cash payment is not used for the purpose for which proffered.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to the property, shall be effective with respect to the property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. The notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement the proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B above, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subsection shall acquire no rights pursuant to this section.

D. The provisions of subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

Nothing in this section shall be construed to affect or impair the authority of a governing body to:

1. Accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or

2. Accept or impose valid conditions pursuant to provision 3 of § 15.2-2286 or other provision of law.

E.  A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development and the residential portion of any mixed-use development made on or after January 1, 2009, shall be limited to reasonable non-cash, on-site conditions necessitated by and attributable to the new development resulting from the rezoning.  As used in this section “on-site” means within the property that is the subject of the rezoning petition.

F.  Notwithstanding any other provision of law, no locality shall accept (i) a cash proffer as a condition for rezoning proffered on or after January 1, 2009, or (ii) an off-site proffer as a condition for rezoning for residential development and the residential portion of any mixed-use development proffered on or after January 1, 2009.  No locality shall accept any off-site proffer as a condition for rezoning for nonresidential development and the nonresidential portion of any mixed-use development unless the proffered condition is limited to transportation improvements. 

§ 15.2-2303. Conditional zoning in certain localities.

A. A zoning ordinance may include reasonable regulations and provisions for conditional zoning as defined in § 15.2-2201 and for the adoption, in counties, or towns therein which have planning commissions, wherein the urban county executive form of government is in effect, or in a city adjacent to or completely surrounded by such a county, or in a county contiguous to any such county, or in a city adjacent to or completely surrounded by such a contiguous county, or in any town within such contiguous county, and in the counties east of the Chesapeake Bay as a part of an amendment to the zoning map of reasonable conditions, in addition to the regulations provided for the zoning district by the ordinance, when such conditions shall have been proffered in writing, in advance of the public hearing before the governing body required by § 15.2-2285 by the owner of the property which is the subject of the proposed zoning map amendment. Reasonable conditions shall not include, however, conditions that impose upon the applicant the requirement to create a property owners' association under Chapter 26 (§ 55-508 et seq.) of Title 55 which includes an express further condition that members of a property owners' association pay an assessment for the maintenance of public facilities owned in fee by a public entity, including open space, parks, schools, fire departments, and other public facilities not otherwise provided for in § 15.2-2241; however, such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation. The governing body may also accept amended proffers once the public hearing has begun if the amended proffers do not materially affect the overall proposal. Once proffered and accepted as part of an amendment to the zoning ordinance, such conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by such conditions. However, such conditions shall continue if the subsequent amendment is part of a comprehensive implementation of a new or substantially revised zoning ordinance.

B. In the event proffered conditions include a requirement for the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, then no amendment to the zoning map for the property subject to such conditions, nor the conditions themselves, nor any amendments to the text of the zoning ordinance with respect to the zoning district applicable thereto initiated by the governing body, which eliminate, or materially restrict, reduce, or modify the uses, the floor area ratio, or the density of use permitted in the zoning district applicable to such property, shall be effective with respect to such property unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare.

C. Any landowner who has prior to July 1, 1990, proffered the dedication of real property of substantial value, or substantial cash payments for or construction of substantial public improvements, the need for which is not generated solely by the rezoning itself, but who has not substantially implemented such proffers prior to July 1, 1990, shall advise the local governing body by certified mail prior to July 1, 1991, that he intends to proceed with the implementation of such proffers. Such notice shall identify the property to be developed, the zoning district, and the proffers applicable thereto. Thereafter, any landowner giving such notice shall have until July 1, 1995, substantially to implement such proffers, or such later time as the governing body may allow. Thereafter, the landowner in good faith shall diligently pursue the completion of the development of the property. Any landowner who complies with the requirements of this subsection shall be entitled to the protection against action initiated by the governing body affecting use, floor area ratio, and density set out in subsection B, unless there has been mistake, fraud, or a change in circumstances substantially affecting the public health, safety, or welfare, but any landowner failing to comply with the requirements of this subdivision shall acquire no rights pursuant to this section.

D. Subsections B and C of this section shall be effective prospectively only, and not retroactively, and shall not apply to any zoning ordinance text amendments which may have been enacted prior to March 10, 1990. Nothing contained herein shall be construed to affect any litigation pending prior to July 1, 1990, or any such litigation nonsuited and thereafter refiled.

E. Nothing in this section shall be construed to affect or impair the authority of a governing body to (i) accept proffered conditions which include provisions for timing or phasing of dedications, payments, or improvements; or (ii) accept or impose valid conditions pursuant to provision 3 of § 15.2-2286, provision 5 of § 15.2-2242, or other provision of law.

F. In addition to the powers granted by the preceding subsections, a zoning ordinance may include reasonable regulations to implement, in whole or in part, the provisions of §§ 15.2-2296 through 15.2-2302.

G.  A voluntary proffer of conditions as part of a rezoning or amendment to a zoning map for residential development and the residential portion of any mixed-use development made on or after January 1, 2009, shall be limited to reasonable non-cash, on-site conditions necessitated by and attributable to the new development resulting from the rezoning.  As used in this section “on-site” means within the property that is the subject of the rezoning petition.

H.  Notwithstanding any other provision of law, no locality shall accept (i) a cash proffer as a condition for rezoning proffered on or after January 1, 2009, or (ii) an off-site proffer as a condition for rezoning for residential development and the residential portion of any mixed-use development proffered on or after January 1, 2009.  No locality shall accept any off-site proffer as a condition for rezoning for nonresidential development and the nonresidential portion of any mixed-use development unless the proffered condition is limited to transportation improvements. 

§ 15.2-2303.1. Development agreements in certain counties.

A. In order to promote the public health, safety and welfare and to encourage economic development consistent with careful planning, New Kent County may include in its zoning ordinance provisions for the governing body to enter into binding development agreements with any persons owning legal or equitable interests in real property in the county if the property to be developed contains at least one thousand acres.

B. Any such agreements shall be for the purpose of stimulating and facilitating economic growth in the county; shall not be inconsistent with the comprehensive plan at the time of the agreement's adoption, except as may have been authorized by existing zoning ordinances; and shall not authorize any use or condition inconsistent with the zoning ordinance or other ordinances in effect at the time the agreement is made, except as may be authorized by a variance, special exception or similar authorization. The agreement shall be authorized by ordinance, shall be for a term not to exceed fifteen years, and may be renewed by mutual agreement of the parties for successive terms of not more than ten years each. It may provide, among other things, for uses; the density or intensity of uses; the maximum height, size, setback and/or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use matters. It may authorize the property owner to transfer to the county land, public improvements, money or anything of value to further the purposes of the agreement or other public purposes set forth in the county's comprehensive plan, but not as a condition to obtaining any permitted use or zoning. The development agreement shall not run with the land except to the extent provided therein, and the agreement may be amended or canceled in whole or in part by the mutual consent of the parties thereto or their successors in interest and assigns.

C. If, pursuant to the agreement, a property owner who is a party thereto and is not in breach thereof, (i) dedicates or is required to dedicate real property to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, (ii) makes or is required to make cash payments to the county, the Commonwealth or any other political subdivision or to the federal government or any agency thereof, or (iii) makes or is required to make public improvements for the county, the Commonwealth or any other political subdivision or for the federal government or any agency thereof, such dedication, payment or construction therefor shall vest the property owner's rights under the agreement. If a property owner's rights have vested, neither any amendment to the zoning map for the subject property nor any amendment to the text of the zoning ordinance with respect to the zoning district applicable to the property which eliminates or restricts, reduces, or modifies the use; the density or intensity of uses; the maximum height, size, setback or location of buildings; the number of parking spaces required; the location of streets and other public improvements; the measures required to control stormwater; the phasing or timing of construction or development; or any other land use or other matters provided for in such agreement shall be effective with respect to such property during the term of the agreement unless there has been a mistake, fraud or change in circumstances substantially affecting the public health, safety or welfare.

D. Nothing in this section shall be construed to preclude, limit or alter the vesting of rights in accordance with existing law; authorize the impairment of such rights; or invalidate any similar agreements entered into pursuant to existing law.

E.  The provisions of this section authorizing cash payments shall not apply to any development agreement entered into on or after January 1, 2009.

§ 15.2-2303.2. Proffered cash payments and expenditures.

A. The governing body of any locality accepting cash payments voluntarily proffered on or after July 1, 2005, pursuant to authority granted prior to January 1, 2009, by § 15.2-2298, 15.2-2303 or 15.2-2303.1 shall, within seven years of receiving full payment of all cash proffered pursuant to an approved rezoning application, begin, or cause to begin (i) construction, (ii) site work, (iii) engineering, (iv) right-of-way acquisition, (v) surveying, or (vi) utility relocation on the improvements for which the cash payments were proffered. A locality that does not comply with the above requirement, or does not begin alternative improvements as provided for in subsection C, shall forward the amount of the proffered cash payments to the Commonwealth Transportation Board no later than December 31 following the fiscal year in which such forfeiture occurred for direct allocation to the secondary system construction program or the urban system construction program for the locality in which the proffered cash payments were collected. The funds to which any locality may be entitled under the provisions of Title 33.1 for construction, improvement, or maintenance of primary, secondary, or urban roads shall not be diminished by reason of any funds remitted pursuant to this subsection by such locality, regardless of whether such contributions are matched by state or federal funds.

B. The governing body of any locality eligible to accept any proffered cash payments pursuant to authority granted prior to January 1, 2009, by § 15.2-2298, 15.2-2303 or 15.2-2303.1 shall, for each fiscal year beginning with the fiscal year 2007, (i) include in its capital improvement program created pursuant to § 15.2-2239, or as an appendix thereto, the amount of all proffered cash payments received during the most recent fiscal year for which a report has been filed pursuant to subsection D, and (ii) include in its annual capital budget the amount of proffered cash payments projected to be used for expenditures or appropriated for capital improvements in the ensuing year.

C. Regardless of the date of rezoning approval, unless prohibited by the proffer agreement accepted by the governing body of a locality pursuant to authority granted prior to January 1, 2009, by § 15.2-2298, 15.2-2303, or 15.2-2303.1, a locality may utilize any cash payments proffered for any road improvement or any transportation improvement that is incorporated into the capital improvements program as its matching contribution under § 33.1-23.05. For purposes of this section, "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. For purposes of this section, "transportation improvement" means any real or personal property acquired, constructed, improved, or used for constructing, improving, or operating any (i) public mass transit system or (ii) highway, or portion or interchange thereof, including parking facilities located within a district created pursuant to this title. Such improvements shall include, without limitation, public mass transit systems, public highways, and all buildings, structures, approaches, and facilities thereof and appurtenances thereto, rights-of-way, bridges, tunnels, stations, terminals, and all related equipment and fixtures.

Regardless of the date of rezoning approval, unless prohibited by the proffer agreement accepted by the governing body of a locality pursuant to authority granted prior to January 1, 2009, by § 15.2-2298, 15.2-2303, or 15.2-2303.1, a locality may utilize any cash payments proffered for capital improvements for alternative improvements of the same category within the locality in the vicinity of the improvements for which the cash payments were originally made. Prior to utilization of such cash payments for the alternative improvements, the governing body of the locality shall give at least 30 days' written notice of the proposed alternative improvements to the entity who paid such cash payment mailed to the last known address of such entity, or if proffer payment records no longer exist, then to the original zoning applicant, and conduct a public hearing on such proposal advertised as provided in subsection F of § 15.2-1427. The governing body of the locality prior to the use of such cash payments for alternative improvements shall, following such public hearing, find: (i) the improvements for which the cash payments were proffered cannot occur in a timely manner; (ii) the alternative improvements are within the vicinity of the proposed improvements for which the cash payments were proffered; and (iii) the alternative improvements are in the public interest. Notwithstanding the provisions of the Virginia Public Procurement Act, the governing body may negotiate and award a contract without competition to an entity that is constructing road improvements pursuant to a proffered zoning condition or special exception condition in order to expand the scope of the road improvements by utilizing cash proffers of others or other available locally generated funds. The local governing body shall adopt a resolution stating the basis for awarding the construction contract to extend the scope of the road improvements. All road improvements to be included in the state primary or secondary system of highways must conform to the adopted standards of the Virginia Department of Transportation.

D. The governing body of any locality with a population in excess of 3,500 persons accepting a cash payment voluntarily proffered pursuant to authority granted prior to January 1, 2009, by § 15.2-2298, 15.2-2303 or 15.2-2303.1 shall within three months of the close of each fiscal year, beginning in fiscal year 2002 and for each fiscal year thereafter, report to the Commission on Local Government the following information for the preceding fiscal year:

1. The aggregate dollar amount of proffered cash payments collected by the locality;

2. The estimated aggregate dollar amount of proffered cash payments that have been pledged to the locality and which pledges are not conditioned on any event other than time; and

3. The total dollar amount of proffered cash payments expended by the locality, and the aggregate dollar amount expended in each of the following categories:


 Schools             $________
 Road and other Transportation Improvements            $________
 Fire and Rescue/Public Safety             $________
 Libraries              $________
 Parks, Recreation, and Open Space            $________
 Water and Sewer Service Extension          $________
 Community Centers             $________
 Stormwater Management             $________
 Special Needs Housing             $________
 Affordable Housing             $________
 Miscellaneous            $________
 Total dollar amount expended            $________

E. The governing body of any locality with a population in excess of 3,500 persons eligible to accept any proffered cash payments pursuant to authority granted prior to January 1, 2009, by § 15.2-2298, 15.2-2303 or 15.2-2303.1 but that did not accept any proffered cash payments during the preceding fiscal year shall within three months of the close of each fiscal year, beginning in 2001 and for each fiscal year thereafter, so notify the Commission on Local Government.

F. The Commission on Local Government shall by November 30, 2001, and by November 30 of each fiscal year thereafter, prepare and make available to the public and the chairmen of the Senate Local Government Committee and the House Counties, Cities and Towns Committee an annual report containing the information made available to it pursuant to subsections D and E.

§ 15.2-2303.3. Cash proffers requested or accepted by a locality.

A. No locality may require payment of a cash proffer prior to payment of any fees for the issuance of a building permit for construction on property that is the subject of a rezoning. However, a landowner petitioning for a zoning change may voluntarily agree to an earlier payment, pursuant to §§ 15.2-2298 and 15.2-2303. If the petitioner voluntarily agrees to an earlier payment, the proffered condition may be enforced as to the petitioner and any successor in interest according to its terms as part of an approved rezoning.

B. No locality shall either request or accept a cash proffer whose amount is scheduled to increase annually, from the time of proffer until tender of payment, by a percentage greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index.

C.  Notwithstanding any other provision of law, no locality shall accept a cash proffer as a condition for rezoning proffered on or after January 1, 2009.

Article 8.
RoadPublic Facility Impact Fees.

§ 15.2-2317. Applicability of article.

This article shall apply to any locality city, the Counties of Fairfax and Arlington and any town therein, and any county that has adopted zoning pursuant to Article 7 (§ 15.2-2280 et seq.) of Chapter 22 of Title 15.2 and that (i) has a population of at least 20,000 and has a population growth rate of at least 5%10 percent or (ii) has population growth of 15% percent or more, and to any town within such county. For the purposes of this section, population growth shall be the difference in population from the next-to-latest to the latest decennial census year, based on population reported by the United States Bureau of the Census.

§ 15.2-2318. Definitions.

As used in this article, unless the context requires a different meaning:

"Cost" includes, in addition to means the actual charges to be paid by or on behalf of the locality for: (i) all labor, materials, machinery and equipment for construction, (i)(ii) the acquisition of land, rights-of-way, property rights, easements and interests, including the costs of moving or relocating utilities, (ii)(iii) demolition or removal of any structure on land so acquired, including acquisition of land to which such structure may be moved, (iii)(iv) survey, engineering, and architectural expenses, (iv)(v) legal, administrative, and other related expenses, and (v)(vi) 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 road improvement public facility improvements.

"Impact fee" means a charge or assessment imposed against new development in order to generate revenue to fund or recover the costs of reasonable road public facility improvements benefiting necessitated by and attributable to providing public facilities to the new development at service levels consistent with those currently experienced within the locality. Impact fees may not be assessed and imposed for road public facilities repair, operation and maintenance, nor to meet demand which existed prior to the new development.

"Impact fee service area" means an a geographic area designated within by an ordinance on the zoning map of a locality and reflected on the comprehensive plan of a such locality having, which has clearly defined boundaries and clearly related traffic public facility needs that have a rational and reasonable relationship to projected new development and within which development is to be subject to the assessment of impact fees.

“On-site” means within the boundaries of the property to be developed.

“Public facilities” means public roads, public safety facilities, or public school facilities.

“Public facility improvement” means public road improvement, public safety facility improvement, or public school facility improvement.

"RoadPublic road improvement" includesmeans construction of new roads or improvement or expansion of existing roads and related appurtenances as required by applicable standards of the Virginia Department of Transportation, or the applicable standards of a locality with road maintenance responsibilities, to meet increased demand necessitated by and attributable to new development. Road improvements do not include on-site construction of roads which a developer may be required to provide pursuant to §§ 15.2-2241 through 15.2-2245.

“Public safety facility improvement” means construction of new police, fire, emergency medical, and rescue facilities or expansion of existing public safety facilities, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within a designated impact fee service area.

“Public school facility improvement” means construction of new primary and secondary public schools or expansion of existing primary and secondary public schools, to include all buildings, structures, parking, and other costs related thereto, to meet demand necessitated by and attributable to new development within the designated impact fee service area.

§ 15.2-2319. Authority to assess and impose impact fees.

A.  Any applicable locality may, by ordinance pursuant to the procedures and requirements of this article, assess and impose impact fees on new residential, commercial, and industrial development to pay all or a part of the cost of reasonable road public facility improvements that benefit are necessitated by and attributable to the new development.

B.  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 ten members appointed by the governing body of the locality and at least forty percent of the membership shall be representatives from the development, building construction, or real estate industries who have been actively engaged in development, construction, or real estate for the past five years. 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 preparation of 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.

C.  A locality shall exempt commercial and industrial development from the imposition of public school facility impact fees.

D.  A locality may reduce or waive any impact fee authorized by this article in urban development areas established pursuant to § 15.2-2223.1.

E.  No locality shall impose any impact fee authorized by this article on any unit subject to an affordable dwelling unit program established pursuant to § 15.2-2304 or 15.2-2305, or on any development constructed pursuant to Section 8 of the federal Housing and Community Development Act of 1974, as amended.

§ 15.2-2320. Impact fee service areas to be established.

A.  The locality shall delineate by ordinance on the zoning map one or more impact fee service areas within its comprehensive plan; however, no locality shall designate the entire locality as a single impact fee service area.

B. Prior to establishing any impact fee service area, the locality shall provide written notice to the affected property owners in a manner consistent with the requirements of subsection B of § 15.2-2204.

C. Impact fees collected from new development within an impact fee service area shall be expended only for road public facility improvements benefiting that impact fee service area. An impact fee service area may encompass more than one road public facility improvement project. A locality may exclude urban development areas designated pursuant to § 15.2-2223.1 from impact fee service areas.

§ 15.2-2321. Adoption of public road, public school facilities, and public safety facility improvements program.

A.  Prior to adopting a system of impact fees, the locality shall conduct an assessment of road public facility improvement needs benefiting an impact fee service area and shall adopt a public road, improvements plan public school facility, and public safety facility improvements plans for the area showing the new roads public facilities proposed to be constructed and the existing roads public facilities to be improved or expanded and the schedule for undertaking such construction, improvement or expansion. The road public facility improvements plan plans shall be adopted as an amendment amendments to the required comprehensive plan and shall be incorporated into the capital improvements program or, in the case of the counties where.  Where applicable, the road improvement plan shall be incorporated into the six-year plan for secondary road construction pursuant to § 33.1-70.01.

B.  The locality shall adopt the road public facility improvements plan plans 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 least 60 days prior to the public hearing.

C.  The locality at a minimum shall include the following items in assessing road public facility improvement needs and preparing a road public facility improvements plan plans:

1. An analysis of the existing capacity, current usage and existing commitments to future usage of existing roads public facilities, as indicated by (i) both current and projected service levels, (ii) current valid building permits outstanding, and (iii) approved and pending site plans and subdivision plats, and (iv) approved conditional zonings, special exceptions, and special use permits. If the current usage and commitments exceed the existing capacity of the roads public facilities, the locality also shall determine the costs of improving the roads public facilities to meet the demand and shall identify funding for such costs from sources other than impact fees.  If the projected service levels exceed current service levels, the locality shall determine the costs of increasing the current service levels to the projected levels in the absence of new development and shall identify funding for such costs from sources other than impact fees. The analysis shall include any off-site road public facility improvements, or cash payments for road public facility improvements accepted by the locality pursuant to authority granted prior to January 1, 2009, and shall include a plan to fund the current usages and commitments that exceed the existing capacity of the roads public facilities.

2. The projected need for and costs of construction of new roads or improvement public facilities or expansion of existing roads public facilities necessitated by and attributable in whole or in part to projected new development. RoadPublic facility improvement 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 20 years in the future, at the end of a 20-year period. The assumptions with regard to land uses, densities, intensities, and population upon which road improvement projections are based shall be presented.

3.  An assessment of (i) such future revenues as shall be generated by the new development towards public facilities improvement within the impact fee service area, (ii) such revenues as shall be generated pursuant to § 58.1-802.2 within the impact fee service area, and (iii) such funds as shall be received from the federal, state, or local government specifically to provide or pay for the public facilities for which the impact fees are to be imposed.

34. The total number of new public facility service units projected for the impact fee service area when fully developed and, if full development is projected to occur more than 20 years in the future, at the end of a 20-year period.  As used in this section, a service unit is a standardized measure of use or generation attributable to an individual unit of new development. 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.

D.  A road "service unit" is a standardized measure of traffic use or generation. 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. The table shall be established by the locality based upon the ITE manual (published by the Institute of Transportation Engineers) or locally conducted trip generation studies, and consistent with the traffic analysis standards adopted pursuant to § 15.2-2222.1.

E.  A public school facility “service unit” is the estimated average number of elementary, middle, and high school pupils generated by each type (single-family detached, single-family attached, and multifamily) of dwelling unit on a county-wide basis. 

The need for new or expanded public school facilities within an impact fee service area shall be established by determining (i) the appropriate enrollment-to-capacity levels for elementary, middle, and high schools, (ii) the current available capacity of the existing elementary, middle, and high schools, (iii) the impact of a new development, on a service unit basis, on the capacity of existing elementary, middle, and high schools, and (iv) the elementary, middle, and high schools necessary to meet the projected increase in demand necessitated by and directly attributable to new residential development within the impact fee service area.  

The enrollment-to-capacity level for each elementary, middle, and high school established within an impact service area shall be consistent with existing enrollment-to-capacity levels and the enrollment-to-capacity level established for the locality as a whole.

The locality shall determine the individual public school facility service unit cost within an impact fee service area by dividing the total site cost and facility cost, not including engineering fees, architecture fees, legal fees, and other professional fees, by the student capacity of each public school facility necessitated by and directly attributable to a new residential development.  The calculation shall include a credit for each service unit for each type of dwelling unit equal to the pro-rata share of total dollars received from the state for public school facility construction or expansion and a credit for the percentage of annual real estate tax paid by the owner to the locality that the locality dedicates to public school facilities capital improvements and public school facility debt service for each of the next 20 years after a certificate of occupancy has been issued.

F. Public safety “service units” shall be established by (i) allocating the number of existing public safety facilities between residential and nonresidential uses in proportion to historical telephone records of calls for public safety service, (ii) dividing the residential proportion of public safety facilities by the residential population served to determine a “residential service unit,” and (iii) dividing the nonresidential proportion of public safety facilities by the total nonresidential building square feet served to determine a “nonresidential service unit.”  

§ 15.2-2322. Adoption of impact fee and schedule.

A.  After adoption of a road public facility improvement program programs, 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 road public facility improvements benefiting necessitated by and attributable to new development in the designated impact fee service area. The ordinance shall set forth the schedule of impact fees.

 B. The public road, public school, and public safety facility impact fees to be imposed shall be determined (i) by dividing projected public road, public school, and public safety facility construction or expansion costs in the impact fee service area when fully developed by the number of projected public road, public school, and public safety facility service units when fully developed, or (ii) for a reasonable period of time, but not less than 10 years, by dividing the projected public road, public school, or public safety facility construction or expansion costs necessitated by and attributable to development in the next 10 years by the public road, public school, and public safety facility service units projected to be created in the next 10 years.

§ 15.2-2322.1.  Maximum impact fees to be imposed by localities.

A. The sum total of public facility impact fees assessed shall not exceed the maximum amounts as enumerated in subsections B and C; provided, however, that beginning January 1, 2009, and annually thereafter, the locality may adjust the maximum impact fee by a percentage not greater than the annual rate of inflation, as calculated by referring to the Consumer Price Index for all urban consumers (CPI-U), 1982-1984=100 (not seasonally adjusted) as reported by the United States Department of Labor, Bureau of Labor Statistics or the Marshall and Swift Building Cost Index. 

B. Except as provided for in subsection A, the maximum impact fee assessed on residential development shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be $8,000 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be $5,000 per single-family detached dwelling unit, two-thirds of such maximum per single-family attached dwelling unit, and one-half of such maximum per multifamily dwelling unit.

C. Except as provided for in subsection A, the maximum impact fee assessed on commercial or industrial development shall be as follows:

1. In the localities enumerated in § 15.2-4831 and subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be as follows:

a.  For office use, $3/gross square foot;

b.  For retail use, $4/gross square foot;

c.  For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

2. In all other localities subject to this article pursuant to § 15.2-2317, the maximum impact fee for public facility improvement shall be as follows:

a.  For office use, $3/gross square foot;

b.  For retail use, $4/gross square foot;

c.  For industrial use, $2/gross square foot; 

d. For hotel use, $1,000/room, plus $3/gross square foot for all other public space such as restaurants and meeting areas.

§ 15.2-2323. When impact fees assessed and imposed.

The amount of impact fees to be imposed on a specific development or subdivision shall be determined before or at the time of the final approval and recordation of the site plan or subdivision is approved. The ordinance shall specify that the impact fee imposed on the individual unit of development is to be collected at the time of the issuance of a building permit for that unit. 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 road improvement costs in the impact fee 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 ten years, by dividing the projected costs necessitated by development in the next ten years by the service units projected to be created in the next ten 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, and thereafter to the circuit court for the locality. The ordinance may provide for the resolution of disputes over an impact fee by arbitration or otherwise.

§ 15.2-2324. Credits against impact fee.

The market value of any land dedication, cash contribution or construction from provided by the developer for off-site all on-site (i) public school facility improvements, (ii) public safety facility improvements, and (iii) public road or other transportation improvements designated on the locality’s comprehensive plan or any plan of the Virginia Department of Transportation or regional transportation authority benefiting the impact fee service area shall be treated as a credit against the impact fees imposed on the developer's project. The locality shall treat as a credit against the impact fee imposed upon a development any off-site transportation public facility improvement, land dedication, cash contribution, or construction, whether it is a condition of a rezoning or otherwise committed to the localityprovided by the developer. The locality may by ordinance provide for credits for approved on-site transportation improvements in excess of those required by the development.Market value shall be determined at the time of dedication, contribution, or construction.

The locality also shall calculate and credit against impact fees the extent to which (i) other developments have already contributed to the cost of existing public roads, public school facilities, and public safety facilities, which will benefit the development, (ii) new development will contribute to the cost of existing public roads, public school facilities, and public safety facilities, and (iii) new development will contribute to the cost of public road, public school facilities, and public safety facilities improvements in the future other than through impact fees, including any special taxing districts, special assessments, or community development authorities.

§ 15.2-2325. Updating plan and amending impact fee.

The locality shall update the needs assessment and the assumptions and projections at least once every two years. The road public facility improvement 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. Any impact fees not yet paid shall be assessed at the updated rate.

§ 15.2-2326. Use of proceeds.

A.  A separateSeparate public road, public school facility, and public safety facility improvement account accounts shall be established for the each impact fee service area, and all funds collected through impact fees shall be deposited in the such separate interest-bearing account accounts. Interest earned on deposits shall become funds of the account. The expenditure of funds from the account accounts shall be only for public road, public school facility, and public safety facility improvements benefiting the impact fee service area as set out in the road public facility improvement plan for the impact fee service area.

B.  The governing body of any locality imposing impact fees pursuant to the authority granted under this article shall within three months of the close of each fiscal year, beginning in fiscal year 2009 and for each fiscal year thereafter, report to the Commission on Local Government the following information for public road, public school facility, and public safety facility improvements for the preceding fiscal year:

1. The aggregate dollar amount of impact fees collected by the locality in each impact fee service area and for each improvement category;

2. The estimated aggregate dollar amount of impact service fees the locality expects to collect in the coming fiscal year for each improvement category;

3.  The aggregate dollar amount expended in the impact fee service area in each improvement category;

4.  The total dollar amount of impact fees collected and expended by the locality in each impact fee service area for all years to date; and

5. The total dollar amount expended by the locality to increase capacity to meet existing commitments or increase existing service levels pursuant to § 15.2-2321.1 as well as the funding sources and the amounts from each source. 

C. The governing body of any locality eligible to collect impact service fees pursuant to authority granted under this article but that did not collect any impact service fees during the preceding fiscal year shall within three months of the close of each fiscal year, beginning in 2009 and for each fiscal year thereafter, so notify the Commission on Local Government.

D. The Commission on Local Government shall by November 30, 2009, and by November 30 of each fiscal year thereafter, prepare and make available to the public and the chairmen of the Senate Local Government Committee and the House Counties, Cities and Towns Committee an annual report containing the information made available to it pursuant to subsections B and C.

§ 15.2-2327. Refund of impact fees.

The locality shall refund any impact fee or portion thereof for which construction of a public facility improvement project is not completed within a reasonable period of time, not to exceed fifteen years. In the event that impact fees are not committed to road improvements benefiting the impact fee service area within seven years from the date of collection, the locality may commit any such impact fees to the secondary or urban system construction program of that locality for road improvements that benefit the impact fee service area.

Upon completion of a public facility improvement project, the locality shall recalculate the impact fee based on the actual cost of the improvement. It shall refund the difference if the impact fee paid exceeds actual cost by more than fifteen percent. Refunds shall be made to the record owner of the property at the time the refund is made.

§ 15.2-2327.1.  Severability.

If any provision of this article is held invalid, such adjudication shall not affect, impair or invalidate the remaining provisions thereof, but shall be confined in its operation to the specific provisions held invalid, and to this end the provisions of this article are severable.

§ 58.1-802.2. Real Property Tax Relief Fee.

A. Any locality not enumerated in § 15.2-4831 or 33.1-391.7 that adopts an impact fee ordinance under the provisions of Article 8 (§ 15.2-2317 et seq.) of Chapter 22 of Title 15.2 shall impose a fee, delineated as the “Real Property Tax Relief Fee” on each deed, instrument, or writing by which lands, tenements, or other realty located in any county or city is sold and granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or any person, by purchaser’s direction.  The rate of the fee, when the consideration or value of the interest, whichever is greater, equals or exceeds $100, shall be $0.20 for each $100 or fraction thereof, exclusive of the value of any lien or encumbrance remaining thereon at the time of the sale, whether such lien is assumed or the realty is sold subject to such lien or encumbrance.

The fee imposed by this section shall be paid by the grantor, or other person who signs on behalf of the grantor, of any deed, instrument, or writing subject to the fee imposed by this section.

B. Fees imposed by this section shall be collected as provided for in subsection B of § 58.1-802; provided, however, the compensation authorized to the clerk of the court under that subsection shall not be applicable to the fee collected under this section.  The clerk shall return all fees collected pursuant to the authority granted under this section to the locality’s capital improvement fund for the construction of new public roads, new public schools buildings, and new pubic safety buildings necessitated by and attributable to new development within an impact fee service area until such time as the construction of such public facilities is completed.  The proceeds collected and forecast to be collected under this section shall be fully utilized in the calculation of impact fees imposed by the locality.

2.  That the provisions of this Act shall become effective January 1, 2009.

3. That the provisions of this Act shall not impair any proffer or proffered condition amendment accepted by a locality, nor any agreement entered into under § 15.2-2303.1 of the Code of Virginia, pursuant to authority granted prior the effective date of this Act.