1 / 35

Current Topics Relating to Development Impact Fees

Current Topics Relating to Development Impact Fees. Presented by Andrew J. McGuire, Esq. Alternate Title: How I Spent My Spring Break, My Summer Vacation, My Fall Break, My Christmas Vacation, Another Spring Break, Probably Another Summer Vacation . . . Current Law A.R.S. § 9-463.05.

annette
Download Presentation

Current Topics Relating to Development Impact Fees

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Current Topics Relating to Development Impact Fees Presented by Andrew J. McGuire, Esq.

  2. Alternate Title:How I Spent My Spring Break, My Summer Vacation, My Fall Break, My Christmas Vacation, Another Spring Break, Probably Another Summer Vacation . . .

  3. Current Law A.R.S. § 9-463.05

  4. Current Law A.R.S. § 9-463.05 • Adopted 1982 • HBACA chipping away year-by-year • Amended a few times • most recent addition — reporting requirements — to address homebuilders concerns about “transparency” (I really hate this word!)

  5. Current Law A.R.S. § 9-463.05 • DIFs generally • Allowed for costs to municipality for providing necessary public services to a development • “Necessary public services” is not defined; generally, anything a municipality may provide

  6. Current Law A.R.S. § 9-463.05 • Beneficial use to development • Accounted for separately • Credits for infrastructure provided • Paid at building permit • Must bear a reasonable relationship to burden on a municipality • Assessed in a non-discriminatory manner

  7. Current Law A.R.S. § 9-463.05 • DIF Approval process • 60 days notice of intent and report supporting the DIF • Public hearing after 60 days and at least 14 days before adoption • Effective 90 days after adoption

  8. Current Law A.R.S. § 9-463.05 • Annual Report (this was the original “transparency” change) • Amount assessed for each type of fee • Beginning and ending balance of each fee • Amount of interest earned

  9. Current Law A.R.S. § 9-463.05 • Amount of DIF funds used to repay • Bonds for CIP project that was subject of fee assessment • Monies advanced by the municipality • Amount of DIF funds monies spent on CIP project & location of improvement

  10. Current Law A.R.S. § 9-463.05 • Amount of DIF fee monies spent for each purpose other than a CIP project • Filed with municipal clerk • FAILURE TO FILE = PROHIBITED FROM COLLECTING FEES

  11. Last Year: HB2381

  12. HB 2381 • HB 2381 generally • Striker bill • Massive attack on municipal authority • Stated agenda was “transparency” but real agenda was “to prevent cities from doing stupid things like adopting plans for lakes that they have no money to build.”

  13. HB 2381 • Passed by one vote in each house • HB 2381 content: • Defined “public services” to specifically exclude “airplanes or arts or cultural facilities” • Other uses were in a non-exclusive laundry list • Stepping stone to exclusive list in later years

  14. HB 2381 • First introduced the idea of linking development impact fees to CIP • General concept was hard to argue against — development impact fees should be tied to capital plan • “Capital improvements plan” — definition was problematic • LOS for all fees – NOT WORKABLE

  15. HB 2381 • Created a CIP approval process similar to development impact fee process • 60 days notice of intention • Hearing on changes at least 30 days before adoption • Needed to be completed BEFORE development impact fee process started — would have extended adoption time

  16. HB 2381 • Amended without notice/hearing if related to • Something developer might be reimbursed for, but specifically excluded parks, open space, etc. • Adjusting cost of providing the service or estimated time • Development exactions

  17. HB 2381 • Created specific requirements for fee study • Service areas/LOS • Linking improvement to specific fee — refund issue — counter intuitive to LOS methodology • Required identification of other funds to be used (i.e. new construction sales tax) for non-DIF portion of capital costs

  18. HB 2381 • Required a refund TO THE PAYOR if DIF not spent in the service area • Camel’s nose — next step in fees tied to specific infrastructure • Nightmare of refunding to original payor (i.e. single-purpose LLC)

  19. HB 2381 • REQUIRED an offset against the development impact fee amount for any non-DIF amounts to be used for a capital project, including grants, new construction sales tax, etc. • Introduced the concept of indexing (about the only good thing in this bill)

  20. HB 2381 • Look-back provision would have invalidated virtually every municipality’s fees • Introduced requirement for discrepancy in assessment to be raised within two years of date fee is paid

  21. HB 2381 • Created definitions for: • “Capital improvements plan” — problematic term, even as defined • “Development” • “Level of service” — again, a non-standard definition of a commonly used term • “Public infrastructure” — first step to an exclusive list

  22. HB 2381 • “Public service” — first step to an exclusive list • “Service area” • Governor’s VETO • How it happened • Her directive

  23. SB 1423

  24. SB 1423 • Background — A Different approach • League compromise bill to start • Worked directly with the “stakeholders” (hate this word, too!); Senate President as sponsor • The uneasy truce — no end-around changes — I AM NOT HOLDING MY BREATH!

  25. SB 1423 • Highlights of the bill • Clarifies the broader scope of DIF uses beyond infrastructure (i.e. police cars) • Requires fees to be spent within the same category as collected (basically stating what we believe to be the law already) • Explains credits for developer-constructed infrastructure

  26. SB 1423 • C of O + 15 days with DA • SAHBA requirement • Requires bond or other security • Hard to argue against because it is at the municipalities’ option

  27. SB 1423 • Requires DIF study to be based upon an infrastructure improvements plan (IIP) • IIP — 60 day period before public hearing • Public hearing 30 days before IIP adopted • May be amended without hearing (but 14 days notice) if it addresses only items currently in the IIP

  28. SB 1423 • Elements of IIP • Estimate of future necessary public services required by new development • Forecast cost & estimate time of completion

  29. SB 1423 • Other changes to current statute • Adds DIF study requirements • Identify methodology • Explain fee relationship to IIP • Identify indices used + timing • Automatic indexing (w/o hearing, with 30 days notice ) • Adopts 2 year collection period

  30. SB 1423 • Defines IIP – non-exclusive list • Issues left out • Commercial pre-payment • Refunds • Payor vs. current owner • Tied to specific infrastructure

  31. SB 1423 • Definition of “necessary public services” • Affordable housing • Greater breakdown of residential uses • Grandfathering • Plat + 2 years for SFR • Site plan approval for MFR

  32. SB 1423 • Calculation of exiting residents’ benefit • Separate accounting of non-DIF funds; contributed when DIF is deposited

  33. QUESTIONS? Andrew J. McGuire Gust Rosenfeld PLC 201 E. Washington St., Suite 800 Phoenix, Arizona 85004 (602) 257-7664 direct dial (602) 304-1538 facsimile amcguire@gustlaw.com www.gustlaw.com

More Related