AN ACT Relating to transportation benefit areas; and amending RCW 36.73.120.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 12, chapter 327, Laws of 1987 and RCW 36.73.120 are each amended to read as follows:

(1) If no mitigation of off-site transportation impacts has been or is being required by any governmental body pursuant to any other authority, a transportation benefit district may impose a fee or charge, either direct or indirect, on the construction or reconstruction of residential buildings, commercial buildings, industrial buildings, or on any other building or building space or appurtenance thereto, or on the development, subdivision, classification, or reclassification of land.

(2) Any fee or charge imposed under this section shall be used exclusively for transportation improvements constructed by a transportation benefit district. The fees or charges so imposed must be reasonably necessary as a result of the impact of collective development, construction, or classification or reclassification of land on identified transportation needs.

(3) When fees or charges are imposed by a district within which there is more than one city or both incorporated and unincorporated areas, the legislative authority for each city in the district and the county legislative authority for the unincorporated area must approve the imposition of such fees or charges before they take effect.

(4) Fees or charges shall not be imposed by a district until the district has developed and adopted a program for the purpose of jointly funding, from public and private sources, local transportation improvements necessitated in whole or in part by economic development and growth within the district. The program shall be adopted by ordinance by the city or county legislative authority, or authorities if the district involves multiple jurisdictions, after notice and public hearing. Each program shall contain the elements described in this section.

(a) The program shall identify the geographic boundaries of the entire area generally benefitted by the proposed off-site transportation improvements and within which transportation impact fees will be imposed pursuant to this chapter.

(b) The program shall contain a comprehensive long-term transportation plan identifying the proposed off-site transportation improvements intended to be covered by this joint funding program, including acquisition of rights of way, construction and reconstruction of all major and minor arterials and intersection improvements, and identification of design standards, levels of service, capacities, and costs. The program shall also indicate how the transportation plan is coordinated with applicable transportation plans for the region and for adjacent jurisdictions.

(c) The program shall include at least a six-year capital funding program, updated annually, identifying the specific public sources and amounts of revenue for the development of all off-site transportation improvements contained in the transportation plan and a proposed schedule for expenditures. The funding plan shall consider the additional local tax revenue estimated to be generated by new development within the plan area, where all or a portion of the additional revenue is proposed to be earmarked as future appropriations for such off-site transportation improvements.

(d) The program shall authorize transportation impact fees to be imposed on development within the plan area for the purpose of providing reasonable and necessary off-site transportation improvements. However, no such fee may be imposed on a development when mitigation of off-site transportation impacts has been or is being required by a governmental body pursuant to any other authority. The fees shall not exceed the amount which the local government can demonstrate is reasonably necessary as a direct result of the proposed development.

(e) The program shall provide that the funds collected as a result of a particular new development shall be used to pay for improvements mitigating the impacts of the development or be refunded to the property owners of record if not spent within five years of the date collected.

(f) The program shall also describe the formula, timing, security, credits, and other terms and conditions affecting the amount and method of payment of the transportation impact fees as further provided for in this section.

(g) The administrative element of the program shall include: (i) An opportunity for administrative appeal and hearing on the amount of the transportation impact fee imposed; (ii) establishment of a designated account for the public and private moneys appropriated or collected for the transportation improvements identified in the plan; (iii) methods to enforce collection of the public and private funds identified in the program; (iv) designation of the administrative departments or other entities responsible for administering the program, including determination of fee amounts, transportation planning, and construction; and (v) provisions for future amendment of the program. The program shall not be amended in a manner to relieve local government of any contractual obligations made to prior developers. Administrative expenses for the development and administration of the program shall not exceed twenty percent of the total public and private moneys collected under the program.

(h) The program shall provide that private transportation impact fees shall not be collected for any off-site transportation improvement which is incapable of being reasonably carried out because of lack of public funds or other foreseeable impediment.

(i) The program shall describe the formula or method for calculating the amount of the transportation impact fees or charges to be imposed on new development within the plan area. The program may provide that developers pay a transportation impact fee or charge for off-site transportation improvements not yet constructed and for those jointly funded improvements constructed since the commencement of the program. The local government or governments within whose jurisdiction the transportation benefit district exists shall fund the transportation benefit district in an amount equal to the local governments' share of revenues resulting from RCW 36.73.060, 36.73.070, and 36.73.080 or other public revenue sources, and the transportation benefit district shall spend this funding for the improvements for which it imposes the transportation impact fees or charges on new development. If no such funding is available, no transportation impact fees or charges may be imposed. The program shall define the event in the development approval process that triggers a determination of the amount of the transportation impact fees and the event that triggers the obligation to make actual payment of the fees. The payment obligation shall not commence before the date the developer has obtained a building permit for the new development. The developer shall be given the option to pay the transportation impact fee in a lump sum, without interest, or by installment with interest over a period of five years or more as specified by the local government. The local government shall require security for the obligation to pay the transportation impact fee, in the form of a recorded agreement, deed of trust, lender set-aside letter, or other instrument determined satisfactory by the local government. The developer shall also be given credit against its obligations for the transportation impact fee for the fair market value of off-site land or improved transportation facilities dedicated to the local government. If the value of the dedication exceeds the transportation impact fee, the developer is entitled to reimbursement from transportation impact fees attributable to the dedicated facilities and payment by subsequent developers within the plan area. Payment of the transportation impact fee entitles the developer and its successors and assigns credit against any other future fee, local improvement district assessment, or other monetary imposition made specifically for the designated off-site transportation improvements intended to be covered by the transportation impact fee imposed pursuant to this program. The program shall also define the criteria for establishing periodic fee increases attributable to construction cost increases for the improvements designated in the program. Any particular development project may be assessed under this section on only a one-time basis.

(j) If a transportation impact fee is imposed on a development pursuant to this section, then no other mitigation of off-site transportation impacts for the development may be required by any governmental agency pursuant to any other local, state, or federal law.