AN ACT Relating to school impact fees; amending RCW 82.02.020; and adding a new chapter to Title 28A RCW.

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

NEW SECTION. Sec. 1. The legislature finds that there is an increasing need for school capital construction and renovation as the result of both existing demands and the foreseeable future demands from economic growth and rapid residential development within the state.

The legislature intends with this chapter to enable school districts and local governments to develop and adopt programs for the purpose of jointly funding, from public and private sources, school capital construction and renovation necessitated in whole or in part by residential development and growth within their jurisdictions.

Programs adopted pursuant to this chapter should provide a fair and predictable method for allocating the cost of necessary school capital construction and renovation between the public and private sectors.

The legislature finds that the private funds authorized to be collected pursuant to this chapter are for the purpose of mitigating the impacts of development and are not taxes.

School district capital construction and renovation projects that are funded in part by local, public, and private funds shall not be treated differently by the state from other school district projects for state funding purposes.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Adverse impacts" means those quantifiable impacts on school facilities that are caused by economic growth and development and that result in increased student enrollment.

(2) "Cost of improvements" means the estimated amount of money that will be required to purchase or acquire the real and personal property identified as needed in the comprehensive school facilities plan and as authorized for acquisition by RCW 28A.51.010.

(3) "Developer" means an individual, group of individuals, partnership, corporation, association, municipal corporation, state agency, or other person undertaking development.

(4) "Development" means the subdivision or short subdivision of land as defined in RCW 58.17.020 or the construction or conversion, for or to residential purposes, of residential, commercial, industrial, public, or any other building, building space, or land, or the installation, location, or placement of mobile homes or manufactured housing units.

(5) "Fair market value" means the price in terms of money that a property will bring in a competitive and open market under all conditions of a fair sale, the buyer and seller each prudently knowledgeable, measured at the time of the dedication to the school district of land, improved school facilities, or new school facilities.

(6) "Improvements" means the real and personal property authorized for acquisition by RCW 28A.51.010.

(7) "School impact fee" means a monetary charge imposed on a development pursuant to this chapter.

NEW SECTION. Sec. 3. School districts may develop and adopt school benefit programs to fund jointly, from public and private sources, improvements necessitated in whole or in part by economic development and growth within their respective jurisdictions. Adoption of a school benefit program shall be by resolution after notice and public hearing. Each school benefit program shall contain all of the following elements:

(1) A finding that new residential construction projected within the school district will require capital expenditures to support the school district's educational program;

(2) A description of the boundaries of the geographic area of the school benefit program, which boundaries shall be identical to the boundaries of the geographic area of the school district;

(3) An adopted comprehensive school facilities plan, for not fewer than four years, updated annually, identifying proposed improvements reasonably required to meet needs caused by current and projected growth within the school district;

(4) A capital funding plan, for not fewer than four years, updated annually, identifying the amount of revenue necessary to fund school improvements required by the school facilities plan and the projected private and public sources of such revenue. The capital funding plan shall include a proposed schedule for construction and expenditure of funds;

(5) Provision for the imposition of school impact fees on new development within the school district. The school impact fee shall provide a portion of the funding for reasonable and necessary improvements;

(6) School impact fee amounts and other terms and conditions affecting the determination, imposition, and payment of school impact fees.

No school impact fee may be imposed under this chapter if the same or comparable mitigation of the same impact is required by any other government agency pursuant to any other local, state, or federal law. This chapter shall not, however, limit the applicability of statute, ordinance, or rule affecting school districts.

Notice shall be published at least once each week for two consecutive weeks in a newspaper of general circulation in the district or, if there is not one, in a newspaper of general circulation in the county or counties in which the district is located. The notice shall designate the date, time, and place and a statement that a school benefit program has been proposed for adoption by the district and summarizing the elements of the program. Copies of the proposed program shall be made available to the public before and at the hearing.

NEW SECTION. Sec. 4. School benefit programs may require developers to pay school impact fees for improvements not yet constructed at the time school impact fees are assessed and for improvements constructed since the commencement of the program. The provisions of RCW 28A.47.801 and 28A.47.804 notwithstanding, school impact fees may be used for obtaining state matching funds, and to pay debt service on school district general obligation bonds, including bonds the proceeds of which are used for obtaining state matching funds.

A school district's school impact fees for imposition in calendar year 1990 shall not exceed three thousand one hundred forty dollars per student projected by the school district as a result of new residential development. The maximum fee shall be adjusted each year according to the change in a nationally recognized construction cost index as specified by the state board of education.

The amount of the school impact fee to be imposed on a particular development shall be based on the number of single-family and multifamily dwelling units in the development and the school district's documented experience as to the number of students resulting from the type of housing proposed for the development. School districts are entitled to rely on data not more than three years old and studies in projecting the average number of students expected from single-family and multifamily dwelling units. School districts may use the average number of students expected from each housing type in determining the amount of the school impact fee for any individual development.

School impact fees established on the basis of such data and studies shall be collected by the appropriate city or county as provided by section 5 of this act and shall be expended by the school district for the purposes provided in this chapter.

School districts shall reimburse the city or county collecting school impact fees for the school district for its administration fees from school impact fees collected.

NEW SECTION. Sec. 5. Upon adoption of a school benefit program and certification of the adoption by a school district to a city or county, the city or county receiving the certification shall adopt such ordinances and rules as may be reasonable and necessary to implement this chapter and the school benefit program, including measures to:

(1) Impose school impact fees on developments it approves or permits within the school district;

(2) Collect school impact fees imposed; and

(3) Remit collected school impact fees to the county treasurer for deposit to the affected school district's capital project or debt service fund as specified by the school district.

School impact fees shall be collected upon plat approval or, if plat approval is not required for a development, upon issuance of a building permit.

NEW SECTION. Sec. 6. A development shall be given credit against its obligations for the school impact fee in an amount equal to the fair market value of school sites and/or construction of school facilities dedicated or donated by the development to and accepted by the school district. If the value of the dedicated school site and/or donated construction exceeds the amount of the school impact fee obligation for the development, the developer is entitled to reimbursement from school impact fees paid by prior or subsequent developments within the plan area.

NEW SECTION. Sec. 7. Sections 1 through 6 of this act apply prospectively only and not retroactively.

Sec. 8. Section 82.02.020, chapter 15, Laws of 1961 as last amended by section 6, chapter 179, Laws of 1988 and RCW 82.02.020 are each amended to read as follows:

Except only as expressly provided in RCW 67.28.180 and 67.28.190 and the provisions of chapter 82.14 RCW, the state preempts the field of imposing taxes upon retail sales of tangible personal property, the use of tangible personal property, parimutuel wagering authorized pursuant to RCW 67.16.060, conveyances, and cigarettes, and no county, town, or other municipal subdivision shall have the right to impose taxes of that nature. No county, city, town, or other municipal corporation shall impose any tax, 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. However, this section does not preclude dedications of land or easements pursuant to RCW 58.17.110 within the proposed development or plat which the county, city, town, or other municipal corporation can demonstrate are reasonably necessary as a direct result of the proposed development or plat to which the dedication of land or easement is to apply.

This section does not prohibit voluntary agreements with counties, cities, towns, or other municipal corporations that allow a payment in lieu of a dedication of land or to mitigate a direct impact that has been identified as a consequence of a proposed development, subdivision, or plat. A local government shall not use such voluntary agreements for local off-site transportation improvements within the geographic boundaries of the area or areas covered by an adopted transportation program authorized by chapter 39.92 RCW. Any such voluntary agreement is subject to the following provisions:

(1) The payment shall be held in a reserve account and may only be expended to fund a capital improvement agreed upon by the parties to mitigate the identified, direct impact;

(2) The payment shall be expended in all cases within five years of collection; and

(3) Any payment not so expended shall be refunded with interest at the rate applied to judgments to the property owners of record at the time of the refund; however, if the payment is not expended within five years due to delay attributable to the developer, the payment shall be refunded without interest.

No county, city, town, or other municipal corporation shall require any payment as part of such a voluntary agreement which the county, city, town, or other municipal corporation cannot establish is reasonably necessary as a direct result of the proposed development or plat.

Nothing in this section prohibits cities, towns, counties, or other municipal corporations from collecting reasonable fees from an applicant for a permit or other governmental approval to cover the cost to the city, town, county, or other municipal corporation of processing applications, inspecting and reviewing plans, or preparing detailed statements required by chapter 43.21C RCW.

This section does not limit the existing authority of any county, city, town, or other municipal corporation to impose special assessments on property specifically benefitted thereby in the manner prescribed by law.

Nothing in this section prohibits counties, cities, or towns from imposing or permits counties, cities, or towns to impose water, sewer, natural gas, drainage utility, and drainage system charges: PROVIDED, That no such charge shall exceed the proportionate share of such utility or system's capital costs which the county, city, or town can demonstrate are attributable to the property being charged: PROVIDED FURTHER, That these provisions shall not be interpreted to expand or contract any existing authority of counties, cities, or towns to impose such charges.

Nothing in this section prohibits a transportation benefit district from imposing fees or charges authorized in RCW 36.73.120 nor prohibits the legislative authority of a county, city, or town from approving the imposition of such fees within a transportation benefit district.

Nothing in this section prohibits counties, cities, or towns from imposing transportation impact fees authorized pursuant to chapter 39.92 RCW.

This section does not apply to special purpose districts formed and acting pursuant to Titles 54, 56, 57, or 87 RCW, nor is the authority conferred by these titles affected.

This section does not prohibit a city or county from imposing fees or charges authorized under chapter 28A.-- RCW (sections 1 through 7 of this 1990 act).

NEW SECTION. Sec. 9. Sections 1 through 7 of this act shall constitute a new chapter in Title 28A RCW.

NEW SECTION. Sec. 10. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.