Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Local Government Committee

HB 1702

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Establishing a process for the payment of impact fees through provisions stipulated in recorded covenants.

Sponsors: Representatives Liias, Rodne, Angel, Springer, Eddy, Smith, Anderson, Clibborn, Stanford and Takko.

Brief Summary of Bill

  • Obligates jurisdictions that impose impact fees to provide a process by which applicants for building permits may: (1) record a covenant against title to the property in lieu of paying impact fees at the time of application; or (2) apply for a deferral of the impact fee payment until final inspection or the issuance of a certificate of occupancy or equivalent certification.

  • Requires sellers of a property subject to an impact fee deferral covenant make specified disclosures to a prospective purchaser regarding the covenant.

  • Delays the starting of the six-year timeframe for satisfying concurrency provisions of the Growth Management Act until after the county or city receives full payment of all deferred impact fees.

Hearing Date: 2/9/11

Staff: Ethan Moreno (786-7386).

Background:

Growth Management Act and Concurrency.

The Growth Management Act (GMA) is the comprehensive land use planning framework for counties and cities in Washington. Originally enacted in 1990 and 1991, the GMA establishes land use designation and environmental protection requirements for all Washington counties and cities, and a significantly wider array of planning duties for the 29 counties and the cities within that are obligated to satisfy all planning requirements of the GMA.

The GMA directs counties and cities that fully plan under the GMA (planning jurisdictions) to adopt internally consistent comprehensive land use plans that are generalized, coordinated land use policy statements of the governing body. Comprehensive plans must address specified planning elements, including land use and transportation, each of which is a subset of a comprehensive plan. Comprehensive plans must be coordinated and consistent with those of other counties and cities with which the county or city has common borders or related regional issues. The implementation of comprehensive plans occurs through locally-adopted development regulations mandated by the GMA.

The transportation element of a comprehensive plan must include sub-elements that address transportation mandates for forecasting, finance, coordination, and facilities and services needs. A provision of the sub-element for facilities and services needs requires planning jurisdictions to adopt level of service (LOS) standards for all locally-owned arterials and transit routes.

Planning jurisdictions must adopt and enforce ordinances prohibiting development approval if the proposed development will cause the LOS on a locally-owned transportation facility to decline below standards adopted in the transportation element. Exemptions to this "concurrency" prohibition may be made if improvements or strategies to accommodate development impacts are made concurrent with the development. These strategies may include:

"Concurrent with the development" means improvements or strategies that are in place at the time of development, or that a financial commitment is in place to complete the improvements or strategies within six years.

Transportation elements may also include, in addition to improvements or strategies to accommodate the impacts of development authorized under the GMA, multimodal transportation improvements or strategies that are made concurrent with the development.

Impact Fees.

Planning jurisdictions may impose impact fees on development activity as part of the financing of public facilities needed to serve new growth and development. This financing must provide a balance between impact fees and other sources of public funds and cannot rely solely on impact fees. Additionally, impact fees:

Impact fees may be collected and spent only for qualifying public facilities that are included within a capital facilities plan element of a comprehensive plan. "Public facilities," within the context of impact fee statutes, are the following capital facilities that are owned or operated by government entities:

County and city ordinances by which impact fees are imposed must conform with specific requirements. Among other obligations, these ordinances:

Covenants.

Covenants are formal agreements or promises between individuals. Covenants may be used to ensure the execution or prevention of an action. A covenant for title is a covenant that binds the person conveying the property to ensure the completeness, security, and continuance of the title transferred.

Land Divisions.

The process by which land divisions may occur is governed by state and local requirements. Local governments, the entities charged with receiving and determining land division proposals, must adopt associated ordinances and procedures in conformity with state requirements.

Numerous statutorily defined terms are applicable in land use division actions. Examples include the following:

Summary of Bill:

Impact Fee Payment Deferral Processes.

Counties, cities, and towns that collect impact fees must make available to applicants for building permits issued for a lot or unit created by a subdivision, short subdivision, site development permit, or condominium a process by which the applicant may either:

A seller and agents of a seller of a property subject to an impact fee deferral covenant must provide written disclosure of the covenant to a purchaser or prospective purchaser under existing sellers' disclosure requirements for real property transfers. The impact fee deferral processes must be in addition to any other fee deferral option offered by the local government and do not apply to dwellings on land owned or otherwise controlled by a party who contracts for the construction of a dwelling.

Growth Management Act - Delayed Start of Concurrency Timeline.

If the collection of impact fees is delayed through a deferral covenant or until final inspection or the issuance of a certificate of occupancy or equivalent certification, the six-year timeframe for completing improvements or strategies for complying with concurrency provisions of the GMA may not begin until after the county or city receives full payment of all impact fees due.

Appropriation: None.

Fiscal Note: Requested on February 7, 2011.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.