BILL REQ. #:  H-0499.1 

Read first time 01/17/11.   Referred to Committee on Local Government.

     AN ACT Relating to establishing a moratorium on the imposition of impact fees; amending RCW 82.02.050 and 39.92.030; adding a new section to chapter 82.02 RCW; creating a new section; and providing expiration dates.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that Washington's building and construction trades along with their linked suppliers of goods and services including but not limited to various sectors in manufacturing; wholesale and retail trade; professional, scientific, and technical services; agriculture and forestry; and information services have been disproportionately affected during the current economic downturn. The construction industry alone has suffered nearly sixty thousand job losses, which is nearly thirty percent of its workforce, in the last two years with the most severe losses focused in the residential sector.
     (2) Building new homes and reinvigorating the housing market will create a positive ripple of economic activity throughout the entire state. The construction industry has the potential to generate billions of dollars in our state, tens of thousands of jobs, and much needed taxable revenue for the state, counties, and local governments. The industry employs a wide spectrum of workers ranging from entry level to professionals and is a broad-based source of family wage jobs. The construction industry plays an integral role in the green economy, representing over forty percent of the green jobs in 2008.
     (3) The legislature finds that impact fees and their associated carrying costs can easily add tens of thousands of dollars to the cost of a new home. These fees are in addition to the many permitting fees, utility fees, property taxes, and real estate excise taxes paid by the property owners. Impact fees artificially inflate the cost of a new home beyond the actual value of the home.
     (4) The legislature recognizes the great degree to which the state of Washington and its local governments depend on the revenues and jobs generated from the construction and sale of new homes and intends to help jumpstart the state economy. By suspending these fees, builders will be more likely to obtain financing in these tight financial markets to cover the actual cost to build enabling them to reemploy thousands of laid-off workers and break even in the current real estate market.

Sec. 2   RCW 82.02.050 and 1994 c 257 s 24 are each amended to read as follows:
     (1) It is the intent of the legislature:
     (a) To ensure that adequate facilities are available to serve new growth and development;
     (b) To promote orderly growth and development by establishing standards by which counties, cities, and towns may require, by ordinance, that new growth and development pay a proportionate share of the cost of new facilities needed to serve new growth and development; and
     (c) To ensure that impact fees are imposed through established procedures and criteria so that specific developments do not pay arbitrary fees or duplicative fees for the same impact.
     (2) Except as provided in section 4 of this act, counties, cities, and towns that are required or choose to plan under RCW 36.70A.040 are authorized to impose impact fees on development activity as part of the financing for public facilities, provided that the financing for system improvements to serve new development must provide for a balance between impact fees and other sources of public funds and cannot rely solely on impact fees.
     (3) The impact fees:
     (a) ((Shall)) Must only be imposed for system improvements that are reasonably related to the new development;
     (b) ((Shall)) May not exceed a proportionate share of the costs of system improvements that are reasonably related to the new development; and
     (c) ((Shall)) Must be used for system improvements that will reasonably benefit the new development.
     (4)(a) Impact fees may be collected and spent only for the public facilities defined in RCW 82.02.090 which are addressed by a capital facilities plan element of a comprehensive land use plan adopted pursuant to the provisions of RCW 36.70A.070 or the provisions for comprehensive plan adoption contained in chapter 36.70, 35.63, or 35A.63 RCW. After the date a county, city, or town is required to adopt its development regulations under chapter 36.70A RCW, continued authorization to collect and expend impact fees ((shall be)) is contingent on the county, city, or town adopting or revising a comprehensive plan in compliance with RCW 36.70A.070, and on the capital facilities plan identifying:
     (((a))) (i) Deficiencies in public facilities serving existing development and the means by which existing deficiencies will be eliminated within a reasonable period of time;
     (((b))) (ii) Additional demands placed on existing public facilities by new development; and
     (((c))) (iii) Additional public facility improvements required to serve new development.
     (b) If the capital facilities plan of the county, city, or town is complete other than for the inclusion of those elements which are the responsibility of a special district, the county, city, or town may impose impact fees to address those public facility needs for which the county, city, or town is responsible.

Sec. 3   RCW 39.92.030 and 1988 c 179 s 3 are each amended to read as follows:
     Local governments may develop and adopt programs for the purpose of jointly funding, from public and private sources, transportation improvements necessitated in whole or in part by economic development and growth within their respective jurisdictions. Local governments ((shall)) must adopt the programs by ordinance after notice and public hearing. Each program ((shall)) must contain the elements described in this section.
     (1) The program ((shall)) must identify the geographic boundaries of the entire area or areas generally benefited by the proposed off-site transportation improvements and within which transportation impact fees will be imposed under this chapter.
     (2) The program ((shall)) must be based on an adopted comprehensive, long-term transportation plan identifying the proposed off-site transportation improvements reasonable and necessary to meet the future growth needs of the designated plan area and intended to be covered by this joint funding program, including acquisition of right-of-way, construction and reconstruction of all major and minor arterials and intersection improvements, and identifying design standards, levels of service, capacities, and costs applicable to the program. The program ((shall)) must also indicate how the transportation plan is coordinated with applicable transportation plans for the region and for adjacent jurisdictions. The program ((shall)) must also indicate how public transportation and ride-sharing improvements and services will be used to reduce off-site transportation impacts from development.
     (3) The program ((shall)) must include at least a six-year capital funding program, updated annually, identifying the specific public sources and amounts of revenue necessary to pay for that portion of the cost of all off-site transportation improvements contained in the transportation plan that will not foreseeably be funded by transportation impact fees. The program ((shall)) must include a proposed schedule for construction and expenditures of funds. The funding plan ((shall)) must consider the additional local tax revenue estimated to be generated by new development within the plan area if all or a portion of the additional revenue is proposed to be earmarked as future appropriations for such off-site transportation improvements.
     (4) Except as provided in section 4 of this act, the program ((shall)) must authorize transportation impact fees to be imposed on new development within the plan area for the purpose of providing a portion of the funding for reasonable and necessary off-site transportation improvements to solve the cumulative impacts of planned growth and development in the plan area. Off-site transportation impacts ((shall)) must be measured as a pro rata share of the capacity of the off-site transportation improvements being funded under the program. The fees ((shall)) must not exceed the amount that the local government can demonstrate is reasonably necessary as a direct result of the proposed development.
     (5) The program ((shall)) must provide that the funds collected as a result of a particular new development ((shall)) must be used in substantial part to pay for improvements mitigating the impacts of the development or be refunded to the property owners of record. Fees paid toward more than one transportation improvement may be pooled and expended on any one of the improvements mitigating the impact of the development. The funds ((shall)) must be expended in all cases within six years of collection by the local government or the unexpended funds ((shall)) must be refunded.
     (6) The program ((shall)) must 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 RCW 39.92.040. In calculating the amount of the fee, local government ((shall)) must consider and give credit for the developer's participation in public transportation and ride-sharing improvements and services.
     (7) The administrative element of the program ((shall)) must include: An opportunity for administrative appeal by the developer and hearing before an independent examiner of the amount of the transportation impact fee imposed; establishment of a designated account for the public and private funds appropriated or collected for the transportation improvements identified in the plan; methods to enforce collection of the public and private funds identified in the program; designation of the administrative departments or other entities responsible for administering the program, including determination of fee amounts, transportation planning, and construction; and provisions for future amendment of the program including the addition of other off-site transportation improvements. The program ((shall)) may not be amended in a manner to relieve local government of any contractual obligations made to prior developers.
     (8) The program ((shall)) must provide that private transportation impact fees shall not be collected for any off-site transportation improvement that is incapable of being reasonably carried out because of lack of public funds or other foreseeable impediment.
     (9) The program ((shall)) must provide that no transportation impact fee may be imposed on a development by local government pursuant to this program when mitigation of the same off-site transportation impacts for the development is being required by any government agency pursuant to any other local, state, or federal law.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.02 RCW to read as follows:
     (1) As of July 1, 2011, counties, cities, and transportation benefit districts created under chapter 36.73 RCW may not impose impact fees under RCW 82.02.050(2) or 39.92.030.
     (2) This section does not limit the authority of a county, city, or transportation benefit district to impose impact fees upon development activities that were approved by the applicable county or city prior to July 1, 2011.
     (3) This section expires June 30, 2013.

NEW SECTION.  Sec. 5   Sections 1 through 3 of this act expire June 30, 2013.