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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: RED DPA 4-1-2-0 |
HB 2946: municipalities; counties; development fees
Sponsor: Representative Powell, LD 14
Caucus & COW
Overview
Revises development fee requirements for municipalities and counties.
History
Statute allows local governments to assess development fees to offset costs associated with providing necessary public services to new developers.
Developers of residential dwelling units are required to pay development fees when construction permits are issued or later, if specified in a development agreement to allow deferral. The deferred fees shall be paid no later than 15 days after the issuance certificate of occupancy. The development agreement shall provide for the value of any deferred fees to be supported by appropriate securities, including a surety bond, letter of credit or cash bond.
Statute prohibits local governments from assessing new or increased fees for 24 months after a project receives final approval or its first building permit, if the site plan remains unchanged. Developers are prohibited from extending the 24-month fee-lock through renewals or amendments of their site plans or subdivision plats. Additionally, property owners are only eligible for a refund on excess development fees if the actual infrastructure costs are at least 10% lower than the original forecast. If the cost difference is less than 10%, the local government is not required to issue a refund (A.R.S. §§ 9-463.05, 11-1102).
Development agreement is a voluntary, legally binding contract between a municipality or county and a landowner or developer that establishes the rules, regulations and financial commitments for a project over a specified period (A.R.S. § 9-500.05).
Provisions
Municipal Development Fees
1. Revises the requirements for development fee payments by allowing a residential developer to elect to pay development fees at the time the construction permit is issued or to defer payment to not more than 15 days after the certificate of occupancy is issued.
2. Requires municipalities to grant fee deferrals if the developer secures the amount with a surety bond, letter of credit or cash bond. (Sec. 1)
3. Prohibits municipalities from requiring:
a. a development agreement as a condition of allowing deferred payments; and
b. a develop to pay development fees earlier than the time elected by the developer. (Sec. 1)
4. Stipulates, for municipalities that require as a condition of development approval the set aside of active or passive open space, the issuance of a credit towards any fees to fund any park facilities or facility expansion. (Sec. 1)
5. Requires municipalities to provide for reimbursement from the development fees paid from all development that will use those facilities or facility expansions of the actual costs of the construction or improvement of contributions to or dedication of the public facilities required as a condition of development approval. (Sec. 1)
6. Stipulates a municipality that imposes a construction contracting excise tax rate, the full amount must be treated as a contribution to the capital costs of necessary public services provide to development for which the fees are assessed. (Sec. 1)
7. Prohibits the municipality from distinguishing between residential developments based on the size of the residential dwelling unit or number of bedrooms. (Sec.1)
8. Establishes limits on the increases in current development fees including:
a. for increases less than 25%; implemented in two equal annual installments;
b. for increases between 25% and 50%; implemented in four equal annual installments;
c. prohibits increases from exceeding 50% of the current fee; and
d. fees can only be increased once every four years; and
e. prohibits fees from being applied retroactively. (Sec. 1)
9. Outlines conditions for which a development fee rate may be increased beyond the specified limits. (Sec. 1)
10. Revises the types of developments to which a new development fee or an increased portion of modified development fee cannot be assessed against. (Sec. 1)
11. Removes the restriction preventing developers from extending their 24-month fee period through site plan renewals or amendments. (Sec.1)
12. Removes the specification, for a current owner be permitted to receive a refund, that the difference between the actual and estimated cost of the development fee is greater than 10%. (Sec. 1)
13. Prohibits a municipality from assessing a development fee on the development of an accessory dwelling units. (Sec.1)
14. Modifies the definition of necessary public service and service area. (Sec. 1)
15. Includes a criterion for municipalities in increasing any water or wastewater rate or rate component, fee or service charge. (Sec. 2)
County Development Fees
16. Allows residential developers to pay development fees 15 days after the certificate of occupancy is issued. (Sec. 3)
17. Removes language relating to allowing residential developers to pay development fees at a time as specified in the development agreement. (Sec. 3)
18. Establishes limits on the increases in current development fees including:
a. for increases less than 25%; implemented in two equal annual installments;
b. for increases between 25% and 50%; implemented in four equal annual installments;
c. prohibits increases from exceeding 50% of the current fee; and
d. fees can only be increased once every four years; and
e. prohibits fees from being applied retroactively. (Sec. 3)
19. Removes the specification, for a current owner be permitted to receive a refund, that the difference between the actual and estimated cost of the development fee is greater than 10%. (Sec. 3)
20. Prohibits counties from assessing development fees on the development of an accessory dwelling units. (Sec. 3)
Miscellaneous
21. Defines accessory dwelling unit. (Sec.1, 3)
22. Technical and conforming changes. (Sec. 1, 3)
Amendments
Committee on Rural Economic Development
1. Adds that, for calculating the required offset to development fees, if a municipality imposes a construction contracting excise tax rate in excess of the percentage amount of the transaction privilege tax rate imposed on the majority of other transaction privilege tax classifications, the entire excess portion of the construction contracting excise tax must be treated as a contribution to the capital costs.
2. Deletes provisions relating to county development fees.
3. Modifies the definition of necessary public service.
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7. Initials PB HB 2946
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