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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
House Engrossed
Overview
Revises development fee requirements for municipalities.
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, or multifamily residential, developer to elect to pay development fees at the time the construction permit is issued or to defer payment to when the certificate of occupancy is issued. (Sec. 1)
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 developer to pay development fees earlier than the time elected by the developer. (Sec. 1)
4. Prohibits a municipality from distinguishing between residential developments on the basis of the size of the residential dwelling unit or number of bedrooms in determining the amount of the development fee. (Sec. 1)
5. Restates that a new development fee or an increased portion of a modified development fee cannot be assessed against a residential, commercial, industrial or multifamily development for 24 months after the effective date of the development fee ordinance that imposes a new or increased development fee if no subsequent changes are made to the approved site plan that increases the number of service units. (Sec. 1)
6. Includes a stipulation authorizing a municipality to assess development fees for water and wastewater necessary public services on the development of an accessory dwelling unit. (Sec. 1)
7. Provides for calculating the proportionate share of the development fee for water and wastewater. (Sec. 1)
8. Defines accessory dwelling unit. (Sec. 1)
9. Modifies the definition of service area. (Sec. 1)
10. Prohibits a municipality from increasing any water or wastewater rate or rate component, fee or services charge unless the water or wastewater rate, rate component, fee or services charge assessed to fund new infrastructure or capital improvements complies with statutory requirements relating to assessing development fees for water and wastewater. (Sec. 2)
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14. Initials PB HB 2946
15. 2/16/2026 Page 0 House Engrossed
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