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Development Impact Fee Act 1 CHAPTER 711 DEVELOPMENT IMPACT FEES 36-71-1. Short title; legislative findings and intent. This chapter shall be known and may be cited as the “Georgia Development Impact Fee Act.” The General Assembly finds that an equitable program for planning and fi- nancing public facilities needed to serve new growth and development is necessary in order to promote and accommodate orderly growth and devel- opment and to protect the public health, safety, and general welfare of the citizens of the State of Georgia. It is the intent of this chapter to: Ensure that adequate public facilities are available to serve new growth and development; Promote orderly growth and development by establishing uniform standards by which municipalities and counties may require that new growth and development pay a proportionate share of the cost of new public facilities needed to serve new growth and development; Establish minimum standards for the adoption of development impact fee ordinances by municipalities and counties; and Ensure that new growth and development is required to pay no more than its proportionate share of the cost of public facilities needed to serve new growth and development and to prevent duplicate and ad hoc development exactions. 36-71-2. Definitions. As used in this chapter, the term: “Capital improvement” means an improvement with a useful life of ten years or more, by new construction or other action, which increases the service capacity of a public facility. “Capital improvements element” means a component of a comprehen- sive plan adopted pursuant to Chapter 70 of this title which sets out projected needs for system improvements during a planning horizon established in the comprehensive plan, a schedule of capital improve- ments that will meet the anticipated need for system improvements, and a description of anticipated funding sources for each required im- provement. “Comprehensive plan” has the same meaning as provided for in Chap- ter 70 of this title. 1 Chapter 71 of Title 36 of the Official Code of Georgia, as amended through 2007. ---PAGE BREAK--- Development Impact Fee Act 2 “Developer” means any person or legal entity undertaking develop- ment. “Development” means any construction or expansion of a building, structure, or use, any change in use of a building or structure, or any change in the use of land, any of which creates additional demand and need for public facilities. “Development approval” means any written authorization from a mu- nicipality or county which authorizes the commencement of construc- tion. “Development exaction” means a requirement attached to a develop- ment approval or other municipal or county action approving or au- thorizing a particular development project, including but not limited to a rezoning, which requirement compels the payment, dedication, or contribution of goods, services, land, or money as a condition of ap- proval. “Development impact fee” means a payment of money imposed upon development as a condition of development approval to pay for a pro- portionate share of the cost of system improvements needed to serve new growth and development. “Encumber” means to legally obligate by contract or otherwise commit to use by appropriation or other official act of a municipality or county. (10) “Feepayor” means that person who pays a development impact fee or his successor in interest where the right or entitlement to any refund of previously paid development impact fees which is required by this chapter has been expressly transferred or assigned to the successor in interest. In the absence of an express transfer or assignment of the right or entitlement to any refund of previously paid development im- pact fees, the right or entitlement shall be deemed “not to run with the land.” (11) “Governmental entity” means any water authority, water and sewer authority, or water or waste-water authority created by or pursuant to an Act of the General Assembly of Georgia. (12) “Level of service” means a measure of the relationship between service capacity and service demand for public facilities in terms of demand to capacity ratios, the comfort and convenience of use or service of public facilities, or both. (13) “Present value” means the current value of past, present, or future payments, contributions or dedications of goods, services, materials, construction, or money. (14) “Project” means a particular development on an identified parcel of land. (15) “Project improvements” means site improvements and facilities that are planned and designed to provide service for a particular develop- ment project and that are necessary for the use and convenience of ---PAGE BREAK--- Development Impact Fee Act 3 the occupants or users of the project and are not system improve- ments. The character of the improvement shall control a determina- tion of whether an improvement is a project improvement or system improvement and the physical location of the improvement on site or off site shall not be considered determinative of whether an improve- ment is a project improvement or a system improvement. If an im- provement or facility provides or will provide more than incidental ser- vice or facilities capacity to persons other than users or occupants of a particular project, the improvement or facility is a system improve- ment and shall not be considered a project improvement. No im- provement or facility included in a plan for public facilities approved by the governing body of the municipality or county shall be consid- ered a project improvement. (16) “Proportionate share” means that portion of the cost of system im- provements which is reasonably related to the service demands and needs of the project within the defined service area. (17) “Public facilities” means: Water supply production, treatment, and distribution facilities; Waste-water collection, treatment, and disposal facilities; Roads, streets, and bridges, including rights of way, traffic sig- nals, landscaping, and any local components of state or federal highways; Storm-water collection, retention, detention, treatment, and dis- posal facilities, flood control facilities, and bank and shore pro- tection and enhancement improvements; Parks, open space, and recreation areas and related facilities; Public safety facilities, including police, fire, emergency medical, and rescue facilities; and Libraries and related facilities. (18) “Service area” means a geographic area defined by a municipality, county, or intergovernmental agreement in which a defined set of pub- lic facilities provides service to development within the area. Service areas shall be designated on the basis of sound planning or engineer- ing principles or both. (19) “System improvement costs” means costs incurred to provide addi- tional public facilities capacity needed to serve new growth and devel- opment for planning, design and construction, land acquisition, land improvement, design and engineering related thereto, including the cost of constructing or reconstructing system improvements or facility expansions, including but not limited to the construction contract price, surveying and engineering fees, related land acquisition costs (including land purchases, court awards and costs, attorneys’ fees, and expert witness fees), and expenses incurred for qualified staff or any qualified engineer, planner, architect, landscape architect, or fi- nancial consultant for preparing or updating the capital improvement ---PAGE BREAK--- Development Impact Fee Act 4 element, and administrative costs, provided that such administrative costs shall not exceed 3 percent of the total amount of the costs. Pro- jected interest charges and other finance costs may be included if the impact fees are to be used for the payment of principal and interest on bonds, notes, or other financial obligations issued by or on behalf of the municipality or county to finance the capital improvements ele- ment but such costs do not include routine and periodic maintenance expenditures, personnel training, and other operating costs. (20) “System improvements” means capital improvements that are public facilities and are designed to provide service to the community at large, in contrast to “project improvements.” 36-71-3. Imposition of development impact fees. Municipalities and counties which have adopted a comprehensive plan con- taining a capital improvements element are authorized to impose by ordi- nance development impact fees as a condition of development approval on all development pursuant to and in accordance with the provisions of this chapter. After the transition period provided in this chapter, development exactions for other than project improvements shall be imposed by munici- palities and counties only by way of development impact fees imposed pur- suant to and in accordance with the provisions of this chapter. Notwithstanding any other provision of this chapter, that portion of a pro- ject for which a valid building permit has been issued prior to the effective date of a municipal or county development impact fee ordinance shall not be subject to development impact fees so long as the building permit re- mains valid and construction is commenced and is pursued according to the terms of the permit. Payment of a development impact fee shall be deemed to be in compliance with any municipal or county requirement for the provision of adequate public facilities or services in regard to the system improvements for which the development impact fee was paid. 36-71-4. Calculation of fees. A development impact fee shall not exceed a proportionate share of the cost of system improvements, as defined in this chapter. Development impact fees shall be calculated and imposed on the basis of service areas. Development impact fees shall be calculated on the basis of levels of service for public facilities that are adopted in the municipal or county comprehen- sive plan that are applicable to existing development as well as the new growth and development. A municipal or county development impact fee ordinance shall provide that development impact fees shall be collected not earlier in the development process than the issuance of a building permit authorizing construction of a building or structure; provided, however, that development impact fees for ---PAGE BREAK--- Development Impact Fee Act 5 public facilities described in subparagraph of paragraph (17) of Code Section 36-71-2 may be collected at the time of a development approval that authorizes site construction or improvement which requires public facilities described in subparagraph of paragraph (17) of Code Section 36-71-2. A municipal or county development impact fee ordinance shall include a schedule of impact fees specifying the development impact fee for various land uses per unit of development on a service area by service area basis. The ordinance shall provide that a developer shall have the right to elect to pay a project’s proportionate share of system improvement costs by pay- ment of development impact fees according to the fee schedule as full and complete payment of the development project’s proportionate share of sys- tem improvement costs. A municipal or county development impact fee ordinance shall be adopted in accordance with the procedural requirements of Code Section 36-71-6. A municipal or county development impact fee ordinance shall include a provision permitting individual assessments of development impact fees at the option of applicants for development approval under guidelines estab- lished in the ordinance. A municipal or county development impact fee ordinance shall provide for a process whereby a developer may receive a certification of the development impact fee schedule or individual assessment for a particular project, which shall establish the development impact fee for a period of 180 days from the date of certification. A municipal or county development impact fee ordinance shall include a provision for credits in accordance with the requirements of Code Section 36-71-7. A municipal or county development impact fee ordinance shall include a provision prohibiting the expenditure of development impact fees except in accordance with the requirements of Code Section 36-71-8. A municipal or county development impact fee ordinance may provide for the imposition of a development impact fee for system improvement costs previously incurred by a municipality or county to the extent that new growth and development will be served by the previously constructed sys- tem improvements. A municipal or county development impact fee ordinance may exempt all or part of particular development projects from development impact fees if: Such projects are determined to create extraordinary economic devel- opment and employment growth or affordable housing; The public policy which supports the exemption is contained in the municipality’s or county’s comprehensive plan; and The exempt development project’s proportionate share of the system improvement is funded through a revenue source other than develop- ment impact fees. ---PAGE BREAK--- Development Impact Fee Act 6 A municipal or county development impact fee ordinance shall provide that development impact fees shall only be spent for the category of system im- provements for which the fees were collected and in the service area in which the project for which the fees were paid is located. A municipal or county development impact fee ordinance shall provide that, in the event a building permit is abandoned, credit shall be given for the present value of the development impact fee against future development impact fees for the same parcel of land. A municipal or county development impact fee ordinance shall provide for a refund of development impact fees in accordance with the requirements of Code Section 36-71-9. A municipal or county development impact fee ordinance shall provide for appeals from administrative determinations regarding development impact fees in accordance with the requirements of Code Section 36-71-10. Development impact fees shall be based on actual system improvement costs or reasonable estimates of such costs. Development impact fees shall be calculated on a basis which is net of cred- its for the present value of revenues that will be generated by new growth and development based on historical funding patterns and that are antici- pated to be available to pay for system improvements, including taxes, as- sessments, user fees, and intergovernmental transfers. 36-71-5. Development Impact Fee Advisory Committee. Prior to the adoption of a development impact fee ordinance, a municipality or county adopting an impact fee program shall establish a Development Impact Fee Advisory Committee. Such committee shall be composed of not less than five nor more than ten members appointed by the governing authority of the municipality or county and at least 50 percent of the membership shall be representatives from the development, building, or real estate industries. An existing plan- ning commission or other existing committee that meets these requirements may serve as the Development Impact Fee Advisory Committee. The Development Impact Fee Advisory Committee shall serve in an advisory capacity to assist and advise the governing body of the municipality or county with regard to the adoption of a development impact fee ordinance. In that the committee is advisory, no action of the committee shall be con- sidered a necessary prerequisite for municipal or county action in regard to adoption of an ordinance. 36-71-6. Hearings on proposed fee ordinance. Prior to the adoption of an ordinance imposing a development impact fee pursuant to this chapter, the governing body of a municipality or county shall cause two duly noticed public hearings to be held in regard to the proposed ordinance. The second hearing shall be held at least two weeks af- ter the first hearing. ---PAGE BREAK--- Development Impact Fee Act 7 36-71-7. Credit for present value of construction accepted by municipality or county from developer. In the calculation of development impact fees for a particular project, credit shall be given for the present value of any construction of improvements or contribution or dedication of land or money required or accepted by a mu- nicipality or county from a developer or his predecessor in title or interest for system improvements of the category for which the development impact fee is being collected. Credits shall not be given for project improvements. In the event that a developer enters into an agreement with a county or municipality to construct, fund, or contribute system improvements such that the amount of the credit created by such construction, funding, or con- tribution is in excess of the development impact fees which would otherwise have been paid for the development project, the developer shall be reim- bursed for such excess construction, funding, or contribution from devel- opment impact fees paid by other development located in the service area which is benefited by such improvements. 36-71-8. Deposit and expenditure of fees; annual report. An ordinance imposing development impact fees shall provide that all de- velopment impact fee funds shall be maintained in one or more interest- bearing accounts. Accounting records shall be maintained for each category of system improvements and the service area in which the fees are col- lected. Interest earned on development impact fees shall be considered funds of the account on which it is earned and shall be subject to all re- strictions placed on the use of development impact fees under the provi- sions of this chapter. The accounting records shall include the following in- formation: The accounting records to be maintained shall specify the address of each property which paid development impact fees, the amount of fees paid in each category in which fees were collected, and the date that such fees were paid; and As to any exemptions granted, the accounting records to be main- tained shall specify the address of each property for which exemptions were granted, the reason for which such exemption was granted, and the revenue source from which the exempt development’s proportion- ate share of the system improvements is to be paid. Expenditures of development impact fees shall be made only for the cate- gory of system improvements and in the service area for which the devel- opment impact fee was imposed as shown by the capital improvements ele- ment and as authorized by this chapter. Development impact fees shall not be used to pay for any purpose that does not involve system improvements that create additional service available to serve new growth and develop- ment. Development impact fees, collected for roads, streets, bridges, including rights of way, traffic signals, landscaping, or any local components of state ---PAGE BREAK--- Development Impact Fee Act 8 or federal highways, shall be expended to fund, in whole or in part, system improvement projects: That have been identified in the capital improvements element of the municipality´s comprehensive development plan; and That are chosen by a municipality after consideration of the fol- lowing factors: The proximity of the proposed system improvements to de- velopments within the service area which have generated development impact fees collected for roads, streets, bridges, including rights of way, traffic signals, landscap- ing, or any local components of state or federal highways; and (ii) The proposed system improvements which will have the greatest effect on level of service for roads, streets, bridges, including rights of way, traffic signals, landscaping, or any local components of state or federal highways impacted by the developments which have paid such impact fees. Where the expenditure of development impact fees paid by a develop- ment is allocated to system improvements in the general area o f such de- velopment, through an agreement between the municipality and the devel- oper and such agreement is approved by the governing body, the analysis required by subparagraph of paragraph of this subsection shall not be applicable. The provisions of this subsection shall only apply to municipalities that have more than 140,000 parcels of land. As part of its annual audit process, a municipality or county shall pre- pare an annual report describing the amount of any development impact fees collected, encumbered, and used during the preceding year by category of public facility and service area. In municipalities that have more than 140,000 parcels o f land, the por- tion of the annual report relating to development impact fees collected for roads, streets, bridges, including rights of way, traffic signals, landscaping, or any local components of state or federal highways shall be referred to such municipality’s most recently constituted Development Impact Fee Ad- visory Committee which shall report to the governing body of such munici- pality any perceived inequities in the expenditure of impact fees collected for roads, streets, bridges, including rights of way, traffic signals, landscap- ing, or any local components of state or federal highways." 36-71-9. Refunds. Any municipality or county which adopts a development impact fee ordi- nance shall provide for refunds in accordance with the following provisions: Upon the request of an owner of property on which a development im- pact fee has been paid, a municipality or county shall refund the de- velopment impact fee if capacity is available and service is denied or if ---PAGE BREAK--- Development Impact Fee Act 9 the municipality or county, after collecting the fee when service is not available, has failed to encumber the development impact fee or com- mence construction within six years after the date that the fee was collected. In determining whether development impact fees have been encumbered, development impact fees shall be considered encum- bered on a first-in, first-out (FIFO) basis; When the right to a refund exists due to a failure to encumber devel- opment impact fees, the municipality or county shall provide written notice of entitlement to a refund to the feepayor who paid the devel- opment impact fee at the address shown on the application for devel- opment approval or to a successor in interest who has given notice to the municipality or county of a transfer or assignment of the right or entitlement to a refund and who has provided a mailing address. Such notice shall also be published within 30 days after the expiration of the six-year period after the date that the development impact fees were collected and shall contain the heading “Notice of Entitlement to Development Impact Fee Refund”; An application for a refund shall be made within one year of the time such refund becomes payable under paragraph or of this Code section or within one year of publication of the notice of entitlement to a refund under this Code section, whichever is later; A refund shall include a refund of a pro rata share of interest actually earned on the unused or excess development impact fee collected; All refunds shall be made to the feepayor within 60 days after it is de- termined by a municipality or county that a sufficient proof of claim for a refund has been made; and The feepayor shall have standing to sue for a refund under the provi- sions of this chapter if there has been a timely application for a refund and the refund has been denied or has not been made within one year of submission of the application for refund to the collecting municipal- ity or county. 36-71-10. Appeal of fee determination; arbitration. A municipality or county which adopts a development impact fee ordinance shall provide for administrative appeals to the governing body or such other body as designated in the ordinance of a determination of the development impact fees for a particular project. A developer may pay a development impact fee under protest in order to ob- tain a development approval or building permit, as the case may be. A de- veloper making such payment shall not be estopped from exercising the right of appeal provided by this chapter, nor shall such developer be es- topped from receiving a refund of any amount deemed to have been illegally collected. A municipality or county development impact fee ordinance may provide for the resolution of disputes over the development impact fee by binding arbi- tration through the American Arbitration Association or otherwise. ---PAGE BREAK--- Development Impact Fee Act 10 36-71-11. Intergovernmental agreements. Municipalities and counties which are jointly affected by development are authorized to enter into intergovernmental agreements with each other, with authorities, or with the state for the purpose of developing joint plans for capital improvements or for the purpose of agreeing to collect and ex- pend development impact fees for system improvements, or both, provided that such agreement complies with any applicable state laws. 36-71-12. Existing municipal and county laws to be brought into conformance with chapter. This chapter shall not repeal any existing laws authorizing a municipality or county to impose fees or require contributions or property dedications for capital improvements; provided, however, that all local ordinances or reso- lutions imposing development exactions for system improvements on April 4, 1990, shall be brought into conformance with this chapter no later than November 30, 1992. 36-71-13. Construction of reasonable project improvements; private agreements be- tween property owners or developers and municipalities and counties; hook- up or connection fees for water or sewer service; applicability of chapter to water authorities. Nothing in this chapter shall prevent a municipality or county from requir- ing a developer to construct reasonable project improvements in conjunc- tion with a development project. Nothing in this chapter shall be construed to prevent or prohibit private agreements between property owners or developers and municipalities, counties, or other governmental entities in regard to the construction or in- stallation of system improvements and providing for credits or reimburse- ments for system improvement costs incurred by a developer including in- terproject transfers of credits or providing for reimbursement for project improvement costs which are used or shared by more than one develop- ment project. Nothing in this chapter shall limit a municipality, county, or other govern- mental entity which provides water or sewer service from collecting a pro- portionate share of the capital cost of water or sewer facilities by way of hook-up or connection fees as a condition of water or sewer service to new or existing users, provided that the development impact fee ordinance of a municipality or county or other governmental entity that collects develop- ment impact fees pursuant to this chapter shall include a provision for credit for such hook-up or connection fees collected by the municipality or county to the extent that such hook-up or connection fee is collected to pay for system improvements. Imposition of such hook-up or connection fees by any governmental entity to pay for system improvements either existing or new shall be consistent with the capital improvement element of the com- prehensive plan and shall be subject to the approval of each county, mu- nicipality, or combination thereof which appoints the governing body of such entity. The adoption, imposition, collection, and expenditure of such ---PAGE BREAK--- Development Impact Fee Act 11 fees for system improvements by any governmental entity shall be subject to the same procedures applicable to the adoption, imposition, collection, and expenditure of development impact fees by a county. Nothing in this chapter shall apply to a water authority created by Act of the General Assembly, as long as such authority is not established as a po- litical subdivision of the State of Georgia but instead acts subject to the ap- proval of a county governing authority.