093_HB1539ham001

 










                                     LRB093 08792 BDD 11801 a

 1                    AMENDMENT TO HOUSE BILL 1539

 2        AMENDMENT NO.     .  Amend House Bill 1539  by  replacing
 3    everything after the enacting clause with the following:

 4        "Section  1.  Short  title.  This Act may be cited as the
 5    Development Impact Fee Authorization  for  Local  Governments
 6    Act.

 7        Section  5.  Statement of purpose and intent. The General
 8    Assembly finds that the purpose of this Act is  to  establish
 9    the  criteria by which municipalities and counties, on behalf
10    of themselves or other units of local government  and  school
11    districts,   may   impose  development  impact  fees  on  all
12    developments.
13        It is the intent of the General Assembly to:
14             (1) Encourage economic growth by assuring  that  all
15        developments   bear   their   fair  share  of  the  costs
16        associated with providing necessary capital  improvements
17        to serve a development.
18             (2)   Preserve   the  right  of  municipalities  and
19        counties to adopt and implement  development  impact  fee
20        ordinances   that   adhere   to   and  meet  the  minimum
21        requirements set forth in this Act.
22             (3) Provide for a system of  due  process  by  which
 
                            -2-      LRB093 08792 BDD 11801 a
 1        parties  affected under this Act have fair and reasonable
 2        notice of, and an  opportunity  to  participate  in,  the
 3        adoption  of  development  impact  fee ordinances and the
 4        collection and use of development impact fees.
 5             (4) To  preserve  the  right  of  municipalities  to
 6        negotiate  annexation  agreements, by providing that this
 7        Act  does  not  affect  the  current  law  of  annexation
 8        agreements or any annexation agreements existing  on  the
 9        effective date of this Act.

10        Section 10. Definitions. In this Act:
11        "Adopted  capital  improvement program or budget" means a
12    document that sets out the need for public  facility  capital
13    improvements,  the  cost  of  the  improvements, and proposed
14    funding sources. A capital improvement program or budget must
15    cover at  least  a  3-year  period  and  be  adopted  by  the
16    governing  body  of  the  unit  of local government or school
17    district.
18        "Credits" means the present value of the contribution  of
19    money,  dedication  of  land,  debt  service  payment, or tax
20    revenue  generated  by  a  development  toward  the  cost  of
21    existing or planned capital improvements,  excluding  wetland
22    enhancement  or  mitigation  required  under local, State, or
23    federal law.
24        "Developer" means any corporation, organization,  person,
25    or other legal entity constructing or creating a development.
26        "Development"  means any change to improved or unimproved
27    real property or the use of any principal structure or  land,
28    including the division of land into parcels.
29        "Development  impact  fee" means the cash contribution or
30    land dedication  that  is  imposed  on  a  development  by  a
31    municipality  or  county  to  fund all or a portion of public
32    facilities capital  improvements  that  are  necessary  as  a
33    result  of  the  development.  Development  impact  fees  are
 
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 1    additional and supplemental to, and not a substitute for, any
 2    other requirements imposed by the municipality or county as a
 3    condition of development approval.
 4        "Discount  rate"  means  the  interest rate, expressed in
 5    terms of percentage per annum, that is used to adjust past or
 6    future financial or monetary payments to present value.
 7        "Encumbered"  means  subject  to  a  commitment  to   use
 8    collected   development  impact  fees  by  legal  obligation,
 9    appropriation, or other official action of a  unit  of  local
10    government or school district.
11        "Present  owner"  means the person or persons shown to be
12    in title to the real estate subject to a refund under Section
13    70 as reflected in the official records of the county kept by
14    the assessor as of the  previous  January  1,  prior  to  any
15    refund.
16        "Present value" means the current value of past, present,
17    or  future  payments  that are adjusted to a base period by a
18    discount rate.
19        "Proportionate share" means the share or portion of total
20    public facilities capital  improvement  costs  that  bears  a
21    rational nexus to development, minus: (i) any credits for the
22    construction   or   dedication  of  public  facility  capital
23    improvements, (ii) any credits for the dedication of land for
24    public facility  capital  improvements,  and  (iii)  past  or
25    future  payments  for  actual  or  estimated  public facility
26    capital improvement costs made or reasonably  anticipated  to
27    be  made  by a developer in the form of debt service payments
28    and taxes.
29        Credits  for  past  or  future  payments  toward  capital
30    improvement costs shall be adjusted to present value in order
31    to make fair comparisons of monetary amounts paid or received
32    at different times.
33        "Public facility" means any facility or  equipment  owned
34    or operated by a unit of local government or school district.
 
                            -4-      LRB093 08792 BDD 11801 a
 1        "Public   facilities  capital  improvement"  or  "capital
 2    improvement"  includes,  but   is   not   limited   to,   any
 3    construction, expansion, or enhancement of any publicly-owned
 4    facilities,    equipment,   land   acquisitions,   and   land
 5    improvements made necessary by the development.
 6        "Public facilities capital  improvement  costs"  include,
 7    but  are  not  limited  to,  the  actual or estimated capital
 8    improvement   costs   associated   with   the   construction,
 9    expansion, or enhancement of  any  publicly-owned  facilities
10    and   the   equipment   and  the  necessary  materials,  land
11    acquisition,  land  improvement,  design,  engineering,   and
12    professional costs related to the construction, expansion, or
13    enhancement.  The  costs  do not include routine and periodic
14    maintenance expenditures or other operating costs.
15        "Rational nexus" means a connection established between a
16    development  and  the  new  or  expanded  capital  facilities
17    required to accommodate the  development,  identification  of
18    the cost of those new or expanded capital facilities required
19    to  accommodate development, and appropriate apportionment of
20    that cost to development in relation to  benefits  reasonably
21    received. A development impact fee is not invalid because the
22    payment of the fee may result in some benefit to other owners
23    or developers.
24        "Service  area"  means  a geographic area delineated by a
25    unit of local  government  or  school  district  in  which  a
26    defined  set  of  capital improvements or a defined amount of
27    school lands, park  lands,  or  other  land  uses  provide  a
28    service to a development within the area.
29        "Service  standard"  means  the level of service delivery
30    associated with a public facility  for  which  a  development
31    impact fee shall be required.
32        "Unit  of  local  government"  means  all  units of local
33    government as defined in Article VII, Section 1 of the  State
34    Constitution.
 
                            -5-      LRB093 08792 BDD 11801 a
 1        Section  15.  Authorization  to impose development impact
 2    fees.
 3        (a) Municipalities and counties are authorized  to  adopt
 4    development impact fee ordinances and to impose, collect, and
 5    expend  development  impact  fees  for  all public facilities
 6    capital improvements. After the effective date of  this  Act,
 7    development  impact fees may be imposed by a municipality and
 8    county only under the requirements and limitations set  forth
 9    in this Act.
10        (b) Development impact fees may be imposed only for those
11    projects  specifically  in  or  covered  by  a  unit of local
12    government's   or   school   district's   approved    capital
13    improvements  program  or  budget. The program or budget must
14    specify the service standards for each facility that is to be
15    the subject of a development impact fee, and these  standards
16    shall apply equally to developments.
17        (c)  Development  impact  fees  shall  be  assessed  in a
18    non-discriminatory manner.
19        (d) In order to preserve the right of  municipalities  to
20    negotiate  agreements,  this  Act does not affect the current
21    law  of  annexation  agreements  or  affect  any   annexation
22    agreements existing on the effective date of this Act.
23        (e)   Development   impact   fees   are   additional  and
24    supplemental  to,  and  not  a  substitute  for,  any   other
25    requirements  imposed  by  the  municipality  or  county as a
26    condition of development approval.

27        Section 20. Ordinance requirements.
28        (a) A municipality or county  that  desires  to  adopt  a
29    development impact fee ordinance shall conduct or cause to be
30    conducted  a  needs  assessment  for  the  public facility or
31    project for  which  the  development  impact  fee  is  to  be
32    imposed. The needs assessment must distinguish existing needs
33    from  the  projected  needs  of  development and must contain
 
                            -6-      LRB093 08792 BDD 11801 a
 1    components  that  describe  (i)  an  inventory  of   existing
 2    facilities, (ii) the identification of service standards upon
 3    which  the development impact fee is to be based, and (iii) a
 4    projection of community needs.  The  municipality  or  county
 5    shall use the needs assessment in formulating its development
 6    impact fee program.
 7        (b)  In  adopting  a  development impact fee ordinance, a
 8    municipality or county shall adhere to all of the following:
 9             (1)  The  creation,  assessment,   collection,   and
10        expenditure of any development impact fees under this Act
11        must bear a rational nexus to the burden imposed upon the
12        unit  of  local  government or school district to provide
13        additional   capital   improvements   to   support    the
14        development.
15             (2)  The  development  impact  fees  imposed  upon a
16        development may not exceed the proportionate share of the
17        costs incurred or to be incurred by  the  unit  of  local
18        government   or  school  district  in  accommodating  the
19        development. In calculating the proportionate share,  the
20        unit  of  local  government or school district shall take
21        the actual or estimated cost of the  public  facility  or
22        capital  improvement  project that bears a rational nexus
23        to a development and subtract from that amount:  (i)  any
24        credits  for  the  construction  or  dedication of public
25        facility capital improvements, (ii) any credits  for  the
26        dedication   of   land   for   public   facility  capital
27        improvements, and  (iii)  past  or  future  payments  for
28        actual  or  estimated public facility capital improvement
29        costs made or reasonably anticipated  to  be  made  by  a
30        developer in the form of debt service payments and taxes.
31             (3)  The  amount  of  each  development  impact  fee
32        imposed under this Act must be based upon actual costs or
33        reasonable   estimates  of  costs  for  the  creation  or
34        expansion of capital improvements to be incurred  by  the
 
                            -7-      LRB093 08792 BDD 11801 a
 1        unit  of  local government or school district as a result
 2        of the development.
 3        (c) Municipalities and counties requiring the payment  of
 4    development   impact   fees   shall   incorporate  these  fee
 5    requirements within their broader system of  development  and
 6    land  use  regulations  in  such  a manner that developments,
 7    either collectively or individually, are not required to  pay
 8    or  otherwise  contribute  more than a proportionate share of
 9    capital improvement costs resulting from the development.
10        (d) Municipalities and counties shall develop a method of
11    calculating development impact fees that is  consistent  with
12    the requirements of this Act.
13        (e)  All documents prepared by a unit of local government
14    or school district under this Section shall be on  file  with
15    the  unit  of  local  government  or  school  district and be
16    available for public inspection.

17        Section 25. Use of development impact fees.
18        (a) Development impact fees may be imposed  and  expended
19    for, but not limited to, the following purposes:
20             (1)  The  construction  of public facilities capital
21        improvements.
22             (2)  Upgrading,  updating,  or  expanding   existing
23        capital improvements to serve developments.
24             (3)  The  acquisition  of  lands for schools, parks,
25        libraries,  roads,  capital  facility  sites,  and  other
26        necessities caused by developments.
27             (4) General improvements  to  lands  that  are  made
28        necessary by developments.
29             (5)  Wastewater  treatment  facilities  and sanitary
30        sewer collection systems.
31             (6) Potable water treatment and  storage  facilities
32        and distribution systems.
33             (7) Stormwater management facilities and systems.
 
                            -8-      LRB093 08792 BDD 11801 a
 1             (8)  Payments advanced by a unit of local government
 2        or school district as part of an  authorized  development
 3        impact fee expenditure.
 4             (9)  Fees  and  costs  associated  with  the  use of
 5        development  impact  fees  for   independent   engineers,
 6        financial   contractors,   other   contractual  services,
 7        planning, surveying, designing, engineering, and  similar
 8        costs as well as attorney's fees and costs.
 9        (b)  Projected  interest  charges and other finance costs
10    may be included in  determining  the  amount  of  development
11    impact  fees  to  the extent that the development impact fees
12    are used for the payment of principal and interest on  bonds,
13    notes,  or  other obligations that are issued by or on behalf
14    of a unit of local government or school district and that are
15    used  to  finance  capital  improvements  made  necessary  by
16    development.

17        Section  30.  Collection   and   expenditure   of   fees;
18    accounting.  Development  impact  fees imposed under this Act
19    shall be paid prior to the issuance of a building  permit  or
20    other appropriate permission to proceed with a development.
21        Moneys  received  from  development  impact fees shall be
22    placed in a separate fund and accounted  for  separately  and
23    may  be  used  only  for the purposes authorized by this Act.
24    Interest earned on all moneys deposited in the separate  fund
25    shall be credited toward that account.

26        Section  35.  Public hearing required. Municipalities and
27    counties must conduct a public hearing regarding any proposal
28    for new or amended development impact fee ordinances and must
29    publish a notice 30 days before the hearing in at  least  one
30    newspaper  of  general  circulation  within the unit of local
31    government or school district. The notice shall  include  the
32    date,  time,  and  location  of  the  hearing, as well as the
 
                            -9-      LRB093 08792 BDD 11801 a
 1    general type of development impact fee ordinance that  is  to
 2    be  considered.  A  development  impact ordinance fee may not
 3    take effect sooner than 60 days after its adoption.

 4        Section 40. Appeals and judicial  review.  Any  developer
 5    paying a development impact fee under this Act shall have the
 6    right  to  contest  the imposition, collection, or use of the
 7    development impact fee, as well as other related matters. The
 8    initial appeal shall be made to the  governing  body  of  the
 9    municipality   or   county   responsible   for  creating  the
10    development impact fee  in  accordance  with  any  procedures
11    adopted in the development impact fee ordinance.
12        Any  subsequent  relief  shall  be  sought  in  a de novo
13    proceeding in a court with proper jurisdiction and venue.

14        Section 45. Intergovernmental agreements. Units of  local
15    government  and school districts that are jointly affected by
16    developments may enter into intergovernmental agreements with
17    each other, with other governmental authorities, or with  the
18    State  to  create,  assess,  collect,  and expend development
19    impact fees in a manner that is consistent with this Act.

20        Section 50. Service areas. If a municipality  or  county,
21    in  its  sole  discretion,  requires  delineation  of service
22    areas, a unit of local government or  school  district  shall
23    establish   these   service  areas  for  the  collection  and
24    expenditure of development impact  fees.  Any  service  areas
25    must  be  appropriate to the nature of the particular capital
26    improvement.

27        Section 55. Land dedications. A  municipality  or  county
28    may,  in its sole discretion, require a developer to dedicate
29    land in place of development impact fees. The  value  of  any
30    required  land  dedication  may  not  exceed  a development's
 
                            -10-     LRB093 08792 BDD 11801 a
 1    proportionate share. The requirement for  a  land  dedication
 2    must  bear  a  rational  nexus  to  the  development and must
 3    conform to the other requirements of this Act.

 4        Section 60. Construction of  capital  improvements.  This
 5    Act   shall   not  prevent  a  municipality  from  acting  in
 6    accordance with any planning or zoning powers  under  Article
 7    11  of  the  Illinois  Municipal Code and shall not prevent a
 8    county from acting in accordance with any planning or  zoning
 9    powers under Article 5 of the Counties Code.

10        Section  65.  Recoupment.  A unit of local government may
11    recoup costs of excess capacity in existing facilities, where
12    the excess capacity has been provided in anticipation of  the
13    needs  of  a development. The development impact fees imposed
14    to recoup these costs must be based  on  the  unit  of  local
15    government's  actual  cost  of  acquiring or constructing the
16    facility and must be no more than a  proportionate  share  of
17    such costs.

18        Section 70. Reversion of unencumbered funds; refunds. All
19    development  impact  fees  collected  under  this Act must be
20    expended or encumbered for  capital  improvements  within  20
21    years of the date of collection. If the fees are not expended
22    or  encumbered  within 20 years, the unit of local government
23    holding the funds shall  return  to  the  present  owner  the
24    amount  of  the  unencumbered fee plus any interest collected
25    upon proper request for a refund and a determination  that  a
26    refund is proper.
27        Where  land is dedicated and is not used for the purposes
28    dedicated, the unit of local government, at its  option,  may
29    return  either  the land or the fair value of the land at the
30    date on which it was dedicated.
31        If eligible for a refund, a present owner must submit  to
 
                            -11-     LRB093 08792 BDD 11801 a
 1    the  municipality or county a written request within one year
 2    after the date the right to claim a  refund  arises.  If  the
 3    refund is proper, the municipality or county shall return, or
 4    require  a  unit  of  local  government or school district to
 5    return, the amount to be refunded. All refunds  due  and  not
 6    claimed  within  the required time period shall remain in the
 7    special fund and be expended only as provided in this Act.

 8        Section 75. Repeal of development impact fee  ordinances.
 9    A municipality or county may, by ordinance, repeal any or all
10    development  impact fee ordinances and make any unexpended or
11    unencumbered funds available for  a  refund  to  the  present
12    owners.
13        Upon  the repeal of any development impact fee ordinance,
14    the municipality or county shall publish notice of the repeal
15    and of the availability of any  refunds  in  a  newspaper  of
16    general  circulation  within  the unit of local government or
17    school district. If at the end of one year no request  for  a
18    refund  is  made,  the remaining development impact fee funds
19    may be transferred to  the  unit  of  local  government's  or
20    school  district's  general  fund  and be used for any public
21    purpose. A municipality or county need not comply  with  this
22    notice requirement if there are no unexpended or unencumbered
23    balances of development impact fee funds.

24        Section  80.  Compliance. No later than 2 years after the
25    effective date of this Act, municipalities and counties  must
26    amend  any  existing  development  impact  fee  ordinances to
27    comply with the requirements of this Act.  Until  this  date,
28    the  failure  of  development  impact  fee ordinances adopted
29    before the effective date of this  Act  to  comply  with  the
30    requirements  of  this  Act shall not be grounds to challenge
31    their validity. This Act applies  only  to  road  impact  fee
32    ordinances adopted after the effective date of this Act.
 
                            -12-     LRB093 08792 BDD 11801 a
 1        Section  97.   Severability.   The provisions of this Act
 2    are severable under Section 1.31 of the Statute on Statutes.

 3        Section 99. Effective date.  This  Act  takes  effect  on
 4    January l, 2004.".