IPFNA_Policy Analysis Memo_Jan_06

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apply to legislatively-adopted fees, impact fees are mo re likely to comply with this standard than other types of developer exactions. These principles have some important corollaries, which may be broadly categorized under the headings of Ñproportionality,Ò ÑcreditsÒ and Ñbenefit.Ò The proportionality rules require that the fees cover only those costs that can be attributed to new development, and speci remedying existing deficiencies. In addition, applicants must have the option of attempting to demonstrate that their developmen t will have less impact on the need for public facilities than is indicated by the fee schedule. The credit rules are designed to ensure that new de velopment is not overcharged. These rules address both revenue credits, which are calculated up-fr ont in the preparation of the fee schedule, and construction credits, which are determined on a case -by-case basis prior to fee payment. Revenue credits reduce the impact fee schedules to account fo r other revenues that w ill be generated by new development and used to retire debt for existing fac ilities or to construct new facilities of the same type funded by the impact fees. Construction credits are used to offset an individual developmentÔs impact fees by the value of required land dedications or ot her developer improvements or contributions for the same types of facilities. Finally, the benefit rules require that the fee revenues be spen improvements that expand system capacity to accommodate the demands of the fee-paying development. State Enabling Act To date, 26 states, including HawaiÔi, have adopted im pact fee enabling legislation. Like most other state enabling acts, HawaiÔiÔs impact fee enabling act for counties re enumerated above. HawaiÔiÔs impact fee enabling a ct, adopted in 1992, authorizes counties to adopt impact fees for any Ñtypes of public facility capita l improvements specifically identified in a county comprehensive plan or a facility needs assessment st udy.Ò The only use of this authority to-date has 4 been the adoption in 2002 of a road impact fee by the City and County of Honolulu for the Ewa region. Counties in HawaiÔi are authorized by state law to enact impact fee ordinances, provided that they follow the requirements of Chapter 46, Pa rt VIII of HawaiÔi Revised Statu tes (Section 46-141 through 46-148). This section provides a brief summary of those requirements most Generally, developers prefer to pay impact fees as late in the development process as possible, and most state acts prohibit the collection of impact fees prio r to the time of issuance of a building permit or certificate of occupancy. HawaiÔiÔs act states in Section 46-146 that ÑAssessment of impact fees shall be a condition precedent to the issuance of a grading or buildin before or upon issuance of the permit.Ò Hawa iÔi CountyÔs Corporation Counsel has interpreted this language to mean that the County may assess and co llect impact fees at any time, up to and including the time of building permit issuance. 4 Chapter 33A of the Revised Ordinances of Honol ulu (the fee for a single-family unit is $1,836) H Ô C \I N A ÐP A M January 5, 2006 , Page 7 AWAI I OUNTY NFRASTRUCTURE EEDS SSESSMENT OLICY NALYSIS EMORANDUM