House Introduced Bill 4020

HOUSE BILL No. 4020

January 25, 2001, Introduced by Rep. Jamnick and referred to the Committee on Land Use and Environment.

A bill to authorize governing bodies located within certain

counties to levy and collect impact fees on developers to defray

the cost of certain improvements required by land development; to

provide for certain credits and exemptions; to allow the govern-

ing bodies to enter into agreements relating to impact fees; to

prescribe powers and duties of the governing bodies; to prescribe

the powers and duties of certain state agencies and officers; to

create certain funds; and to prescribe remedies.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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Sec. 1. This act shall be known and may be cited as the

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"traffic impact fee enabling act".

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Sec. 3. As used in this act:

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(a) "County road agency" means a board of county road

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commissioners or an individual or entity exercising the powers

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and duties of a board of county road commissioners pursuant to

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county charter in a county that does not have a board of county

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road commissioners.

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(b) "Developer" means a person proposing new land develop-

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ment and any successor in interest to that new land development.

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(c) "Governing body" means any of the following in a county

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that has a population of 400,000 or more:

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(i) The legislative body of a city.

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(ii) The legislative body of a village.

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(iii) The township board of a township.

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(iv) A county road agency that acts only with the concur-

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rence of the county board of commissioners.

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(d) "Impact fee" means an amount to defray a portion of the

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cost of an off-site improvement.

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(e) "Impact fund" means a fund created by a governing body

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under section 15.

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(f) "New land development" means the construction, recon-

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struction, or expansion of a building or a complex of buildings,

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or the improvement of a recreational area, that will result in

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the increase of traffic on a highway, street, or road near the

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building, complex of buildings, or recreational area. However,

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new land development does not include the construction, recon-

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struction, or expansion of residential property or a residential

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development if the property or development has a value of less

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than $2,000,000.00.

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(g) "Off-site improvement" means a road improvement

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necessitated by new land development and located off the premises

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of that new land development.

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(h) "Person" means an individual, partnership, corporation,

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association, governmental entity, including but not limited to a

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governing body, or other legal entity.

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(i) "Road improvement" means the construction, reconstruc-

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tion, paving, replacement, extension, or widening of a highway,

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street, road, or bridge. Road improvement includes, but is not

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limited to, the cost of design and construction, plan prepara-

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tion, right-of-way acquisition, turning lanes, drainage facili-

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ties, curbs, medians, and shoulders in conjunction with the road

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improvement. Road improvement also includes the purchase and

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installation of traffic signs and signals that are permanent and

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not installed temporarily before or during the construction of a

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road improvement.

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(j) "Traffic improvement plan" means a plan established

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under section 7.

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(k) "Traffic improvement zone" means a designated area with

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distinct boundaries in which new land development is expected to

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occur and in which off-site improvements will be required to

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serve that new land development. A traffic improvement zone may

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cross jurisdictional boundaries.

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Sec. 5. A governing body, by ordinance or resolution, may

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levy and collect an impact fee from a developer subject to the

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requirements of this act.

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Sec. 7. (1) A governing body shall not adopt an impact fee

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ordinance or resolution unless the governing body has established

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a traffic improvement plan.

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(2) A traffic improvement plan shall do all of the

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following:

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(a) Identify 1 or more traffic improvement zones. A govern-

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ing body may enter into an agreement with another governing body

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to identify 1 or more traffic improvement zones.

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(b) Identify those segments of the city or village street

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system, county road system, or state highway system that need

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improvement, or may need improvement within 5 years after the

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date of the plan, due to present or future traffic congestion.

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(c) Identify off-site improvements within traffic improve-

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ment zones.

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(d) Set forth anticipated methods of financing the off-site

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improvements, including but not limited to the following:

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(i) The portion of the off-site improvements expected to be

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paid for by impact fees, which shall not exceed a pro rata share

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of reasonably anticipated costs of the off-site improvements nec-

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essary to serve the increased traffic generated by the new land

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development.

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(ii) The portion of the off-site improvements expected to be

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paid from special assessments or other fees, if any, against

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property benefited by the off-site improvements.

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(iii) The portion of the off-site improvements expected to

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be paid from other sources.

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(3) To establish a traffic improvement plan, the governing

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body shall hold a public hearing on, adopt, and obtain approval

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of a proposed traffic improvement plan as provided in this

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section.

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(4) Before establishing a traffic improvement plan, a gov-

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erning body shall publish notice of a public hearing on the pro-

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posed traffic improvement plan in the same manner provided by law

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or charter for a public hearing on an ordinance. If the govern-

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ing body is a county road agency, the county road agency shall

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publish notice of the proposed traffic improvement plan not less

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than 2 weeks before the date of the hearing.

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(5) A traffic improvement plan adopted by a county road

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agency shall be reviewed and approved by resolutions of the gov-

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erning bodies of not less than 2/3 of the cities and villages

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within the county in which traffic improvement zones are wholly

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or partially located. The review by the governing body of a city

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or village shall be limited to traffic improvement zones con-

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tained in the traffic improvement plan that are located wholly or

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partially within that particular city or village.

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(6) A traffic improvement plan of a county road agency shall

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be reviewed and approved by resolution of each township board

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with regard to those provisions, if any, in the plan that require

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a portion of the cost of a road improvement to be borne by that

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township or from impact fees, special assessments, or other

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charges to be imposed by that township.

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(7) A traffic improvement plan of a township shall be

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reviewed and approved by the county road agency of the county in

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which the township is located.

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(8) A traffic improvement plan of a city, village, or county

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road agency that identifies road improvements needed on a segment

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of a state highway and methods of financing those road improve-

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ments shall be reviewed and approved by the state transportation

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commission.

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Sec. 9. (1) Before adopting an impact fee ordinance or res-

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olution, the governing body shall hold a public hearing on the

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impact fee ordinance or resolution. The governing body shall

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publish a notice of the public hearing as provided by law or

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charter for public hearings on ordinances. If the governing body

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is a county road agency, the county road agency shall publish

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notice of the proposed impact fee resolution not less than 2

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weeks before the date of the public hearing.

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(2) A resolution of a county road agency imposing an impact

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fee shall be concurred in by a majority of the county board of

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commissioners before the impact fee may be imposed.

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(3) A governing body may enter into an agreement with

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another governing body to levy, collect, and regulate the dispo-

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sition of impact fees in a manner consistent with this act.

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Sec. 11. (1) An impact fee ordinance or resolution shall

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set forth a schedule of impact fees. The schedule of impact fees

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shall be uniform within each traffic improvement zone with regard

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to each type or class of new land development. The schedule of

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impact fees shall bear a reasonable relationship to the increased

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traffic attributable to the new land development and the cost of

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the road improvements attributable to that increased traffic.

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The schedule of impact fees may vary with regard to different

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segments or classes of highways, streets, or roads and with

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regard to the proportionate impact of new land development on the

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existing traffic carried by those segments or classes of high-

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ways, streets, or roads. An impact fee shall be assessed only

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once during the period of the new land development, but may be

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paid in installments based on a schedule established pursuant to

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this subsection.

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(2) The impact fee ordinance or resolution shall set forth

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when the impact fee is to be paid and the information required to

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accompany the impact fee.

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(3) The impact fee ordinance or resolution shall provide a

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procedure for determining an alternative impact fee if the devel-

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oper believes that the cost of an off-site improvement is less

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than the impact fee established in the impact fee ordinance or

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resolution.

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(4) The impact fee ordinance or resolution may provide that

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the governing body and a developer may enter into an impact fee

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agreement designed to establish a just and equitable impact fee,

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or its equivalent in the form of contributed right-of-way or

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other appropriate equivalent, instead of the impact fee set forth

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in the impact fee ordinance or resolution. The impact fee agree-

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ment may provide that the developer shall be reimbursed from

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impact fees subsequently paid by another developer. The

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governing body shall approve an impact fee agreement only if the

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governing body finds that the impact fee agreement will apportion

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the burden of expenditures for off-site improvements in a just

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and equitable manner.

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(5) The impact fee ordinance or resolution shall provide

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that a developer is entitled to a credit against an impact fee in

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an amount equal to the cost of the off-site improvement, or con-

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tributions of land, money, or services for the off-site improve-

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ment contributed or previously contributed, paid, or legally com-

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mitted to by the developer or by his or her predecessor in inter-

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est as a condition of any new land development permit issued by

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the governing body.

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Sec. 13. (1) A developer that received a new land develop-

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ment permit before adoption of an impact fee ordinance or resolu-

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tion may petition the governing body for an exemption from the

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impact fees assessed pursuant to an impact fee ordinance or

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resolution. A petition shall be evaluated by the governing body

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based on the following criteria:

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(a) Whether a legally enforceable act of the governing body

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authorizes the specific new land development for which a determi-

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nation is sought.

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(b) Whether the petitioner has made or incurred expenditures

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or obligations in reliance upon the authorizing act described in

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subdivision (a) that are reasonably equivalent to the impact fee

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required by the impact fee ordinance or resolution.

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(c) Whether it is inequitable to deny the petitioner the

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opportunity to complete the new land development in a manner

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consistent with the conditions of the permit by requiring the

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developer to comply with the requirements of the impact fee

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ordinance or resolution. For the purposes of this subdivision,

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consideration of whether the injury suffered by the petitioner

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outweighs the public cost of allowing the new land development to

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proceed without payment of the impact fee shall be considered as

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a factor in determining whether it would be inequitable to deny

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the petitioner the opportunity to complete the new land

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development.

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(2) If the permit contains conditions with respect to

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off-site improvements, the developer may request a modification

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of the permit in order to bring the previously approved condi-

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tions into compliance with the impact fee ordinance or resolution

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adopted pursuant to this act. A modification of the permit is

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not a substantial change under a city or village planned develop-

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ment ordinance or a substantial deviation under state law.

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Sec. 15. (1) A governing body that levies and collects

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impact fees under this act shall create an impact fund for each

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traffic improvement zone identified under section 7. A governing

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body shall deposit all impact fees collected pursuant to this act

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in the impact fund created for that traffic improvement zone.

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The revenue in an impact fund shall be kept separate from other

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revenue of the city, village, township, or county road agency.

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(2) The governing body shall use impact fund revenue solely

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for the purpose of off-site improvements determined to be needed

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to serve traffic generated within the traffic improvement zone.

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(3) Impact fee revenue shall not be expended on a particular

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off-site improvement unless the governing body has identified

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sources of funding for right-of-way acquisition and construction

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of improvements needed to overcome existing or future service

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deficiencies for the particular off-site improvement not attrib-

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utable to the proposed new land development.

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(4) The governing body shall use 90% or more of the impact

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fund revenue exclusively for off-site improvements within the

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traffic improvement zone from which the impact fees were

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collected.

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(5) The governing body may use not more than 10% of the

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impact fund revenue for off-site improvements on highways,

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streets, or roads that provide access to the traffic improvement

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zone from which the impact fees were collected.

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(6) The governing body shall use amounts withdrawn from an

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impact fund solely as provided by this section. The disbursement

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of revenue from an impact fund shall occur only upon the approval

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of a majority of the members of the governing body.

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(7) The governing body shall invest in interest-bearing

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accounts the money on deposit in the impact fund that is not

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immediately necessary for expenditure as provided in this act.

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All income derived from the accounts shall be credited to the

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impact fund.

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Sec. 17. The impact fee ordinance or resolution shall pro-

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vide that the impact fees collected shall be returned to the

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present owner of the new land development if actual physical work

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has not commenced on the off-site improvement by the last day of

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the calendar quarter that ends immediately following the

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expiration of 5 years from the date the impact fees were

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collected by the governing body, subject to the following

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procedure:

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(a) The present owner shall file a petition with the govern-

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ing body for the refund within 1 year following the last day of

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the calendar quarter that ends immediately following the expira-

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tion of 5 years from the date on which the fee was collected.

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(b) The petition shall contain the following:

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(i) A notarized sworn statement that the petitioner is the

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present owner of the property.

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(ii) A certified copy of the latest recorded deed.

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(iii) A copy of the most recent ad valorem property tax bill

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for the property.

13 (c) Upon approval of the governing body, the money shall be

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returned to the petitioner with interest paid at the average rate

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of 1-year United States treasury bills for the 12-month period

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immediately preceding the month in which the money is returned.

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Sec. 19. A governing body shall annually review an impact

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fee ordinance or resolution adopted by that governing body. The

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review shall consider trip generation rates, trip lengths, and

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actual construction and right-of-way acquisition costs for work

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contracted for off-site improvements by the governing body. In

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the review, the governing body shall do all of the following:

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(a) Analyze the effects of inflation on the actual costs of

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road improvements and the impact fees charged to support these

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improvements.

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(b) Review and revise, if necessary, the off-site

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improvements encompassed by the impact fee ordinance or

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resolution.

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(c) Review and revise, if necessary, the size, shape, and

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location of the traffic improvement zones identified in the traf-

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fic improvement plan of the governing body.

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(d) Ensure that the impact fees charged against new land

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development do not exceed the new land development's pro rata

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share of the reasonably anticipated costs of off-site improve-

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ments necessitated solely by that new land development.

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Sec. 21. A person may bring a civil action against any

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person that violates an impact fee ordinance or resolution

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adopted under this act.

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