The Vermont Statutes Online
Title 24: Municipal and County Government
Chapter 131: IMPACT FEES
§ 5200. Purpose
It is the intent of this chapter to enable municipalities to require the beneficiaries of new development to pay their proportionate share of the cost of municipal and school capital projects that benefit them and to require them to pay for or mitigate the negative effects of construction. (Added 1987, No. 200 (Adj. Sess.), § 37, eff. July 1, 1989.)
§ 5201. Definitions
As used in this chapter:
(1) “Municipality” means a town, a city, or an incorporated village or an unorganized town or gore.
(2) “Capital project” means:
(A) any physical betterment or improvement including furnishings, machinery, apparatus, or equipment for such physical betterment or improvement;
(B) any preliminary studies and surveys relating to any physical betterment or improvement;
(C) land or rights in land; or
(D) any combination of these.
(3) “Impact fee” means a fee levied as a condition of issuance of a zoning or subdivision permit that will be used to cover any portion of the costs of an existing or planned capital project that will benefit or is attributable to the users of the development or to compensate the municipality for any expenses it incurs as a result of construction. The fee may be levied for recoupment of costs for previously expended capital outlay for a capital project that will benefit the users of the development.
(4) “Offsite mitigation” means permanent protection of land not necessarily adjacent to the development site and which compensates for the impact of the development. (Added 1987, No. 200 (Adj. Sess.), § 37, eff. July 1, 1989.)
§ 5202. Authorization
(a) A municipality may levy an impact fee in accordance with this chapter.
(b) A municipality may accept offsite mitigation in lieu of an impact fee or as compensation for damage to important land such as prime agricultural land or important wildlife habitat. (Added 1987, No. 200 (Adj. Sess.), § 37, eff. July 1, 1989.)
§ 5203. Procedure
(a) A municipality may levy an impact fee on any new development within its borders provided that it has:
(1) been confirmed under section 4350 of this title and, after July 1, 1992, adopted a capital budget and program pursuant to chapter 117 of this title. The plan or capital budget and program may include:
(A) indication of locations proposed for development with a potential to create the need for new capital projects;
(B) standards for level of service for the capital projects to be fully or partially funded with impact fees;
(C) proposed locations and project lists, cost estimates, and funding sources;
(D) timing or sequence of development in the identified locations; and
(2) developed a reasonable formula that will be used to assess a developer’s impact fee. The formula shall reflect the level of service for the capital project to be funded and a means of assessing the impact associated with the development such as square footage or number of bedrooms. The level of service shall be either:
(A) an existing level of service;
(B) a State or federal standard; or
(C) a standard adopted as part of a town plan or capital budget.
(b) The amount of an impact fee used to fund a capital project shall be determined according to a formula developed under subsection (a) of this section. The fee shall be equal to or less than the portion of the capital cost of a capital project that will benefit or is attributable to the development and shall not include costs attributable to the operation, administration, or maintenance of a capital project. The municipality may require a fee for the entire cost of a capital project that will initially be used only by the beneficiaries of the development so assessed. In this case, if the project will be used by beneficiaries of future development the municipality shall establish a formula consistent with the formula developed under subsection (a) of this section to require that beneficiaries of future development pay an impact fee to the owners of the development on which the impact fee has already been levied.
(c) In determining the amount of a fee that will be used to fund a capital project, the municipality may account for:
(1) the cost of the existing or proposed facility;
(2) the means, including State or federal grants and fees paid by other developers, by which the facility has been or will be financed;
(3) the extent, if any, to which impact fees should be offset to account for other taxes or fees paid by the developer that will cover the cost of the capital project;
(4) extraordinary costs incurred by the municipality in serving the new development;
(5) the time-price differential inherent in fair comparisons of amounts paid at different times.
(d) In determining the amount of the impact fee to compensate the municipality for expenses incurred as a result of construction, the municipality shall project the expenses that will be incurred. If the actual expense incurred is less than the fee collected from the developer, the municipality shall refund the unexpended portion of the fee within one year of the termination of construction of the project.
(e) The municipality shall provide an annual accounting for each impact fee showing the source, amount of each fee collected, and project that was funded with the fee. The municipality must spend the fee on the capital project, for which the fee was intended, within six years of when the fee was paid. If it fails to do this, the owner of the property at the expiration of the six-year period may apply for and receive a refund of his or her proportionate share of that fee during the year following the date on which the right to claim the refund began.
(f) The municipality shall establish the formula and procedure for levying an impact fee by an ordinance or bylaw adopted under chapter 59 or 117 of this title. Such ordinance or bylaw shall include a provision for administrative appeal of the impact fee assessed. (Added 1987, No. 200 (Adj. Sess.), § 37, eff. July 1, 1989; amended 1989, No. 106; 1989, No. 280 (Adj. Sess.), § 11c.)
§ 5204. Payment of fees
(a) An impact fee or obligation for offsite mitigation shall be a lien upon all property and improvements within land development for which the fee is assessed in the same manner and to the same effect as taxes are a lien upon real estate under section 32 V.S.A. § 5061.
(b) A municipality may require payment of an impact fee or accept offsite mitigation before issuance of a zoning or subdivision permit.
(c) A municipality may accept fees on installment at a reasonable rate of interest.
(d) A municipality may require a letter of credit to guarantee future payment of an impact fee or offsite mitigation. (Added 1987, No. 200 (Adj. Sess.), § 37, eff. July 1, 1989.)
§ 5205. Exemptions
A municipality may exempt certain types of development from any part or all of the impact fee assessed, provided that the exemption achieves other policies or objectives clearly stated in the municipal plan. The policies or objectives may include, but are not limited to, the provision of affordable housing and the retention of existing employment, or the generation of new employment. (Added 1987, No. 200 (Adj. Sess.), § 37, eff. July 1, 1989.)
§ 5206. Construction of chapter
Nothing in this chapter shall be construed as prohibiting a municipality from adopting ordinances otherwise authorized by law. (Added 1987, No. 200 (Adj. Sess.), § 37, eff. July 1, 1989.)