§ 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.)