71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1688
A-Engrossed
House Bill 2980
Ordered by the House May 4
Including House Amendments dated May 4
Sponsored by Representative MORGAN (at the request of Oregon
Building Industry Association)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Requires reimbursement fee and improvement fee to be
proportionate to impact of new development. Requires local
government to refund double amount of system development charges
unlawfully collected. - }
{ - Requires Housing and Community Services Department
annually to report current status of capital improvement plans,
system development charges, economic development and needed
housing. - }
{ - Revises definition of capital improvement. - }
{ + Revises Bancroft Bonding Act to cover purchase or
development of public park. Defines increased use for purposes of
system development charges. Permits governmental units to adopt
procedures for administrative review of calculation of system
development charges. Specifies method for calculating fees for
improvements already constructed or under construction and for
calculating fees for improvements to be constructed. Increases
period for written notice to be given by unit of local government
that proposes to establish or modify system development charge.
Makes related changes. + }
A BILL FOR AN ACT
Relating to impact of new development on system development
charges; amending ORS 223.208, 223.299, 223.302, 223.304,
223.309, 223.311 and 223.314.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 223.208 is amended to read:
223.208. (1) Subject to subsection (2) of this section, the
rights and duties accorded governmental units and the owners of
property for financing and assessments under ORS 223.205 to
223.775 shall apply to the following:
(a) A systems development charge designed to finance the { +
purchase or development of a public park or the + } construction,
extension or enlargement of a street, community water supply,
storm sewer or sewerage or disposal system as defined in ORS
199.464 imposed by a governmental unit as a condition to issuance
of any occupancy permit or imposed by a governmental unit at such
other time as, by ordinance, it may determine.
(b) That portion of a connection charge imposed by a
governmental unit which is greater than the amount necessary to
reimburse the unit for its costs of inspection and installing
connections with system mains.
(2) Notwithstanding ORS 223.230, the financing of systems
development or connection charges under this section may, at the
option of the governing body, be a second lien on real property,
which lien shall be inferior only to the mortgage or other
security interest held by the lender of the owner's purchase
money. Bonds issued under this subsection shall be issued
separately from bonds otherwise issued under ORS 223.205 to
223.775 and shall comply with all applicable federal regulations.
SECTION 2. ORS 223.299 is amended to read:
223.299. As used in ORS 223.297 to 223.314:
(1)(a) 'Capital improvement' means facilities or assets used
for the following:
(A) Water supply, treatment and distribution;
(B) Waste water collection, transmission, treatment and
disposal;
(C) Drainage and flood control;
(D) Transportation; or
(E) Parks and recreation.
(b) 'Capital improvement' does not include costs of the
operation or routine maintenance of capital improvements.
(2) 'Improvement fee' means a fee for costs associated with
capital improvements to be constructed. { +
(3) 'Increased use' means growth in the number of discrete
units that are the basis for the methodology for calculating a
reimbursement fee or an improvement fee. + }
{ - (3) - } { + (4) + } 'Reimbursement fee' means a fee for
costs associated with capital improvements already constructed or
under construction.
{ - (4) - } { + (5) + }(a) 'System development charge'
means a reimbursement fee, an improvement fee or a combination
thereof assessed or collected at the time of increased usage of a
capital improvement or issuance of a development permit, building
permit or connection to the capital improvement. 'System
development charge' includes that portion of a sewer or water
system connection charge that is greater than the amount
necessary to reimburse the governmental unit for its average cost
of inspecting and installing connections with water and sewer
facilities.
(b) 'System development charge' does not include any fees
assessed or collected as part of a local improvement district or
a charge in lieu of a local improvement district assessment, or
the cost of complying with requirements or conditions imposed
upon a land use decision, expedited land division or limited land
use decision.
SECTION 3. ORS 223.302 is amended to read:
223.302. (1) Governmental units are authorized to establish
system development charges, but the revenues produced therefrom
shall be expended only in accordance with ORS 223.297 to 223.314.
If a governmental unit expends any such revenues in violation of
the limitations described in ORS 223.307, the governmental unit
shall replace the misspent amount with moneys derived from other
sources. Replacement moneys shall be deposited in a fund
designated for the system development charge revenues not later
than one year following a determination that the funds were
misspent.
(2) Governmental units shall adopt administrative review
procedures by which any citizen or other interested person may
challenge an expenditure of system development charge revenues.
Such procedures shall provide that such a challenge must be filed
within two years of the expenditure of the system development
charge revenues. The decision of the governmental unit shall be
{ + judicially + } reviewed only as provided in ORS 34.010 to
34.100 { - , and not otherwise - } .
{ + (3)(a) Governmental units may adopt administrative review
procedures by which a person who is subject to a system
development charge may challenge, in writing, the calculation of
a system development charge.
(b) If a governmental unit has established administrative
review procedures under this subsection, the governmental unit
shall notify each person who is subject to a system development
charge of:
(A) The administrative review procedures available under this
subsection; and
(B) The right to petition for review under ORS 34.010 to
34.100. + }
SECTION 4. ORS 223.304 is amended to read:
223.304. (1) { + (a) + } Reimbursement fees shall { + :
(A) + } Be established { + or modified + } by ordinance or
resolution setting forth a methodology that considers the cost of
the existing facility or facilities, prior contributions by
existing users, { + gifts or grants from federal or state
government or private persons, + } the value of unused capacity,
rate-making principles employed to finance publicly owned capital
improvements and other relevant factors identified by the local
government imposing the fee.
{ + (B) Be calculated to recover only the value or cost of
capital improvements for system capacity attributable to new
users or to increased use by existing users.
(b) + } The methodology { + for establishing or modifying a
reimbursement fee + }shall { + :
(A) + } Promote the objective of future system users
contributing no more than an equitable share to the cost of
existing facilities. { - The methodology for establishing such
fees shall - }
{ + (B) + } Be available for public inspection.
(2) { + (a) + } Improvement fees shall { + :
(A) + } Be established { + or modified + } by ordinance or
resolution setting forth a methodology that considers the cost of
projected capital improvements needed to increase the capacity of
the systems to which the fee is related.
{ + (B) Be calculated to obtain only the value or cost of
capital improvements for the projected need for system capacity
attributable to new users or increased use by existing users.
(b) + } The methodology for establishing { - such - } { +
or modifying improvement + } fees shall be available for public
inspection.
(3) The ordinance or resolution that establishes { + or
modifies + } an improvement fee shall also provide for a credit
against such fee for the construction of a qualified public
improvement. A ' qualified public improvement' means a capital
improvement that is required as a condition of development
approval, identified in the plan adopted pursuant to ORS 223.309
and either:
(a) Not located on or contiguous to property that is the
subject of development approval; or
(b) Located in whole or in part on or contiguous to property
that is the subject of development approval and required to be
built larger or with greater capacity than is necessary for the
particular development project to which the improvement fee is
related.
(4)(a) The credit provided for in subsection (3) of this
section shall be only for the improvement fee charged for the
type of improvement being constructed, and credit for qualified
public improvements under subsection (3)(b) of this section may
be granted only for the cost of that portion of such improvement
that exceeds the government units minimum standard facility size
or capacity needed to serve the particular development project or
property. The applicant shall have the burden of demonstrating
that a particular improvement qualifies for credit under
subsection (3)(b) of this section.
(b) When the construction of a qualified public improvement
gives rise to a credit amount greater than the improvement fee
that would otherwise be levied against the project receiving
development approval, the excess credit may be applied against
improvement fees that accrue in subsequent phases of the original
development project. This subsection shall not prohibit a unit of
government from providing a greater credit, or from establishing
a system providing for the transferability of credits, or from
providing a credit for a capital improvement not identified in
the plan adopted pursuant to ORS 223.309, or from providing a
share of the cost of such improvement by other means, if a unit
of government so chooses.
(c) Credits shall be used in the time specified in the
ordinance but not later than 10 years from the date the credit is
given.
(5) Any unit of local government that proposes to
{ - adopt - } { + establish or modify + } a system development
charge shall maintain a list of persons who have made a written
request for notification prior to adoption or amendment of a
methodology for any system development charge.
{ + (6) + } Written notice shall be mailed to persons on the
list at least { - 45 - } { + 90 + } days prior to the first
hearing to { - adopt or amend - } { + establish or modify + }
a system development charge, and the methodology supporting the
{ - adoption or amendment - } { + system development
charge + } shall be available at least { - 30 - } { + 60 + }
days prior to the first hearing { - to adopt or amend - } . The
failure of a person on the list to receive a notice that was
mailed { - shall - } { + does + } not invalidate the action
of the local government. The unit of local government may
periodically delete names from the list, but at least 30 days
prior to removing a name from the list must notify the person
whose name is to be deleted that a new written request for
notification is required if the person wishes to remain on the
notification list. { - No - } Legal action intended to contest
the methodology used for calculating a system development charge
{ - shall - } { + may not + } be filed after 60 days
following adoption or
{ - modification - } { + amendment + } of the system
development charge ordinance or resolution by the local
government. A person shall
{ - contest - } { + request judicial review of + } the
methodology used for calculating a system development charge only
as provided in ORS 34.010 to 34.100 { - , and not otherwise - }
.
{ + (7) A change in the amount of a reimbursement fee or an
improvement fee is not a modification of the system development
charge if the change in amount is based on the periodic
application of a specific cost index incorporated in the
established methodology. + }
SECTION 5. ORS 223.309 is amended to read:
223.309. (1) { - Any governmental unit which has adopted - }
{ + Prior to the establishment of + } a system development
charge by ordinance or resolution { + , a governmental unit
+ }shall prepare a capital improvement plan, public facilities
plan, master plan or comparable plan { - which lists - } { +
that includes a list of + } the capital improvements { - that
may be funded - } { + the governmental unit intends to fund and
a list of the capital improvements that may be funded + } with
improvement fee revenues and the estimated cost and timing for
each improvement.
(2) A governmental unit that has prepared a plan { + and the
lists + } described in subsection (1) of this section may modify
such plan { + and lists + } at any time.
SECTION 6. ORS 223.311 is amended to read:
223.311. { + (1) + } System development charge revenues shall
be deposited in accounts designated for such moneys. The
governmental unit shall provide an annual accounting { + , to be
completed by October 1 of each year, + } for system development
charges showing the total amount of system development charge
revenues collected for each system and the projects that were
funded.
{ + (2) The governmental unit shall include in the annual
accounting a list of the amount spent on each project funded, in
whole or in part, with system development charge revenues. + }
SECTION 7. ORS 223.314 is amended to read:
223.314. The { - adoption - } { + establishment,
modification or implementation + } of a system development
charge, or a plan as provided for in ORS 223.309, or any
modification { - thereto - } { + of a plan + }, is not a land
use decision pursuant to ORS chapters 195 and 197.
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