Chapter 765 Oregon Laws 2003

AN ACT

SB 939

Relating to process for imposing system development charges; creating new provisions; and amending ORS 223.297, 223.299, 223.302, 223.304, 223.307, 223.309, 223.311 and 223.314.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 223.297 is amended to read:

223.297. The purpose of ORS 223.297 to 223.314 is to provide a uniform framework for the imposition of system development charges by governmental units, [for specified purposes] to provide equitable funding for orderly growth and development in Oregon’s communities and to establish that the charges may be used only for capital improvements.

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;

(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) “Reimbursement fee” means a fee for costs associated with capital improvements already constructed, or under construction when the fee is established, for which the governmental unit determines that capacity exists.

(4)(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 2a. If House Bill 2278 becomes law, section 2 of this 2003 Act (amending ORS 223.299) is repealed and ORS 223.299, as amended by section 18, chapter 802, Oregon Laws 2003 (Enrolled House Bill 2278), is amended to read: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;

(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) “Reimbursement fee” means a fee for costs associated with capital improvements already constructed, or under construction when the fee is established, for which the local government determines that capacity exists.

(4)(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 local government for its average cost of inspecting and installing connections with water and sewer facilities.

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] must be expended only in accordance with ORS 223.297 to 223.314. If a governmental unit expends [any such] revenues from system development charges in violation of the limitations described in ORS 223.307, the governmental unit shall replace the misspent amount with moneys derived from [other] sources other than system development charges. Replacement moneys [shall] must 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.

(3)(a) A governmental unit must advise a person who makes a written objection to the calculation of a system development charge of the right to petition for review pursuant to ORS 34.010 to 34.100.

(b) If a governmental unit has adopted an administrative review procedure for objections to the calculation of a system development charge, the governmental unit [must] shall provide adequate notice regarding the procedure for review to a person who makes a written objection to the calculation of a system development charge.

SECTION 4. ORS 223.304 is amended to read:

223.304. (1)(a) Reimbursement fees [shall] must be established or modified by ordinance or resolution setting forth a methodology that [considers the cost of the existing facility or facilities,] is, when applicable, based on:

(A) Ratemaking principles employed to finance publicly owned capital improvements;

(B) Prior contributions by existing users[,];

(C) Gifts or grants from federal or state government or private persons[,];

(D) The value of unused capacity available to future system users[, rate-making principles employed to finance publicly owned capital improvements and other relevant factors identified by the local government imposing the fee] or the cost of the existing facilities; and

(E) Other relevant factors identified by the governmental unit imposing the fee.

(b) The methodology for establishing or modifying a reimbursement fee [shall] must:

(A) Promote the objective of future system users contributing no more than an equitable share to the cost of existing facilities.

(B) Be available for public inspection.

[(2)(a)] (2) Improvement fees [shall] must:

[(A)] (a) Be established or modified by ordinance or resolution setting forth a methodology that [considers the cost of projected] is available for public inspection and demonstrates consideration of:

(A) The projected cost of the capital improvements identified in the plan and list adopted pursuant to ORS 223.309 that are needed to increase the capacity of the systems to which the fee is related; and

(B) The need for increased capacity in the system to which the fee is related that will be required to serve the demands placed on the system by future users.

[(B)] (b) Be calculated to obtain the cost of capital improvements for the projected need for available system capacity for future users.

[(b) The methodology for establishing or modifying improvement fees shall be available for public inspection.]

(3) A governmental unit may establish and impose a system development charge that is a combination of a reimbursement fee and an improvement fee, if the methodology demonstrates that the charge is not based on providing the same system capacity.

[(3)] (4) 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 and list 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)] (5)(a) The credit provided for in subsection [(3)] (4) of this section [shall be] is only for the improvement fee charged for the type of improvement being constructed, and credit for qualified public improvements under subsection [(3)(b)] (4)(b) of this section may be granted only for the cost of that portion of such improvement that exceeds the [government units] governmental unit’s 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)] (4)(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] does not prohibit a [unit of government] governmental unit 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 and list 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] governmental unit so chooses.

(c) Credits [shall] must be used in the time specified in the ordinance but not later than 10 years from the date the credit is given.

[(5)] (6) Any [unit of local government] governmental unit that proposes to 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)] (7)(a) Written notice [shall] must be mailed to persons on the list at least 90 days prior to the first hearing to establish or modify a system development charge, and the methodology supporting the system development charge [shall] must be available at least 60 days prior to the first hearing. The failure of a person on the list to receive a notice that was mailed does not invalidate the action of the [local government] governmental unit. The governmental 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] shall 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.

(b) Legal action intended to contest the methodology used for calculating a system development charge may not be filed after 60 days following adoption or modification of the system development charge ordinance or resolution by the [local government] governmental unit. A person shall request judicial review of the methodology used for calculating a system development charge only as provided in ORS 34.010 to 34.100.

[(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 an adopted specific cost index or on a modification to any of the factors related to rate that are incorporated in the established methodology.]

(8) A change in the amount of a reimbursement fee or an improvement fee is not a modification of the system development charge methodology if the change in amount is based on:

(a) A change in the cost of materials, labor or real property applied to projects or project capacity as set forth on the list adopted pursuant to ORS 223.309; or

(b) The periodic application of one or more specific cost indexes or other periodic data sources. A specific cost index or periodic data source must be:

(A) A relevant measurement of the average change in prices or costs over an identified time period for materials, labor, real property or a combination of the three;

(B) Published by a recognized organization or agency that produces the index or data source for reasons that are independent of the system development charge methodology; and

(C) Incorporated as part of the established methodology or identified and adopted in a separate ordinance, resolution or order.

SECTION 4a. If House Bill 2278 becomes law, section 4 of this 2003 Act (amending ORS 223.304) is repealed and ORS 223.304, as amended by section 21, chapter 802, Oregon Laws 2003 (Enrolled House Bill 2278), is amended to read:

(A) Ratemaking principles employed to finance publicly owned capital improvements;

(B) Prior contributions by existing users[,];

(C) Gifts or grants from federal or state government or private persons[,];

(E) Other relevant factors identified by the local government imposing the fee.

(b) The methodology for establishing or modifying a reimbursement fee [shall] must:

(A) Promote the objective of future system users contributing no more than an equitable share to the cost of existing facilities.

(B) Be available for public inspection.

[(2)(a)] (2) Improvement fees [shall] must:

(B) The need for increased capacity in the system to which the fee is related that will be required to serve the demands placed on the system by future users.

[(B)] (b) Be calculated to obtain the cost of capital improvements for the projected need for available system capacity for future users.

[(b) The methodology for establishing or modifying improvement fees shall be available for public inspection.]

(3) A local government may establish and impose a system development charge that is a combination of a reimbursement fee and an improvement fee, if the methodology demonstrates that the charge is not based on providing the same system capacity.

(a) Not located on or contiguous to property that is the subject of development approval; or

[(4)(a)] (5)(a) The credit provided for in subsection [(3)] (4) of this section [shall be] is only for the improvement fee charged for the type of improvement being constructed, and credit for qualified public improvements under subsection [(3)(b)] (4)(b) of this section may be granted only for the cost of that portion of such improvement that exceeds the local government’s 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)] (4)(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] does not prohibit a local 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 and list adopted pursuant to ORS 223.309, or from providing a share of the cost of such improvement by other means, if a local government so chooses.

(c) Credits [shall] must be used in the time specified in the ordinance but not later than 10 years from the date the credit is given.

[(5)] (6) Any local government that proposes to 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)] (7)(a) Written notice [shall] must be mailed to persons on the list at least 90 days prior to the first hearing to establish or modify a system development charge, and the methodology supporting the system development charge [shall] must be available at least 60 days prior to the first hearing. The failure of a person on the list to receive a notice that was mailed does not invalidate the action of the local government. The local government may periodically delete names from the list, but at least 30 days prior to removing a name from the list [must] shall 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.

(b) Legal action intended to contest the methodology used for calculating a system development charge may not be filed after 60 days following adoption or modification of the system development charge ordinance or resolution by the local government. A person shall request judicial review of the methodology used for calculating a system development charge only as provided in ORS 34.010 to 34.100.

(8) A change in the amount of a reimbursement fee or an improvement fee is not a modification of the system development charge methodology if the change in amount is based on:

(a) A change in the cost of materials, labor or real property applied to projects or project capacity as set forth on the list adopted pursuant to ORS 223.309; or

(b) The periodic application of one or more specific cost indexes or other periodic data sources. A specific cost index or periodic data source must be:

(A) A relevant measurement of the average change in prices or costs over an identified time period for materials, labor, real property or a combination of the three;

(B) Published by a recognized organization or agency that produces the index or data source for reasons that are independent of the system development charge methodology; and

(C) Incorporated as part of the established methodology or identified and adopted in a separate ordinance, resolution or order.

SECTION 5. ORS 223.304, as amended by section 4 of this 2003 Act, is amended to read:

223.304. (1)(a) Reimbursement fees must be established or modified by ordinance or resolution setting forth a methodology that is, when applicable, based on:

(A) Ratemaking principles employed to finance publicly owned capital improvements;

(B) Prior contributions by existing users;

(D) The value of unused capacity available to future system users or the cost of the existing facilities; and

(E) Other relevant factors identified by the governmental unit imposing the fee.

(b) The methodology for establishing or modifying a reimbursement fee must:

(A) Promote the objective of future system users contributing no more than an equitable share to the cost of existing facilities.

(B) Be available for public inspection.

(2) Improvement fees must:

(a) Be established or modified by ordinance or resolution setting forth a methodology that is available for public inspection and demonstrates consideration of:

(A) The projected cost of the capital improvements identified in the plan and list adopted pursuant to ORS 223.309 that are needed to increase the capacity of the systems to which the fee is related; and

(B) The need for increased capacity in the system to which the fee is related that will be required to serve the demands placed on the system by future users.

(b) Be calculated to obtain the cost of capital improvements for the projected need for available system capacity for future users.

(4) 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 and list adopted pursuant to ORS 223.309 and either:

(a) Not located on or contiguous to property that is the subject of development approval; or

(5)(a) The credit provided for in subsection (4) of this section is only for the improvement fee charged for the type of improvement being constructed, and credit for qualified public improvements under subsection (4)(b) of this section may be granted only for the cost of that portion of such improvement that exceeds the governmental unit’s 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 (4)(b) of this section.

(b) A governmental unit may deny the credit provided for in subsection (4) of this section if the governmental unit demonstrates:

(A) That the application does not meet the requirements of subsection (4) of this section; or

(B) By reference to the list adopted pursuant to ORS 223.309, that the improvement for which credit is sought was not included in the plan and list adopted pursuant to ORS 223.309.

[(b)] (c) 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 does not prohibit a governmental unit 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 and list adopted pursuant to ORS 223.309, or from providing a share of the cost of such improvement by other means, if a governmental unit so chooses.

[(c)] (d) Credits must be used in the time specified in the ordinance but not later than 10 years from the date the credit is given.

(6) Any governmental unit that proposes to 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.

(7)(a) Written notice must be mailed to persons on the list at least 90 days prior to the first hearing to establish or modify a system development charge, and the methodology supporting the system development charge must be available at least 60 days prior to the first hearing. The failure of a person on the list to receive a notice that was mailed does not invalidate the action of the governmental unit. The governmental unit may periodically delete names from the list, but at least 30 days prior to removing a name from the list shall 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.

(b) Legal action intended to contest the methodology used for calculating a system development charge may not be filed after 60 days following adoption or modification of the system development charge ordinance or resolution by the governmental unit. A person shall request judicial review of the methodology used for calculating a system development charge only as provided in ORS 34.010 to 34.100.

(8) A change in the amount of a reimbursement fee or an improvement fee is not a modification of the system development charge methodology if the change in amount is based on:

(a) A change in the cost of materials, labor or real property applied to projects or project capacity as set forth on the list adopted pursuant to ORS 223.309; or

(b) The periodic application of one or more specific cost indexes or other periodic data sources. A specific cost index or periodic data source must be:

(A) A relevant measurement of the average change in prices or costs over an identified time period for materials, labor, real property or a combination of the three;

(B) Published by a recognized organization or agency that produces the index or data source for reasons that are independent of the system development charge methodology; and

(C) Incorporated as part of the established methodology or identified and adopted in a separate ordinance, resolution or order.

SECTION 5a. If House Bill 2278 becomes law, section 5 of this 2003 Act (amending ORS 223.304) is repealed and ORS 223.304, as amended by section 21, chapter 802, Oregon Laws 2003 (Enrolled House Bill 2278), and section 4a of this 2003 Act, is amended to read:

223.304. (1)(a) Reimbursement fees must be established or modified by ordinance or resolution setting forth a methodology that is, when applicable, based on:

(A) Ratemaking principles employed to finance publicly owned capital improvements;

(B) Prior contributions by existing users;

(D) The value of unused capacity available to future system users or the cost of the existing facilities; and

(E) Other relevant factors identified by the local government imposing the fee.

(b) The methodology for establishing or modifying a reimbursement fee must:

(A) Promote the objective of future system users contributing no more than an equitable share to the cost of existing facilities.

(B) Be available for public inspection.

(2) Improvement fees must:

(a) Be established or modified by ordinance or resolution setting forth a methodology that is available for public inspection and demonstrates consideration of:

(B) The need for increased capacity in the system to which the fee is related that will be required to serve the demands placed on the system by future users.

(b) Be calculated to obtain the cost of capital improvements for the projected need for available system capacity for future users.

(a) Not located on or contiguous to property that is the subject of development approval; or

(5)(a) The credit provided for in subsection (4) of this section is only for the improvement fee charged for the type of improvement being constructed, and credit for qualified public improvements under subsection (4)(b) of this section may be granted only for the cost of that portion of such improvement that exceeds the local government’s 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 (4)(b) of this section.

(b) A local government may deny the credit provided for in subsection (4) of this section if the local government demonstrates:

(A) That the application does not meet the requirements of subsection (4) of this section; or

(B) By reference to the list adopted pursuant to ORS 223.309, that the improvement for which credit is sought was not included in the plan and list adopted pursuant to ORS 223.309.

[(b)] (c) 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 does not prohibit a local 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 and list adopted pursuant to ORS 223.309, or from providing a share of the cost of such improvement by other means, if a local government so chooses.

[(c)] (d) Credits must be used in the time specified in the ordinance but not later than 10 years from the date the credit is given.

(6) Any local government that proposes to 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.

(7)(a) Written notice must be mailed to persons on the list at least 90 days prior to the first hearing to establish or modify a system development charge, and the methodology supporting the system development charge must be available at least 60 days prior to the first hearing. The failure of a person on the list to receive a notice that was mailed does not invalidate the action of the local government. The local government may periodically delete names from the list, but at least 30 days prior to removing a name from the list shall 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.

(b) Legal action intended to contest the methodology used for calculating a system development charge may not be filed after 60 days following adoption or modification of the system development charge ordinance or resolution by the local government. A person shall request judicial review of the methodology used for calculating a system development charge only as provided in ORS 34.010 to 34.100.

(8) A change in the amount of a reimbursement fee or an improvement fee is not a modification of the system development charge methodology if the change in amount is based on:

(a) A change in the cost of materials, labor or real property applied to projects or project capacity as set forth on the list adopted pursuant to ORS 223.309; or

(b) The periodic application of one or more specific cost indexes or other periodic data sources. A specific cost index or periodic data source must be:

(A) A relevant measurement of the average change in prices or costs over an identified time period for materials, labor, real property or a combination of the three;

(B) Published by a recognized organization or agency that produces the index or data source for reasons that are independent of the system development charge methodology; and

(C) Incorporated as part of the established methodology or identified and adopted in a separate ordinance, resolution or order.

SECTION 6. ORS 223.307 is amended to read:

223.307. (1) Reimbursement fees [shall] may be spent only on capital improvements associated with the systems for which the fees are assessed including expenditures relating to repayment of indebtedness.

(2) Improvement fees [shall] may be spent only on capacity increasing capital improvements, including expenditures relating to repayment of debt for such improvements. An increase in system capacity may be established if a capital improvement increases the level of performance or service provided by existing facilities or provides new facilities. The portion of [such] the improvements funded by improvement fees must be related to [current or projected development] the need for increased capacity to provide service for future users.

(3) System development charges [shall] may not be expended for costs associated with the construction of administrative office facilities that are more than an incidental part of other capital improvements or for the expenses of the operation or maintenance of the facilities constructed with system development charge revenues.

(4) Any capital improvement being funded wholly or in part with system development charge revenues [shall] must be included in the plan and list adopted by a governmental unit pursuant to ORS 223.309.

(5) Notwithstanding subsections (1) and (2) of this section, system development charge revenues may be expended on the [direct] costs of complying with the provisions of ORS 223.297 to 223.314, including the costs of developing system development charge methodologies and providing an annual accounting of system development charge expenditures.

SECTION 7. ORS 223.309 is amended to read:

223.309. (1) 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 that includes a list of the capital improvements that [may be funded] the governmental unit intends to fund, in whole or in part, with revenues from an improvement fee [revenues] and the estimated cost, [and] timing and percentage of costs eligible to be funded with revenues from the improvement fee for each improvement.

(2) A governmental unit that has prepared a plan and the list described in subsection (1) of this section may modify [such] the plan and list at any time. If a system development charge will be increased by a proposed modification of the list to include a capacity increasing capital improvement, as described in ORS 223.307 (2):

(a) The governmental unit shall provide, at least 30 days prior to the adoption of the modification, notice of the proposed modification to the persons who have requested written notice under ORS 223.304 (6).

(b) The governmental unit shall hold a public hearing if the governmental unit receives a written request for a hearing on the proposed modification within seven days of the date the proposed modification is scheduled for adoption.

(c) Notwithstanding ORS 294.160, a public hearing is not required if the governmental unit does not receive a written request for a hearing.

(d) The decision of a governmental unit to increase the system development charge by modifying the list may be judicially reviewed only as provided in ORS 34.010 to 34.100.

SECTION 7a. If House Bill 2278 becomes law, section 7 of this 2003 Act (amending ORS 223.309) is repealed and ORS 223.309, as amended by section 23, chapter 802, Oregon Laws 2003 (Enrolled House Bill 2278), is amended to read:

223.309. (1) Prior to the establishment of a system development charge by ordinance or resolution, a local government shall prepare a capital improvement plan, public facilities plan, master plan or comparable plan that includes a list of the capital improvements that [may be funded] the local government intends to fund, in whole or in part, with revenues from an improvement fee [revenues] and the estimated cost, [and] timing and percentage of costs eligible to be funded with revenues from the improvement fee for each improvement.

(2) A local government that has prepared a plan and the list described in subsection (1) of this section may modify [such] the plan and list at any time. If a system development charge will be increased by a proposed modification of the list to include a capacity increasing capital improvement, as described in ORS 223.307 (2):

(a) The local government shall provide, at least 30 days prior to the adoption of the modification, notice of the proposed modification to the persons who have requested written notice under ORS 223.304 (6).

(b) The local government shall hold a public hearing if the local government receives a written request for a hearing on the proposed modification within seven days of the date the proposed modification is scheduled for adoption.

(c) Notwithstanding ORS 294.160, a public hearing is not required if the local government does not receive a written request for a hearing.

(d) The decision of a local government to increase the system development charge by modifying the list may be judicially reviewed only as provided in ORS 34.010 to 34.100.

SECTION 8. ORS 223.311 is amended to read:

223.311. (1) System development charge revenues [shall] must be deposited in accounts designated for such moneys. The governmental unit shall provide an annual accounting, to be completed by January 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 in the previous fiscal year.

(2) The governmental unit shall include in the annual accounting:

(a) A list of the amount spent on each project funded, in whole or in part, with system development charge revenues; and

(b) The amount of revenue collected by the governmental unit from system development charges and attributed to the costs of complying with the provisions of ORS 223.297 to 223.314, as described in ORS 223.307.

SECTION 8a. If House Bill 2278 becomes law, section 8 of this 2003 Act (amending ORS 223.311) is repealed and ORS 223.311, as amended by section 24, chapter 802, Oregon Laws 2003 (Enrolled House Bill 2278), is amended to read:

223.311. (1) System development charge revenues [shall] must be deposited in accounts designated for such moneys. The local government shall provide an annual accounting, to be completed by January 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 in the previous fiscal year.

(2) The local government shall include in the annual accounting:

(a) A list of the amount spent on each project funded, in whole or in part, with system development charge revenues; and

(b) The amount of revenue collected by the local government from system development charges and attributed to the costs of complying with the provisions of ORS 223.297 to 223.314, as described in ORS 223.307.

SECTION 9. ORS 223.314 is amended to read:

223.314. The establishment, modification or implementation of a system development charge, or a plan [as provided for in] or list adopted pursuant to ORS 223.309, or any modification of a plan or list, is not a land use decision pursuant to ORS chapters 195 and 197.

SECTION 10. The amendments to ORS 223.304 and 223.309 by sections 5 and 7 of this 2003 Act become operative on July 1, 2004.

SECTION 10a. If House Bill 2278 becomes law, section 10 of this 2003 Act is amended to read:

Sec. 10. The amendments to ORS 223.304 and 223.309 by sections [5 and 7] 5a and 7a of this 2003 Act become operative on July 1, 2004.

Approved by the Governor September 17, 2003

Filed in the office of Secretary of State September 18, 2003

Effective date January 1, 2004

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