72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
HA to HB 2983
LC 1642/HB 2983-1
HOUSE AMENDMENTS TO
HOUSE BILL 2983
By COMMITTEE ON BUSINESS, LABOR AND CONSUMER AFFAIRS
May 1
On page 1 of the printed bill, line 2, after the first
semicolon delete the rest of the line and delete line 2 and
insert ' amending ORS 223.297, 223.299, 223.302, 223.304,
223.307, 223.309 and 223.311.'.
Delete lines 5 through 30 and delete pages 2 through 4 and
insert:
' { + 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 an equitable funding mechanism 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;
' (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) 'Reimbursement fee' means a fee for costs associated with
capital improvements already constructed { + , + } or under
construction { + when the fee is established, in 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 3. + } ORS 223.302 is amended to read:
' 223.302. (1) Governmental units are authorized to establish
system development charges, but the { - revenues - }
{ + income + } produced therefrom { - shall - } { + must + }
be expended only in accordance with ORS 223.297 to 223.314. If a
governmental unit expends { - any such revenues - }
{ + income from system development charges + } in violation of
the limitations described in ORS 223.307, the governmental unit
shall replace the misspent amount { + , including the costs of
compliance with ORS 223.297 to 223.314 that are found to be
unreasonable, + } with moneys derived from other sources.
Replacement moneys { - shall - } { + must + } be deposited in
a fund designated for the system development charge
{ - revenues - } { + income + } 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 - } { + income + }. Such procedures shall provide
that such a challenge must be filed within two years of the
expenditure of the system development charge { - revenues - }
{ + income + }. 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 - }
{ + is based on cost of service rate-making principles employed
to finance publicly owned capital improvements and may include
other relevant factors identified by the governmental unit
imposing the fee, including but not limited to + }the cost of
the existing facility or facilities, prior contributions by
existing users, gifts or grants from federal or state government
or private persons { - , - } { + and + }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 - } .
' (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 takes into account:
' (A) The projected costs of the + } capital improvements { +
identified in the plan adopted under 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 for future users of the
system to which the fee is related + }.
' { - (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
reimbursement fee and an improvement fee simultaneously as long
as the share of system capacity acquired with income from
improvement fees does not overlap or duplicate the share of
system capacity reimbursed with income from reimbursement
fees. + }
' { - (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 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 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 - } { + 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 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) + } Written notice shall 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 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 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. 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.
' { - (7) - } { + (8) + } 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 - }
{ + cost + } that are incorporated { + and identified + } in
the established methodology { + and are not within the control
of the governmental unit. A specific cost index must be 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 and must be published by a
recognized organization or agency that produces the index for
reasons that are independent of the system development charge
methodology + }.
' { + SECTION 5. + } 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 { + the need for increased
capacity to provide service for + } current or projected
development.
' (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
personnel associated, in whole or in part, with the operation or
maintenance of the facilities constructed with income from system
development charges + }.
' (4) Any capital improvement being funded wholly or in part
with { + income from a + } system development charge
{ - revenues shall - } { + must + } be included in the plan
adopted by a governmental unit pursuant to ORS 223.309.
' (5) Notwithstanding subsections (1) { + , + } { - and - }
(2) { + and (3) + } of this section, { + income from a + }
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 { + and meeting the reasonable costs of compliance
with ORS 223.297 to 223.314 + }.
' { + SECTION 6. + } 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
{ + income from an + }improvement fee
{ - revenues - } and the estimated cost { + , + }
{ - and - } timing { + and estimated percentage of costs to be
funded with income from an 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 { + unless
the modification results in an increase in the amount of the
system development charges imposed or the deletion of a project
that is necessary to serve current or projected development + }.
' { + SECTION 7. + } ORS 223.311 is amended to read:
' 223.311. (1) { + Income from a + } 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 - } { + income + } 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 - } { + income; and
' (b) The amount of income collected by the governmental unit
from system development charges and expended for the costs of
compliance with ORS 223.297 to 223.314 + }.'.
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