H-2637.2
HOUSE BILL 2451
State of Washington 68th Legislature 2024 Regular Session
By Representatives Hutchins, Barkis, Jacobsen, and Cheney
Read first time 01/22/24. Referred to Committee on Local Government.
1 AN ACT Relating to increasing the consistency and transparency of
2 impact fees; amending RCW 82.02.050, 82.02.070, 43.31.980,
3 36.70A.070, and 64.06.070; and adding a new section to chapter 64.06
4 RCW.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
6 Sec. 1. RCW 82.02.050 and 2015 c 241 s 1 are each amended to
7 read as follows:
8 (1) It is the intent of the legislature:
9 (a) To ensure that adequate facilities are available to serve new
10 growth and development;
11 (b) To promote orderly growth and development by establishing
12 standards by which counties, cities, and towns may require, by
13 ordinance, that new growth and development pay a proportionate share
14 of the cost of new facilities needed to serve new growth and
15 development; and
16 (c) To ensure that impact fees are imposed through established
17 procedures and criteria so that specific developments do not pay
18 arbitrary fees or duplicative fees for the same impact.
19 (2) Counties, cities, and towns that are required or choose to
20 plan under RCW 36.70A.040 are authorized to impose impact fees on
21 development activity as part of the financing for public facilities,
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 1 provided that the financing for system improvements to serve new
2 development must provide for a balance between impact fees and other
3 sources of public funds and cannot rely solely on impact fees.
4 (3)(a)(i) Counties, cities, and towns collecting impact fees
5 must, by September 1, 2016, adopt and maintain a system for the
6 deferred collection of impact fees for single-family detached and
7 attached residential construction. The deferral system must include a
8 process by which an applicant for a building permit for a single-
9 family detached or attached residence may request a deferral of the
10 full impact fee payment. The deferral system offered by a county,
11 city, or town under this subsection (3) must include one or more of
12 the following options:
13 (A) Deferring collection of the impact fee payment until final
14 inspection;
15 (B) Deferring collection of the impact fee payment until
16 certificate of occupancy or equivalent certification; or
17 (C) Deferring collection of the impact fee payment until the time
18 of closing of the first sale of the property occurring after the
19 issuance of the applicable building permit.
20 (ii) Counties, cities, and towns utilizing the deferral process
21 required by this subsection (3)(a) may withhold certification of
22 final inspection, certificate of occupancy, or equivalent
23 certification until the impact fees have been paid in full.
24 (iii) The amount of impact fees that may be deferred under this
25 subsection (3) must be determined by the fees in effect at the time
26 the applicant applies for a deferral.
27 (iv) Unless an agreement to the contrary is reached between the
28 buyer and seller, the payment of impact fees due at closing of a sale
29 must be made from the seller's proceeds. In the absence of an
30 agreement to the contrary, the seller bears strict liability for the
31 payment of the impact fees.
32 (b) The term of an impact fee deferral under this subsection (3)
33 may not exceed eighteen months from the date of building permit
34 issuance.
35 (c) Except as may otherwise be authorized in accordance with (f)
36 of this subsection (3), an applicant seeking a deferral under this
37 subsection (3) must grant and record a deferred impact fee lien
38 against the property in favor of the county, city, or town in the
39 amount of the deferred impact fee. The deferred impact fee lien,
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 1 which must include the legal description, tax account number, and
2 address of the property, must also be:
3 (i) In a form approved by the county, city, or town;
4 (ii) Signed by all owners of the property, with all signatures
5 acknowledged as required for a deed, and recorded in the county where
6 the property is located;
7 (iii) Binding on all successors in title after the recordation;
8 and
9 (iv) Junior and subordinate to one mortgage for the purpose of
10 construction upon the same real property granted by the person who
11 applied for the deferral of impact fees.
12 (d)(i) If impact fees are not paid in accordance with a deferral
13 authorized by this subsection (3), and in accordance with the term
14 provisions established in (b) of this subsection (3), the county,
15 city, or town may institute foreclosure proceedings in accordance
16 with chapter 61.12 RCW.
17 (ii) If the county, city, or town does not institute foreclosure
18 proceedings for unpaid school impact fees within forty-five days
19 after receiving notice from a school district requesting that it do
20 so, the district may institute foreclosure proceedings with respect
21 to the unpaid impact fees.
22 (e)(i) Upon receipt of final payment of all deferred impact fees
23 for a property, the county, city, or town must execute a release of
24 deferred impact fee lien for the property. The property owner at the
25 time of the release, at his or her expense, is responsible for
26 recording the lien release.
27 (ii) The extinguishment of a deferred impact fee lien by the
28 foreclosure of a lien having priority does not affect the obligation
29 to pay the impact fees as a condition of final inspection,
30 certificate of occupancy, or equivalent certification, or at the time
31 of closing of the first sale.
32 (f) A county, city, or town with an impact fee deferral process
33 on or before April 1, 2015, is exempt from the requirements of this
34 subsection (3) if the deferral process delays all impact fees and
35 remains in effect after September 1, 2016.
36 (g)(i) Each applicant for a single-family residential
37 construction permit, in accordance with his or her contractor
38 registration number or other unique identification number, is
39 entitled to annually receive deferrals under this subsection (3) for
40 the first twenty single-family residential construction building
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 1 permits per county, city, or town. A county, city, or town, however,
2 may elect, by ordinance, to defer more than twenty single-family
3 residential construction building permits for an applicant. If the
4 county, city, or town collects impact fees on behalf of one or more
5 school districts for which the collection of impact fees could be
6 delayed, the county, city, or town must consult with the district or
7 districts about the additional deferrals. A county, city, or town
8 considering additional deferrals must give substantial weight to
9 recommendations of each applicable school district regarding the
10 number of additional deferrals. If the county, city, or town
11 disagrees with the recommendations of one or more school districts,
12 the county, city, or town must provide the district or districts with
13 a written rationale for its decision.
14 (ii) For purposes of this subsection (3)(g), an "applicant"
15 includes an entity that controls the applicant, is controlled by the
16 applicant, or is under common control with the applicant.
17 (h) Counties, cities, and towns may collect reasonable
18 administrative fees to implement this subsection (3) from permit
19 applicants who are seeking to delay the payment of impact fees under
20 this subsection (3).
21 (i) In accordance with RCW ((44.28.812 and)) 43.31.980, counties,
22 cities, and towns must cooperate with and provide requested data,
23 materials, and assistance to the department of commerce and the joint
24 legislative audit and review committee.
25 (4) The impact fees:
26 (a) Shall only be imposed for system improvements that are
27 reasonably related to the new development;
28 (b) Shall not exceed a proportionate share of the costs of system
29 improvements that are reasonably related to the new development; and
30 (c) Shall be used for system improvements that will reasonably
31 benefit the new development.
32 (5)(a) Impact fees may be collected and spent only for the public
33 facilities defined in RCW 82.02.090 which are addressed by a capital
34 facilities plan element of a comprehensive land use plan adopted
35 pursuant to the provisions of RCW 36.70A.070 or the provisions for
36 comprehensive plan adoption contained in chapter 36.70, 35.63, or
37 35A.63 RCW. After the date a county, city, or town is required to
38 adopt its development regulations under chapter 36.70A RCW, continued
39 authorization to collect and expend impact fees is contingent on the
40 county, city, or town adopting or revising a comprehensive plan in
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 1 compliance with RCW 36.70A.070, and on the capital facilities plan
2 identifying:
3 (i) Deficiencies in public facilities serving existing
4 development and the means by which existing deficiencies will be
5 eliminated within a reasonable period of time;
6 (ii) Additional demands placed on existing public facilities by
7 new development; and
8 (iii) Additional public facility improvements required to serve
9 new development.
10 (b) If the capital facilities plan of the county, city, or town
11 is complete other than for the inclusion of those elements which are
12 the responsibility of a special district, the county, city, or town
13 may impose impact fees to address those public facility needs for
14 which the county, city, or town is responsible.
15 (6) Any update or amendment to an impact fee schedule adopted
16 pursuant to RCW 82.02.060 may not increase the impact fee imposed by
17 the schedule by a percentage greater than the percentage increase in
18 the consumer price index in the time since the schedule was last
19 adopted, updated, or amended. For purposes of this subsection,
20 "consumer price index" means the average consumer price index for the
21 most recent 12-month period, Seattle, Washington area, for urban wage
22 earners and clerical workers, all items, compiled by the bureau of
23 labor and statistics, United States department of labor.
24 Sec. 2. RCW 82.02.070 and 2011 c 353 s 8 are each amended to
25 read as follows:
26 (1) Impact fee receipts shall be earmarked specifically and
27 retained in special interest-bearing accounts. Separate accounts
28 shall be established for each type of public facility for which
29 impact fees are collected. All interest shall be retained in the
30 account and expended for the purpose or purposes for which the impact
31 fees were imposed. ((Annually)) By July 1st of each year, each
32 county, city, or town imposing impact fees shall provide a report to
33 the department of commerce on each impact fee account showing the
34 source and amount of all moneys collected, earned, or received and
35 system improvements that were financed in whole or in part by impact
36 fees over the prior calendar year. The department of commerce must
37 produce an annual report by December 1st of each year compiling the
38 information received from jurisdictions imposing impact fees.
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 1 (2) Impact fees for system improvements shall be expended only in
2 conformance with the capital facilities plan element of the
3 comprehensive plan.
4 (3)(a) Except as provided otherwise by (b) of this subsection,
5 impact fees shall be expended or encumbered for a permissible use
6 within ten years of receipt, unless there exists an extraordinary and
7 compelling reason for fees to be held longer than ten years. Such
8 extraordinary or compelling reasons shall be identified in written
9 findings by the governing body of the county, city, or town.
10 (b) School impact fees must be expended or encumbered for a
11 permissible use within ten years of receipt, unless there exists an
12 extraordinary and compelling reason for fees to be held longer than
13 ten years. Such extraordinary or compelling reasons shall be
14 identified in written findings by the governing body of the county,
15 city, or town.
16 (4) Impact fees may be paid under protest in order to obtain a
17 permit or other approval of development activity.
18 (5) Each county, city, or town that imposes impact fees shall
19 provide for an administrative appeals process for the appeal of an
20 impact fee; the process may follow the appeal process for the
21 underlying development approval or the county, city, or town may
22 establish a separate appeals process. The impact fee may be modified
23 upon a determination that it is proper to do so based on principles
24 of fairness. The county, city, or town may provide for the resolution
25 of disputes regarding impact fees by arbitration.
26 Sec. 3. RCW 43.31.980 and 2015 c 241 s 4 are each amended to
27 read as follows:
28 (1) Beginning December 1, 2018, and each year thereafter, the
29 department of commerce must prepare an annual report on the impact
30 fee deferral process established in RCW 82.02.050(3). The report must
31 include: (a) The number of deferrals requested of and issued by
32 counties, cities, and towns; (b) the number of deferrals that were
33 not fully and timely paid; and (c) other information as deemed
34 appropriate.
35 (2) The department of commerce must also compile an annual report
36 by December 1st of each year compiling the information it has
37 received under RCW 82.02.070 from each jurisdiction imposing impact
38 fees.
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1 (3) The reports required by this section must, in accordance with
2 RCW 43.01.036, be submitted to the appropriate committees of the
3 house of representatives and the senate.
4 Sec. 4. RCW 36.70A.070 and 2023 c 228 s 3 are each amended to
5 read as follows:
6 The comprehensive plan of a county or city that is required or
7 chooses to plan under RCW 36.70A.040 shall consist of a map or maps,
8 and descriptive text covering objectives, principles, and standards
9 used to develop the comprehensive plan. The plan shall be an
10 internally consistent document and all elements shall be consistent
11 with the future land use map. A comprehensive plan shall be adopted
12 and amended with public participation as provided in RCW 36.70A.140.
13 Each comprehensive plan shall include a plan, scheme, or design for
14 each of the following:
15 (1) A land use element designating the proposed general
16 distribution and general location and extent of the uses of land,
17 where appropriate, for agriculture, timber production, housing,
18 commerce, industry, recreation, open spaces and green spaces, urban
19 and community forests within the urban growth area, general aviation
20 airports, public utilities, public facilities, and other land uses.
21 The land use element shall include population densities, building
22 intensities, and estimates of future population growth. The land use
23 element shall provide for protection of the quality and quantity of
24 groundwater used for public water supplies. The land use element must
25 give special consideration to achieving environmental justice in its
26 goals and policies, including efforts to avoid creating or worsening
27 environmental health disparities. Wherever possible, the land use
28 element should consider utilizing urban planning approaches that
29 promote physical activity and reduce per capita vehicle miles
30 traveled within the jurisdiction, but without increasing greenhouse
31 gas emissions elsewhere in the state. Where applicable, the land use
32 element shall review drainage, flooding, and stormwater runoff in the
33 area and nearby jurisdictions and provide guidance for corrective
34 actions to mitigate or cleanse those discharges that pollute waters
35 of the state, including Puget Sound or waters entering Puget Sound.
36 The land use element must reduce and mitigate the risk to lives and
37 property posed by wildfires by using land use planning tools, which
38 may include, but are not limited to, adoption of portions or all of
39 the wildland urban interface code developed by the international code
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 1 council or developing building and maintenance standards consistent
2 with the firewise USA program or similar program designed to reduce
3 wildfire risk, reducing wildfire risks to residential development in
4 high risk areas and the wildland urban interface area, separating
5 human development from wildfire prone landscapes, and protecting
6 existing residential development and infrastructure through community
7 wildfire preparedness and fire adaptation measures.
8 (2) A housing element ensuring the vitality and character of
9 established residential neighborhoods that:
10 (a) Includes an inventory and analysis of existing and projected
11 housing needs that identifies the number of housing units necessary
12 to manage projected growth, as provided by the department of
13 commerce, including:
14 (i) Units for moderate, low, very low, and extremely