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91_HB1881
LRB9100168PTbd
1 AN ACT concerning impact fees.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Local Government Impact Fee Act.
6 Section 5. General purposes. The purpose of this
7 legislation is to create the authority for units of local
8 government to adopt and implement impact fee ordinances and
9 resolutions. The General Assembly further recognizes that
10 the imposition of the impact fees is designed to supplement
11 other funding sources so that the burden of paying for
12 improvements can be allocated in a fair and equitable manner.
13 It is the intent of the General Assembly to promote orderly
14 economic growth throughout the State by assuring that new
15 development bears its fair share of the cost of meeting the
16 demand for improvements through the imposition of impact
17 fees. It is also the intent of the General Assembly to
18 preserve the authority of elected local government officials
19 to adopt and implement impact fee ordinances or resolutions
20 that adhere to the minimum standards and procedures adopted
21 in this Act by the State.
22 Section 10. Definitions. As used in this Act:
23 "Advisory committee" means the group of members selected
24 from the public and private sectors to advise in the
25 development, implementation, and update of the comprehensive
26 improvement plan.
27 "Assisted financing" means the financing of residential
28 development by the Illinois Housing Development Authority,
29 including loans to developers for multi-unit residential
30 development and loans to purchasers of single family
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1 residences, condominiums, and townhomes.
2 "Comprehensive improvement plan" means a plan prepared by
3 a unit of local government in consultation with the advisory
4 committee.
5 "Developer" means a person who undertakes new
6 development.
7 "Existing deficiencies" means existing public
8 infrastructure and facilities operating at a level of service
9 below the adopted level of service selected by the unit of
10 local government as defined in the improvement plan.
11 "Impact fee" means a fee imposed by a unit of local
12 government as a condition to the issuance of a building
13 permit or a certificate of occupancy for new development from
14 which a portion of the revenues collected is intended to be
15 used to fund a portion of the costs of improvements.
16 "Improvements" mean the improvement, expansion,
17 enlargement, or construction of public infrastructure and
18 facilities under the jurisdiction of the unit of local
19 government.
20 "Land use assumptions" means a description of the service
21 area and the improvements or existing deficiencies within the
22 area, including projections relating to changes in land uses,
23 densities, and population growth rates that may affect the
24 service area over a 20-year period.
25 "Level of service" means one of the categories of service
26 as defined by a unit of local government imposing the impact
27 fee as the adopted level of service to serve existing
28 development not subject to the fee and new development. The
29 level of service selected for new development may not exceed
30 the level of service adopted for existing development.
31 "New development" means a residential, commercial,
32 industrial, or other project that is being newly constructed,
33 reconstructed, redeveloped, structurally altered, relocated,
34 or enlarged, and that causes additional burdens on the public
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1 infrastructure and facilities of the service area of the unit
2 of local government. "New development" does not include any
3 new development for which (i) site specific development
4 approval has been given by a unit of local government within
5 18 months before the first date of publication by the unit of
6 local government of a notice of public hearing to consider
7 the land use assumptions relating to the development of a
8 comprehensive improvement plan and imposition of impact fees
9 and (ii) a building permit for the new development is issued
10 within 18 months after the date of publication of the notice.
11 "Nonresidential development" means a building or other
12 structure that is suitable or capable of being used for all
13 purposes other than residential purposes.
14 "Person" means an individual, entity, or unit of local
15 government.
16 "Proportionate share" means the cost of improvements that
17 have a rational nexus to a new development after the
18 consideration of the following factors: the burdens on public
19 infrastructure and facilities caused by the new development,
20 any appropriate credit or offset for contribution of money,
21 dedication of land, construction of improvements, payments
22 reasonably anticipated to be made by or as a result of a new
23 development in the form of user fees, debt service payments,
24 or taxes that are dedicated for improvements, and all other
25 available sources of funding improvements.
26 "Rational nexus" means the relationship between new
27 development and the public infrastructure or facilities
28 necessitated by the development.
29 "Residential development" means a house, building, or
30 other structure that is suitable or capable of being used for
31 residential purposes.
32 "Service area" means a land area within the boundaries of
33 the unit of local government that has been designated by the
34 unit of local government in the comprehensive improvement
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1 plan.
2 "Site specific development approval" means an approval of
3 a plan submitted by a developer to a unit of local government
4 describing with reasonable certainty the type and intensity
5 of use for a specific parcel or parcels of property.
6 "Units of local government" has the meaning provided in
7 Section 1 of Article VII of the Illinois Constitution and
8 includes home rule units.
9 Section 15. Impact fee authorization. A unit of local
10 government may impose an impact fee within a service area
11 upon a developer for the demands for public infrastructure or
12 facilities caused by new development, including estimated
13 maintenance costs for a 20-year period. An impact fee
14 payable by a developer may not exceed a proportionate share
15 of the governmental costs that have a rational nexus to the
16 new development. The impact fee may be used to cover costs
17 associated with the acquisition of land and rights-of-way,
18 with surveying, engineering, planning, and design costs, and
19 with all other costs rationally related to improvements for
20 the public infrastructure and facilities within the service
21 area as designated in the comprehensive improvement plan.
22 Improvements may include roads and bridges, police, fire, and
23 school facilities, and water and sewer lines. The impact fee
24 may also be used for estimated clean-up costs for septic
25 tanks for their potential contamination of surface waters or
26 groundwaters.
27 An impact fee may not be imposed to pay solely for
28 existing deficiencies. The fees may be used in conjunction
29 with other funds available to the unit of local government
30 for the purpose of curing existing deficiencies. The amount
31 of impact fees charged may not exceed the development's
32 proportionate share of the cost of the improvements.
33 Nothing contained in this Section precludes a unit of
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1 local government from providing credits to the developer for
2 services, conveyances, improvements, other fees, or cash as
3 provided by agreement. The improvements, however, must be
4 eligible for inclusion in the comprehensive improvement plan.
5 Section 20. Imposition of impact fees.
6 (a) A unit of local government intending to impose an
7 impact fee must adopt an ordinance or resolution to hold a
8 public hearing to consider land use assumptions that will be
9 used to develop the comprehensive improvement plan. Before
10 the adoption of an ordinance or resolution establishing the
11 public hearing date, the governing body of the unit of local
12 government shall appoint an advisory committee according to
13 Section 30.
14 (b) The unit of local government shall publish notice of
15 the hearing date once each week for 3 consecutive weeks, not
16 less than 30 and not more than 60 days before the scheduled
17 date of the hearing, in a newspaper of general circulation
18 within the unit of local government. The notice may not be
19 smaller than one-quarter page of standard size or
20 tabloid-size newspaper. The notice shall contain the
21 following information:
22 (1) Headline designated as follows: "NOTICE OF
23 PUBLIC HEARING ON LAND USE ASSUMPTIONS RELATING TO THE
24 DEVELOPMENT OF A COMPREHENSIVE IMPROVEMENT PLAN AND
25 IMPOSITION OF IMPACT FEES".
26 (2) The date, time, and location of the public
27 hearing.
28 (3) A statement that the purpose of the hearing is
29 to consider proposed land use assumptions within the
30 service area that will be used to develop a comprehensive
31 improvement plan.
32 (4) A general description of the service area
33 within the unit of local government being affected by the
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1 proposed land use assumptions.
2 (5) A statement that the unit of local government
3 will make available to the public upon request the
4 following: proposed land use assumptions, an easily
5 understandable and detailed map of the service area to
6 which the proposed land use assumptions will apply, along
7 with all other available information relating to the
8 proposed land use assumptions.
9 (6) A statement that any member of the public
10 affected by the proposed land use assumptions has the
11 right to appear at the public hearing and present
12 evidence in support of or against the proposed land use
13 assumptions.
14 In addition to the public notice requirement, the unit of
15 local government must send notice of the intent to hold a
16 public hearing to any person who has requested hearing
17 notification in writing by certified mail, return receipt
18 requested, at least 30 days before the date of the adoption
19 of the ordinance or resolution establishing the public
20 hearing date.
21 (c) Within 30 days after the public hearing has been
22 held, the advisory committee must make a recommendation to
23 adopt, reject in whole or in part, or modify the proposed
24 land use assumptions presented at the hearing by written
25 report to the unit of local government. The unit of local
26 government shall have not less than 30 nor more than 60 days
27 to approve, disapprove, or modify by ordinance or resolution
28 the land use assumptions proposed at the public hearing and
29 the recommendations made by the advisory committee. The
30 ordinance or resolution may not be adopted as an emergency
31 measure.
32 (d) Upon the adoption of an ordinance or resolution
33 approving the land use assumptions, the unit of local
34 government shall provide for a comprehensive improvement plan
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1 to be developed under Section 45 by qualified professionals
2 familiar with generally accepted engineering, planning, and
3 transportation practices. The comprehensive improvement plan
4 must include projections of all costs related to the
5 improvements designated in the comprehensive improvement
6 plan.
7 (e) The unit of local government must then adopt an
8 ordinance or resolution establishing a date for a public
9 hearing to consider the comprehensive improvement plan and
10 the imposition of impact fees related the plan.
11 (f) A public hearing to consider the adoption of the
12 comprehensive improvement plan and imposition of impact fees
13 must be held within the unit of local government subject to
14 the same notice provisions as those stated in subsection (b).
15 The public hearing must be conducted by an official
16 designated by the unit of local government.
17 (g) Within 30 days after the public hearing has been
18 held, the advisory committee must make a recommendation to
19 adopt, reject in whole or in part, or modify the proposed
20 comprehensive improvement plan and related impact fees. The
21 unit of local government shall have not less than 30 nor more
22 than 60 days to approve, disapprove, or modify by ordinance
23 or resolution the proposed comprehensive improvement plan and
24 impact fees. The ordinance or resolution may not be adopted
25 as an emergency measure.
26 Section 25. Ordinance or resolution requirements.
27 (a) An impact fee ordinance or resolution must satisfy
28 the following 2 requirements:
29 (1) The construction, improvement, expansion or
30 enlargement of new or existing public infrastructure or
31 facilities for which an impact fee is imposed must have a
32 rational nexus to the new development paying the fee.
33 (2) The impact fee imposed may not exceed a
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1 proportionate share of the costs incurred or the costs
2 that will be incurred by the unit of local government in
3 the provision of improvements to serve the new
4 development. The proportionate share is the cost
5 rationally related to the new development after the unit
6 of local government considers the following: (i) any
7 appropriate credit, offset, or contribution of money,
8 dedication of land, or construction of improvements; (ii)
9 payments reasonably anticipated to be made by or as a
10 result of a new development in the form of user fees,
11 debt service payments, or taxes that are dedicated for
12 improvements; and (iii) all other available sources of
13 funding improvements.
14 (b) In determining the proportionate share of the cost
15 of improvements to be paid by the developer, the following
16 factors must be considered by the unit of local government
17 imposing the impact fee:
18 (1) The extent to which the new development being
19 assessed the impact fees has already contributed to the
20 cost of improving existing public infrastructure or
21 facilities through taxation, assessment, other fees, or
22 developer or landowner contributions paid in prior years.
23 (2) The extent to which the new development will
24 contribute to the cost of improving existing public
25 infrastructure or improvements in the future.
26 (3) The extent to which the new development should
27 be credited for providing improvements without charge to
28 other properties within the service area.
29 (4) Extraordinary costs, if any, incurred in
30 servicing the new development.
31 (c) An impact fee ordinance or resolution must provide
32 for the calculation of an impact fee according to generally
33 accepted accounting practices. An impact fee shall not be
34 deemed invalid because payment of the fee may result in a
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1 benefit to other owners or developers within the service
2 area, other than the person paying the fee.
3 Section 30. Advisory committee. An impact fee advisory
4 committee must be appointed by the corporate authorities of
5 the unit of local government intending to impose the impact
6 fees. The advisory committee may consist of not less than 10
7 members and not more than 20 members. Not less than 40% of
8 the members of the committee must be representatives of the
9 real estate, development, and building industries and the
10 labor community who are not employees or officials of the
11 unit of local government. The members of the Advisory
12 Committee shall be selected as follows:
13 (1) The representatives of the real estate industry
14 must be licensed under the Real Estate License Act of
15 1983 and must be recommended by a local realtors
16 association.
17 (2) The representatives of the development industry
18 must be recommended by a regional developers association.
19 (3) The representatives of the building industry
20 must be recommended by a regional home builders
21 association.
22 (4) The labor representatives must be recommended
23 by a local labor association.
24 (5) If the unit of local government is a county, at
25 least 30% of the members serving on the commission must
26 be representatives of the municipalities within the
27 county. A convention of mayors in the county shall
28 recommend from their membership municipal representatives
29 to serve on the advisory committee.
30 (6) If the unit of local government has a planning
31 or zoning commission, the unit of local government may
32 elect to use its planning or zoning commission to serve
33 as the advisory committee, provided that not less than
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1 40% of the committee members include representatives of
2 the real estate, development, and building industries and
3 the labor community who are not employees or officials of
4 the unit of local government. A unit of local government
5 may appoint additional members to serve on the planning
6 or zoning commission as ad hoc voting members whenever
7 the planning or zoning commission functions as the
8 advisory committee. No less than 40% of the ad hoc
9 members must include representatives of the real estate,
10 development, and building industries and the labor
11 community.
12 Section 35. Duties of the advisory committee. An
13 advisory committee serves in an advisory capacity and has the
14 following duties:
15 (1) Advise and assist the unit of local government
16 by recommending proposed land use assumptions.
17 (2) Make recommendations with respect to the
18 development of a comprehensive improvement plan.
19 (3) Make recommendations to approve, disapprove, or
20 modify a comprehensive improvement plan by preparing a
21 written report containing these recommendations for the
22 unit of local government.
23 (4) Report to the unit of local government on all
24 matters relating to the imposition of impact fees.
25 (5) Monitor and evaluate the implementation of the
26 comprehensive improvement plan and the assessment of
27 impact fees.
28 (6) Report annually to the unit of local government
29 with respect to the progress of the implementation of the
30 comprehensive improvement plan.
31 (7) Advise the unit of local government of the need
32 to update or revise the land use assumptions,
33 comprehensive improvement plans, or impact fees.
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1 Section 40. Rules and reports. The unit of local
2 government must adopt procedural rules to be used by the
3 advisory committee in carrying out the duties imposed by this
4 Act. The unit of local government must make available to the
5 advisory committee all professional reports relating to the
6 development and implementation of land use assumptions, the
7 comprehensive improvement plan, and periodic up-dates to the
8 comprehensive improvement plan.
9 Section 45. Comprehensive improvement plan. Each unit of
10 local government intending to impose an impact fee must
11 prepare a comprehensive improvement plan. The plan must be
12 prepared by persons qualified in fields relating to
13 engineering, planning, or transportation. The persons
14 preparing the plan shall consult with the advisory committee.
15 The comprehensive improvement plan must contain the
16 following:
17 (1) A description of all existing public
18 infrastructure and facilities, their existing
19 deficiencies within the service area of the unit of local
20 government, a reasonable estimate of all costs related to
21 curing the existing deficiencies, and the current level
22 of service of the existing public infrastructure and
23 facilities.
24 (2) A commitment by the unit of local government to
25 cure existing deficiencies when practical.
26 (3) A description of the land use assumptions
27 adopted by the unit of local government.
28 (4) A description of the public infrastructure and
29 facilities proposed to be improved, expanded, enlarged,
30 or constructed to serve new development and a reasonable
31 estimate of all costs related to the improvement,
32 expansion, enlargement, or construction of the public
33 infrastructure or facilities needed to serve new
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1 development at a level of service not to exceed the level
2 of service currently existing in the service area.
3 (5) Identification of all sources and levels of
4 funding available to the unit of local government for the
5 financing of the improvements.
6 (6) If the proposed improvements include the
7 improvement of public infrastructure or facilities under
8 the jurisdiction of the State or another unit of local
9 government, then an agreement between units of government
10 must specify the proportionate share of funding by each
11 unit. All agreements entered into by the State must
12 provide that the portion of the impact fees collected due
13 to the impact of new development upon public
14 infrastructure and facilities under State jurisdiction be
15 allocated for expenditure for improvements to that
16 infrastructure and those facilities.
17 (7) A schedule stating estimated dates for
18 commencing construction of all improvements identified in
19 the comprehensive improvement plan.
20 Nothing contained in this Section limits the right of a home
21 rule unit to impose conditions on a planned unit development
22 or impose other zoning requirements that may include
23 contributions for improvements necessary or appropriate for
24 the developments.
25 Section 50. Assessment of impact fees. Impact fees shall
26 be assessed by units of local government at the time of final
27 plat approval or when the building permit is issued when no
28 plat approval is necessary. An impact fee may not be
29 assessed by a unit of local government for public
30 infrastructure or facilities within the service area if and
31 to the extent that another unit of local government has
32 imposed an impact fee for the same infrastructure or
33 facilities.
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1 Section 55. Payment of impact fees.
2 (a) In order to minimize the effect of impact fees on
3 the person paying the fees, the following methods of payment
4 shall be used by the unit of local government in collecting
5 the fees. Impact fees imposed upon a residential
6 development, consisting of one single family residence, shall
7 be payable as a condition to the issuance of the building
8 permit. Impact fees imposed upon all other types of new
9 development, including multi-unit residential development,
10 shall be payable as a condition to the issuance of the
11 certificate of occupancy. The developer and the unit of
12 local government must enter into an agreement mandating that
13 the developer notify the unit of local government that the
14 building permit or the certificate of occupancy has been
15 issued. For any development receiving assisted financing,
16 including any development for which a commitment for assisted
17 financing has been issued and for which assisted financing is
18 provided within 6 months of the issuance of the certificate
19 of occupancy, the unit of local government shall provide for
20 the payment of the impact fees through an installment
21 agreement at a reasonable rate of interest for a period of 10
22 years after the impact fee is due.
23 (b) Nothing contained in this Section precludes the
24 payment of the impact fee at the time when the building
25 permit is issued or at an earlier stage of development if
26 agreed to by the unit of local government and the person
27 paying the fees. Nothing contained in this Section precludes
28 the unit of local government from making and entering into
29 agreements providing for the cooperative collection of impact
30 fees. The collection of impact fees shall be the sole
31 responsibility of the unit of local government imposing the
32 impact fee. The agreements may also provide for the
33 reimbursement of collection costs from the fees collected.
34 At the option of the unit of local government, impact fees
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1 may be paid through an installment agreement at a reasonable
2 rate of interest for a period of up to 10 years after the
3 impact fee is due. Nothing contained in this Section shall be
4 construed to give units of local government a preference over
5 the rights of any purchaser, mortgagee, judgment creditor, or
6 other lienholder arising prior to the filing in the office of
7 the recorder of the county or counties in which the property
8 is located of notification of the existence of any
9 uncollected impact fees.
10 Section 60. Interest bearing accounts. All impact fees
11 collected under this Act must be deposited into interest
12 bearing accounts designated solely for the funds for each
13 service area. All interest earned on the funds becomes a part
14 of the moneys to be used for the improvements authorized by
15 this Act. The unit of local government must provide that an
16 accounting be made annually for any account containing impact
17 fee proceeds and interest earned. The accounting must
18 include, but shall not be limited to, the total funds
19 collected, the source of the funds collected, the total
20 amount of interest accruing on the funds, and the amount of
21 funds expended on improvements. Notice of the results of the
22 accounting must be published in a newspaper of general
23 circulation within the unit of local government at least 3
24 times. A statement that a copy of the report is available to
25 the public for inspection at reasonable times must be
26 contained in the notice. A copy of the report must be
27 provided to the advisory committee.
28 Section 65. Amending comprehensive improvement plan. The
29 unit of local government imposing an impact fee may amend the
30 comprehensive improvement plan no more than once per year,
31 provided that the cumulative amendments do not exceed 10% of
32 the total plan in terms of estimated project costs. If a
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1 proposed plan amendment will result in the cumulative
2 amendments to the plan exceeding 10% of the total plan, then
3 the unit of local government must follow the hearing and
4 notice procedures in Section 20. Regardless of whether the
5 comprehensive improvement plan has been amended, the unit of
6 local government imposing an impact fee must update the
7 comprehensive improvement plan at least once every 5 years.
8 The 5-year period commences on the date of the original
9 adoption of the comprehensive improvement plan. The updating
10 of the comprehensive improvement plan must be made according
11 to the hearing and notice procedures in Section 20.
12 Section 70. Refunds. Impact fees collected by a unit of
13 local government must be refunded to the person who paid the
14 fee or to that person's successor in interest whenever the
15 unit of local government fails to encumber by contract impact
16 fees collected within 5 years of the date on which the impact
17 fees were due to be paid. Refunds must be made under this
18 Section only if the person who paid the fee or that person's
19 successor in interest files a petition with the unit of local
20 government imposing the impact fee seeking a refund within
21 one year after the date that the fees were required to be
22 encumbered by contract.
23 Section 75. Appeals. A person paying an impact fee has
24 the right to contest the land use assumptions, the
25 development and implementation of the comprehensive
26 improvement plan, the imposition of impact fees, the periodic
27 updating of the improvement plan, the refund of impact fees,
28 and all other matters relating to impact fees. The initial
29 appeal must be made to the legislative body of the unit of
30 local government according to the procedures adopted in the
31 ordinance or resolution. Subsequent relief must be sought in
32 a de novo proceeding in the appropriate circuit court.
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1 Section 80. Transition clauses.
2 (a) A unit of local government that currently has in
3 effect an impact fee ordinance or resolution for new
4 development to assist with financing public infrastructure
5 and facilities has 12 months from the effective date of this
6 Act to bring its ordinance or resolution into conformance
7 with the requirements imposed by this Act. This Section also
8 applies to an impact fee or ordinance under the Road
9 Improvement Impact Fee Law (scheduled for repeal).
10 (b) A development that has received site specific
11 development approval from a unit of local government within
12 18 months before the first date of publication by the unit of
13 local government of a notice of public hearing to consider
14 land use assumptions relating to the development of a
15 comprehensive improvement plan and imposition of impact fees
16 and that has filed for building permits or certificates of
17 occupancy within 18 months of the date of approval of the
18 site specific development plan may not be required to pay
19 impact fees under this Act for permits or certificates of
20 occupancy issued within that 18-month period. This Act has no
21 effect on the validity of any existing agreements entered
22 into between a developer and a unit of local government
23 pertaining to fees, exactions, or donations made by a
24 developer for the purpose of funding improvements, including
25 fees under the Road Improvement Impact Fee Law.
26 (c) Nothing in this Section requires the refund of
27 impact fees previously collected by units of local government
28 according to their ordinances or resolutions adopted before
29 the effective date of this Act.
30 Section 85. Home rule preemption. A home rule unit may
31 not impose impact fees in a manner inconsistent with this
32 Act. This Act is a limitation under subsection (i) of Section
33 6 of Article VII of the Illinois Constitution on the
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1 concurrent exercise by home rule units of powers and
2 functions exercised by the State.
3 (605 ILCS 5/Art. 5, Div. 9 rep.)
4 Section 105. The Illinois Highway Code is amended by
5 repealing the Road Improvement Impact Fee Law (Division 9 of
6 Article 5).