Montana Code 7-6-1602. Calculation of impact fees — documentation required — ordinance or resolution — requirements for impact fees
7-6-1602. Calculation of impact fees — documentation required — ordinance or resolution — requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report.
Terms Used In Montana Code 7-6-1602
- Capital improvements: means improvements, land, and equipment with a useful life of 10 years or more that increase or improve the service capacity of a public facility. See Montana Code 7-6-1601
- Development: means construction, renovation, or installation of a building or structure, a change in use of a building or structure, or a change in the use of land when the construction, installation, or other action creates additional demand for public facilities. See Montana Code 7-6-1601
- Governmental entity: means a county, city, town, or consolidated government. See Montana Code 7-6-1601
- Impact fee: means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. See Montana Code 7-6-1601
- Proportionate share: means that portion of the cost of capital system improvements that reasonably relates to the service demands and needs of the project. See Montana Code 7-6-1601
- Public facilities: means :
(a)a water supply production, treatment, storage, or distribution facility;
(b)a wastewater collection, treatment, or disposal facility;
(c)a transportation facility, including roads, streets, bridges, rights-of-way, traffic signals, and landscaping;
(d)a storm water collection, retention, detention, treatment, or disposal facility or a flood control facility;
(e)a police, emergency medical rescue, or fire protection facility; and
(f)other facilities for which documentation is prepared as provided in 7-6-1602 that have been approved as part of an impact fee ordinance or resolution by:
(i)a two-thirds majority of the governing body of an incorporated city, town, or consolidated local government; or
(ii)a unanimous vote of the board of county commissioners of a county government. See Montana Code 7-6-1601
- User fees: Fees charged to users of goods or services provided by the government. In levying or authorizing these fees, the legislature determines whether the revenue should go into the treasury or should be available to the agency providing the goods or services.
(2)The service area report is a written analysis that must:
(a)describe existing conditions of the facility;
(b)establish level-of-service standards;
(c)forecast future additional needs for service for a defined period of time;
(d)identify capital improvements necessary to meet future needs for service;
(e)identify those capital improvements needed for continued operation and maintenance of the facility;
(f)make a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits;
(g)make a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits;
(h)establish the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area;
(i)establish the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee;
(j)establish the amount of the impact fee that will be imposed for each unit of increased service demand; and
(k)have a component of the budget of the governmental entity that:
(i)schedules construction of public facility capital improvements to serve projected growth;
(ii)projects costs of the capital improvements;
(iii)allocates collected impact fees for construction of the capital improvements; and
(iv)covers at least a 5-year period and is reviewed and updated at least every 5 years.
(3)The service area report is a written analysis that must contain documentation of sources and methodology used for purposes of subsection (2) and must document how each impact fee meets the requirements of subsection (7).
(4)The service area report that supports adoption and calculation of an impact fee must be available to the public upon request.
(5)The amount of each impact fee imposed must be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the governmental entity as a result of new development. The calculation of each impact fee must be in accordance with generally accepted accounting principles.
(6)The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (2).
(7)An impact fee must meet the following requirements:
(a)The amount of the impact fee must be reasonably related to and reasonably attributable to the development’s share of the cost of infrastructure improvements made necessary by the new development.
(b)The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs:
(i)the need for public facilities capital improvements required to serve new development; and
(ii)consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements.
(c)Costs for correction of existing deficiencies in a public facility may not be included in the impact fee.
(d)New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service.
(e)Impact fees may not include expenses for operations and maintenance of the facility.