2023 -- S 0595
========
LC002302
========
S TATE OF RHODE IS LAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
____________
A N A C T
RELATING TO TOWNS AN D CITIES – RHODE ISLAND DEVELOPMENT IMPACT FEE
ACT
Introduced By: Senators Gu, Euer, Kallman, Mack, Valverde, and Lauria
Date Introduced: March 07, 2023
Referred To: Senate Housing & Municipal Government
It is enacted by the General Assembly as follows:
SECTION 1. Sections 45-22.4-3 and 45-22.4-5 of the General Laws in Chapter 45-22.4 1
entitled "Rhode Island Development Impact Fee Act" are hereby amended to read as follows: 2
45-22.4-3. Definitions. 3
As used in this chapter, the following words have the meanings stated in this section: 4
(1) “Capital improvements” means improvements with a useful life of ten (10) years or 5
more, which increases or improves the service capacity of a public facility; 6
(2) “Capital improvement program” means that component of a municipal budget that sets 7
out the need for public facility capital improvements, the costs of the improvements, and proposed 8
funding sources. A capital improvement program must cover at least a five (5) year period and 9
should be reviewed at least every five (5) years; 10
(3) “Developer” means a person or legal entity undertaking development; 11
(4) “Governmental entity” means a unit of local government; 12
(5) “Impact fee” means the charge imposed upon new development by a governmental 13
entity to fund all or a portion of the public facility’s capital improvements affected by the new 14
development from which it is collected; 15
(6) “Proportionate share” means that portion of the cost of system improvements which 16
reasonably relates to the service demands and needs of the project; and 17
(7) “Public facilities” means: 18
LC002302 - Page 2 of 4
(i) Water supply production, treatment, storage, and distribution facilities; 1
(ii) Wastewater and solid waste collection, treatment, and disposal facilities; 2
(iii) Roads, streets, and bridges, including rights-of-way, traffic signals, landscaping, and 3
local components of state and federal highways; 4
(iv) Storm water collection, retention, detention, treatment, and disposal facilities, flood 5
control facilities, bank and shore projections, and enhancement improvements; 6
(v) Parks, open space areas, and recreation facilities; 7
(vi) Police, emergency medical, rescue, and fire protection facilities; 8
(vii) Public schools and libraries; and 9
(viii) Affordable housing projects; and 10
(ix) Other public facilities consistent with a community’s capital improvement program. 11
45-22.4-5. Collection and expenditure of impact fees. 12
(a) The collection and expenditure of impact fees must be reasonably related to the benefits 13
accruing to the development paying the fees. The ordinance shall consider the following 14
requirements: 15
(1) Upon collection, impact fees must be deposited in a special proprietary fund, which 16
shall be invested with all interest accruing to the trust fund; 17
(2) Within eight (8) years of the date of collection, impact fees shall be expended or 18
encumbered for the construction of public facilities’ capital improvements of reasonable benefit to 19
the development paying the fees and that are consistent with the capital improvement program; 20
(3) Where the expenditure or encumbrance of fees is not feasible within eight (8) years, the 21
governmental entity may retain impact fees for a longer period of time if there are compelling 22
reasons for the longer period. The governing body shall identify, in writing, the compelling reasons 23
for retaining impact fees for a longer period of time over eight (8) years. In no case shall impact 24
fees be retained longer than ten (10) years. 25
(b) All impact fees imposed pursuant to the authority granted in this chapter shall be 26
assessed upon the issuance of a building permit or other appropriate permission to proceed with 27
development and shall be collected only upon the issuance of the certificate of occupancy or other 28
final action authorizing the intended use of a structure. 29
(c) A governmental entity may recoup costs of excess capacity in existing capital facilities, 30
where the excess capacity has been provided in anticipation of the needs of new development, by 31
requiring impact fees for that portion of the facilities constructed for future users. The need to 32
recoup costs for excess capacity must have been documented by a preconstruction assessment that 33
demonstrated the need for the excess capacity. Nothing contained in this chapter shall prevent a 34
LC002302 - Page 3 of 4
municipality from continuing to assess an impact fee that recoups costs for excess capacity in an 1
existing facility without the preconstruction assessment so long as the impact fee was enacted at 2
least ninety (90) days prior to July 22, 2000, and is in compliance with this chapter in all other 3
respects pursuant to § 45-22.4-7. The fees imposed to recoup the costs to provide the excess 4
capacity must be based on the governmental entity’s actual cost of acquiring, constructing, or 5
upgrading the facility and must be no more than a proportionate share of the costs to provide the 6
excess capacity. That portion of an impact fee deemed recoupment is exempted from provisions of 7
subsection (a)(2) of this section. 8
(d) Governmental entities may accept the dedication of land or the construction of public 9
facilities in lieu of payment of impact fees provided that: 10
(1) The need for the dedication or construction is clearly documented in the community’s 11
capital improvement program or comprehensive plan; 12
(2) The land proposed for dedication or the facilities to be constructed are determined to 13
be appropriate for the proposed use by the local governmental entity; 14
(3) Formulas and/or procedures for determining the worth of proposed dedications or 15
constructions are established. 16
(e) The collection of impact fees may, at the discretion of the appropriate governmental 17
entity, be imposed on commercial properties to subsidize the creation of affordable housing projects 18
within the municipality. 19
(f) Exemptions: 20
(1) Impact fees shall not be imposed for remodeling, rehabilitation, or other improvements 21
to an existing structure, or rebuilding a damaged structure, unless there is an increase in the number 22
of dwelling units or any other measurable unit for which an impact fee is collected. Impact fees 23
may be imposed when property that is owned or controlled by federal or state government is 24
converted to private ownership or control. 25
(2) Nothing in this chapter shall prevent a municipality from granting any exemption(s) 26
that it deems appropriate. 27
(3) Impact fees shall not be imposed on any affordable housing projects. 28
SECTION 2. This act shall take effect upon passage. 29
========
LC002302
========
LC002302 - Page 4 of 4
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TOWNS AN D CITIES – RHODE ISLAND DEVELOP MENT IMPACT FEE
ACT
***
This act would allow impact fees to be imposed on commercial properties to subsidize the 1
creation of affordable housing projects within the municipality, at the discretion of the appropriate 2
governmental agency. 3
This act would take effect upon passage. 4
========
LC002302
========