Changes to Development Impact Fee System (SB 1525)

Arizona law currently allows a municipality to assess development impact fees in order to offset costs associated with various public services to a development.  Senate Bill 1525 changes the manner in which municipalities are permitted to charge and calculate development impact fees.

Senate Bill 1525 requires municipalities to create impact fee advisory committees comprised of a majority of members from the real estate, development, and homebuilding industries.  As an alternative to creating such an advisory committee, a municipality may provide for a biennial audit of its land use assumptions, infrastructure improvements plan, and development impact fees.  Senate Bill 1525 also modifies the scope of “necessary public services” to be provided by a municipality to a development to include water, wastewater, storm water, drainage, and flood control facilities; libraries; certain street facilities; fire and police departments; and neighborhood parks and recreational facilities.  The new legislation also imposes certain restrictions on a municipality’s ability to use development impact fees.

Revitalization Districts (SB 1203)

Arizona law allows for the formation of revitalization districts in certain redevelopment and other areas in order to allow developers to finance the cost of certain public infrastructure.  Senate Bill 1203 expands the list of public infrastructure that can be financed through a revitalization district to include the collection, transport, delivery, storage, treatment, and dispersal of water systems.  The legislation also clarifies that the restrictions established under the current law relating to professional sports stadiums do not apply to multipurpose venues that host sporting events and other events such as music concerts, etc.

Acquisition of Wastewater Utility (SB 1171)

Senate Bill 1171 allows a municipality that is authorized to operate a wastewater utility to acquire all or part of a sewage system from a county, and establishes requirements for the transfer process.  Upon an affirmative vote by a majority of electors, title to sewer pipes, pumps, and other infrastructure within municipal limits is transferred to that municipality.  In addition, title to a sewage treatment facility within or outside a municipality may be transferred to the municipality if at least 75% of the sewage treated at such facility originates in that municipality.