Municipal Law Alert, June 2012
Impact fees collected before January 1, 2003 must be used no later than December 31 of this year. If a municipality had an impact fee ordinance in effect prior to 2003 and it collected any funds, those funds must either be used for the purpose for which they were collected, or any remaining funds must be refunded to the present owner of the property on which the impact fees were imposed.
This deadline is the result of changes made to Wisconsin statutes when, on January 4, 2008, then-Governor Doyle signed into law 2007 Act 44 (which became effective on January 19, 2008). This law made changes to Wisconsin Statute § 66.0617, titled “Impact fees.” You can review Act 44 and its legislative history here.
One of the more significant of these changes was to establish a relatively complicated series of deadlines by which a municipality must either (a) use impact fees; or (b) refund the money to the present owner of the property on which the fee was imposed.
Along with the December 31, 2012 deadline mentioned above, Act 44 also established other deadlines for fees collected after January 1, 2003. (2009 Act 180, a “correction bill,” modified those deadlines to clear up an ambiguity with respect to certain deadlines). A rule of thumb would be that, in general, there is a ten year deadline to use impact fees, but this rule of thumb is subject to exceptions. The following somewhat complicated series of deadlines currently apply:
- Impact fees collected after December 31, 2002 and before April 11, 2006, must be used not later than the first day of the 120th month beginning after the date on which the fee was collected. For example, pursuant to Wis. Stat. § 66.0617(9)(c)2, impact fees collected after December 31, 2002, and before April 11, 2006 will be on a rolling ten year deadline, so if an impact fee was collected on, say, January 10 of 2003, its deadline would be Feb 1, 2013.
- Impact fees collected after April 10, 2006 and collected within seven years of the effective date of the ordinance imposing the fee must be used within 10 years after the effective date of the ordinance. The 10-year limit may be extended for three years if the municipality passes a resolution that includes detailed written findings specifying the extenuating circumstances or hardship supporting the need for the extension.
- Impact fees collected after April 10, 2006 and collected more than seven years after the effective date of the ordinance imposing the fees must be used within a reasonable period of time after collected.
As mentioned above, watch out for the complicated exceptions. For example, impact fees collected after April 10, 2006 and more than seven years after passage of the local impact fee ordinance must be used within a “reasonable” time. Of course “reasonable” may vary depending on the circumstances. A reasonable time to build a water tower will almost certainly be considerably longer than a reasonable time to install playground equipment in a park. These determinations will have to be made on a case by case basis (unless the law changes).
Speaking of parks, Wisconsin 2007 Act 44 also reauthorized collecting fees in lieu of parkland dedications as a condition of approval of plats and subdivisions. This was not a change to the impact fee laws under 66.0617. Instead, this authorization is found in the platting and subdivision statute, Wis. Stat. §§ 236.45(6)(am) & (b). This law has changed several times since 2001, but appears to have stabilized. Municipalities should check their ordinances to make sure they comply with current state law concerning collecting fees for parkland development in lieu of requiring land dedications.