Municipal Law Alert, February 2008
2007 Wisconsin Act 44 was enacted on January 4 and took effect on January 8, 2008. The proposed provisions of this Act were summarized in the July 2007 issue of the Municipal Law Alert. Since additional provisions were added to this Act since that time, a brief review of the major provisions of this Act is warranted.
1. The time period within which impact fees must be used:
Impact fees collected prior to April 10, 2006 (the effective date of the prior amendment containing the previous seven-year limit) must be used prior to the following deadlines:
a. For impact fees collected prior to 2003: December 31, 2012.
b. For impact fees collected from January 1, 2003 through April 10, 2006: the first day of the 120th month beginning after the date on which the fee was collected (this would be a maximum of ten years and one month).
c. For impact fees collected after April 10, 2006, and within seven years of the effective date of the municipality’s impact fee ordinance: ten years from the effective date of the ordinance.
d. For impact fees collected after April 10, 2006, and more than seven years from the effective date of the municipality’s impact fee ordinance: “within a reasonable period of time after they are collected.”
Note that only the ten-year limitation specified for those impact fees collected within the time frames specified in Paragraph “c.” above can be extended for an additional three years by passage of a resolution detailing the extenuating circumstances justifying the extension.
To some degree, then, the Wisconsin legislature has come “full circle” on this issue. For fees collected consistent with the time frames specified in Paragraph “d.” above, the “reasonable period of time” language that was in the original statute is now brought back. Some commentators attributed the previous reduction of the time limit to seven years to the fact that some municipalities had interpreted the “reasonable period” language too broadly and had specified limits of 40 years or more in their ordinances.
In light of this history, municipalities that choose to specify a specific number of years for impact fees collected within the time frames in Paragraph “d.” above would be well advised to avoid setting that limit too long – it should perhaps be 10-15 years at the very most and should be based on the nature and type of public improvement for which the fees are collected.
Municipal officials in municipalities which have unused impact fees would also be well advised to track those impact fees, in order to determine and document the specific deadline that applies to the various fees already collected. Failure to analyze impact fees that have been collected but not spent could result in a claim that certain impact fees be refunded because the applicable statutory deadline for use has expired.