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This item will be discussed and voted upon at upcoming meetings of the Chapel Hill Town Council and the Orange County Board of Commissioners. If passed, the General Assembly will be asked to pass enabling legislation. ORANGE COUNTY IMPACT TAX Mr. Gledhill mentioned that the Impact Tax would be much more manageable than trying to administer an Impact Fee. The Impact Fee would require a nexus be established between the development which is occurring and the infrastructure which that development would require. It is a complicated process to keep that nexus in place. That would not be required with an Impact Tax. The tax money would be used for the same purposes. It would be held in capital trusts and would be reserved to be used for the infrastructure that the development creates, however, the calculations would not need to be done. He indicated that this would be a tax on current construction and would not be retroactive. Council Member Preston stated that there is a great deal already required of developers in Chapel Hill . They must pave the roads, landscape, dedicate recreation land, and protect trees. This Impact Tax could place an undue burden on them. Commissioner Willhoit agreed that they are required to do those things, however, they are not required to do anything for the schools. The two systems are requesting upwards of $90,000,000 in capital improvements which could be a property tax impact unless other action is taken. He pointed out that if it were a fee it would be relatively simple to define the impact on water and sewer for residential development. Establishing the impact on the schools would require changing the wording so that it was clearly applicable within all of Orange County. Mr. Gledhill indicated that the Impact Fee authority that the Town has covers their planning jurisdiction. The County's Impact Fee authority covers its planning jurisdiction. There is no overlap. The Impact Tax would be imposed on all development in the County, not just in on section. Commissioner Willhoit remarked that the real impact is in providing the additional classrooms. The largest percentage of the increase in property taxes over the years has been for the schools. The Impact Tax could help offset that increase in the future. Council Member Andresen indicated that she believes further study of the issue isneeded to determine the consequences this tax will have on local developers. Mr. Gledhill indicated that the Impact Tax proposal had two features. It has a district in which the revenue is divided between the town and county, with the town getting the tax collected on development within the Town's jplanning jurisdiction.