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12 <br /> CHCCS School Impact Fee Report(DRAFT) <br /> General Impact Fee Requirements <br /> Impact fees are one-time payments used to fund capital improvements necessitated by new growth.This <br /> type of fee has been utilized by local governments in various forms for at least 50 years. Impact fees have <br /> limitations and should not be regarded as the total solution for infrastructure financing needs. Rather, <br /> they should be considered one component of a comprehensive portfolio to ensure adequate provision of <br /> public facilities with the goal of maintaining current LOS in a community in the face of new growth. Any <br /> community considering impact fees should note the following limitations: <br /> • Impact fees can only be used to finance capital infrastructure and cannot be used to finance <br /> ongoing operations and/or maintenance and rehabilitation costs; <br /> • Impact fees cannot be deposited in the local government's General Fund: the funds must be <br /> accounted for separately in individual accounts and earmarked for the capital expenses for which <br /> they were collected; and <br /> • Impact fees cannot be used to correct existing infrastructure deficiencies unless there is a funding <br /> plan in place to correct the deficiency for all current residents and businesses in the community. <br /> LEGAL FRAMEWORK <br /> U.S. Constitution. Like all land use regulations, development exactions—including impact fees—are <br /> subject to the Fifth Amendment prohibition on taking of private property for public use without just <br /> compensation. Both state and federal courts have recognized the imposition of impact fees on <br /> development as a legitimate form of land use regulation, provided the fees meet standards intended to <br /> protect against regulatory takings. To comply with the Fifth Amendment, development regulations must <br /> be shown to substantially advance a legitimate governmental interest. In the case of impact fees, that <br /> interest is the protection of public health, safety, and welfare by ensuring that development is not <br /> detrimental to the quality of essential public services. <br /> There is little federal case law specifically dealing with impact fees, although other rulings on other types <br /> of exactions (e.g., land dedication requirements) are relevant. In one of the most important exaction <br /> cases,the U.S.Supreme Court found that a government agency imposing exactions on development must <br /> demonstrate an "essential nexus" between the exaction and the interest being protected (see Nollan v. <br /> California Coastal Commission, 1987). In a more recent case (Dolan v. City of Tigard, OR, 1994),the Court <br /> ruled that an exaction also must be "roughly proportional" to the burden created by development. <br /> However, the Dolan decision appeared to set a higher standard of review for mandatory dedications of <br /> land than for monetary exactions such as impact fees. <br /> REQUIRED I I <br /> There are three reasonable relationship requirements for impact fees that are closely related to "rational <br /> nexus" or"reasonable relationship" requirements enunciated by a number of state courts. Although the <br /> 5 <br />