The impact fee structure in Washington is based on a simple premise – development should pay for the impacts of development. Two bills that are scheduled to be heard before the cutoff deadline would change that structure to taxpayers should pay for the growth impacts of development.

Impact fees are one-time charges assessed by local governments and paid by real estate developers to help pay for new or expanded public facilities infrastructure—only those facilities that are included in their capital facilities plan completed as part of their growth management planning responsibilities. The impact fee statute requires a detailed study to determine the amount of fees based on a development’s actual impact to facilities and infrastructure. If the project changes, and with it the construction costs, the impact fees are adjusted.

HB 2451, sponsored by Rep. Spencer Hutchins (R–Gig Harbor), proposes to tie impact fees to inflation and prohibits any increases beyond the consumer price index since the last impact fee schedule was adopted. The artificial cap this creates would cap the amount the developer must pay for the impacts, shifting those costs to the existing taxpayers (rather that the new occupants of the development) to make up the rest.

SB 6285, sponsored by Sen. John Braun (R–Centralia), goes even further by restricting impact fees from paying more than half of the cost of the new development’s impacts to public facilities and infrastructure. The rest would come from taxpayers. The bill also requires a separate account for impact fees assessed after July 1, 2024, and only allows those funds to be spent within five years, instead of the existing 10-year timeframe. Impact fees come in as development comes in and piecing the necessary funding together takes time. These significant projects cannot be tuned around in five years, when often state and federal permitting takes that long alone.

AWC opposes both approaches.

Dates to remember

HB 2451 is scheduled for a public hearing in the House Housing Committee on Tuesday, January 30 at 10:30 am. The bill is scheduled for a committee vote on Wednesday, January 31 at 8 am.

SB 6285 is scheduled for a public hearing in the Senate Ways & Means Committee on Thursday, February 1 at 1:30 pm.