Impact Fee - Implementation and Legal Basis

Implementation and Legal Basis

There are two main rationales that focus on how to implement impact fees. The first focuses on recognizing that the fees are positive exactions of funds for a community and should be used in that manner. Second, impact fees should be used for any need in the community. At the time when impact fee usage first started people argued whether they should just focus on utility types or include other types of special services of facilities. Some argued for just utility types because only the people paying the actual fee would receive the service. This is known as a closed ended use. An open ended use, such as parks or libraries, allows anyone to use the service, even if they have not directly paid for the service. Still people argue and believe that development can have an impact on all services and should help contribute to them. When it comes to implementing impact fees there is a legal basis that must be considered or followed in order for legal implementation. They must follow the rational nexus and roughly proportional rules or guidelines. There must be a connection between the new development and the need for the new facilities in the region. Also, the impact fee must be able to benefit the person paying the fee along with calculating the fee on a fair proportionate formula for all residents. One main dilemma with implementing the fee is characterized as the exclusiveness of benefit. It focuses on determining who should pay for what in the case of impact fees. Some may have to pay for the fee, but may not get to use the service which can be seen as a tax, but by using impact fees on people that cause the need for the new service it helps to not cause a tax on everyone and allows those that are not using the service to be excluded from paying the fee.