An impact fee is a charge on new development to pay for the construction or expansion of off-site capital improvements (roads, public buildings, etc.) that are necessitated by and benefit the new development.
In general, a residential developer will pay mandatory impact fees (roads, community parks and emergency services) at the time of the development approval. The individual home buyer will pay the remaining impact fees when the building permit for the home is obtained. Home builders who are not part of a recently approved development project would pay all of the fees at the time that a building permit is obtained. Fees are used to build parks, public buildings, libraries, emergency services facilities, law enforcement facilities, law enforcement and correction facilities, transportation facilities, and schools.
For nonresidential development, impact fees for public buildings, emergency services, law enforcement, corrections and transportation facilities are charged based on the type of nonresidential development. The fee may be based on square footage, per room (hotels), per pump (gas stations), or slip (boat storage), as appropriate. Differences in cost are based on the amount of the impact expected by the particular type of development. For example, more people visit a fast food restaurant over the course of a day than would typically visit a mini-warehouse, thereby creating more impact on roads.
Article 6, Section 6.11.A of the Land Development Regulations provides rules on the exemption of impact fees for the alteration, expansion, or replacement of existing residential or nonresidential buildings:
6.11.A. Exemptions. The following shall be exempted from payment of impact fees:
- Alteration, expansion or replacement of an existing residential building where no additional dwelling units are created, where the use is not changed, and no additional vehicular trips will be produced over and above that produced by the existing use.
- Alteration, remodeling or replacement of an existing nonresidential building or structure where the use is not changed and the square footage and/or parking is not increased.
- The construction of accessory buildings or structures that do not create an additional impact on public capital facilities or produce additional vehicular trips over and above that produced by the principal building or use of the land.
- If a new use on a site exceeds the square footage of the prior use, impact fees are based on the net increase in square in footage between the two uses. If the use is changed but the square footage decreases, there is no impact.
- If the square footage stays the same, but the use changes to a more intense use, impacts are based on the difference between the new uses.