2021 Impact Fee Deferral Report
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- Congressional materials
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- 2021 Commercereports 20211217 Lgd Impactfeedeferral Final 223E109E 5F4E 4E0
- Case
- 2021 Commercereports 20211217 Lgd Impactfeedeferral Final 223E109E 5F4E 4E0
Summary
The 2021 Impact Fee Deferral Report is a report to the Legislature from the Washington State Department of Commerce, Local Government Division, submitted pursuant to RCW 43.31.980 and dated December 20, 2021. It is the fourth annual report on the impact fee deferral process established in RCW 82.02.050(3). Commerce sent a survey in October 2021 to 200 cities, towns and counties; 104 responded, 62 required impact fees and 13 reported issuing deferrals. The report sets out three recommendations from the Joint Legislative Audit and Review Committee and Commerce's October 21, 2021 response, which supports repealing the data collection requirement. Its tables report 1,394 deferrals requested and issued across fire protection, parks, schools and transportation fees, with 2 transportation deferrals not paid fully or on time.
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“2021 Impact Fee Deferral Report.”
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2021 Impact Fee Deferral
Report
Submitted pursuant to RCW 43.31.980
December 20, 2021
LOCAL GOVERNMENT DIVISION
GROWTH MANAGEMENT
SERVICES Report to the Legislature
Lisa Brown, Director
V3.0
Acknowledgments
Washington State Department of Commerce
Lisa Brown
Director
Mark Barkley
Assistant Director
Local Government Division
Dave Andersen, AICP
Managing Director
Growth Management Services
Washington State Department of Commerce
Matt Ojennus
Senior Planner
(360) 292-3435
matthew.ojennus@commerce.wa.gov
Growth Management Services
1011 Plum St. SE
P.O. Box 42525
Olympia, WA 98504-2525
www.commerce.wa.gov
For people with disabilities, this report is available
on request in other formats. To submit a request,
please call 360.725.4000 (TTY 360.586.0772)
2021 Impact Fee Deferral Report
Table of Contents
Introduction ................................................................................................................................................. 2
Deferral data................................................................................................................................................ 4
2021 Impact Fee Deferral Report 1
Introduction
Authorizing legislation
Per RCW 43.31.980, the Department of Commerce (Commerce) must report annually on the deferral process
for impact fees as follows:
(1) Beginning December 1, 2018, and each year thereafter, the department of commerce must prepare an annual
report on the impact fee deferral process established in RCW 82.02.050(3). The report must include (a) The number
of deferrals requested of and issued by counties, cities, and towns; (b) the number of deferrals that were not fully and
timely paid; and (c) other information as deemed appropriate.
(2) The report required by this section must, in accordance with RCW 43.01.036, be submitted to the appropriate
committees of the house of representatives and the senate.
Commerce published its first report in 2018. This is the fourth annual report.
Background
During the 2015 session, the Washington State Legislature passed Senate Bill 5923, which in part established a
deferral program for impact fees.
Local governments fully planning under the Growth Management Act (GMA) can collect impact fees for fire
protection facilities, transportation facilities, parks and schools. Local governments can chose to charge
different rates for different classes of construction, such as residential, commercial and retail. Local
governments can also chose to collect impact fees on only a single type of construction. Except under specific
circumstances, a local government must refund fees not expended or dedicated within 10 years of collection.
All local governments imposing an impact fee were required to establish an impact fee deferral program by
Sept. 1, 2016.
The deferral program applies to builders. Local governments can allow for a minimum of 20 deferrals of single-
family homes built per year by a builder, and have the option to permit more. The deferral can last no longer
than 18 months. At minimum, the local government must offer builders at least one of the following options to
defer collection of the impact fee payment:
Payment of the final property inspection
Issuance of a certificate of occupancy or similar certificate
Closing of the first sale of the property occurring after issuance of the applicable building permit
Report methodology
Commerce collected data for this report using SurveyMonkey in October 2021. There were 17 questions.
Planning directors, permitting departments and city administrators were notified of the survey by email.
Non-respondents received a reminder email in the third week of October.
Survey responses
Commerce sent the survey to 200 cities, towns and counties. Of those, 104 responded (52% response rate).
Sixty-two respondents required impact fees. Thirteen local governments reported issuing deferrals.
2021 Impact Fee Deferral Report 2
The future of impact fee deferral reporting
In 2021, the Joint Legislative Audit and Review Committee (JLARC) completed its report on the Impact Fee
Deferral Program. They provided three recommendations:
Jurisdictions without a deferral program should pass an ordinance to adopt and maintain deferral
programs as required by statute.
The Legislature should consider whether liens are necessary to ensure that deferred fees are paid.
The Legislature should either repeal Commerce's data collection requirement or identify specific
measures Commerce should collect for ongoing program oversight.
On October 21, 2021, Commerce Director Lisa Brown responded to JLARC:
Commerce concurs with JLARC's recommendation that cities without a deferral program should pass
an ordinance to adopt and maintain deferral programs as required by statute.
Commerce concurs with JLARC's recommendation that the Legislature should consider whether liens
are necessary to ensure that deferred fees are paid.
Commerce partially concurs with JLARC's recommendation that the Legislature either repeal
Commerce's data collection requirement or identify specific measures Commerce should collect for
ongoing program oversight.
Commerce supports the repeal of the data collection requirement. JLARC's 2021 study identifies:
Ninety-eight jurisdictions offered deferrals.
Five of these jurisdictions accounted for 91% of the issued deferrals.
Ferndale
Kitsap County
La Center
Redmond
Ridgefield
These five jurisdictions issued only 8% of the single-family building permits.
Less than 5% of eligible permits were issued with deferral programs.
Local governments report that 99.9% of deferred fees were paid on time.
This data shows that builders rarely request impact fee deferrals. We also see that deferral programs have a
limited impact on affordability, likely due to relatively low costs that must be carried by developers for the
impact fees until project completion. Commerce sees no risk in discontinuing data collection. Staff resources
currently needed to perform survey requirements can be better used elsewhere.
2021 Impact Fee Deferral Report 3
Deferral data
Table 1: Total deferrals by type of impact fee
Deferrals not paid fully
Type of impact fee Deferral requested Deferrals issued or on time
Fire protection facility 3 3 0
Parks 487 487 0
Schools 426 426 0
Transportation 478 478 2
Total impact fees 1,394 1,394 2
Table 2: Fire protection facility impact fee deferrals
Deferrals not paid fully
Jurisdiction Deferrals requested Deferrals issued or on time
Auburn 2 2 0
Battle Ground 1 1 0
Total 3 3 0
2021 Impact Fee Deferral Report 4
Table 3: Park deferrals
Deferrals not paid fully
Jurisdiction Deferrals requested Deferrals issued or on time
Auburn 2 2 0
Battle Ground 1 1 0
Bellingham 23 23 0
Carnation 1 1 0
Ferndale 59 59 0
Kitsap County 226 226 0
La Center 20 20 0
Olympia 48 48 0
Ridgefield 105 105 0
University Place 2 2 0
Total 487 487 0
2021 Impact Fee Deferral Report 5
Table 4: School facility deferrals
Deferrals not paid fully
Jurisdiction Deferrals requested Deferrals issued or on time
Auburn 2 2 0
Battle Ground 1 1 0
Bellingham 23 23 0
Carnation 1 1 0
Clark County 1 1 0
Ferndale 59 59 0
King County 3 3 0
Kitsap County 226 226 0
La Center 20 20 0
Olympia 19 19 0
Ridgefield 71 71 0
Total 426 426 0
2021 Impact Fee Deferral Report 6
Table 5: Transportation deferrals
Deferrals not paid fully
Jurisdiction Deferrals requested Deferrals issued or on time
Auburn 2 2 0
Battle Ground 1 1 0
Bellingham 23 23 0
Carnation 1 1 0
Clark County 1 1 0
Ferndale 59 59 0
Kitsap County 226 226 0
La Center 20 20 0
Olympia 48 48 0
Ridgefield 81 81 0
Shelton 11 11 0
University Place 5 5 2
Total 478 478 2
2021 Impact Fee Deferral Report 7
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