Impact fees

AN ACT Relating to impact fees; and amending RCW 82.02.050.1
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:2
Sec. 1. RCW 82.02.050 and 2015 c 241 s 1 are each amended to 3
read as follows: 4
(1) It is the intent of the legislature: 5
(a) To ensure that adequate facilities are available to serve new 6
growth and development; 7
(b) To promote orderly growth and development by establishing 8
standards by which counties, cities, and towns may require, by 9
ordinance, that new growth and development pay a proportionate share 10
of the cost of new facilities needed to serve new growth and 11
development; and 12
(c) To ensure that impact fees are imposed through established 13
procedures and criteria so that specific developments do not pay 14
arbitrary fees or duplicative fees for the same impact.15
(2) Counties, cities, and towns that are required or choose to 16
plan under RCW 36.70A.040 are authorized to impose impact fees on 17
development activity as part of the financing for public facilities, 18
provided that the financing for system improvements to serve new 19
development must provide for a balance between impact fees and other 20
sources of public funds and cannot rely solely on impact fees.21
S-0665.2
SENATE BILL 5614
State of Washington 69th Legislature 2025 Regular Session
By Senators Salomon, Trudeau, Alvarado, Liias, Frame, and Nobles
Read first time 01/31/25. Referred to Committee on Housing.
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(3)(a)(((i))) Counties, cities, and towns collecting impact fees 1
must, by September 1, ((2016)) 2026, adopt and maintain a system for 2
the deferred collection of impact fees for single-family detached and 3
attached residential construction. The deferral system must include a 4
process by which an applicant for a building permit for ((a)) single-5
family detached or attached residence s may ((request a deferral of 6
the full impact fee payment. The deferral system offered by a county, 7
city, or town under this subsection (3) must include one or more of 8
the following options:9
(A) Deferring collection of the impact fee payment until final 10
inspection;11
(B) Deferring collection of the impact fee payment until 12
certificate of occupancy or equivalent certification; or13
(C) Deferring collection of the impact fee payment until the time 14
of closing of the first sale of the property occurring after the 15
issuance of the applicable building permit.16
(ii) Counties, cities, and towns utilizing the deferral process 17
required by this subsection (3)(a))) execute a promissory note in 18
favor of the county, city, or town imposing the impact fee for the 19
full value of the impact fees imposed. The note must come due at the 20
time provided for in (b) of this subsection (3). The note must 21
identify each impact fee that it covers and the total amount of fees 22
that are due. The note must be recorded with the county auditor at 23
the expense of the applicant. If lots have not been created on the 24
subdivision, the note must be recorded for the entire subdivision. 25
The payment of the fees detailed in the promissory note is the legal 26
responsibility of the applicant.27
(b) The promissory note must include a provision for payment of 28
the impact fee:29
(i) At the time of the issuance of a certificate of occupancy or 30
equivalent certification for the lot or unit;31
(ii) At the time of the closing of the first sale of the lot or 32
unit occurring after the issuance of the applicable building permit; 33
or34
(iii) At the time of final inspection.35
(c)(i) If a county, city, or town has determined that payment of 36
the impact fees is due at the time of the issuance of the certificate 37
of occupancy or equivalent certification or at the time of the final 38
inspection, the county, city, or town may withhold certification of 39
final inspection, the certificate of occupancy, or equivalent 40
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certification until the impact fees have been paid in full . If the 1
applicant has not paid in full by the time of the first sale of the 2
lot or unit occurring after the issuance of the applicable building 3
permit, then the impact fees are due immediately at the time of sale.4
(ii) If the full impact fees have not been paid within one month 5
of the sale of the first sale of the lot or unit occurring after the 6
issuance of the applicable building permit, then the note bears 7
interest at the rate provided for in RCW 82.32.050(2). The rate must 8
be adjusted on the first day of January of each year for use in 9
computing interest for that calendar year. The county treasurer must 10
provide the county, city, or town covered by the promissory note with 11
the variable rate on or before December 31st of the year preceding 12
the year in which the rate applies.13
(iii) In addition to the interest provided for in (c)(ii) of this 14
subsection (3), if an applicant has not paid the impact fees in full 15
within one month of the first sale of the lot or unit occurring after 16
the issuance of the applicable building permit, the applicant must 17
additionally be assessed a penalty of five percent of the total 18
amount remaining due on the promissory note. If the promissory note 19
has not been paid in full within two months of the time of the first 20
sale of the lot or unit occurring after the issuance of the 21
applicable building permit, the applicant must instead be assessed a 22
penalty of 10 percent of the total amount remaining due on the 23
promissory note. If the promissory note has not been paid in full 24
within three months of the time of the first sale of the lot or unit 25
occurring after the issuance of the applicable building permit, the 26
applicant must instead be assessed a penalty of 20 percent of the 27
total amount remaining due on the promissory note.28
(iv) The interest and penalties provided for in this subsection 29
(3)(c) are collectible only from the applicant and may not be a lien 30
against the property sold by the applicant for which the impact fees 31
were due. An applicant who has not paid the impact fees in full 32
within one month of the first sale of the lot or unit occurring after 33
the issuance of the applicable building permit are personally liable 34
for the full amount of the note, unless the sale has been recorded in 35
the official county property record. 36
(((iii))) (d) The amount of impact fees that may be deferred 37
under this subsection (3) must be determined by the fees in effect at 38
the time the applicant applies for a deferral. 39
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(((iv) Unless an agreement to the contrary is reached between the 1
buyer and seller, the payment of impact fees due at closing of a sale 2
must be made from the seller's proceeds. In the absence of an 3
agreement to the contrary, the seller bears strict liability for the 4
payment of the impact fees.5
(b))) (e) The applicant must provide written disclosure of a 6
deferral agreement to a property buyer as required by chapter 64.06 7
RCW.8
(f) The term of an impact fee deferral under this subsection (3) 9
may not exceed ((eighteen)) 18 months from the date of building 10
permit issuance. 11
(((c) Except as may otherwise be authorized in accordance with 12
(f) of this subsection (3), an applicant seeking a deferral under 13
this subsection (3) must grant and record a deferred impact fee lien 14
against the property in favor of the county, city, or town in the 15
amount of the deferred impact fee. The deferred impact fee lien, 16
which must include the legal description, tax account number, and 17
address of the property, must also be:18
(i) In a form approved by the county, city, or town;19
(ii) Signed by all owners of the property, with all signatures 20
acknowledged as required for a deed, and recorded in the county where 21
the property is located;22
(iii) Binding on all successors in title after the recordation; 23
and24
(iv) Junior and subordinate to one mortgage for the purpose of 25
construction upon the same real property granted by the person who 26
applied for the deferral of impact fees.27
(d)(i) If impact fees are not paid in accordance with a deferral 28
authorized by this subsection (3), and in accordance with the term 29
provisions established in (b) of this subsection (3), the county, 30
city, or town may institute foreclosure proceedings in accordance 31
with chapter 61.12 RCW.32
(ii) If the county, city, or town does not institute foreclosure 33
proceedings for unpaid school impact fees within forty-five days 34
after receiving notice from a school district requesting that it do 35
so, the district may institute foreclosure proceedings with respect 36
to the unpaid impact fees.37
(e)(i) Upon receipt of final payment of all deferred impact fees 38
for a property, the county, city, or town must execute a release of 39
deferred impact fee lien for the property. The property owner at the 40
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time of the release, at his or her expense, is responsible for 1
recording the lien release. 2
(ii) The extinguishment of a deferred impact fee lien by the 3
foreclosure of a lien having priority does not affect the obligation 4
to pay the impact fees as a condition of final inspection, 5
certificate of occupancy, or equivalent certification, or at the time 6
of closing of the first sale.7
(f))) (g) A county, city, or town with an impact fee deferral 8
process on or before April 1, 2015, is exempt from the requirements 9
of this subsection (3) if the deferral process delays all impact fees 10
and remains in effect after September 1, 2016. 11
(((g)(i) Each applicant for a single-family residential 12
construction permit, in accordance with his or her contractor 13
registration number or other unique identification number, is 14
entitled to annually receive deferrals under this subsection (3) for 15
the first twenty single-family residential construction building 16
permits per county, city, or town. A county, city, or town, however, 17
may elect, by ordinance, to defer more than twenty single-family 18
residential construction building permits for an applicant. If the 19
county, city, or town collects impact fees on behalf of one or more 20
school districts for which the collection of impact fees could be 21
delayed, the county, city, or town must consult with the district or 22
districts about the additional deferrals. A county, city, or town 23
considering additional deferrals must give substantial weight to 24
recommendations of each applicable school district regarding the 25
number of additional deferrals. If the county, city, or town 26
disagrees with the recommendations of one or more school districts, 27
the county, city, or town must provide the district or districts with 28
a written rationale for its decision.29
(ii))) (h) For purposes of this subsection (3)(((g))), an 30
"applicant" includes an entity that controls the applicant, is 31
controlled by the applicant, or is under common control with the 32
applicant. 33
(((h) Counties, cities, and towns may collect reasonable 34
administrative fees to implement this subsection (3) from permit 35
applicants who are seeking to delay the payment of impact fees under 36
this subsection (3).37
(i) In accordance with RCW 44.28.812 and 43.31.980, counties, 38
cities, and towns must cooperate with and provide requested data, 39
materials, and assistance to the department of commerce and the joint 40
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legislative audit and review committee. )) (i) This subsection (3) 1
does not apply to impact fees imposed to pay for public facilities 2
under RCW 82.02.090(7)(c).3
(4) The impact fees: 4
(a) Shall only be imposed for system improvements that are 5
reasonably related to the new development; 6
(b) Shall not exceed a proportionate share of the costs of system 7
improvements that are reasonably related to the new development; and8
(c) Shall be used for system improvements that will reasonably 9
benefit the new development. 10
(5)(a) Impact fees may be collected and spent only for the public 11
facilities defined in RCW 82.02.090 which are addressed by a capital 12
facilities plan element of a comprehensive land use plan adopted 13
pursuant to the provisions of RCW 36.70A.070 or the provisions for 14
comprehensive plan adoption contained in chapter 36.70, 35.63, or 15
35A.63 RCW. After the date a county, city, or town is required to 16
adopt its development regulations under chapter 36.70A RCW, continued 17
authorization to collect and expend impact fees is contingent on the 18
county, city, or town adopting or revising a comprehensive plan in 19
compliance with RCW 36.70A.070, and on the capital facilities plan 20
identifying: 21
(i) Deficiencies in public facilities serving existing 22
development and the means by which existing deficiencies will be 23
eliminated within a reasonable period of time; 24
(ii) Additional demands placed on existing public facilities by 25
new development; and 26
(iii) Additional public facility improvements required to serve 27
new development. 28
(b) If the capital facilities plan of the county, city, or town 29
is complete other than for the inclusion of those elements which are 30
the responsibility of a special district, the county, city, or town 31
may impose impact fees to address those public facility needs for 32
which the county, city, or town is responsible. 33
(6) Impact fees on development activity shall be considered under 34
the impact fees ordinances adopted pursuant to RCW 82.02.060 in 35
effect on the subject location at the time a fully completed project 36
permit application has been submitted to the appropriate city 37
official.38
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