1Amending the act of July 31, 1968 (P.L.805, No.247), entitled,
2as amended, "An act to empower cities of the second class A,
3and third class, boroughs, incorporated towns, townships of
4the first and second classes including those within a county
5of the second class and counties of the second through eighth
6classes, individually or jointly, to plan their development
7and to govern the same by zoning, subdivision and land
8development ordinances, planned residential development and
9other ordinances, by official maps, by the reservation of
10certain land for future public purpose and by the acquisition
11of such land; to promote the conservation of energy through
12the use of planning practices and to promote the effective
13utilization of renewable energy sources; providing for the
14establishment of planning commissions, planning departments,
15planning committees and zoning hearing boards, authorizing
16them to charge fees, make inspections and hold public
17hearings; providing for mediation; providing for transferable
18development rights; providing for appropriations, appeals to
19courts and penalties for violations; and repealing acts and
20parts of acts," in municipal capital improvement, further
21providing for definitions; amending provisions relating to
22municipal capital improvements; and providing for development
23impact fees.

24The General Assembly of the Commonwealth of Pennsylvania
25hereby enacts as follows:

26Section 1.  The definition of "impact fee" in section 502-A
27of the act of July 31, 1968 (P.L.805, No.247), known as the
28Pennsylvania Municipalities Planning Code, reenacted and amended

1December 21, 1988 (P.L.1329, No.170) and added December 19, 1990 
2(P.L.1343, No.209), is amended and the section is amended by
3adding a definition to read:

4Section 502-A.  Definitions.--The following words and phrases
5when used in this article shall have the meanings given to them
6in this section unless the context clearly indicates otherwise:

7* * *

8["Impact fee," a charge or fee imposed by a municipality
9against new development in order to generate revenue for funding
10the costs of transportation capital improvements necessitated by
11and attributable to new development.]

12* * *

13"Transportation impact fee," a charge or fee imposed by a 
14municipality against new development in order to generate 
15revenue for funding the costs of transportation capital 
16improvements necessitated by and attributable to new 
17development.

18* * *

19Section 2.  Section 503-A of the act, amended or added
20December 19, 1990 (P.L.1343, No.209) and June 22, 2000 (P.L.495, 
21No.68), is amended to read:

22Section 503-A.  Grant of Power.--(a)  The governing body of
23each municipality other than a county, in accordance with the
24conditions and procedures set forth in this act, may enact,
25amend and repeal transportation impact fee ordinances and,
26thereafter, may establish, at the time of municipal approval of
27any new development or subdivision, the amount of [an] a 
28transportation impact fee for any of the offsite public
29transportation capital improvements authorized by this act as a
30condition precedent to final plat approval under the

1municipality's subdivision and land development ordinance. Every
2ordinance adopted pursuant to this act shall include, but not be
3limited to, provisions for the following:

4(1)  The conditions and standards for the determination
5and imposition of transportation impact fees consistent with
6the provisions of this act.

7(2)  The agency, body or office within the municipality
8which shall administer the collection, disbursement and
9accounting of transportation impact fees.

10(3)  The time, method and procedure for the payment of
11transportation impact fees.

12(4)  The procedure for issuance of any credit against or
13reimbursement of transportation impact fees which an
14applicant may be entitled to receive consistent with the
15provisions of this act.

16(5)  Exemptions or credits which the municipality may
17choose to adopt. In this regard the municipality shall have
18the power to:

19(i)  Provide a credit of up to 100% of the applicable
20transportation impact fees for all new development and
21growth which constitutes affordable housing to low- and
22moderate-income persons.

23(ii)  Provide a credit of up to 100% of the
24applicable transportation impact fees for growth which
25are determined by the municipality to serve an overriding
26public interest.

27(iii)  Exempt de [minimus] minimis applications from
28transportation impact fee requirements. If such a policy
29is adopted, the definition of de [minimus] minimis shall
30be contained in the ordinance.

1(b)  No municipality shall have the power to require as a
2condition for approval of a land development or subdivision
3application the construction, dedication or payment of any
4offsite improvements or capital expenditures of any nature
5whatsoever or impose any contribution in lieu thereof, exaction
6fee, or any connection, tapping or similar fee except as may be
7specifically authorized under this act.

8(c)  No municipality may levy [an] a transportation impact
9fee prior to the enactment of a municipal transportation impact
10fee ordinance adopted in accordance with the procedures set
11forth in this act, except as may be specifically authorized by
12the provisions of this act. A transportation impact fee shall be
13imposed by a municipality within a service area or areas only
14where such fees have been determined and imposed pursuant to the
15standards, provisions and procedures set forth herein.

16(d)  [Impact] Transportation impact fees may be used for
17those costs incurred for improvements designated in the
18transportation capital improvement program which are
19attributable to new development, including the acquisition of
20land and rights-of-way; engineering, legal and planning costs;
21and all other costs which are directly related to road
22improvements within the service area or areas, including debt
23service. [Impact] Transportation impact fees shall not be
24imposed or used for costs associated with any of the following:

25(1)  Construction, acquisition or expansion of municipal
26facilities other than capital improvements identified in the
27transportation capital improvements plan required by this
28act.

29(2)  Repair, operation or maintenance of existing or new
30capital improvements.

1(3)  Upgrading, updating, expanding or replacing existing
2capital improvements to serve existing developments in order
3to meet stricter safety, efficiency, environmental or
4regulatory standards not attributable to new development.

5(4)  Upgrading, updating, expanding or replacing existing
6capital improvements to remedy deficiencies in service to
7existing development or fund deficiencies in existing
8municipal capital improvements resulting from a lack of
9adequate municipal funding over the years for maintenance or
10capital construction costs.

11(5)  Preparing and developing the land use assumptions,
12roadway sufficiency analysis and transportation capital
13improvement plan, except that transportation impact fees may
14be used for no more than a proportionate amount of the cost
15of professional consultants incurred in preparing a roadway
16sufficiency analysis of infrastructure within a specified
17transportation service area, such allowable proportion to be
18calculated by dividing the total costs of all road
19improvements in the adopted transportation capital
20improvement program within the transportation service area
21attributable to projected future development within the
22service area, as defined in section 504-A(e)(1)(iii), by the
23total costs of all road improvements in the adopted
24transportation capital improvement program within the
25specific transportation service area, as defined in section
26504-A.

27(e)  Nothing in this act shall be deemed to alter or affect a
28municipality's existing power to require an applicant for
29municipal approval of any new development or subdivision from
30paying for the installation of onsite improvements as provided

1for in a municipality's subdivision and land development
2ordinance as authorized by this act.

3(f)  No municipality may delay or deny any application for
4building permit, certificate-of-occupancy, development or any
5other approval or permit required for construction, land
6development, subdivision or occupancy for the reason that any
7project of an approved capital improvement program has not been
8completed.

9(g)  A municipality which has enacted an impact fee ordinance
10on or before June 1, 1990, may for a period not to exceed one
11year from the effective date of this article, adopt an impact
12fee ordinance to conform with the standards and procedures set
13forth in this article. Where a fee previously imposed pursuant
14to an ordinance in effect on June 1, 1990, for transportation
15improvements authorized by this article is greater than the
16recalculated fee due under the newly adopted ordinance, the
17individual who paid the fee is entitled to a refund of the
18difference. If the recalculated fee is greater than the
19previously paid fee, there shall be no additional charge.

20(h)  The powers provided by this section may be exercised by
21two or more municipalities, other than counties, which have
22adopted a joint municipal comprehensive plan pursuant to Article
23XI through a joint municipal authority, subject to the
24conditions and procedures set forth in this article.

25Section 3.  Sections 504-A(a), (b), (e), (f) and (g) and 505-
26A of the act, amended June 22, 2000 (P.L.495, No.68), are
27amended to read:

28Section 504-A.  Transportation Capital Improvements Plan.--

29(a)  (1)  A transportation capital improvements plan shall be
30prepared and adopted by the governing body of the

1municipality prior to the enactment of any transportation
2impact fee ordinance.

3(2)  In lieu of preparing a transportation capital
4improvements plan, the governing body of the municipality may
5elect to have the municipality's comprehensive plan and maps
6serve as a transportation capital improvements plan, provided
7that:

8(i)  the municipality's comprehensive plan and maps
9contain the necessary information for the transportation
10impact fee advisory committee and governing body to
11perform the calculations, make the recommendations and
12carry out other duties required by this article; and

13(ii)  the municipality's comprehensive plan and maps
14have been adopted or revised within ten years of the date
15of enactment of a transportation impact fee ordinance.

16(3)  The municipality shall provide qualified
17professionals to assist the transportation impact fee
18advisory committee or the planning commission in the
19preparation of the transportation capital improvements plan
20or the transportation elements of the municipality's 
21comprehensive plan and calculation of the transportation
22impact fees to be imposed to implement the plan in accordance
23with the procedures, provisions and standards set forth in
24this act.

25(b)  (1)  [An] A transportation impact fee advisory committee
26shall be [created] established by resolution of a
27municipality intending to adopt a transportation impact fee
28ordinance. The resolution shall describe the geographical
29area or areas of the municipality for which the advisory
30committee shall develop the land use assumptions and conduct

1the roadway sufficiency analysis studies.

2(2)  The advisory committee shall consist of no fewer
3than 7 nor more than 15 members, all of whom shall serve
4without compensation. The governing body of the municipality
5shall appoint as members of the advisory committee persons
6who are either residents of the municipality or conduct
7business within the municipality and are not employees or
8officials of the municipality. Not less than [40%] 25% of the
9members of the advisory committee shall be representatives of
10the real estate, commercial and residential development, and
11building industries. The municipality may also appoint
12traffic or transportation engineers or planners to serve on
13the advisory committee provided the appointment is made after
14consultation with the advisory committee members. The traffic
15or transportation engineers or planners appointed to the
16advisory committee may not be employed by the municipality
17for the development of or consultation on the roadways
18sufficiency analysis which may lead to the adoption of the
19transportation capital improvements plan.

20(3)  The governing body of the municipality may elect to
21designate the municipal planning commission appointed
22pursuant to Article II as the transportation impact fee
23advisory committee. If the existing planning commission does
24not include members representative of the real estate,
25commercial and residential development, and building
26industries at no less than [40%] 25% of the membership, the
27governing body of the municipality shall appoint the
28sufficient number of representatives of the aforementioned
29industries who reside in the municipality or conduct business
30within the municipality to serve as ad hoc voting members of

1the planning commission whenever such commission functions as
2the impact fee advisory committee.

3(4)  No transportation impact fee ordinance may be
4invalidated as a result of any legal action challenging the
5composition of the advisory committee which is not brought
6within 90 days following the first public meeting of [said]
7the advisory committee.

8(5)  The advisory committee shall serve in an advisory
9capacity and shall have the following duties:

10(i)  To make recommendations with respect to land use
11assumptions, the development of comprehensive road
12improvements and transportation impact fees.

13(ii)  To make recommendations to approve, disapprove
14or modify a capital improvement program by preparing a
15written report containing these recommendations to the
16municipality.

17(iii)  To monitor and evaluate the implementation of
18a capital improvement program and the assessment of
19transportation impact fees, and report annually to the
20municipality with respect to the same.

21(iv)  To advise the municipality of the need to
22revise or update the land use assumptions, capital
23improvement program or transportation impact fees.

24* * *

25(e)  (1)  Utilizing the information provided by the land use
26assumption and the roadway sufficiency analysis as the basis
27for determination of the need for road improvements to remedy
28existing deficiencies and accommodate future projected
29traffic volumes, the advisory committee shall identify those
30capital projects which the municipality should consider for

1adoption in its transportation capital improvements plan and
2shall recommend the delineation of the transportation service
3area or areas. The capital improvement plan shall be
4developed in accordance with generally accepted engineering
5and planning practices. The capital improvement program shall
6include projections of all designated road improvements in
7the capital improvement program. The total cost of the road
8improvements shall be based upon estimated costs, using
9standard traffic engineering standards, with a 10% maximum
10contingency which may be added to said estimate. These costs
11shall include improvements to correct existing deficiencies
12with identified anticipated sources of funding and timetables
13for implementation. The transportation capital improvements
14plan shall include the following components:

15(i)  A description of the existing highways, roads
16and streets within the transportation service area and
17the road improvements required to update, improve, expand
18or replace such highways, roads and streets in order to
19meet the preferred level of service and usage and
20stricter safety, efficiency, environmental or regulatory
21standards not attributable to new development.

22(ii)  A plan specifying the road improvements within
23the transportation service area attributable to
24forecasted pass-through traffic so as to maintain the
25preferred level of service after existing deficiencies
26identified by the roadway sufficiency analysis have been
27remedied.

28(iii)  A plan specifying the road improvements or
29portions thereof within the transportation service area
30attributable to the projected future development,

1consistent with the adopted land use assumptions, in
2order to maintain the preferred level of service after
3accommodation for pass-through traffic and after existing
4deficiencies identified in the roadway sufficiency
5analysis have been remedied.

6(iv)  The projected costs of the road improvements to
7be included in the transportation capital improvements
8plan, calculating separately for each project by the
9following categories:

10(A)  The costs or portion thereof associated with
11correcting existing deficiencies as specified in
12subparagraph (i).

13(B)  The costs or portions thereof attributable
14to providing road improvements to accommodate
15forecasted pass-through trips as specified in
16subparagraph (ii).

17(C)  The costs of providing necessary road
18improvements or portions thereof attributable to
19projected future development as specified in
20subparagraph (iii), provided that no more than 50% of
21the cost of the improvements to any highway, road or
22street which qualifies as a State highway or portion
23of the rural State highway system as provided in
24section 102 of the act of June 1, 1945 (P.L.1242, No.

25428), known as the "State Highway Law," may be
26included.

27(v)  A projected timetable and proposed budget for
28constructing each road improvement contained in the plan.

29(vi)  The proposed source of funding for each capital
30improvement included in the road plan. This shall include

1anticipated revenue from the Federal Government, State
2government, municipality, transportation impact fees and
3any other source. The estimated revenue for each capital
4improvement in the plan which is to be provided by
5transportation impact fees shall be identified separately
6for each project.

7(2)  The source of funding required for projects to
8remedy existing deficiencies as set forth in paragraph (1)(i)
9and the road improvements attributable to forecasted pass-
10through traffic as set forth in paragraph (1)(ii) shall be
11exclusive of funds generated from the assessment of
12transportation impact fees.

13(3)  Upon the completion of the transportation capital
14improvements plan and prior to its adoption by the governing
15body of the municipality and the enactment of a municipal
16transportation impact fee ordinance, the advisory committee
17shall hold at least one public hearing for consideration of
18the plan. Notification of the public hearing shall comply
19with the requirement of section 107. The plan shall be
20available for public inspection at least ten working days
21prior to the date of the public hearing. After presentation
22of the recommendation by the advisory committee or its
23representatives at a public meeting of the governing body,
24the governing body may make such changes to the plan prior to
25its adoption as the governing body deems appropriate
26following review of the public comments made at the public
27hearing.

28(4)  The governing body may periodically, but no more
29frequently than annually, request the transportation impact
30fee advisory committee to review the capital improvements

1plan and transportation impact fee charges and make
2recommendations for revisions for subsequent consideration
3and adoption by the governing body based only on the
4following:

5(i)  New subsequent development which has occurred in
6the municipality.

7(ii)  Capital improvements contained in the capital
8improvements plan, the construction of which has been
9completed.

10(iii)  Unavoidable delays beyond the responsibility
11or control of the municipality in the construction of
12capital improvements contained in the plan.

13(iv)  Significant changes in the land use
14assumptions.

15(v)  Changes in the estimated costs of the proposed
16transportation capital improvements, which may be
17recalculated by applying the construction cost index as
18published in the American City/County magazine or the
19Engineering News Record.

20(vi)  Significant changes in the projected revenue
21from all sources listed needed for the construction of
22the transportation capital improvements.

23(f)  Any improvements to Federal-aid or State highways to be
24funded in part by transportation impact fees shall require the
25approval of the Department of Transportation and, if necessary,
26the United States Department of Transportation. Nothing in this
27act shall be deemed to alter or diminish the powers, duties or
28jurisdiction of the Department of Transportation with respect to
29State highways or the rural State highway system.

30(g)  Two or more municipalities may, upon agreement, appoint

1a joint transportation impact fee advisory committee which may
2develop roadway sufficiency analyses and transportation capital
3improvements plans for the participating municipalities. The
4members of the joint advisory committee must be either residents
5of or conduct business within one of the participating
6municipalities.

7Section 505-A.  Establishment and Administration of Impact
8Fees.--

9(a)  (1)  The transportation impact fee for transportation
10capital improvements shall be based upon the total costs of
11the road improvements included in the adopted capital
12improvement plan within a given transportation service area
13attributable to and necessitated by new development within
14the service area as calculated pursuant to section 504-A(e)
15(1)(iv)(C), divided by the number of anticipated peak hour
16trips generated by all new development consistent with the
17adopted land use assumptions and calculated in accordance
18with the Trip Generation Manual published by the Institute of
19Transportation Engineers, fourth or subsequent edition as
20adopted by the municipality by ordinance or resolution to
21equal a per trip cost for transportation improvements within
22the service area.

23(2)  The specific transportation impact fee for a
24specific new development or subdivision within the service
25area for road improvements shall be determined as of the date
26of preliminary land development or subdivision approval by
27multiplying the per trip cost established for the service
28area as determined in section 503-A(a) by the estimated
29number of peak hour trips to be generated by the new
30development or subdivision using generally accepted traffic

1engineering standards.

2(3)  A municipality may authorize or require the
3preparation of a special transportation study in order to
4determine traffic generation or circulation for a new
5nonresidential development to assist in the determination of
6the amount of the transportation impact fee for such
7development or subdivision. The municipality shall set forth
8by ordinance the circumstances in which such a study should
9be authorized or required, provided however, that no special
10transportation study shall be required when there is no
11deviation from the land use assumptions resulting in
12increased density, intensity or trip generation by a
13particular development. A developer or municipality may,
14however, at any time, voluntarily prepare and submit a
15traffic study for a proposed development or may have such a
16study prepared at its expense after the development is
17completed to include actual trips generated by the
18development for use in any appeal as provided for under this
19act. The special transportation study shall be prepared by a
20qualified traffic or transportation engineer using procedures
21and methods established by the municipality based on
22generally accepted transportation planning and engineering
23standards. The study, where required by the municipality,
24shall be submitted prior to the imposition of [an] a 
25transportation impact fee and shall be taken into
26consideration by the municipality in increasing or reducing
27the amount of the transportation impact fee for the new
28development for the amount shown on the transportation impact
29fee schedule adopted by the municipality.

30(b)  The governing body shall enact [an] a transportation

1impact fee ordinance setting forth a description of the
2boundaries and a transportation impact fee schedule for each
3transportation service area. At least ten working days prior to
4the adoption of the ordinance at a public meeting, the ordinance
5shall be available for public inspection. The transportation
6impact fee ordinance shall include, but not be limited to, those
7provisions set forth in section 503-A(a) and conform with the
8standards, provisions and procedures set forth in this act.

9(c)  (1)  A municipality may give notice of its intention to
10adopt [an] a transportation impact fee ordinance by
11publishing a statement of such intention twice in one
12newspaper of general circulation in the municipality. The
13first publication shall not occur before the adoption of the
14resolution by which the municipality establishes its
15transportation impact fee advisory committee. The second
16publication shall occur not less than one nor more than three
17weeks thereafter.

18(2)  A municipal transportation impact fee ordinance
19adopted under and pursuant to this act may provide that the
20provisions of the ordinance may have retroactive application,
21for a period not to exceed 18 months after the adoption of
22the resolution [creating an] establishing a transportation
23impact fee advisory committee pursuant to section 504-A(b)
24(1), to preliminary or tentative applications for land
25development, subdivision or PRD with the municipality on or
26after the first publication of the municipality's intention
27to adopt [an] a transportation impact fee ordinance;
28provided, however, that the transportation impact fee imposed
29on building permits for construction of new development
30approved pursuant to such applications filed during the

1period of [pendancy] pendency shall not exceed $1,000 per
2anticipated peak hour trip as calculated in accordance with
3the generally accepted traffic engineering standards as set
4forth under the provisions of subsection (a)(1) or the
5subsequently adopted fee established by the ordinance,
6whichever is less.

7(3)  No action upon an application for land development,
8subdivision or PRD shall be postponed, delayed or extended by
9the municipality because adoption of a municipal
10transportation impact fee ordinance is being considered.
11Furthermore, the adoption of [an] a transportation impact fee
12ordinance more than 18 months after adoption of a resolution
13[creating the] establishing the transportation impact fee
14advisory committee shall not be retroactive or applicable to
15plats submitted for preliminary or tentative approval prior
16to the legal publication of the proposed transportation
17impact fee ordinance and any transportation impact fees
18collected pursuant to this subsection shall be refunded to
19the payor of such fees; provided the adoption of the
20transportation impact fee ordinance was not delayed due to
21the initiation of any litigation challenging the adoption of
22such ordinance.

23(d)  Any transportation impact fees collected by a
24municipality pursuant to a municipal transportation impact fee
25ordinance shall be deposited by the municipality into an
26interest-bearing fund account designated solely for
27transportation impact fees, clearly identifying the
28transportation service area from which the transportation impact
29fee was received. Funds collected in one transportation service
30area must be accounted for and expended within that

1transportation service area, and such funds shall only be
2expended for that portion of the transportation capital
3improvements identified as being funded by transportation impact
4fees under the transportation capital improvements plan.
5Notwithstanding any other provisions of this act, municipalities
6may expend transportation impact fees paid by an applicant on
7projects not contained in the adopted transportation capital
8improvement plan or may provide credit against transportation
9impact fees for the value of any construction projects not
10contained in the transportation capital improvement plan which
11are performed at the applicant's expense if all of the following
12criteria are met:

13(1)  The applicant has provided written consent to use of
14its collected transportation impact fees or the provision of
15such credit against the applicant's transportation impact
16fees for specific transportation projects which are not
17included in the transportation capital improvement plan.

18(2)  The alternative transportation projects, whether
19highway or multimodal, have as their purpose the reduction of
20traffic congestion or the removal of vehicle trips from the
21roadway network.

22(3)  The municipality amends its transportation capital
23improvement plan components required by section 504-A(e)(1)
24(vi) to provide replacement of the collected transportation
25impact fees transferred to transportation projects outside
26the approved transportation capital improvement plan from
27sources other than transportation impact fees or developer
28contributions within three years of completion of the
29alternative projects to which the transferred transportation 
30impact fees were applied or for which credit was provided.

1All interest earned on such funds shall become funds of that
2account. The municipality shall provide that an accounting be
3made annually for any fund account containing transportation
4impact fee proceeds and earned interest. Such accounting
5shall include, but not be limited to, the total funds
6collected, the source of the funds collected, the total
7amount of interest accruing on such funds and the amount of
8funds expended on specific transportation improvements.
9Notice of the availability of the results of the accounting
10shall be included and published as part of the annual audit
11required of municipalities. A copy of the report shall also
12be provided to the transportation advisory committee.

13(e)  All transportation impact fees imposed under the terms
14of this act shall be payable at the time of the issuance of
15building permits for the applicable new development or
16subdivision. The municipality may not require the applicant to
17provide a guarantee of financial security for the payment of any
18transportation impact fees, except the municipality may provide
19for the deposit with the municipality of financial security in
20an amount sufficient to cover the cost of the construction of
21any road improvement contained in the transportation capital
22improvement plan which is performed by the applicant.

23(f)  An applicant shall be entitled to a credit against the
24transportation impact fee in the amount of the fair market value
25of any land dedicated by the applicant to the municipality for
26future right-of-way, realignment or widening of any existing
27roadways or for the value of any construction of road
28improvements contained in the transportation capital improvement
29program which is performed at the applicant's expense. The
30amount of such credit for any capital improvement constructed

1shall be the amount allocated in the capital improvement
2program, including contingency factors, for such work. The fair
3market value of any land dedicated by the applicant shall be
4determined as of the date of the submission of the land
5development or subdivision application to the municipality.

6(g)  [Impact] Transportation impact fees previously collected
7by a municipality shall be refunded, together with earned
8accrued interest thereon, to the payor of [such] the 
9transportation impact fees from the date of payment under any of
10the following circumstances:

11(1)  In the event that a municipality terminates or
12completes an adopted capital improvements plan for a
13transportation service area and there remains at the time of
14termination or completion undispersed funds in the accounts
15established for that purpose, the municipality shall provide
16written notice by certified mail to those persons who
17previously paid the transportation impact fees which remain
18undispersed of the availability of said funds for refund of
19the person's proportionate share of the fund balance. The
20allocation of the refund shall be determined by generally
21accepted accounting practices. In the event that any of the
22funds remain unclaimed following one year after the notice,
23which notice shall be provided to the last known address
24provided by the payor of the transportation impact fees to
25the municipality, the municipality shall be authorized to
26transfer any funds so remaining to any other fund in the
27municipality without any further obligation to refund said
28funds.

29(2)  If the municipality fails to commence construction
30of any transportation service area road improvements within

1three years of the scheduled construction date set forth in
2the transportation capital improvements plan, any person who
3paid any transportation impact fees pursuant to that
4transportation capital improvements plan shall, upon written
5request to the municipality, receive a refund of that portion
6of the transportation impact fee attributable to the
7contribution for the uncommenced road improvement, plus the
8interest accumulated thereon from the date of payment.

9(3)  If, upon completion of any road improvements
10project, the actual expenditures of the capital project are
11less than 95% of the costs properly allocable to the
12transportation impact fee paid within the transportation
13service area in which the completed road improvement was
14adopted, the municipality shall refund the pro rata
15difference between the budgeted costs and the actual
16expenditures, including interest accumulated thereon from the
17date of payment, to the person or persons who paid the
18transportation impact fees for such improvements.

19(4)  If the new development for which transportation
20impact fees were paid is not commenced prior to the
21expiration of building permits issued for the new development
22within the time limits established by applicable building
23codes within the municipality or if the building permit as
24issued for the new development is altered and the alteration
25results in a decrease in the amount of the transportation
26impact fee due in accordance with the calculations set forth
27in subsection (a)(1).

28(h)  Where [an] a transportation impact fee ordinance has
29been adopted pursuant to the other provisions of this act, the
30ordinance may impose an additional transportation impact fee

1upon new developments which generate 1,000 or more new peak hour
2trips, net of pass-by trips as defined by the current edition of
3the Institute of Transportation Engineers Trip Generation
4Manual, during the peak hour period designated in the ordinance.
5In such case, the transportation impact fee ordinance adopted
6under this act may require the applicant for such a development
7to perform a traffic analysis of development traffic impact on
8highways, roads or streets outside the transportation service
9area in which the development site is located but within the
10boundaries of the municipality or municipalities adopting a
11joint municipal transportation impact fee ordinance or
12municipalities which are participating in a joint municipal
13authority authorized to impose transportation impact fees by
14this article. Any such highways, roads or streets or parts
15thereof outside the transportation service area which will
16accommodate 10% or more of development traffic and 100 or more
17new peak hour trips may be required to be studied, and the
18ordinance may require the applicant to mitigate the traffic
19impacts of the development on such highways, roads and streets
20to maintain the predevelopment conditions after completion of
21the development.

22Section 4.  Section 506-A of the act, added December 19, 1990 
23(P.L.1343, No.209), is amended to read:

24Section 506-A.  Appeals.--(a)  Any person required to pay
25[an] a transportation impact fee shall have the right to contest
26the land use assumptions, the development and implementation of
27the transportation capital improvement program, the imposition
28of transportation impact fees, the periodic updating of the
29transportation capital improvement program, the refund of
30transportation impact fees and all other matters relating to

1transportation impact fees, including the constitutionality or
2validity of the transportation impact fee ordinance by filing an
3appeal with the court of common pleas.

4(b)  A master may be appointed by the court to hear testimony
5on the issues and return the record and a transcript of the
6testimony, together with a report and recommendations, or the
7court may appoint a master to hold a nonrecord hearing and to
8make recommendations and return the same to the court, in which
9case either party may demand a hearing de novo before the court.

10(c)  Any cost incurred by parties in such an appeal shall be
11the separate responsibility of the parties.

12Section 5.  Section 508-A of the act, added June 22, 2000 
13(P.L.495, No.68), is amended to read:

14Section 508-A.  Joint Municipal Transportation Impact Fee
15Ordinance.--(a)  For the purpose of permitting municipalities
16which cooperatively plan for their future to also provide for
17transportation capital improvements in a cooperative manner, the
18governing bodies of each municipality which has adopted a joint
19municipal comprehensive plan pursuant to Article XI in
20accordance with the conditions and procedures set forth in this
21article may cooperate with one or more municipalities to enact,
22amend and repeal joint transportation impact fee ordinances to
23accomplish the purposes of this act in accordance with this
24article.

25(b)  The procedures set forth in this article shall be
26applicable to the enactment of a joint municipal transportation
27impact fee ordinance.

28(c)  Each municipality party to a joint municipal
29transportation impact fee ordinance shall approve the advisory
30committee and shall adopt the land use assumptions, roadway

1sufficiency analysis, capital improvement plan and ordinances
2and amendments thereto in accordance with the procedures in this
3article, and no such ordinance shall become effective until it
4has been properly adopted by all the participating
5municipalities.

6Section 6.  The act is amended by adding an article to read:

7ARTICLE V-B

8DEVELOPMENT IMPACT FEES

9Section 501-B.  Legislative findings and intent.

10The General Assembly finds and declares as follows:

11(1)  It is the public policy of this Commonwealth to
12protect the public health, safety and general welfare of its
13citizens by providing an equitable program for the planning
14and financing of public facilities to serve new growth and
15development and to authorize school districts and
16municipalities to assess, impose, levy and collect fees as
17defined in this article as development impact fees for all
18new development within their jurisdictional limits.

19(2)  By enacting this article, the General Assembly
20intends to encourage and promote all of the following:

21(i)  Adequate public facilities to serve new growth
22and development.

23(ii)  Orderly growth and development that does not
24place an undue financial burden upon existing taxpayers.

25(iii)  Standards for apportioning the fair share of
26the cost of new or upgraded public facilities that serve
27new growth and development among those who will benefit
28by permitting school districts and municipalities to:

29(A)  adopt development impact fee ordinances; and

30(B)  impose development impact fees.

1Section 502-B.  Definitions.

2The following words and phrases when used in this article
3shall have the meanings given to them in this section unless the
4context clearly indicates otherwise:

5"Capital improvement costs."  Costs incurred to provide 
6public facilities and capital improvements to serve new 
7development, including costs for planning, design and 
8construction, land acquisition, improvement, design and 
9engineering related thereto, including, but not limited to, the 
10construction contract price, surveying and engineering fees, 
11related land acquisition costs, including land purchases, court 
12awards and costs, attorney fees and expert witness fees and 
13expenses incurred for qualified staff of any engineer, planner, 
14architect, landscape architect or financial consultant for 
15preparing or updating the capital improvement program and 
16administrative costs related thereto, provided that such 
17administrative costs shall not exceed 3% of the total amount of 
18the costs. Projected interest charges and other finance costs 
19may be included if the development impact fees are to be used 
20for the payment of principal and interest on bonds, notes or 
21other financial obligations issued by or on behalf of the 
22governmental entity to finance capital improvements. The term 
23may include up to one year's start-up costs related to the 
24operation of public facilities or capital improvements, 
25including the costs of hiring and training additional personnel, 
26acquiring additional insurance and providing additional 
27transportation. The term also includes routine and periodic 
28maintenance expenditures or other operating costs for public 
29facilities or capital improvements attributed to new 
30development.

1"Capital improvement program."  A plan adopted by a 
2governmental entity setting out the need for public facilities 
3or capital improvements, the costs of the improvements and 
4proposed funding sources and which plan covers at least a five-
5year period and is reviewed at least every five years.

6"Capital improvements."  Improvements and equipment that 
7increase or improve the service capacity of a public facility 
8and have a useful life to ten years or more.

9"Development impact fee."  A charge imposed upon new 
10development by a governmental entity to fund all or a portion of 
11the public facility's capital improvement costs affected by the 
12new development from which it is collected.

13"Governmental entity."  A municipality or a school district.

14"Municipal facilities."

15(1)  Police, emergency medical, rescue and fire
16protection facilities and equipment.

17(2)  Park and recreational facilities and equipment. The
18authority to impose development impact fees for park and
19recreation purposes in accordance with this article shall be
20in addition to and shall not restrict the power of a
21municipality to require the construction of recreational
22facilities or the dedication of land, or fees in lieu
23thereof, in accordance with section 503(11).

24"Municipality."  A municipality, excluding a county, as those 
25terms are defined in section 107.

26"New development."  A commercial, industrial or residential 
27or other project that involves new construction, enlargement, 
28reconstruction, redevelopment, relocation or structural 
29alteration that is reasonably expected to generate additional 
30need for public facility capital improvements.

1"Ordinance."  A legislative act of a municipality and a 
2resolution of a school district adopted under this article and 
3enacted pursuant to the procedures provided in section 608.

4"Proportionate share."  The portion of capital improvement 
5costs that reasonably relates to the service demands and needs 
6of new development.

7"Public facilities."  School facilities and municipal 
8facilities.

9"School district."  A school district of any class, except a 
10school district of the first class or a school district of the 
11first class A.

12"School facilities."  Public schools and equipment.

13Section 503-B.  Grant of power.

14The governing body of a governmental entity, in accordance
15with the conditions and procedures set forth in this article,
16may enact, amend and repeal an ordinance authorizing the
17assessment and collection of development impact fees.

18Section 504-B.  Calculation of development impact fees.

19(a)  Needs assessment.--The governmental entity considering
20the adoption of development impact fees shall conduct a needs
21assessment for the type of public facilities or capital
22improvements for which development impact fees are to be levied.
23The needs assessment shall identify levels of service standards
24and projected public facilities or capital improvements needs
25and distinguish existing needs and deficiencies from future
26needs. The findings of this document shall be adopted by
27ordinance of the governmental entity.

28(b)  Public availability.--The data sources and methodology
29upon which needs assessments and development impact fees are
30based shall be made available to the public upon request.

1(c)  Accounting principles.--The amount of a development
2impact fee imposed shall be based upon the actual cost of public
3facility expansion or capital improvements or reasonable
4estimates of the cost to be incurred by the governmental entity
5as a result of new development. The calculation of a development
6impact fee shall be in accordance with generally accepted
7accounting principles.

8(d)  Requirements.--A development impact fee shall meet the
9following requirements:

10(1)  The amount of the development impact fee shall be
11reasonably related or reasonably attributable to the new
12development's share of the cost of public facilities and
13capital improvements made necessary by the new development.

14(2)  The development impact fee imposed may not exceed a
15proportionate share of the costs incurred or to be incurred
16by the governmental entity in accommodating the development.
17The following factors shall be considered in determining a
18proportionate share of public facilities and capital
19improvement costs:

20(i)  The need for public facilities and capital
21improvements required to serve new development, based on
22a capital improvements program that shows deficiencies in
23public facilities serving existing development, and the
24means, other than development impact fees, by which
25existing deficiencies will be eliminated within a
26reasonable period of time and that shows additional
27demands anticipated to be placed on specified public
28facilities and capital improvements by new development.

29(ii)  The extent to which new development is required
30to contribute to the cost of system improvements in the

1future.

2Section 505-B.  Collection and expenditure of development impact
3fees.

4(a)  Related to benefits.--The collection and expenditure of
5development impact fees shall be reasonably related to the
6benefits accruing to the development against which the
7development impact fees are assessed. The ordinance shall impose
8the following requirements:

9(1)  Upon collection, development impact fees shall be
10deposited in a special proprietary trust fund and invested
11with all interest accruing to the fund.

12(2)  No later than eight years from the date of
13collection, development impact fees shall be expended or
14encumbered for the construction of public facilities or
15capital improvements that are of reasonable benefit to the
16development for which the fees were paid and that are
17consistent with the capital improvement program.

18(3)  When the expenditure or encumbrance of development
19impact fees is not feasible within eight years, the
20governmental entity may retain development impact fees for a
21longer period of time if there are compelling reasons for the
22longer period. Development impact fees may not be retained
23for more than 12 years.

24(b)  Restrictions.--The following restrictions shall apply to
25the assessment and collection of development impact fees:

26(1)  Development impact fees shall be assessed upon the
27issuance of a building permit or other appropriate permission
28to proceed with development.

29(2)  Except as provided in paragraph (3), development
30impact fees shall be collected in full upon the issuance of

1certificate of occupancy or other final action authorizing
2the intended use of a structure.

3(3)  If a development impact fee is assessed against a
4residential development in which one or more dwellings are to
5be conveyed to a purchaser or purchasers other than the
6developer, the governmental entity shall assess a portion of
7the development impact fee on a pro rata basis upon each
8dwelling to be conveyed to a purchaser other than the
9developer, and the prorated amount shall be collected from
10the purchaser of the dwelling at the time of closing or
11settlement.

12(4)  Assessed development impact fees shall constitute a
13lien in accordance with this paragraph:

14(i)  Except as provided in subparagraph (ii), an
15assessed development impact fee shall constitute a lien
16on the new development against which it is imposed, and
17the lien shall continue until the development impact fee
18is paid in full.

19(ii)  If a development impact fee is to be collected
20on a pro rata basis in accordance with paragraph (3),
21only the prorated amount of the development impact fee to
22be paid by the purchaser of a dwelling shall constitute a
23lien on the dwelling, and the lien shall continue until
24the prorated amount is paid in full.

25(c)  Recoupment of costs.--A governmental entity may recoup
26costs of excess capacity in public facilities or capital
27improvements constructed after the effective date of this
28article, if the excess capacity has been provided in
29anticipation of the needs of new development, by requiring
30development impact fees for the portion of the facilities

1constructed for future users. The need to recoup costs for
2excess capacity must have been documented by a preconstruction
3assessment that demonstrated the need for the excess capacity.
4The fees imposed to recoup the costs to provide the excess
5capacity shall be based on the governmental entity's actual cost
6of acquiring, constructing or upgrading the facility and shall
7be no more than a proportionate share of the costs to provide
8the excess capacity. The portion of a development impact fee
9deemed recoupment is exempt from the provisions of section 504-
10B(d)(2).

11(d)  In lieu of payments.--Governmental entities may accept
12the dedication of land or the construction of public facilities
13or capital improvements in lieu of payment of development impact
14fees provided that:

15(1)  The need for the dedication or construction is
16clearly documented in the governmental entity's capital
17improvement program or comprehensive plan.

18(2)  The land proposed for dedication for the public
19facilities to be constructed is determined to be appropriate
20for the proposed use by the governmental entity.

21(3)  Formulas or procedures for determining the worth of
22proposed dedications or constructions are established.

23(e)  Exemptions.--The following exemptions shall apply:

24(1)  Development impact fees may not be imposed for
25remodeling, rehabilitation or similar improvements to an
26existing structure or rebuilding a damaged structure unless
27there is an increase in the number of dwelling units or any
28other measurable unit for which a development impact fee is
29collected. Development impact fees may be imposed when
30property that is owned or controlled by Federal or State

1government is converted to private ownership or control.

2(2)  Nothing in this article shall prevent a governmental
3entity from granting any exemptions which it deems
4appropriate, including reducing or eliminating development
5impact fees on affordable housing units for low-income or
6moderate-income individuals.

7Section 506-B.  Refund of development impact fees.

8(a)  Amount of refund.--If development impact fees are not
9expended or encumbered within the period established in section
10504-B, the governmental entity shall refund to the current
11property owner the amount of the development impact fee paid and
12accrued interest. The governmental entity shall send the refund
13to the current property owner by a form of mail requiring a
14receipt signed by the current property owner or an authorized
15agent within one year of the date on which the right to claim a
16refund arises. If the refund is returned unclaimed, the
17governmental entity shall publish notice of the refund once a
18week for two consecutive weeks in a newspaper of general
19circulation in the county where the governmental entity is
20located. All refunds due and not claimed within one year after
21notification as provided in this section shall be retained by
22the municipality and may be transferred to the municipality's
23general fund and used for a public purpose.

24(b)  Refund upon termination.--

25(1)  A governmental entity that terminates the collection
26of development impact fees for any or all categories of
27public facilities shall refund all unexpended or unencumbered
28funds collected in accordance with the notice provisions of
29subsection (a) and shall place a notice of the termination
30and availability of refunds in a newspaper of general

1circulation in the county of the governmental entity once a
2week for at least two consecutive weeks.

3(2)  This subsection does not apply if there are no
4unexpended or unencumbered balances within a fund being
5terminated.

6Section 507-B.  Severability.

7If any portion of this article or any rule, regulation or
8determination made under this article, or the application of
9this article to any person, agency or circumstance is held
10invalid by a court of competent jurisdiction, the remainder of
11this article, rule, regulation or determination and the
12application of those provisions to other persons, agencies or
13circumstances shall not be affected. The invalidity of any
14section or sections, or parts of any section or sections of this
15article, shall not affect the validity of the remainder of this
16article.

17Section 508-B.  Limitation on development impact fees.

18A municipality may not include any transportation-related
19improvement or expenditure already included under Article V-A in
20any development impact fee adopted under this article.

21Section 7.  This act shall take effect in 60 days.