| Impact Fee
FREQUENTLY ASKED QUESTIONS:
What is an Impact Fee?
Impact Fees are one-time payments used to fund school capital improvements needed to accommodate new development. Impact Fees relate only to capital facility expenses benefiting new development and are not to be used to address existing deficiencies and/or operating expenses.
What is the legal basis to charge School Impact Fees in Harford County?
During the 2004 Legislative Session, the Maryland General Assembly amended Article 24, Section 9-10 A-01 of the Annotated Code of Maryland by enacting the Harford County School Construction Act of 2004. In general, the Act provides enabling Legislation for the Harford County Council to fix, impose and collect by ordinance, a School Development Impact Fee not to exceed $10,000 for new construction or development.
What will the Impact Fee be used for?
The new revenue may only be used for School Site Acquisition, School Construction, School Renovation, School Debt Reduction, or School Capital Expenses.
What other jurisdictions in Maryland charge a School Impact Fee?
Anne Arundel, Calvert, Carroll, Frederick, Montgomery, Prince Georges, Queen Anne's, and St. Mary's counties.
Did Harford County hire an outside consultant to help develop a School Impact Fee?
Yes. Harford County contracted with Tischler & Associates, a nationally respected fiscal, economic and planning consulting firm that specializes in impact fees. The firm has assisted more than 500 jurisdictions in their efforts to develop impact fee programs.
The planning and legal framework for establishing Impact Fees in Harford County was established through Tischler and Associates preparation of a School Impact Fee Study, which was completed and presented to the Harford County Council in December 2004. This study outlined key components necessary to justify re-establishment of School Impact Fees and included detailed discussions and analyses on fee methodologies, credits, maximum supportable impact fees, student generation rates, collection and expenditure zones, chronology of redistricting activity, inventories of public schools, local cost of public schools and school sites, vehicles and equipment, credit for future payments on school by projects, implementation and administration, and demographic and development projections.
Who pays the Impact Fee?
Anyone applying for a new residential structure for which a building permit is required, but does not include renovations, additions or modifications to an existing residential structure.
When will the Impact Fee be paid?
The Impact Fee is paid at the time of building permit application.
Are changes in use or additions to existing houses charged an Impact Fee?
No.
If I buy an existing home, will I be charged an Impact Fee?
No.
What uses can be exempted from payment of an Impact Fee?
Bill 05-21, with amendments, exempts housing for the elderly, continuing care retirement communities (CCRC), transient housing, housing constructed by not for profit organizations and redevelopment, re-construction or replacement of an existing residential structure that results in no new housing units.
Do Impact Fee revenues have to be spent within a certain period of time?
Yes. Bill 05-21, as amended, stipulates that Development Impact Fees must be used within 8 years from the date of payment.
What is an Impact Fee credit?
An impact fee credit is appropriate since new residential units that pay School Impact Fees will also contribute to future principal payments through property taxes. These credits are calculated in the Impact Fee Study and cause a reduction in the maximum justifiable impact fee. The application of credits is important to ensure that new development does not pay twice for the same new capital facility.
How do Impact Fees benefit existing, as well as new, residents?
As new development will pay for a higher percentage of its own capacity-enhancing infrastructure needs, current funds that have been designated to pay for those projects may be shifted to the more immediate needs of existing residents, such as facility maintenance and rehabilitation.
If Harford County has to refund Impact Fees collected at some time in the future, who receives the refund?
Assuming the County has failed to use/appropriate the Development Impact Fee within 8 years from its date of payment, the current property owner may request a refund.
Can the Impact Fee revenues be deposited in a general fund?
No. Impact fee revenues must be earmarked and deposited in a special dedicated fund/account.
Do School Impact Fees apply to the incorporated towns in Harford County?
Yes. School Impact Fee legislation applies to the incorporated towns of Bel Air, Aberdeen and Havre de Grace. Applications for residential building permits within the incorporated towns must be accompanied by a transmittal documenting that any required public school impact fee had been paid to the Harford County Treasurers Office.
When will School Impact Fees take effect?
Public School Impact Fees, authorized under Bill 05-21, as amended, will become effective on July 1, 2005.
How much are the Public School Impact Fees?
| EFFECTIVE DATE | COST |
| | Single Family Detached | Townhouse/Duplex | All Other Residential Including Mobile Homes |
| 7/1/05 - 6/30/06 | $6,000 | $4,200 | $1,200
|
| 7/1/06 - 6/30/07 | $7,442 | $5,148 | $1,473
|
| 7/1/07 ? | $8,269 | $5,720 | $1,637 |
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