SB2904 94TH GENERAL ASSEMBLY

LRB094 17822 BDD 53123 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2904

Introduced 1/20/2006, by Sen. Chris Lauzen

SYNOPSIS AS INTRODUCED:

New Act

Creates the Illinois School Land and Capital Facilities Assessment Act. Authorizes school districts to impose assessment fees on the owners of newly constructed dwelling units for school land and capital facilities, and prohibits units of local government from imposing impact fees on new development for school purposes. Requires school districts to conduct needs assessments, adopt plans, and hold public hearings before imposing assessment fees. Sets forth requirements and procedures for the imposition, payment, and use of the assessment fees. Sets forth limitations on challenges to the imposition or use of the assessment fees. Requires units of local government to repeal existing ordinances imposing school impact fees. Makes an exemption for existing impact fee agreements. Preempts home rule powers. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOME RULE NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning schools.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Article 1. SHORT TITLE; LEGISLATIVE PURPOSE AND INTENT

DEFINITIONS; AUTHORIZATION; LIMITATIONS

Section 1.1. Short title. This Act may be cited as the the Illinois School Land and Capital Facilities Assessment Act.

Section 1.5. Statement of purpose and intent. The General Assembly declares that the purposes of this Act are to establish a mechanism for Illinois school districts to pay or finance costs they incur in acquiring and improving school lands and constructing school capital facilities to serve new development; to ensure that the burden of paying for needed school lands and school capital facilities is determined and allocated in a fair and equitable manner among the owners of newly constructed homes so that the owners carry no more than their "fair share" of the burden of providing school lands and school capital facilities and to maintain the affordability of housing in the state.

The General Assembly further finds that it is the General Assembly's intent:

(1) to promote orderly economic growth and development throughout the State while assuring that owners of newly constructed homes pay their "fair share", but no more than their "fair share", of the cost of acquiring and improving needed school lands and of constructing needed school capital facilities;

(2) to ensure that the owners of newly constructed homes who pay their "fair share" of the aforesaid costs are able to pay such costs over time so that the cost of constructing their homes remains affordable;

(3) to ensure that adequate school lands and school capital facilities are available to serve the student populations that will be generated by the construction of new homes;

(4) to establish fair and equitable procedures and standards for school districts to employ in creating and implementing school land acquisition plans and school capital facilities plans and in assessing and expending school land assessment fees and school capital facilities assessment fees; and

(5) to prevent the assessment of unfair and inconsistent school impact fees.

Section 1.10. Definitions. As used in this Act, the term:

"Assessment period" means a 10-year period that commences on the date of issuance of a certificate of occupancy for a newly constructed dwelling unit within a new development.

"Dwelling unit" means an attached or detached single-family or multiple-family residence, apartment, or condominium within a new development that has not previously been included on the tax rolls for building value. Residences, apartments, and condominiums that are to be occupied by persons 62 years of age or older under 42 U.S.C. Section 3607 (b)(2)(b) (2000) or by persons 55 years of age and older under 42 U.S.C. Section 3607 (c)(2)(c) (2000), and hotels and motels, assisted living facilities, nursing homes, congregate care facilities and convalescent care centers shall not be deemed "dwelling units" for purposes of this Act.

"Encumber" means to use or commit to use collected school land assessment fees and school capital facilities assessment fees by legal obligation, appropriation, or other official action by a school district.

"Fee payer" means an owner of a dwelling unit who is required to pay a school land assessment fee, a school capital facilities assessment fee, or both.

"New development" means a development containing new dwelling units that is being newly constructed or that is projected to be constructed.

"Proportionate share" means that portion of the school land acquisition costs and the school capital facilities costs that is rationally related to the new development that will benefit from the acquisition or improvement of new school lands or the acquisition or construction of new school capital facilities. In calculating "proportionate share" credit shall be given for the tax revenues that will be paid by the owner of a newly constructed dwelling unit that will be used to satisfy those school land acquisition costs and school capital facilities costs.

"School capacity" means the maximum student enrollment capacity of an existing school determined on the basis of the space and physical standards recommended by the Illinois State Board of Education and the then-current State of Illinois and federal special education and accessibility facility mandates.

"School capital facilities" means new schools or building additions to or renovations of existing schools.

"School capital facilities assessment fees" means fees established by a school district pursuant to a school capital facilities plan.

"School capital facilities costs" means the reasonable costs a school district incurs in constructing school capital facilities. School capital facilities costs may include the reasonable planning, design, engineering, architectural, title, survey, brokerage, environmental investigation, and legal costs incurred by a school district provided not more than 10% of the total costs incurred in constructing the school capital facilities shall be used to pay the planning, design, engineering, architectural title, survey, brokerage, environmental investigation, and legal costs.

"School capital facilities needs assessment" means an assessment of a school district's need for new school capital facilities as described in Section 5.5 of this Act.

"School capital facilities plan" means a plan adopted by a school district pursuant to Article 10 of this Act.

"School capital facilities planning period" means the period of time evaluated by a school district over which new school capital facilities are anticipated to be needed. A school capital facilities planning period shall not exceed 10 years in duration, as measured from the date of enactment of a school capital facilities plan.

"School district" means any public elementary, high school, consolidated, or unit school district.

"School land acquisition costs" means the reasonable costs a school district incurs in acquiring and improving school lands. School land acquisition and improvement costs may include the reasonable planning, title, survey, brokerage, environmental investigation, and legal costs incurred by a school district provided not more than 10% of the total costs incurred in acquiring and improving school lands shall be used to pay the planning, engineering, architectural, title, survey, brokerage, environmental investigation, and legal costs. For these purposes, the word "improving" or "improvement" means constructing sanitary sewers, storm sewers, water mains, sidewalks, roadway improvements, electric, phone, cable and natural gas improvements, landscaping improvements, athletic facilities, or playground facilities or undertaking demolition or grading activities on school lands in furtherance of the construction of new school capital facilities. School land acquisition and improvement costs shall not include any costs that are incurred or to be incurred as school capital facilities costs.

"School land acquisition plan" means a plan adopted by a school district pursuant to Article 10 of this Act.

"School land acquisition planning period" means the period of time evaluated by a school district over which new school lands are anticipated to be needed. A school land acquisition planning period shall not exceed 10 years in duration, as measured from the date of enactment of a school land acquisition plan.

"School land assessment fees" means fees established by a school district pursuant to a school land acquisition plan.

"School land needs assessment" means an assessment of a school district's need for additional school lands as described in Section 5.1 of this Act.

"School lands" means lands that are intended to be used by a school district for school purposes.

"School sub-district" means a defined portion of a school district served by particular school lands or school capital facilities.

"Unit of local government" means all units of local government, as defined in Article VII, Section 1 of the Constitution of 1970, including all home rule units of local government.

Section 1.15. Authorization.

(a) Only school districts in counties having a population in excess of 50,000 shall have the authority to adopt a school land acquisition plan and a school capital facilities plan and to assess and collect school land assessment fees and school capital facilities assessment fees. Notwithstanding the foregoing, the provisions of this Act shall not apply to school districts situated in municipalities having a population in excess of 1,000,000.

(b) Only school districts that have undertaken a school land needs assessment and concluded that they will need to acquire and improve new school lands over a school land acquisition planning period to meet the demand of new development shall be authorized to impose school land assessment fees. Only school districts that have undertaken a school capital facilities needs assessment and concluded that they will need to construct new school capital facilities over a school capital facilities planning period shall be authorized to impose school capital facilities assessment fees.

Section 1.20. Limitations.

(a) No unit of local government other than the school districts described in subsection (a) of Section 1.15 shall have the authority to adopt a school land acquisition plan and a school capital facilities plan and to impose school land assessment fees and school capital facilities assessment fees.

(b) The assessment, imposition, and collection of school land assessment fees and school capital facilities assessment fees pursuant to this Act shall be the sole and exclusive means by which units of local government and school districts assess, impose, and collect fees against new development for purposes of satisfying and financing the school land acquisition costs and school capital facilities costs that a school district will incur in meeting the demands of new development.

(c) No school district authorized by this Act to assess and impose school land assessment fees and school capital facilities assessment fees shall impose fees for the acquisition and improvement of school lands or for the construction of school capital facilities in a manner that is inconsistent with the provisions of this Act.

(d) The aggregate amount of school land assessment fees and school capital facilities assessment fees that are to be paid for dwelling units within a new development over an assessment period may not exceed 3% of the average projected market value of such dwelling units.

(e) No annexation agreement entered into by a unit of local government under Division 15.1 of Article 11 of the Municipal Code shall require payment of fees for the acquisition and improvement of school lands or for the construction of school capital facilities other than school land assessment fees and school capital facilities assessment fees that have been established by a school district pursuant to this Act. If a unit of local government seeks to enter into an annexation agreement with a developer of a new development, the annexation agreement shall provide for the payment of school land assessment fees and school capital facilities assessment fees as and to the extent the school districts within whose jurisdiction the new development is to be constructed have adopted a school land acquisition plan and a school capital facilities plan and established a school land assessment fee and school capital facilities assessment fee schedule.

(f) This Act is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of local government of powers and functions exercised by the State.

Article 5. NEEDS ASSESSMENTS

Section 5.1. School land needs assessment.

(a) No school district shall impose a school land assessment fee unless it first undertakes a school land needs assessment that concludes that new school lands will need to be acquired or improved over the school land acquisition planning period to meet the demands of new development that is then occurring or projected to occur with the school district or school sub-district. A school land needs assessment shall not be more than one year old at the time of adoption of a school land acquisition plan.

(b) A school land needs assessment shall contain the following:

(1) a description of the existing school lands within the school district or school sub-district and their current uses, including an appraisal by a licensed appraiser of the value of such lands;

(2) a computation of the school lands then being provided for each student in the school district or school sub-district, exclusive of school lands not currently being used for school purposes;

(3) a description of the new development that is expected to occur within the school district or school sub-district over the school land acquisition planning period;

(4) a description of the school lands that are proposed to be acquired within the school district or school sub-district and their proposed uses, including an appraisal by a licensed appraiser of the value of such school lands;

(5) a computation of the amount of school lands the school district proposes to acquire or improve in order to meet the demands of the new development that is projected to occur within the school district or school sub-district over the school land acquisition planning period, which amount shall be generally consistent with the amount of school lands being provided by existing school lands within the school district or school sub-district, as established by the computation set forth under item (2); and

(6) a projection of the school land acquisition costs the school district will incur in improving already-owned school lands and in improving and acquiring new school lands over the school land acquisition planning period in order to meet the demands of the aforesaid new development.

(c) If a school land needs assessment is not undertaken for a given classification of school lands, then the school district shall not include within a proposed school land acquisition plan a component for the acquisition or improvement of new school lands or for the incurring of any school land acquisition costs for such classification of school buildings.

Section 5.5. School capital facilities needs assessment.

(a) No school district shall impose a school capital facilities assessment fee unless it first undertakes a capital facilities needs assessment that concludes that new school capital facilities will need to be constructed or acquired over the school capital facilities planning period to meet the needs of new development that is then occurring or projected to occur within the school district or school sub-district. A school capital facilities needs assessment shall not be more than one year old at the time of adoption of a school capital facilities plan.

(b) A school capital facilities needs assessment shall contain the following for each classification of school building (that is, elementary, middle or high school) that exists within the school district or school sub-district:

(1) a description of the existing school buildings within the school district or school sub-district and their current uses, including an appraisal by a licensed appraiser of the replacement cost of such school capital facilities;

(2) an identification of the school capacity of each school building within the school district or school sub-district and of the number of students then enrolled in each school building and a computation of the average square feet of school building then being provided by the school district per student;

(3) a projection of the new development that is expected to occur within the school district or school sub-district over the school capital facilities planning period;

(4) a computation of the amount of school capital facilities that the school district proposes to acquire or construct in order to meet the demands of the aforesaid new development, which amount shall be generally consistent with the amount of school capital facilities being provided by existing school capital facilities within the school district or school sub-district, as established by the computation set forth at paragraph (2);

(5) a projection of the school capital facilities costs the school district will incur in acquiring or constructing new school capital facilities over the school capital facilities planning period in order to meet the demands of the aforesaid new development.

(c) If a capital facilities needs assessment is not undertaken for a given classification of school buildings, then the school district shall not include within a proposed school capital facilities plan a component for the acquisition or construction of new school capital facilities or for the incurring of any school capital facilities costs for such classification of school buildings.

Article 10. ADOPTION OF SCHOOL LAND ACQUISITION AND SCHOOL

CAPITAL FACILITIES PLANS; PREPARATION OF SUPERINTENDENT'S

REPORT AND RECOMMENDATION; PUBLIC HEARING

Section 10.1. Requirement to adopt plan; passage of resolution. A school district that seeks to impose school land assessment fees or school capital facilities assessment fees against new development shall first adopt, respectively, a school land acquisition plan or a school capital facilities plan. Adoption of such a plan shall be effected by the passage of a resolution by a two-thirds vote of the school district's board members then-holding office. No school board shall consider and act on such resolution unless it has first received, respectively, the school land needs assessment or school capital facilities needs assessment and the school district superintendent's report and recommendation as provided below and until after it has conducted the public hearing described in Section 10.10. If, after considering the needs assessments and the superintendent's report and recommendation and after taking into account the testimony received at the public hearing, the school district wishes to adopt a school land acquisition plan or a school capital facilities plan it shall issue adopt the resolution herein provided for not later than 60 days following the close of the public hearing.

School land acquisition plans and school capital facilities plans shall be submitted to the school district's school board for consideration at a regularly scheduled meeting of the school board. If appropriate, such plans shall divide the school district into school sub-districts for analysis and planning purposes. The boundaries of any school sub-district shall be consistent with the boundaries of the areas being served by the various school buildings existing or planned for within such school sub-district. The plans shall identify a school district's need for new school lands and new school capital facilities for each separate classification of school buildings and set forth with particularity the school land assessment fees and school capital facilities assessment fees that are to be paid by the owners of dwelling units that will be constructed within new developments occurring within the school district or school sub-district over the school land acquisition planning period or school capital facilities planning period. The plans may provide for an owner's right to prepay school land assessment fees and school capital facilities assessment fees but no right of prepayment shall exist from and after the date a school district issues a school land assessment fee bond or school capital facilities assessment fee bond pursuant to Section 15.15 of this Act. No plan shall be submitted to the school board for its consideration unless it is accompanied by a report from the school district superintendent that recommends approval of the plan.

Section 10.5. Public hearing. The school district shall conduct a public hearing on the school land acquisition plan or school capital facilities plan not later than 60 days following the school board's receipt of the plan from the school superintendent. Notice of the public hearing shall be published at least once in a newspaper of general circulation within the school district not less than 21 days and not more than 45 days prior to the date scheduled for the public hearing. The school district shall also give notice of the public hearing by certified mail, within the same time period, to any person or entity that has registered with the school district in accordance with the school district's adopted procedures for the receipt of public hearing notices.

Article 15. IMPOSITION, PAYMENT, AND USE OF SCHOOL LAND

ASSESSMENT FEES AND SCHOOL CAPITAL FACILITIES ASSESSMENT FEES

Section 15.1. Imposition of school land assessment fees and capital facilities assessment fees. Once a school district has adopted a school land acquisition plan or a school capital facilities plan and established a school land assessment fee schedule or a school capital facilities assessment fee schedule, it shall have the authority and obligation to impose school land assessment fees and school capital facilities assessment fees against the owners of all dwelling units within new developments that are thereafter constructed in the school district or school sub-district. School land assessment fees and school capital facilities assessment fees for a given dwelling unit shall be due and payable annually over the assessment period for the dwelling unit.

Section 15.5. Standard for imposition of school land assessment fees and school capital facilities assessment fees. Owners of dwelling units within new developments that are required to pay school land assessment fees and school capital facilities assessment fees shall not be required to pay more than their proportionate share of the school land acquisition costs and school capital facilities costs that a school district will incur pursuant to the adopted school land acquisition plan and school capital facilities plan. Such proportionate share shall take into account the value of any lands that the developer of those new developments may have theretofore donated to the school district.

Section 15.10. Exclusion of new development increases in assessed value and from certain property tax extensions. If a school district adopts a school land acquisition plan or a school capital facilities plan and establishes a school land assessment fee schedule or a school capital facilities assessment fee schedule, the tax rates for the school district's existing or subsequently issued bonds or other evidence of indebtedness, to the extent issued to cover the school district's school land acquisition costs or school capital facilities costs, and the school district's tax rate for capital improvements established under Section 17-2(4) of the School Code (105 ILCS 5/17-2), shall not be attributed or extended to new construction increases in the assessed value of newly constructed dwelling units in the school district for the assessment periods established for those dwelling units, notwithstanding the provisions of Section 18-115 and Section 18-140 of the Property Tax Code (35 ILCS 200/18-115 and 200/18-140).

Section 15.15. Issuance of assessment fee anticipation warrants, notes, bonds, and other evidence of indebtedness. A school district that has adopted a school land acquisition plan or a school capital facilities plan may issue school land assessment fee or school capital assessment fee anticipation warrants, notes, bonds, or other evidence of indebtedness to defray school land acquisition costs and school capital facilities costs the school district anticipates incurring to meet the needs of new development to the extent of 75% of the amount of school land assessment fees and school capital facilities assessment fees that it anticipates collecting over the school land planning period or the school capital facilities planning period. Moneys borrowed by a school district in this manner shall be applied to the purposes for which they were obtained and no other purpose.

Section 15.20. Payment of fees. Each dwelling unit in a new development that is subject to the payment of a school land assessment fee or a school capital assessment fee shall pay 10% of the fee as a condition to issuance of a certificate of occupancy for the dwelling unit. The balance of the fee shall be paid in equal consecutive annual installments over the assessment period on the anniversary of the initial payment date. The installments shall be due not later than 30 days after a fee payer receives from the school district an invoice requesting such payment. A school district shall have the right to charge reasonable interest of not more than 12% per annum on installments that are not paid when due.

Section 15.25. Encumbering of collected school land assessment fees and school capital facilities assessment fees. A school district shall encumber all collected school land assessment fees or school capital facilities assessment fees within 5 years of their collection by the school district.

Section 15.30. Enforcement; lien rights. The school district shall have the right to enforce the collection of school land assessment fees and school capital facilities fees, and of any interest due on unpaid installments of such fees, by any means not otherwise precluded by law. In addition, the school district shall have the right to place a lien on the property of any fee payer that is subject to the payment of a school land assessment fee or a school capital facilities assessment fee if such fee payer fails to pay the fee or any interest due as and when due and the right to foreclose such lien in the same manner provided by law for the foreclosure of mortgage liens.

Section 15.35. Annual certification by superintendent. The school district superintendent shall annually submit to the school district school board and to the County Superintendent of Schools, within 30 days of expiration of the school district's fiscal year, a certification made under oath to the effect that, to the best of his or her knowledge, and after undertaking a good faith investigation, school land assessment fees and school capital facilities assessment fees imposed pursuant to the school district's adopted school land acquisition plan or school capital facilities plan have been imposed, held and used in the manner required by this Act and by the adopted school land acquisition plan and school capital facilities plan.

Article 20. LIMITATIONS ON CHALLENGES

Section 20.1. Challenges to adopted plans or fee schedules. No party shall have the right to contest a school district's adoption of a school land acquisition plan, a school capital facilities plan, a school district's school land assessment fee schedule or a school district's capital facilities assessment fee schedule more than 6 months after the date of adoption of the plan or schedule. The resolution adopting a school land acquisition plan or school capital facilities plan shall provide for the consideration of the contest by an arbitrator and for the prevailing party in such challenge to recover from the non-prevailing party the attorneys' fees and costs that the prevailing party has reasonably incurred in pursuing or defending such contest. The arbitrator shall have the authority to determine whether a school district's adopted school land acquisition plan, school capital facilities plan, school land assessment fee schedule, or school capital facilities assessment fee schedule are consistent with the manifest weight of the evidence presented at the public hearing required under Sections 10.10 of this Act or are otherwise contrary to law. The arbitrator's decision shall be subject to judicial review in the circuit court under the provisions of the Administrative Review Law.

Section 20.5. Challenges to use of collected fees. A fee payer shall have the right to challenge or contest the use of collected school land assessment fees or school capital facilities assessment fees provided the fee payer commences such challenge or contest in the appropriate circuit court not more than one year after the date of payment of the fees. Notwithstanding the foregoing: (i) an action seeking the refund of a school land assessment fees or school capital facilities assessment fee that has not been encumbered by a school district as and when required by an adopted school land acquisition plan, an adopted school capital facilities plan or by this Act may be commenced by a fee payer more than one year after the date of its payment provided it is commenced by the fee payer no later than one year after the expiration of the period within which the fee was to have been encumbered; and (ii) if a school district has issued school land assessment bonds or school capital facilities bonds pursuant to Section 15.15 of this Act, the commencement of any action challenging the use of collected school land assessment fees or school capital facilities assessment fees shall not negate the fee payer's continuing obligation to pay school land assessment fees or school capital assessment fees thereafter coming due.

Article 25. TRANSITION

Section 25.1. Repeal of existing ordinances. Any unit of local government that has adopted an ordinance that requires a party constructing a new development or an owner of a newly constructed dwelling unit in a new development to pay an impact fee or transition fee to satisfy school land acquisition costs, school capital facilities costs, or school operating costs for school districts operating within its boundaries shall repeal such ordinance not later than 6 months after the effective date of this Act.

Section 25.5. Existing agreements. New developments that, as of the date of a school district's passage of a resolution adopting a school land acquisition plan or a school capital facilities plan, are the subject of an agreement that provides for the payment of impact fees to a school district or unit of local government to pay school land acquisition costs or school capital facilities costs shall not be included within the school district's school land acquisition plan or school capital facilities plan, as applicable, or subject to the school district's subsequent imposition of school land assessment fees or school capital facilities assessment fees.

Article 99. EFFECTIVE DATE

Section 999. Effective date. This Act takes effect upon becoming law.