Impact Fee

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A fee, also called a development fee, levied on the developer of a project by a city, county, or other public agency as compensation for otherwise unmitigated impacts of new development on a community. California Government Code section 66000 et seq. specifies that development fees shall not exceed the estimated reasonable cost of providing the service for which the fee is charged. To lawfully impose a development fee, the public agency must verify its method of calculation and document proper restrictions on use of the fund. (See Nexus.) The most common are: (1) impact fees (such as parkland acquisition fees, school facilities fees, or street construction fees) related to funding public improvements which are necessitated in part or in whole by the development; (2) connection fees (such as water line fees) to cover the cost of installing public services to the development; (3) permit fees (such as building permits, grading permits, sign permits) for the administrative costs of processing development plans; and (4) application fees (rezoning, CUP variance, etc.) for the administrative costs of reviewing and hearing development proposals.

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