2017 ORS 223.304¹
Determination of amount of system development charges
  • methodology
  • credit allowed against charge
  • limitation of action contesting methodology for imposing charge
  • notification request

(1)(a) Reimbursement fees must be established or modified by ordinance or resolution setting forth a methodology that is, when applicable, based on:

(A) Ratemaking principles employed to finance publicly owned capital improvements;

(B) Prior contributions by existing users;

(C) Gifts or grants from federal or state government or private persons;

(D) The value of unused capacity available to future system users or the cost of the existing facilities; and

(E) Other relevant factors identified by the local government imposing the fee.

(b) The methodology for establishing or modifying a reimbursement fee must:

(A) Promote the objective of future system users contributing no more than an equitable share to the cost of existing facilities.

(B) Be available for public inspection.

(2) Improvement fees must:

(a) Be established or modified by ordinance or resolution setting forth a methodology that is available for public inspection and demonstrates consideration of:

(A) The projected cost of the capital improvements identified in the plan and list adopted pursuant to ORS 223.309 (Preparation of plan for capital improvements financed by system development charges) that are needed to increase the capacity of the systems to which the fee is related; and

(B) The need for increased capacity in the system to which the fee is related that will be required to serve the demands placed on the system by future users.

(b) Be calculated to obtain the cost of capital improvements for the projected need for available system capacity for future users.

(3) A local government may establish and impose a system development charge that is a combination of a reimbursement fee and an improvement fee, if the methodology demonstrates that the charge is not based on providing the same system capacity.

(4) The ordinance or resolution that establishes or modifies an improvement fee shall also provide for a credit against such fee for the construction of a qualified public improvement. A “qualified public improvement” means a capital improvement that is required as a condition of development approval, identified in the plan and list adopted pursuant to ORS 223.309 (Preparation of plan for capital improvements financed by system development charges) and either:

(a) Not located on or contiguous to property that is the subject of development approval; or

(b) Located in whole or in part on or contiguous to property that is the subject of development approval and required to be built larger or with greater capacity than is necessary for the particular development project to which the improvement fee is related.

(5)(a) The credit provided for in subsection (4) of this section is only for the improvement fee charged for the type of improvement being constructed, and credit for qualified public improvements under subsection (4)(b) of this section may be granted only for the cost of that portion of such improvement that exceeds the local government’s minimum standard facility size or capacity needed to serve the particular development project or property. The applicant shall have the burden of demonstrating that a particular improvement qualifies for credit under subsection (4)(b) of this section.

(b) A local government may deny the credit provided for in subsection (4) of this section if the local government demonstrates:

(A) That the application does not meet the requirements of subsection (4) of this section; or

(B) By reference to the list adopted pursuant to ORS 223.309 (Preparation of plan for capital improvements financed by system development charges), that the improvement for which credit is sought was not included in the plan and list adopted pursuant to ORS 223.309 (Preparation of plan for capital improvements financed by system development charges).

(c) When the construction of a qualified public improvement gives rise to a credit amount greater than the improvement fee that would otherwise be levied against the project receiving development approval, the excess credit may be applied against improvement fees that accrue in subsequent phases of the original development project. This subsection does not prohibit a local government from providing a greater credit, or from establishing a system providing for the transferability of credits, or from providing a credit for a capital improvement not identified in the plan and list adopted pursuant to ORS 223.309 (Preparation of plan for capital improvements financed by system development charges), or from providing a share of the cost of such improvement by other means, if a local government so chooses.

(d) Credits must be used in the time specified in the ordinance but not later than 10 years from the date the credit is given.

(6) Any local government that proposes to establish or modify a system development charge shall maintain a list of persons who have made a written request for notification prior to adoption or amendment of a methodology for any system development charge.

(7)(a) Written notice must be mailed to persons on the list at least 90 days prior to the first hearing to establish or modify a system development charge, and the methodology supporting the system development charge must be available at least 60 days prior to the first hearing. The failure of a person on the list to receive a notice that was mailed does not invalidate the action of the local government. The local government may periodically delete names from the list, but at least 30 days prior to removing a name from the list shall notify the person whose name is to be deleted that a new written request for notification is required if the person wishes to remain on the notification list.

(b) Legal action intended to contest the methodology used for calculating a system development charge may not be filed after 60 days following adoption or modification of the system development charge ordinance or resolution by the local government. A person shall request judicial review of the methodology used for calculating a system development charge only as provided in ORS 34.010 (Former writ of certiorari as writ of review) to 34.100 (Power of court on review).

(8) A change in the amount of a reimbursement fee or an improvement fee is not a modification of the system development charge methodology if the change in amount is based on:

(a) A change in the cost of materials, labor or real property applied to projects or project capacity as set forth on the list adopted pursuant to ORS 223.309 (Preparation of plan for capital improvements financed by system development charges); or

(b) The periodic application of one or more specific cost indexes or other periodic data sources. A specific cost index or periodic data source must be:

(A) A relevant measurement of the average change in prices or costs over an identified time period for materials, labor, real property or a combination of the three;

(B) Published by a recognized organization or agency that produces the index or data source for reasons that are independent of the system development charge methodology; and

(C) Incorporated as part of the established methodology or identified and adopted in a separate ordinance, resolution or order. [1989 c.449 §4; 1991 c.902 §28; 1993 c.804 §20; 2001 c.662 §3; 2003 c.765 §§4a,5a; 2003 c.802 §21]

Note: See note under 223.297 (Policy).

Notes of Decisions

System develop­ment charge levied upon broad class of prop­erty on uniform assess­ment basis is not “taking” subject to rough propor­tionality analysis. Rogers Machinery, Inc. v. Washington County, 181 Or App 369, 45 P3d 966 (2002), Sup Ct review denied, cert. denied, 538 US 906 (2003)

System develop­ment charges do not effect taking in viola­tion of sec­tion 18, Article I of Oregon Constitu­tion. Homebuilders Assn. v. Tualatin Hills Park and Recrea­tion District, 185 Or App 729, 62 P3d 404 (2003)

Chapter 223

Notes of Decisions

Fact that ordinance, which charged fee to prop­erty owners taking advantage of privilege of making connec­tion to city wa­ter system, specified that pay­ment would be secured by liens which would be “enforced” in matter provided by this chapter did not, of itself, show that such charges were “assess­ments.” Montgomery Brothers v. City of Corvallis, 34 Or App 785, 580 P2d 190 (1978)

Circuit court has jurisdic­tion to determine merits of assess­ment, but cannot address whether assess­ment is subject to constitu­tional limits on prop­erty taxes. Martin v. City of Tigard, 14 OTR 517 (1999), aff’d 335 Or 444, 72 P3d 619 (2003)

State statutory pro­ce­dures for financing local improve­ments are not exclusive and do not displace consistent local pro­ce­dures. Baker v. City of Woodburn, 190 Or App 445, 79 P3d 901 (2003), Sup Ct review denied

1 Legislative Counsel Committee, CHAPTER 223—Local Improvements and Works Generally, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors223.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 223, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano223.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.