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BOOK 95 PA 1121 In providing public services and facilities, governments must consider who is requiring and utilizing the service. As a community grows, new residents increase the demand for facilities. Government must then determine how improvements or expansions of the existing facilities will be funded in order to serve the new growth. In so doing, government must determine if the existing community will bear any or all of the costs to expand existing facilities to accommodate new residents. Typically, charging existing residents to fund facility expansions for new residents is discouraged. Instead, many communities prefer the concept that new growth should pay for itself. In response to this concept, many communities- assess special fees for new developments which will increase the demand for public facilities. These special fees are known as impact fees, and they are used to fund expansions of capital facilities to accommodate new growth. Using impact fees, a community avoids charging existing residents for the full cost of facility improvements necessitated by new residents. • Impact Fees Generally Impact fees may be defined as.single, one-time payments required from developers at the time of obtaining project development approval, which are calculated to be the proportionate share of the capital cost of providing public facilities for the development project. In relation to housing, a 1,000 square foot single-family home is typically charged the same impact fee as a 5,000 square foot single-family home, since the facility impact is the same for both and the impact is not affected by the size of the home. Consequently, impact fees differ from taxes, because the amount of a tax does not need not relate to the level of government services received. Generally, impact fees are assessed against new development, as well as expansions of existing developments; usually, impact fees are payable at the time building permits are issued. For this reason, impact fees assessed on housing effectively become part of the upfront costs which are included in, or added to, the purchase price of a housing unit. This "additional cost" has created a substantial amount of controversy in relation to the need for affordable housing. In 1992, the Florida Legislature adopted the William Sadowski Affordable Housing Act which established the State Housing Initiatives Partnership (SHIP) Program. In compliance with the SHIP Program, participating counties, including Indian River County, were required to establish Affordable Housing Advisory Committees which would examine impact fees in their jurisdictions and, where warranted, make recommendations, concerning the modification of impact fee requirements, including reductions or waivers of fees and alternative methods of payment. The Committee, however, may recommend that the existing impact fee program remain with no change. The Committee's final recommendation will then be included in the Local Housing Incentive Plan to be prepared by the Committee for presentation to the local government. • Impact Fees in Florida In the State of Florida, a number of local governments, both cities and counties, assess impact fees for new development or expansions of existing development. According to the Florida Advisory Council on Intergovernmental Relations (FACIR) 1991 Florida Impact' Fee Report, Margate, Florida assessed the first impact fee in Florida in December 1971. By 1991, 33 of Florida's 67 counties were assessing at least one type of impact fee, and two other counties were preparing to establish impact fees. Of the counties surrounding Indian River -County, Brevard, St. Lucie, and Osceola 12 MAY 189 1995