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1.Introduction 1.2 LEGAL CONSIDERATIONS Capital charges for new utility infrastructure in Florida (such as the County's impact fees) are typically developed consistent with the statutory guidelines of the Florida Impact Fee Act, which was created in 2006 by Senate Bill 1194, and is outlined in Section 163.31801 of the Florida Statutes. Most notably, this legislation requires 1) that the calculation of impact fees be based upon the most recent, localized data, 2) separate reporting/accounting of impact fee revenue and expenditures in a distinct fund, 3) that the administrative charges collected in impact fees be based upon actual costs, and 4) that 90 days' notice be given prior to the effective date of an ordinance or resolution imposing or amending an impact fee. The courts and the referenced legislation have fundamentally addressed three areas associated with the development of impact fees. These areas include: 1) "fair share" allocations dealing with payment of impact fees by the affected property owners, 2) "rational nexus" standards, which focus on the expenditure or purpose of the fees, and 3) "credit" allowances, which recognize offsets in the calculation of impact fees. The "fair share" allocations would require that an impact fee should only be used for capital expenditures that are attributable to new growth. Additionally, the "fair share" allocation principles recognize that the cost of facilities used by both existing customers and new development must be apportioned between the two user groups, such that the user groups are treated equally, and one group does not subsidize the other. The "rational nexus" standards require that there is a reasonable relationship between the need for capital facilities and the benefits received by new customers for which the impact fees will be expended. There are two general conditions that limit where and when impact fees can be collected and used. With respect to the first condition, although there is no specific limit as to distance between an applicant paying the facilities charges and the capital expenditure to be constructed using the revenue from the charge, there should be a general geographical relationship between the location of the property that the charge is collected on and its use. The second nexus condition recognizes that the property must receive a benefit from the service for which the impact fees are being applied. With respect to the water and sewer impact fees, the water and sewer facilities are used by and constructed on behalf of all the customers of the Utility, and they benefit both residential and commercial customers. As such, all new growth requesting capacity from the Utility (either water and/or sewer) should be subject to impact fees. The "credit" allowances recognize that if a public agency has received property or infrastructure in the form of cost-free capital or if there is another revenue source that will be used for the capital expenditures necessitated by new growth (i.e., debt financing), a credit should be included within the development of impact fees. Specifically, "credits" should be determined as part of calculating impact fees to recognize any grants, contributions by developers, assessments, and other sources that provide funds for the same capital expenditures included in the impact fees to avoid a double recovery of costs. On June 4th, 2021, the Governor approved Chapter 2021-63, Laws of Florida, amending the Florida Impact Fee Act, including the addition of a limitation on impact fee charges increases. More specifically the approved limitations are as follows: