GO Item 2
January 29, 2015
Government Operations and Fiscal Policy Committee
Michael Faden, Senior Legislative Attorney
Bill 62-14, Taxation - Development Impact Taxes - Exemption
Bill 62-14, Taxation - Development Impact Taxes - Exemption - Ancillary Facilities,
sponsored by then-Council President Rice, was introduced on November 25, 2014. After the Bill
was introduced, Council President Leventhal and Councilmembers Floreen, Katz, and Riemer
added themselves as co-sponsors.
Bill 62-14 would exempt from development impact taxes certain ancillary facilities in
residential developments that do not increase the number ofdwelling units in the development and
are not open to the public, such as clubhouses, fitness centers, or administration buildings.
A public hearing was held on January 13, 2015, at which the only speaker was Philip
Marks, representing the Leisure World Board of Directors, who supported the Bill.
noted that Leisure World had paid about $75,000 in impact taxes in 2005 for an accessory building
after having their appeal of the tax denied. They now plan to build a new fitness center, restricted
to current residents, for which the impact tax would amount to $60-90,000.
A fiscal impact statement, received from the Office of Management and Budget after the
hearing, concluded that "the amount of square footage and revenue potentially affected by this
legislation cannot be determined" because of a lack of historical data.
In Council staff's view, taxing these kinds of ancillary buildings, which are not open to the
public and therefore would not add any outside traffic, is not justified by the purposes of the
development impact tax to assess new development a fair share of the cost of new or expended
transportation facilities needed to serve that development. The school impact tax also should not
be assessed because these ancillary facilities do not add new dwelling units and therefore do not
increase the number of students in the development.
Council staff recommendation:
62-14 as introduced.