Committee advances expedited bill to delay impact tax payment until final inspection, adds municipal coordination amendment

The Government Operations and Fiscal Policy Committee voted unanimously to forward Expedited Bill 22‑24 — which would require development impact taxes to be paid at final inspection rather than at six or 12 months after permit issuance — to the full County Council with a favorable recommendation, committee members said during the meeting.

The bill would strike existing provisions in county code that allow deferred payment six or 12 months after permit issuance and replace them with a single rule: payment is due at final inspection. The committee adopted staff amendments clarifying that municipalities should be able to issue building permits even if county payment is delayed and that the amendment apply to building‑permit applications filed on or after Jan. 1, 2025.

Developers, housing advocates, and several chambers of commerce provided testimony during the public hearing portion of the record, mostly in support of the change; testimony argued that delaying payment until final inspection would reduce developers’ up‑front financing costs and could encourage more projects and additional housing. The Office of Legislative Oversight (OLO) prepared an economic impact statement concluding that later impact‑tax payments can reduce financing costs and therefore could make more projects financially viable. "By allowing impact tax payments to be made later, the financing costs would go down for the development projects," an OLO summary in the staff packet said.

County finance staff and the Office of Management and Budget (OMB) provided a fiscal impact analysis that modeled how the delay would affect county cash flows. Todd Follett, Financial Analyst with the Department of Finance, described the modeling approach: "We chose to use a random number generator within that parameter to every single payment that DPS received over the past 10 years," he said, referring to a simulation on roughly 16,000 payment records that applied residential and nonresidential timing parameters (residential: ~6 months–1 year delay; nonresidential: ~1–2 years) to estimate when payments would occur under the proposed rule.

Using that approach, OMB’s fiscal forecast presented in the packet estimated a six‑year reduction in impact‑tax receipts of about $14,800,000 for school impact taxes and $13,000,000 for transportation impact taxes (six‑year total estimated loss shown in staff materials). The county executive submitted a letter urging caution and recommending delay until a previously‑proposed multi‑stakeholder work group considers broader impact‑tax policy changes.

Committee members debated timing and consequences. Councilmember Friedson summarized the tradeoff as balancing county cash flow with private‑sector financing, saying in the meeting, "time isn't money, but time is money," to underline that payment timing matters to both the county and developers. Councilmembers expressed interest in the work group but also concern that delaying the bill’s effective date could cause developers to postpone applications and stall projects.

Two technical points were clarified and added as staff amendments: (1) an amendment proposed with support from municipalities allows municipalities to issue building permits without a county payment having been made and requires applicants to notify municipalities when the county payment is eventually made; and (2) staff recommended and the committee adopted language specifying that, in practice, Department of Permitting Services (DPS) will not schedule a final inspection until the impact‑tax payment has been received under DPS policy (to avoid disputes about what "until final inspection" means).

DPS staff said permit forms already include language noting the prevailing impact‑tax rate at time of permit and that rates are subject to change; DPS staff also committed to improving web and permit communications so applicants are clearly informed that impact‑tax rates are those in effect at the time of payment. "On the permit is also language that says that rates are subject to change and that the rate that you pay is the rate in effect when you pay," a DPS representative (Miss Lucas) said.

After discussion and adoption of the amendments, the committee voted unanimously to transmit a favorable recommendation to the full Council; the packet and staff presentation state the amendment will apply to building‑permit applications filed on or after Jan. 1, 2025.

Less critical/contextual details: the fiscal model used a large sample of historic records (about 16,000), applied timing parameters drawn from DPS permit/payment history, and used a random draw per payment to simulate collection timing. The staff packet includes a screenshot of the forecast and the executive’s letter expressing concern and recommending the broader work group review before permanent policy change.