This page provides a general overview of impact fees for cities and counties in Washington State, including information on how they may be used, rate calculations, waivers and exemptions, deadlines for collecting and expending funds, and sample documents from selected jurisdictions.
What Are Impact Fees?
Impact fees are one-time charges assessed by a local government against a new development project to help pay for new or expanded public capital facilities that will directly address the increased demand for services created by that development.
What Can Impact Fees Be Used For?
RCW 82.02.050-.110 and WAC 365-196-850 authorize counties, cities, and towns planning under the Growth Management Act (GMA) to impose impact fees for:
- Public streets and roads,
- Publicly owned parks, open space, and recreation facilities,
- School facilities, and
- Fire protection facilities.
These impact fees may only be imposed for “system improvements” which are defined as public capital facilities in a local government’s capital facilities plan that provides service to the community at large (not private facilities), are reasonably related to the new development, and will benefit the new development (WAC 365-196-850).
Impact fee revenues cannot be used to help pay for a specific capital project if that project is not listed or referenced within a comprehensive plan’s capital facilities element, per RCW 82.02.050(5).
Impact fees also cannot exceed a proportionate share of the cost of the system improvements: Municipalities must have additional funding sources and may not rely solely on impact fees to fund the system improvements (RCW 82.02.050).
What Can Impact Fees Not Be Used For?
Impact fees may not be used to correct existing deficiencies. For instance, a school district may use the impact fees from a development to pay for construction of new classrooms at specific schools to accommodate the increased enrollment anticipated from that specific development. But the district may not use the impact fees to build new classrooms to reduce overcrowding caused by existing residents.
Per RCW 82.02.060(9), an impact fee ordinance may:
(P)rovide for the imposition of an impact fee for system improvement costs previously incurred by a county, city, or town to the extent that new growth and development will be served by the previously constructed improvements provided such fee shall not be imposed to make up for any system improvement deficiencies.
For example, if a public works maintenance facility was designed and constructed to address both existing deficiencies (e.g., 60%) and future growth needs (e.g., 40%), impact fees could be used to pay for up to 40% of the debt service on the bond issued for that facility.
Transportation Impact Fees
Transportation impact fees must be used for “public streets and roads” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the Growth Management Act (GMA), per RCW 82.02.050(4) and RCW 82.02.090(7).
It is unclear whether state law allows these impact fees to be used to fund multimodal improvements, but such use is probably acceptable as long as the improvement is within the street right-of-way (e.g., bus lanes, sidewalks, or bike lanes) and there is a strong transportation-related justification. However, it is doubtful that impact fees could pay for buses, vanpool vehicles, recreational trails, or other projects outside the right-of-way.
Since impact fees are restricted to capital facilities, they cannot be used to fund transportation studies or operating and maintenance costs.
Bellingham has compiled a comparison of 2021-22 transportation impact fee base rates in Western Washington.
Note: This information only applies to transportation impact fees authorized by RCW 82.02.050-.110 and WAC 365-196-850 for jurisdictions planning under the GMA. Separate legislation (the Local Transportation Act, chapter 39.92 RCW, whose initial passage predated GMA by two years) authorizes all counties, cities, towns, and transportation benefit districts across the state — including those not planning under the GMA — to impose transportation impact fees. While this option appears to be less common, some jurisdictions may have adopted transportation impact fees under chapter 39.92 RCW. For instance, see Lacey Municipal Code Ch. 14.21, which imposes transportation mitigation fees under this statute.
Park Impact Fees
Park impact fees must be used for “publicly owned parks, open space, and recreation facilities” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the GMA. See RCW 82.02.050(4) and RCW 82.02.090(7).
Most cities and counties in Washington only charge park impact fees to residential construction or the residential portion of a mixed-use building or development, but a few (see Tukwila Municipal Code Ch. 16.28) also charge commercial or industrial developments, since employees (and not just residents) can directly benefit from nearby parks and recreational facilities.
School Impact Fees
School impact fees must be used for “school facilities” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the GMA (RCW 82.02.050(4) and RCW 82.02.090(7)). Typically, school impact fees apply only to residential construction or the residential portion of a mixed-use building or development.
School districts are responsible for expending the impact fees but are not authorized to collect them. As a result, school impact fees require cooperation between school districts and the cities, towns, or counties administering the program. This cooperation should take the form of an interlocal agreement (ILA) that specifically identifies each party’s role.
Any exemption for school impact fees that would otherwise be distributed to a school district must first be approved by the school district, per RCW 82.02.060(4).
Fire Impact Fees
Fire impact fees must be used for “fire protection facilities” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the GMA, per RCW 82.02.050(4) and RCW 82.02.090(7).
Since state law provides no further statutory or administrative definitions, some jurisdictions have taken it upon themselves to define “fire protection facilities” in their own municipal codes. For example, see Auburn Municipal Code Ch. 19.06, which defines this to include fire engines and equipment.
Determining Impact Fee Rates
Local governments must establish a rate schedule for each type of development activity that is subject to impact fees, specifying the fee to be imposed for each type of system improvement (RCW 82.02.060). The schedule must be based on a formula or other calculation that incorporates, among other things:
- The cost of public facilities necessitated by new development,
- The cost of existing public facilities improvements,
- Adjustments to the cost of the public facilities for past or future payments made or reasonably anticipated to be made by new development,
- The availability of other public funding sources, and
- The method by which public facilities improvements were financed.
These rate studies should be updated periodically to reflect changing facilities costs. While local governments are not required to hold a public hearing before adopting or increasing impact fees, it may be prudent to do so, especially if the decision might be controversial.
Practice Tip: Some jurisdictions automatically adjust their impact fees by indexing them, which protects future revenues and can potentially eliminate the need for the legislative body to go through a formal rate setting process again. For instance, see:
- Federal Way Municipal Code Sec. 19.91.160 — Requires the transportation impact fee to be adjusted to the annual change in the June Consumer Price Index (CPI-U) for the Seattle area. The rate study must be updated every three years unless the city determines that circumstances have not changed to warrant an update.
- Ridgefield Municipal Code Sec. 18.070.090 — Annually indexes park impact fees to the West Region CPI-U for first half of the year and may only increase fees automatically for three consecutive years. If impact fees are set to automatically increase for a fourth consecutive year, city council must hold a public hearing and establish new rates.
- West Richland Municipal Code Sec. 16.14.105 — Annually indexes park impact fees to the Seattle CPI-U and rounds to the nearest $5.00 increment. (Contains a similar provision for transportation.)
Impact Fee Exemptions, Waivers, or Reductions
Local governments may provide exemptions, waivers, or reductions for the following developments:
- Low-income housing as defined in RCW 82.02.060(2);
- Early learning facilities (as defined in RCW 43.31.565) with exempted fees being paid following RCW 82.02.060(2), fee amounts restricted by RCW 82.02.060(3), or partial exemptions based on standards outlined in RCW 82.02.060(4);
- Development activities with “broad public purposes” (RCW 82.02.060); and
- Construction or expansion of a building that is not defined as a “development activity,” such as buildings constructed by a regional transit authority (defined in RCW 81.112) or those constructed as emergency homeless or domestic violence shelters as defined in RCW 70.123.020 and RCW 82.02.090(1)(b).
Reductions or waivers in impact fees for low-income housing, early learning facilities, and developments with a “broad public purpose” are permitted “provided that the impact fees for such development activity shall be paid from public funds other than impact fee accounts,” per RCW 82.02.060(2).
RCW 82.02.060(4) allows local governments to grant a partial exemption without requiring that exempted fees be paid by another public source under certain circumstances, such as when a developer builds a certain percentage of affordable units or records a covenant that the property will be permanently used for low-income housing.
Some jurisdictions reduce or waive certain types of impact fees for certain types of development, such as Accessory Dwelling Units (ADU), because the development places no significant burden on existing facilities. Below are examples of when jurisdictions waive impact fees for ADUs, low-income housing, or early learning facilities:
- Covington Municipal Code Sec. 19.20.060 — Exempts legally defined ADUs (and additional structures) from impact fees.
- Everett Municipal Code Sec. 19.52.060 — Allows the city council to grant impact fee exemptions on a case-by-case basis to low-income housing developments, granted certain conditions are met. ADUs are also fully exempt from the city’s traffic, school, and parks impact fees.
- Kirkland Municipal Code Sec. 27.04.050 — Specifies a number of different types of projects (including ADUs, low-income housing) that are exempt from impact fees and the criteria and goals that must be met for a project to be eligible.
- Olympia Municipal Code Sec. 15.04.060 — Exempts ADUs from school and park impact fees.
- Redmond Municipal Code Sec. 3.10.060 — Exempts city-approved ADUs from payment of all impact fees. Several other types of construction are also exempt so long as no additional fire, park, school, or transportation demand occurs over time.
Collecting Impact Fees
Impact fees generally must be paid before construction begins. However, developers of single-family residential construction may request a deferral. In this instance, the impact fee money collected must be earmarked and retained in a special interest-bearing account, with separate accounts for every type of facility for which impact fees are collected (schools, fire, etc.). Any agency that imposes impact fees must provide an annual report on each of the accounts showing the source and amount of revenues as well as any improvements financed with this revenue (RCW 82.02.070).
For information on accounting requirements, see the GAAP BARS Manual, section 3.6.7 (no equivalent section in the Cash Basis BARS Manual).
Impact Fee Deferrals
All jurisdictions imposing impact fees under RCW 82.02.050 must have adopted, by September 1, 2016, a deferral system for the collection of impact fees for new, single-family detached and attached residential construction.
Upon developer request, these jurisdictions must delay payment of impact fees until the time of:
- Final inspection;
- Issuance of the certificate of occupancy or equivalent certification; and/or
- The closing of the first sale of the property.
Other statutory provisions include:
- The term of deferral is 18 months from issuance of the building permit.
- The amount of impact fees that may be deferred is determined by the fees in effect at the time the applicant applies for a deferral.
- Deferral of impact fees can be limited to the first 20 single-family residential building permits, annually, per applicant.
- An applicant seeking a deferral must grant and record a lien against the property in favor of the municipality in the amount of the deferred impact fee.
- Municipalities may collect reasonable administrative fees from applicants seeking a deferral.
- To limit the “spin-off LLC” issue, “applicant” is defined to include “an entity that controls the applicant, is controlled by the applicant, or is under common control with the applicant.”
- Limited grandfathering is authorized for an existing deferral system (in effect on or before April 1, 2015), even if it does not fully match the new state requirements, as long as all impact fees are deferred.
- Municipalities and school districts are authorized to institute foreclosure proceedings if impact fees are not paid.
- The Department of Commerce must develop an annual report, beginning December 1, 2018, on the payment and collection of impact fees from school districts, counties, and cities for single-family residential construction (RCW 43.31.980).
Below are selected examples of code provisions and deferral forms:
- Cheney Municipal Code Sec. 23.115.150 — May be deferred until final inspection or certificate of occupancy, whichever comes first.
- Enumclaw Municipal Code Sec. 19.24.050 — May be deferred until final inspection. The Deferred Impact Fees Information and Application (2017) includes a description of the deferral process, a sample lien agreement, and sample release of lien.
- Mercer Island City Code Sec. 19.17.080 (schools), 19.18.060 (parks), and 19.19.060 (transportation) — May be deferred until final inspection. The Impact Fee Deferral Application Form (2016) includes a description of the deferral process, a sample lien agreement, and a lien release.
- Mountlake Terrace Municipal Code Sec. 18.30.130 — May be deferred to no later than request for final inspection or 18 months from date of building permit issuance, whichever comes first. The Impact Fee Deferral Application (2016) is brief and seeks basic contact and project information.
- Sammamish Unified Development Code Sec. 21.08.050 — May be deferred until final inspection or closing of the first property sale, whichever comes first. The Applicant Declaration for Assessment and Collection of Impact Fees (2016) allows applicants to select when they will pay impact fees for platted and non-platted development, including deferral if desired.
- Sequim Municipal Code Sec. 22.20.010 — Deferral expires upon final inspection, certificate of occupancy, closing of the first property transfer, or 18 months after building permit issuance, whichever is earliest.
- Vancouver Municipal Code Sec. 20.915.075 — May be deferred until scheduling of final building inspection. The Impact Fee Deferral (Single-Family) Supplemental Application (2017) includes a lien agreement and application considerations.
Deadline for Expending Impact Fees
Impact fees must be expended or encumbered within 10 years of receipt unless there is an “extraordinary and compelling reason” for fees to be held longer, which must be documented in writing by the governing body (RCW 82.02.070).
RCW 82.02.080 requires each jurisdiction to refund the impact fees (plus earned interest) to the developer if:
- The impact fee is not expended or encumbered within 10 years of collection;
- The jurisdiction ends its impact fee program and the funds have not yet been expended or encumbered; or
- The developer does not proceed with the proposed development activity and requests a refund.
Examples of Impact Fee Provisions
Below are selected examples of impact fee ordinances, codes, and rate studies from cities and counties in Washington State.
Rate Studies and Calculations
- Bainbridge Island Transportation Impact Fee Rate Study (2015)
- Bellingham Comparison of Transportation Impact Fee Base Rates (2021)
- Lake Washington School District Six-Year Capital Facilities Plan (2015)
- Renton Rate Study for Impact Fees for Transportation, Parks, & Fire Protection (2011)
- Sequim Transportation Impact Fee Program (2013)
- Thurston County Parks & Recreational Facilities Impact Fee Rate Study (2012)
Impact Fees for Multiple Capital Facilities — Cities
- Redmond Municipal Code Ch. 3.10 — Highlighted in a 2008 State Auditor’s Office report for using leading practices in fire and transportation impact fees, including calculating, charging, and maintaining transportation impact fees and taking into account fire impacts by land use type.
- Olympia Municipal Code Title 15 — Offers a consolidated format of the impact fee provisions and includes a chapter on transportation concurrency.
Transportation Impact Fees — Cities
- Bellingham Municipal Code Sec. 19.06.040(E) — Received the 2012 APA-PAW Award for Transportation Planning for incentivizing fewer auto trips through reduced impact fees for certain types of development. For details, see Bellingham’s Multimodal Transportation Impact Fees.
- Ellensburg Municipal Code Ch. 14.04 — Regards any development activity in the central commercial district to be redevelopment, and thus, exempt from transportation impact fees; Includes a 5% administrative fee and requires the public works director to determine whether a particular development activity falls within a transportation impact fee exemption.
- Spokane Municipal Code Ch. 17D.075 — Includes a “four service areas” map, impact fee project list, severability clause, and many more details.
Park Impact Fees — Cities
- Bothell Municipal Code Ch. 21.08 — Broadly focuses on parks and recreation facility needs; includes a detailed fee schedule.
- Tumwater Municipal Code Ch. 3.52 — Assesses impact fees for two types of service areas: regional/citywide and local; includes a detailed fee schedule.
- West Richland Municipal Code Sec. 16.14.070 — Focuses on the demand for public parks and recreation spaces created by new growth and development.
School Impact Fees — Cities
- Vancouver Municipal Code Sec. 20.915.060 — Highlighted in a 2008 State Auditor’s Office report for leading practices in school impact fees, particularly the rate schedule and calculations.
- Mukilteo Municipal Code Ch. 3.100 — Requires city council to adopt by reference the school district’s capital facilities plan into the city’s comprehensive plan, and this plan must be readopted by the city at least once every two years and must meet city’s requirements; impact fee calculation formulation included as Attachment A.
- Pasco Municipal Code Sec. 3.45.040(3) – Offers credit for in-kind contributions.
Fire Impact Fees - Cities
- Auburn Municipal Code Sec. 19.06.020 — Defines “fire protection facilities” to include fire trucks and apparatus, fire stations, furnishings, and equipment.
- DuPont Municipal Code Sec. 26.05.050 — Mentions fire capital facilities plan and its six-year capacity; includes the fee amount.
County Impact Fees
The examples listed below contain most of the provisions covered in the city samples.
- Kitsap County Code Ch. 4.110 — Offers impact fees related to roads, parks, and schools.
- Pierce County Code Title 4A — Offers impact fees related to transportation, schools, and parks.
- Thurston County Code Title 25 — Offers impact fees related to traffic, parks, schools, and fire districts/authorities.
- Interlocal Agreement with Rochester School District (2013) — Identifies roles and responsibilities for collecting, distributing, and expending school impact fees.
- Ordinance Nos. 15340, 15463, and 15573 (2016-2018) — Adopts impact fee deferral system and authorizes interlocal agreements for county to collect impact fees on behalf of fire protection districts and regional fire authorities.
For selected decisions affecting impact fees, see Impact Fee Court Decisions.
- Impactfees.com – Provides comprehensive resources such as news, state and local links, surveys, publications, and case law.
- Office of the Washington State Auditor – Provides an overview of state legislation regarding impact fees.