Okla. Stat. tit. 62, § 62-895

A. Municipalities that adopt ordinances, resolutions, or

regulations for the implementation and collection of development

fees shall provide that such development fees are adopted and

governed pursuant to the provisions of this section. As used in

this section:

1. “Development fee” means any payment of money imposed, in

whole or in part, as a condition of approval of any building permit,

plat approval, or zoning change, to the extent the fee is to pay for

public infrastructure systems that are attributable to new

development or to expand or modify existing development;

2. “Expanded or modified development” is one in which the

expansion or modification results in an increased demand or

increased impact upon the public infrastructure system as compared

to the demand or impact prior to the expansion or modifications;

3. “Public infrastructure system” includes any real property

improvement, fixture, or accession that is included within, but not

limited to, any of the following categories of public systems:

a. water systems, including supply, production,

treatment, and distribution facilities,

b. wastewater systems, including collection, treatment,

and disposal facilities,

c. street systems, including roads, streets, boulevards,

bridges, sidewalks, bicycle routes, drainage, traffic

signals and systems, traffic control devices and

signage, traffic calming devices, landscaping

associated with street rights-of-way, and any local

components of county, state, or federal highways to

the extent and to the proportionate cost that the

local components are not funded by state or federal

grants or other state or federal permanent funding

sources,

d. storm water systems, including collection, retention,

detention, treatment, channelization, disposal,

discharge, flood control, and bank and shoreline

protection facilities,

Oklahoma Statutes - Title 62. Public Finance Page 602

e. parks systems, including parks, open spaces, trails,

bicycle paths, and natural recreation areas and

related facilities,

f. public safety systems, including police, fire,

emergency medical, and rescue facilities,

g. solid waste systems, including facilities,

h. public transportation systems, including facilities,

and

i. public capital improvement communications facilities;

and

4. “Public infrastructure system costs” means capital

improvements that have a projected useful life of at least ten (10)

years or more, and that result in an increase or expansion to the

functional service capacity of that public infrastructure system.

B. New development and expanded or modified existing

development may only be charged the development fee for capital

improvement costs for increases or expansion to the capacity of

public infrastructure systems attributable to that development.

1. Development fees shall not exceed a clear, ascertainable,

and reasonably determined proportionate share of the cost of capital

improvement to the public infrastructure system attributable to the

expansion or increase in functional service capacity generated, or

to be generated by, the development being charged the fee. There

shall be a clearly established functional nexus between the purpose

and amount of the development fee being charged and the development

against which the fee is charged. In determining the development

fee, the municipality shall make a documented effort to quantify the

projected impact from development and determine that the proposed

development fee is reasonably and roughly proportional to the nature

and extent of the impact of development.

2. Development fees cannot be adopted or used to fund repairs,

maintenance, restorations, refurbishments, alterations,

improvements, or fixes to existing public infrastructure systems in

any way that does not result in an increase or expansion in the

functional service capacity of the system which is available to

serve new or expanded existing growth and development in the
ct of development.

2. Development fees cannot be adopted or used to fund repairs,

maintenance, restorations, refurbishments, alterations,

improvements, or fixes to existing public infrastructure systems in

any way that does not result in an increase or expansion in the

functional service capacity of the system which is available to

serve new or expanded existing growth and development in the

applicable service area.

3. The development fees shall be based on actual system

improvement costs or reliable, ascertainable and reasonable

projected estimates of the costs. Any estimates of costs shall be

based upon factual and historically realized costs for similar

system capital improvements.

4. Development fees may only be imposed to recover or fund the

costs of public infrastructure system capital improvements,

including, but not limited to, the cost of real property interest

acquisitions, rights-of-ways, capital improvements, design,

construction, inspection, and capital improvement construction

Oklahoma Statutes - Title 62. Public Finance Page 603

administration, related to one or more public infrastructure

systems.

C. A municipal development fee ordinance, resolution, or

regulation shall provide for the following:

1. A schedule of development fees specifying the development

fee for various land uses per unit of development, the purpose for

the development fee, and termination of the development fee when the

applicable public infrastructure system has been fully funded and

the expanded or modified development has no additional impact on the

public infrastructure system; and

2. A component capital improvement plan that:

a. lists public infrastructure system capital projects or

facility expansions that are necessitated by

development of various land uses in designated areas,

b. provides reasonable notice to developers of specific

public infrastructure system impacts from development

of various land uses within the area of the

development, and

c. delineates the property locations that are clearly

served by the public infrastructure system that will

be funded through the development fee.

In the alternative, a municipality may establish one or more

service areas for the collection of development fees. As used in

this section, “service area” means a geographic area defined by a

municipality in which a defined public infrastructure system

provides service to developments within that service area. Service

areas shall be carefully drawn so as to include only property

locations that are clearly served by the cost of capital

improvements that increase or expand the functional service capacity

of the public infrastructure system that will be funded through the

development fee that is associated with the service area. The

determinations regarding the establishment of one or more service

areas will be a matter of legislative determination and discretion.

Different public infrastructure systems may have different and

separately defined service areas unique to each system’s coverage.

The development fees within a particular service area may be

different as applied to different types of land uses; and

3. An adoption process that provides for at least the following

before any development fees, capital improvement plan, service plan,

or creation of service areas shall become effective:

a. a public hearing before the municipal planning

commission. Notice of the time, date and place of the

hearing shall be published in a newspaper of general

circulation in the municipality at least fifteen (15)

days prior to the hearing,

b. a subsequent public hearing before the municipal

governing body. Notice of the time, date and place of

Oklahoma Statutes - Title 62. Public Finance Page 604

the hearing shall be published in a newspaper of

general circulation in the municipality at least

fifteen (15) days prior to the hearing.

All duly enacted ordinances, resolutions, or regulations
fteen (15)

days prior to the hearing,

b. a subsequent public hearing before the municipal

governing body. Notice of the time, date and place of

Oklahoma Statutes - Title 62. Public Finance Page 604

the hearing shall be published in a newspaper of

general circulation in the municipality at least

fifteen (15) days prior to the hearing.

All duly enacted ordinances, resolutions, or regulations

existing at the time of the effective date of this section shall

remain in full force and effect; provided, no existing impact or

development fees shall be amended, modified, or renewed except in

accordance with this act.

D. The development fees collected pursuant to a component

capital improvement plan or within a service area, and any interest

on the funds, shall be spent only for capital improvements that

expand or increase the functional service capacity of that

particular public infrastructure system to serve the area

encompassing the development or only within that service area from

which the funds were collected.

1. Every assessment of a development fee shall be in writing

and a copy shall be provided to the developer and property owner(s)

affected, as such names and addresses of the property owner(s) are

provided by the developer. The assessment shall specify the purpose

or service area for which the development fee is being collected,

the basis for calculation of the assessment, and the amount of the

assessment. No development fee collected for one purpose shall be

devoted to another purpose except as hereinafter provided.

2. If the purpose, component capital improvement plan, or

service area is changed or redrawn, or if a development spans more

than one component capital improvement plan or service area, the

development fees collected prior to the change shall be spent

proportionately pursuant to the new purpose or within the new

component capital improvement plan or service area or areas that

encompass the development at the time of expenditure from which the

fee was originally collected. Any change or expansion in a purpose,

component capital improvement plan, or service area shall be done

through the full hearing process as set forth in paragraph 3 of

subsection C of this section.

E. Each municipality shall present an annual report to its

governing body on:

1. The collection, investment, and expenditure of development-

fee funds as separately reported upon for each development capital

project or service area, and each public infrastructure system for

each development capital project or in each service area;

2. The recovery of costs from development-fee revenues; and

3. Estimates of the timing of system-capacity-expansion

improvements, as such construction is funded by development fees.

If the municipality determines that the development fees as

collected within a service area are no longer needed or desired for

the purpose for which they were collected, the municipality may

either refund the collected fees to the current owners of the

Oklahoma Statutes - Title 62. Public Finance Page 605

property within the development for which the fees were paid, or

proceed through the hearing process as set forth in paragraph 3 of

subsection C of this section in order to adopt a new purpose for the

fees.

F. Municipalities may establish a process for the collection of

development fees to occur at a point in time no earlier than the

issuance of a building permit.

G. Municipalities may enter into written agreements with

developers to construct capital improvements to expand or increase

the functional service capacity of a public infrastructure system

within the designated development area or to serve a service area

and provide a credit against or an adjustment to payment of all or

part of the development fee for that system and that development.

The credit or adjustment may not exceed the cost of the capital

improvement or the amount of the development fee that would have
the functional service capacity of a public infrastructure system

within the designated development area or to serve a service area

and provide a credit against or an adjustment to payment of all or

part of the development fee for that system and that development.

The credit or adjustment may not exceed the cost of the capital

improvement or the amount of the development fee that would have

been collected from that developer for the development and that

system. No credit or adjustment will be carried over or transferred

to a different development, a subsequent development, a subsequent

change to that development, or against a development fee for a

different system.

H. Nothing in this section will:

1. Preclude a municipality from requiring the developer to

donate or dedicate real property or capital improvements, or to

install, construct, operate, maintain, or repair capital

improvements; or

2. Require a credit against or an adjustment to a development

fee for contribution of, or to the cost of, any real property or

capital improvement provided by a developer if the direct cost of

the specific contribution is not specifically and directly included

in the calculation of the applicable development fees.

I. No credit or adjustment shall be carried over from one

development to a development at a different location. No credit or

adjustment will be carried over from one development to a subsequent

development at the same location, unless the development fee

collected previously is for the same purpose, making any subsequent

collection a repeat charge for the same purpose.

J. Development fees shall be deemed dedicated and restricted

revenues and therefore shall require accounting for development

proceeds as restricted funds. Interest earned on development fees

shall be considered funds of the account on which it is earned and

shall be subject to all restrictions placed on the use of

development fees under the provisions of this section. The

accounting records and details thereof shall be maintained as public

records of the municipality, be accessible to the public through

open records requests, and include at least the following

information, as relates both to each development capital project or

Oklahoma Statutes - Title 62. Public Finance Page 606

service area and each public infrastructure system for each

development capital project or within each service area:

1. The receipt of development fees;

2. The development capital project or service area from which

the development fee was collected;

3. The accumulation of interest on the development fee funds;

4. The type of public infrastructure system for which the funds

were collected;

5. The cost of the capital improvements to which the

development fees were applied; and

6. The dates when development fee funds were expended to fund,

or applied to reimburse, the cost of capital improvements to public

infrastructure systems.

K. Any ordinance, resolution, or regulation adopted in

compliance with this section which is thereafter challenged in any

future court action shall be reviewed through rational-basis

scrutiny, such that it shall be upheld if it substantially complies

with this section and if the municipality documented reasonably

conceivable facts that provided a rational basis for the adoption.

L. No municipality is required to adopt development fees and it

is within the discretion of the municipality as to whether

development fees should be considered for adoption. Any municipal

development fee ordinance, resolution, or regulation may provide for

appeal to the governing body for exemption of all or part of

particular development projects from development fees if:

1. The projects are determined to create desirable economic

development, quality jobs, a type of desirable land use that is in

short supply within the municipality, or affordable housing; or

2. The exempt development project's proportionate share of the
ation may provide for

appeal to the governing body for exemption of all or part of

particular development projects from development fees if:

1. The projects are determined to create desirable economic

development, quality jobs, a type of desirable land use that is in

short supply within the municipality, or affordable housing; or

2. The exempt development project's proportionate share of the

system expansion improvements is funded through a revenue source

other than development fees.

M. Any payment of a development fee by a payor shall not be

deemed to have waived the standing or rights of the payor to later

challenge or protest the payment as being invalid and not required.

N. A municipality may not recover the public infrastructure

system costs as a development fee by way of connection fees, hook-up

fees or other fees in any manner that results in charges beyond the

public infrastructure system cost that the development fee already

collected. Any connection fees, hook-up fees or any other fees

charged by a municipality as related to the cost of capital

improvements necessary to increase or expand the functional service

capacity of public infrastructure systems shall be determined

relative to the functional service capacity actually being provided

or made available to the fee payor, and any amounts in excess

thereof shall be considered development fees and may only be applied

if put forth in accordance with this section. Nothing herein shall

prevent a municipality to separately impose and collect connection

Oklahoma Statutes - Title 62. Public Finance Page 607

fees, hook-up fees or any other fees that are reasonably related in

character and amount charged to the costs of regulation of the

activities for which the fees were enacted or enforcement of

municipal health or safety codes.

O. This section shall not prohibit municipalities from self-

funding capital improvements by use of pay-back agreements utilizing

recoupment districts or lease-purchase agreements in order to

finance improvements to public infrastructure systems, by borrowing

or on a cash basis, so long as such procedures are utilized in a

manner that is consistent with the requirements of this section to

the extent such procedures pertain to development fees. Nothing in

this section shall limit, regulate, or prohibit a municipality from

investing public resources in public infrastructure systems in

anticipation of development, recovering those public resources

through proportional reimbursement payments equal to the total cost

of the public investment in those public infrastructure systems, and

subsequently expending the proceeds from those reimbursement

payments for any purpose determined by the jurisdiction.