Impact fee: who pays it, who is exempt and how to dispute it

It is Chapter 9.10 of Joint Regulation No. 9473. Its purpose, the text says, is the express implementation of Article 8.14 of Ley 161-2009, without impairing and subject to Planning Regulation No. 21, the "Regulation of New Competences to Enable Urban Development", created under Ley No. 75, and in harmony with Ley 38-2017 and Ley 81-1991. As part of issuing a final determination, the impact-fee contributions applicable to the project are imposed, as established by the regulation in force of each government entity concerned or autonomous municipality, as applicable.

The charges are imposed on and collected from all owners, whether of urbanisations, multifamily buildings or institutional, industrial or commercial uses — including hotels and hospitals — for using the infrastructure systems. Presumed to have no impact on public facilities, and therefore outside the fee, are: the alteration or expansion of an existing dwelling unit where no additional units are created and the use does not change; the construction of accessory buildings or structures that are not dwelling units and do not constitute an increase in use intensity; and the replacement of a destroyed or partly destroyed building with a new building or structure of the same size and use.

• That the impact-fee contributions have been paid in full: this is a prerequisite for issuing the Permiso Único.Verified against the official source
• Making payment to the government entity concerned or the autonomous municipality, through the payment system that entity establishes.Verified against the official source
• For Green-Design certified projects, posting a bond issued by an insurer authorised to do business in Puerto Rico and acceptable to OGPe, or any other guarantee document acceptable to OGPe.Verified against the official source
• To dispute the classification of the works, notifying the reclassification request to the government entity concerned, copy to OGPe, within no more than sixty (60) days.Verified against the official source

Information pending verification.

1. 1

   Step 1: Where the amount lives

   The first thing to understand is that this chapter publishes no rate. It says that, as part of issuing a final determination, the impact-fee contributions applicable to the project will be imposed as established by the regulation in force of each government entity concerned or autonomous municipality, as applicable. The figure comes from the regulation of the agency or municipality that applies to you, not from here. That is why we publish no cost: our rule against inventing figures forbids it.

2. 2

   Step 2: The three presumptions of no impact

   The regulation presumes the following have no impact whatsoever on public facilities. First: the alteration or expansion of an existing dwelling unit where no additional units are created and the use does not change. Second: the construction of accessory buildings or structures that are not dwelling units and do not constitute an increase in use intensity. Third: the replacement of a destroyed or partly destroyed building with a new building or structure of the same size and use. If your project fits one of the three, that is the sentence of the regulation to quote.

3. 3

   Step 3: Who is exempt

   Exempt from impact-fee contributions are projects obtaining a green-design certification, housing development duly certified as social-interest, and projects whose owner and proponent is the Government of Puerto Rico, any municipal government or the Government of the United States of America. Note the condition in that last item: owner and proponent. It is not enough for the project to be of public interest.

4. 4

   Step 4: And the renewable-energy rule

   The chapter closes its general-provisions section with a short sentence worth knowing: the impact fee does not apply to photovoltaic, wind or any other renewable-source generation systems. It is not drafted as a conditional exemption or a presumption: it says it does not apply.

5. 5

   Step 5: When you are required to build works instead of paying

   There is a trade built in. In any case where the government entity concerned requires site-related works as part of the permit process and their cost is greater than the applicable impact fee, the proponent is obliged to build those works. And conversely, the government entity may waive payment of the impact fee where the required site-related works represent an improvement to the system and leave residual capacity beyond what is needed to serve the project as proposed, and their cost exceeds the applicable impact charges.

6. 6

   Step 6: How long the charge lasts

   The impact-fee charge imposed is valid for the life of the final determination or the permit issued by OGPe. At the end of that period, the government entity determines the charge afresh. If the permit lapses and you must start again, the old figure does not follow you: it is recalculated.

7. 7

   Step 7: Payment, the bond and the Permiso Único

   Payments are made to the government entity concerned or the autonomous municipality, through the payment system that entity establishes. To secure the payment waived for Green-Design certified projects, OGPe requires a bond issued by an insurer authorised to do business in Puerto Rico and acceptable to OGPe, or any other guarantee document acceptable to OGPe. For phased single permits, OGPe, in coordination with the entity, may accept partial payments in proportion to the number of units approved; where the total charge was secured by a bond or other document, those payments are credited as a reduction of the guarantee’s total, and on receiving payment in full the entity cancels the bond. The decisive point: payment of the impact-fee contributions in full is a prerequisite for issuing the Permiso Único.

8. 8

   Step 8: Site work or system improvement: the 60 days

   Here the remedy begins. The government entity concerned must clearly state the description of the works required of the proponent or its representative as part of its recommendation, and the works must be described and classified as site-related works or as system improvements. If you disagree with that classification, you must, within no more than sixty days, notify the entity, copy to OGPe, of the reasons why you consider the works to be system improvements and not local works: that is the reclassification request. The entity has sixty days from filing to notify you of a reasoned denial. And if it does not express itself within those sixty days, the reclassification as requested is understood to have been approved.

9. 9

   Step 9: If it is denied: the third-party decider

   Once denied within the sixty days, the applicant chooses five candidates from the list of third parties published by OGPe and submits it to the entity within twenty days of the denial notice. If you do not submit it within those twenty days, you are understood to waive the reclassification request. The entity is obliged to choose two candidates from that list in order of preference within twenty days of its submission, and to notify its decision — copy to OGPe — to both the applicant and the first candidate within those same twenty days; the second is notified only on the death or mental incapacity of the first. If the entity does not act within those twenty days, the reclassification as originally requested is understood to have been granted in full.

10. 10

    Step 10: The decision: twenty days, final and binding

    The first selected candidate evaluates the reclassification request and the entity’s denial determination and issues a decision; the second is an alternate only for the case of death or mental incapacity preventing the first from deciding. The candidate must issue the decision using both the reclassification request and the reasoned denial, within twenty days. The candidate’s decision is final and binding on the parties, and must establish whether what was requested does correspond to a system improvement; it is notified to the entity and the applicant, copy to OGPe, within five days of being issued. The third party’s professional fees are borne in equal parts by both.

The fee is imposed as part of the permit’s final determination and paid to the government entity concerned or the autonomous municipality, through the payment system that entity establishes. The amount comes from that entity’s or municipality’s regulation in force. The reclassification request is notified to the government entity concerned, always with a copy to OGPe, and the list of third-party deciders is published by OGPe.

• Paying the fee for extending an existing dwelling without creating units or changing the use.
• Paying the fee on photovoltaic, wind or other renewable generation systems.
• Assuming a public-interest project is exempt even where the Government is not owner and proponent.
• Letting the sixty days to request reclassification of the works lapse.
• Not copying OGPe on the reclassification request.
• Missing the twenty days to submit the five candidates, which counts as a waiver.
• Expecting the Permiso Único to issue without having paid the fee in full.
• Assuming the fixed charge survives the lapse of the permit or the final determination.

These are the government pages this guide is based on.

• Oficina de Gerencia de Permisos (OGPe)

  OGPe

  docs.pr.gov

• Permit Management Office

  ogpe

  ogpe.pr.gov