Knowledgebase-Use of Adequate Facilities Tax Revenues


Information Product

Title:Use of Adequate Facilities Tax Revenues
Summary:MTAS was asked whether Adequate FacilitiesTax Revenues can be used
to pay indebtedness for past sewer projects.
Original Author:Huffer, Dennis
Co-Author:
Product Create Date:03/18/2002
Last Reviewed on::06/30/2017
Subject:Public works--Facilities; Tax collection; Taxes
Type:Legal Opinion
Legal Opinion: Adequate Facilities Tax Revenues public.doc

Reference Documents:

Text of Document: March 18, 2002


Re: Use of Adequate Facilities Tax Revenues

Dear Madam:

Your request to your consultant about the use of Adequate Facilities Tax revenues has been referred to me for reply. Your question is whether these revenues can be used to pay indebtedness for past sewer projects. The private act that authorizes your town to levy this tax appears to restrict use of the revenues to future projects and would need to be amended to allow the use of these revenues to pay debt associated with past projects.

Chapter No. 53, Private Acts of 1997, is the Act that authorizes your town to levy this tax. Section 5 of this Act provides in pertinent part:

The governing body may levy the tax authorized herein by passage of an ordinance after adopting a capital improvements program indicating the need for and cost of public facilities anticipated to be funded, in part, by this tax. (Underlining added.)

Section 1(3) of this Act defines “capital improvement program” as “a proposed schedule of future projects, listed in order of construction priority, together with cost estimates and the anticipated means of financing each project.” (Underlining added.) The intent of these two (2) provisions seems to be that the revenues from this tax cannot be used for projects that are not included in the capital improvements program as future projects.

This Private Act treats the this measure almost as an impact fee rather than a tax. Section 8, for example, requires that revenues be accounted for in a separate capital projects fund and restricts their use to providing public facilities to serve residents. The Town might want to consider getting this Act amended to make it more tax-like and allow a more general use of revenues.

I hope this information is helpful. If I may be of further assistance, please contact me.


Sincerely,


Dennis Huffer
MTAS Legal Consultant

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