A.R.S. 9-463.05: How Arizona Cities Can Charge Development Impact Fees

Every impact fee an Arizona city or town charges on a new home traces back to one statute: A.R.S. 9-463.05. It is both the permission slip and the leash. The law lets a city collect a one-time fee on new development to help pay for the public infrastructure that growth requires, but it boxes in what the money can cover, how the fee must be calculated, and what it can never pay for. This page explains the rule so you can read a city fee schedule and know whether it is playing by the book.

What this statute authorizes

A city or town may charge a development fee (the legal name for an impact fee) to help pay for necessary public services that a new development needs. The fee is a one-time charge. Cities usually collect it when they issue the building permit or approve the final plat. The main limit is proportionality. The fee must match the burden your project actually puts on the system.

A municipality shall not impose a development fee... that exceeds a proportionate share of the cost of necessary public services... attributable to the development.

"Necessary public services" is a fixed, closed list. It covers facilities the city owns or operates that last three years or more: water and wastewater, storm drainage and flood control, designated arterial and collector streets, fire and police facilities, libraries up to 10,000 square feet, and neighborhood parks up to 30 acres. Items not on the list cannot be paid for with impact fees. That rules out things like general government buildings or park amenities beyond those caps.

The guardrails that protect homeowners

The statute spends most of its length restricting cities, and these limits are the reason a builder or buyer should know it exists.

• No paying for existing problems. Fees cannot be used to repair, operate, or maintain existing infrastructure, or to upgrade and expand existing services to fix a current shortfall. New growth pays for new capacity, not for catching up on deferred maintenance.
• You get credit for what you already contribute. The city must forecast the future taxes, fees, and other revenue your development will generate and offset that against the fee so you are not charged twice for the same capacity. Land or improvements you dedicate that are in the city's infrastructure plan also earn a credit.
• It must be in a published plan. Before charging a fee, the city has to adopt land use assumptions and an infrastructure improvements plan that ties specific projects to the growth being charged. The plan must be updated at least every five years.
• A waiting period and oversight. A new or increased fee cannot take effect until at least 75 days after adoption, and the city must use an advisory committee or biennial audit to keep the math honest.

What it means for your home build

For a homeowner building in a growing Arizona suburb, impact fees are often one of the largest line items on the permit bill after the permit itself. In high-growth cities like Buckeye, Goodyear, or Queen Creek, combined water, wastewater, parks, streets, and public-safety impact fees on a single new house can run from a few thousand dollars to well over $15,000, depending on the city and the home's water meter size. The number is set by the city's adopted fee schedule, not negotiated per project.

Two practical moves follow from the statute. First, ask the city's planning or development services office for its current adopted fee schedule before you budget, because the fee is fixed by ordinance and you can confirm the exact dollar figure for your lot. Second, if a fee looks wrong, the proportionality and offset rules above are your grounds to question it, since a fee that funds general operations or existing deficiencies is outside what 9-463.05 allows.

How this connects to other rules

This statute sits upstream of nearly every city-specific impact fee page, which is why builders treat it as the backbone reference. The fee is collected during the permitting process, so it pairs directly with what drives your overall building permit cost in Arizona . For the concept itself, see impact fees in the glossary. Counties have a parallel authority for unincorporated areas under A.R.S. 11-1102, but for any home inside city limits, 9-463.05 is the controlling law.

Full text and source

Read the current section, including the full definitions and the detailed plan and audit requirements, on the legislature's site: View A.R.S. 9-463.05 on azleg.gov .

Impact fee amounts change by ordinance and vary widely between cities, so pull your specific city's adopted fee schedule before relying on any estimate here.