PREVIOUS Clarification of Reimbursement Provisions

Act 57 Adds New Provisions for Refunds

If a tapping fee is based, in part, on future facilities that are never constructed, Act 57 requires the authority to pay builders a refund of that portion of the fee related to the un-constructed facilities. This amount must be refunded after seven years for most authorities, but those that serve more than five municipalities have a grace period of 15 years.

In general, authorities may only include the cost of future capacity related facilities, and they cannot include the future cost of distribution, collection, or special purpose facilties. To the extent that future facilities increase system capacity, the increased capacity must be included in the fee calculation. Fortunately, Act 57 clarifies the requirements for including the cost of future capacity facilities in the tapping fee calculation.

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