STANDARDS FOR FIRST NATION DEVELOPMENT COST CHARGES LAWS, 2019 PART I PREAMBLE WHEREAS: A. Section 35 of the First Nations Fiscal Management Act gives the First Nations Tax Commission the authority to establish standards respecting the form and content of First Nation local revenue laws enacted under subsection 5(1) of the Act; B. Standards are established by the Commission to further the policy objectives of the Commission and the Act, including to ensure the integrity of the First Nations property taxation system and to assist First Nations to achieve economic growth through the generation of stable local revenues; and C. Section 31 of the Act requires the Commission to review every local revenue law and subsection 5(2) of the Act provides that such a law has no force and effect until it is reviewed and approved by the Commission. PART II PURPOSE These Standards set out the requirements that must be met for First Nation development cost charges laws enacted under subparagraph 5(1)(a)(v) of the Act. These Standards are used by the Commission in its review and approval of First Nations’ development cost charges laws, pursuant to section 31 of the Act. The requirements established in these Standards are in addition to those requirements set out in the Act. The Commission recognizes that each First Nation’s property taxation system operates within the broader context of its fiscal relationships with other governments. These Standards are intended to support a more comprehensive First Nation fiscal framework within Canada. PART III AUTHORITY AND PUBLICATION These Standards are established under subsection 35(1) of the Act and are published in the First Nations Gazette as required by subsection 34(1) of the Act. PART IV APPLICATION These Standards apply to every development cost charges law submitted to the Commission for approval under the Act. PART V CITATION These Standards may be cited as the Standards for First Nations Development Cost Charges Laws, 2019. PART VI DEFINITIONS In these Standards: “Act” means the First Nations Fiscal Management Act, S.C. 2005, c. 9 and the regulations enacted under that Act; 1
“administrator” means a person appointed by Council to administer a Law; “assist factor” means that percentage of the capital costs of each development cost charge class that will be paid by the First Nation, as determined by the First Nation; “building” means any structure used or intended for supporting or sheltering any use or occupancy and includes a manufactured home; “building approval” means a permit or other authorization from a First Nation for the construction, alteration or extension of a building or structure on the First Nation’s reserve; “capital costs” includes planning, engineering and legal costs directly related to the work for which a capital cost may be incurred, and interest costs incurred by the First Nation that are directly related to the work and meet the requirements of subsection 3.6; “commercial development” means a development used or intended to be used for the carrying on of any business, including the provision or sale of goods, accommodation, entertainment, meals or services, but excludes an industrial or residential development; “Commission” means the First Nations Tax Commission established under the Act; “developer” means a person undertaking a development on the reserve; “development” includes a subdivision of a parcel and any construction, alteration, excavation or improvement of land, buildings or structures, including the installation of works or services; “development approval” means a permit or other authorization from a First Nation in respect of all or part of a proposed development on the First Nation’s reserve; “development cost charge” means a development cost charge levied under a Law; “development cost charge class” means a class described in subsection 3.1; “dwelling unit” means one (1) or more habitable rooms having collectively its or their own entrance from the exterior, used or intended to be used for the residential accommodation of not more than one (1) person or family, having provision for living, sleeping and sanitary facilities and containing or providing for not more than one (1) cooking facility; “expenditure law” means an expenditure law enacted under paragraph 5(1)(b) of the Act; “First Nation” means a band named in the schedule to the Act; “gross floor area” means the combined area of all floors within a building, including any basement or cellar, measured to the inside surface of the exterior walls of the building; “gross site area” means the total area of land that is proposed for development in a building approval or development approval application, including access, parking, loading and landscape areas; “industrial development” means a development used or intended to be used for manufacturing, production, assembly, testing, warehousing, distribution or storage of products or materials; “institutional development” means a building or structure used or intended to be used only on a non-profit basis for cultural, recreational, social, religious, governmental, public hospital or educational purposes, and also includes any building or structure that is serviced with sewer, water or drainage and which is not a residential, commercial or industrial development; “Law” means a development cost charges law enacted under subparagraph 5(1)(a)(v) of the Act; “long-term capital plan” means a plan approved by Council that sets out the First Nation’s requirements for infrastructure development and the capital costs of that infrastructure for the purposes for which 2
development cost charges are to be collected; “manufactured home” means a structure, whether or not ordinarily equipped with wheels, that is designed, constructed or manufactured (a) to be moved from one place to another by being towed or carried; and (b) to provide (i) a dwelling house or premises, (ii) a business office or premises, (iii) accommodation for any other purpose, (iv) shelter for machinery or other equipment, or (v) storage, workshop, repair, construction or manufacturing facilities; “manufactured home park development” means a residential development where spaces and utilities are provided for two (2) or more manufactured homes; “parcel” means a parcel, block or other defined area of land on the reserve; “parcel area” means the total area of land of a parcel; “park improvements” means fencing, landscaping, drainage and irrigation, trails, restrooms, changing rooms, and playground and playing field equipment; “Province” refers to the province in which a First Nation’s reserve lands are situated; “reserve” means a reserve of a First Nation within the meaning of the Indian Act; “residential (multi-family) development” means a development for residential purposes that does not include single-family residential, two-family residential or three-family residential; “secondary suite” means an additional dwelling unit that is contained within a single-family residential building; “single-family residential” means a detached building consisting of only one (1) dwelling unit, not including a secondary suite; “structure” means a construction of any kind, whether fixed to, supported by or sunk into land or water; “subdivision” means the division of land into two (2) or more parcels by any means, including by survey plan or by a metes and bounds description; “subdivision approval” means an authorization from a First Nation for the subdivision of a parcel; “three-family residential” means a detached building consisting of three (3) dwelling units; and “two-family residential” means a detached building consisting of two (2) dwelling units. Except as otherwise provided in these Standards, words and expressions used in these Standards have the same meaning as in the Act. PART VII STANDARDS 1. Administration 1.1 The Law must provide for the appointment of an administrator to oversee the administration and enforcement of the Law. 1.2 The Law must require the administrator to 3
(a) maintain a separate development cost charge reserve fund for each development cost charge class; (b) maintain records for all development cost charges imposed and collected; and (c) undertake such further duties as set out in the Law or as specified by Council. 1.3 The Law must require the administrator to report annually to Council on the administration of the Law, which report must include, for each development cost charge class, (a) the amount of development cost charges received; (b) the expenditures from each development cost charge reserve fund; (c) the balance in each development cost charge reserve fund account at the start and at the end of each calendar year; (d) any exemptions, credits, rebates or refunds of development cost charges; (e) the amount of all outstanding installment payments of development cost charges; and (f) a summary of the works completed and the works to be undertaken within each development cost charge class. 1.4 The Law must require the administrator to make available to the public, upon request, the considerations, information and calculations used to determine the development cost charges imposed under the Law, other than information respecting the contemplated acquisition costs and locations of specific properties. 2. Application of Law 2.1 The Law must apply to the entire reserve. 2.2 Notwithstanding subsection 2.1, the Law may apply to a portion of the reserve where application to the entire reserve would create a significant disparity between those who pay the development cost charges and those who benefit from the infrastructure funded by the development cost charges. 3. Establishing Development Cost Charges 3.1 The Law may establish the following development cost charges classes: (a) sewer; (b) water; (c) drainage; (d) transportation; and (e) park and recreation land and improvement. 3.2 The Law must provide for development cost charges to be levied only to pay the capital costs of (a) providing, constructing, altering, or expanding sewage, water, drainage and transportation facilities, and (b) providing and improving park and recreation land, to service, directly or indirectly, the development for which the development cost charge is being imposed. 3.3 The capital costs used to determine the development cost charges levied in the Law must be supported by (a) a long-term capital plan; 4
(b) a local government regional growth strategy, official community plan, or other regional development plan, where the First Nation participates in regional planning; or (c) a service agreement with a local government under which the First Nation contributes to the development cost charges levied by the local government. 3.4 Where paragraph 3.3(c) applies to a development cost charge class, the Law may establish development cost charges that include the amounts payable by the First Nation to the local government under the service agreement in that development cost charge class, and subsection 3.5 does not apply in respect of those included amounts. 3.5 The Law must establish similar development cost charges for all developments that impose similar capital cost burdens on the First Nation, but may vary with respect to (a) different zones or different defined or specified areas; (b) different uses; (c) different capital costs as they relate to different classes of development; or (d) different sizes or different numbers of lots or units in a development. 3.6 The Law may establish development cost charges that include interest costs as part of the capital costs for a development cost charge class only where the First Nation must construct the development cost charge-funded infrastructure in advance of sufficient development cost charges being collected, and only where (a) the fixed-capacity infrastructure, such as sewer and water, must be constructed before development can occur; or (b) the infrastructure must be provided in an area with no services, to enable development to occur. 3.7 Where interest costs are included in the capital costs of a development cost charge under subsection 3.6, the interest rate used must not exceed the fixed rate for a ten (10) year loan set by the First Nations Finance Authority at the time Council makes the Law. 4. Calculation of Development Cost Charges The Law must include the following provisions: (a) the development cost charges payable per unit of development for each development cost charge class and for each type of development; (b) how development cost charges are assessed for each development cost charge class; (c) for development types not specifically identified in the Law, a provision that the amount of development cost charges payable must be equal to the development cost charges that would have been payable for the most comparable type of development, as determined by the administrator; (d) for developments that contain two (2) or more uses, a provision that the development cost charges must be calculated separately for each use within the development and the total amount payable must be the sum of the development cost charges levied for all uses in the development; and (e) where a building approval relates only to the expansion or alteration of an existing building, a provision that the development cost charges must be levied only on that portion of the building that expands or alters the existing building. 5. Units of Development 5.1 The Law must specify the basis on which development costs charges are calculated for each 5
development type, in accordance with subsection 5.2. 5.2 The Law must specify a unit of development for each development type that is (a) one of the following units of development: (i) for a single-family residential, a two-family residential or a three-family residential development, on one of a per dwelling unit, a per square metre of parcel area, or a per parcel basis, (ii) for a residential (multi-family) development, on one of a per dwelling unit, per square metre of gross floor area, or per square metre of parcel area basis, (iii) for a commercial development, an institutional development or an industrial development, on one of a per square metre of gross floor area, per square metre of gross site area, or per square metre of parcel area basis, (iv) for a manufactured home park development, on either a per pad or per square metre of parcel area basis; or (b) a unit of development that is used by a local government in the Province for the levy of development cost charges for that development type. 6. Assist Factor Where a First Nation has an assist factor as part of its development cost charges calculation, the assist factor must be set out in the Law. 7. Levy and Payment of Development Cost Charges 7.1 The Law must set out when development cost charges will be levied, which must be (a) at the time of building approval; (b) at the time of subdivision approval; or (c) at the time of development approval. 7.2 The Law must include a reference to the First Nation’s law, by-law, policy or procedure which sets out the application process for a building approval, subdivision approval or development approval, as applicable. 7.3 The Law must require the payment in full of development cost charges at the time, and as a condition, of the granting of the approval referenced in subsection 7.1, as applicable. 7.4 The Law must provide that where a development occurs in phases, development cost charges levied at the time of subdivision approval or development approval must be levied only in respect of each phase at the time it receives approval. 7.5 Notwithstanding subsection 7.3, the Law may allow for the payment of development cost charges in installments where requested by a developer and approved by Council in its sole discretion. 7.6 Where the Law allows for the payment of development cost charges in installments, the Law must set out (a) how a developer may request to pay by installments; (b) any qualifying criteria for paying by installments; (c) the maximum number of installment payments allowed; (d) how each installment amount is calculated; (e) the required timing of each installment payment; 6
(f) the consequences of failing to pay an installment by the installment due date; (g) any penalties or interest that will be levied on unpaid installment payments and when such charges will be imposed; and (h) any requirement for the developer to provide security for the unpaid development cost charges and the acceptable forms of security. 8. Application of Development Cost Charges 8.1 The Law must provide that a development cost charge is not payable under the Law (a) where the development does not impose any new capital cost burden on the First Nation; or (b) where a development cost charge has previously been paid for the same development, unless, as a result of a further development, new capital cost burdens will be imposed on the First Nation. 8.2 Where a First Nation wishes to provide for exemptions from development cost charges under a Law, those exemptions must be set out within the Law. 8.3 Where exemptions from development cost charges are included in a Law, the exemptions must be (a) within a class of exemption required or allowed under development cost charges legislation in the Province; or (b) exemptions for developments undertaken by members of the First Nation. 8.4 Where the Law provides for an exemption from development costs charges under paragraph 8.3(b), the Law must require the First Nation to (a) pay into the appropriate development cost charge reserve funds an amount equivalent to the development cost charges that would have been payable in respect of the development had the exemption not applied; and (b) make the payment under paragraph (a) using moneys that are not local revenues. 9. Development Cost Charge Credits and Rebates 9.1 The Law must provide that if a developer has, with the written agreement of the First Nation, provided or paid the cost of providing a specific service outside the boundaries of the parcel being developed, and that service is included in the calculations used to determine the amount of a development cost charge, the First Nation must give a credit to the developer by deducting the developer’s costs of providing that service from the development cost charges payable for the applicable development cost charge class. 9.2 The Law must provide that where a service is included in the calculations used to determine the amount of a development cost charge and a developer has, with the written agreement of a First Nation, (a) provided that service outside the boundaries of the parcel being developed, and (b) provided the service to a standard that exceeds the local standard required, the First Nation must offer a development cost charge rebate for the incremental portion of costs beyond the local standard required for that development cost charge class. 10. Development Cost Charge Refunds The Law must provide for a refund to a developer of development cost charges paid in respect of a development where the building approval, subdivision approval or development approval is cancelled, as the case may be, provided (a) the developer makes an application for a refund within six (6) months of the cancellation; and 7
(b) a new or replacement building approval, subdivision approval or development approval application has not been received or approved in respect of the development. 11. Use of Development Cost Charges 11.1 The Law must require (a) a separate development cost charge reserve fund to be established by an expenditure law for each development cost charge class; and (b) all development cost charges collected by the First Nation for a development cost charge class to be deposited in the development cost charge reserve fund established for that class. 11.2 The Law must require all expenditures of development cost charge moneys to be authorized by an expenditure law. 11.3 The Law must provide that moneys in a development cost charge reserve fund, plus interest earned on those moneys, must be used only (a) to pay the capital costs of providing, constructing, altering, improving, replacing or expanding sewer, water, drainage and transportation facilities that relate directly or indirectly to the development in respect of which the development cost charge was collected; (b) to pay the capital costs of (i) acquiring park and recreation land or reclaiming land as park and recreation land, and (ii) providing park improvements on park and recreation land, subject to the restriction that the capital costs must relate directly or indirectly to the development in respect of which the development cost charge was collected; (c) to pay the principal of and interest on a debt incurred by a First Nation as a result of an expenditure under paragraphs (a) or (b); (d) to pay a person subject to a development cost charge for some or all of the capital costs the person incurred in completing a project described in paragraph (a) or (b) if (i) the project was completed under a written agreement between the person and the First Nation, and (ii) the project is included in the calculations used to determine the amount of that development cost charge. 11.4 For clarity, payments under paragraphs 11.3(a) and (b) may be made to a local government in accordance with the terms of a service agreement between the First Nation and the local government under which the First Nation contributes to the development cost charges levied by the local government. 12. Transfer of Development Cost Charges 12.1 The Law may provide for moneys in a development cost charge reserve fund to be transferred from that reserve fund to another development cost charge reserve fund, where the amount to the credit of a reserve fund is greater than required for the purpose for which the reserve fund was established. 12.2 The Law must require all transfers of development cost charge moneys to be authorized by an expenditure law. 13. Borrowing of Development Cost Charges 13.1 The Law may allow for the First Nation to borrow from a development cost charge reserve fund for the purposes of a capital purpose reserve fund only on the following conditions: 8
(a) the moneys in the originating reserve fund are not currently required for its purpose; (b) the First Nation has a reserve fund established for a capital purpose for which it requires the moneys; (c) the First Nation must repay to the originating reserve fund, no later than the time when the money is needed for the purposes of that reserve fund, (i) the amount borrowed, and (ii) an amount equivalent to the interest that would have been earned on the amount had it remained in the originating reserve fund; and (d) interest paid under paragraph (c) must be at a rate that is at or above the prime lending rate set from time to time by the principal banker to the First Nation. 13.2 The Law must allow for the First Nation to borrow from a development cost charge reserve fund where the First Nations Financial Management Board has assumed third-party management of the First Nation’s local revenue account and, acting in the place of the Council, has determined that moneys must be borrowed from a development cost charge reserve fund to meet the financial obligations of the First Nation. 13.3 The Law must require all borrowing of development cost charge moneys to be authorized by an expenditure law. 14. Investing of Development Cost Charges Where the Law provides for the investing of moneys in a development cost charge reserve fund that are not immediately required, it must allow for investment only in (a) securities of Canada or of a province; (b) securities guaranteed for principal and interest by Canada or by a province; (c) securities of a municipal finance authority or the First Nations Finance Authority; (d) investments guaranteed by a bank, trust company or credit union; or (e) deposits in a bank or trust company in Canada or non-equity or membership shares in a credit union. 15. Complaints The Law must provide for a complaints process that allows a developer to object to the development cost charges payable in respect of a development on at least the following grounds: (a) there is an error or omission respecting the calculation of the development cost charges; and (b) an exemption from development cost charges has been improperly applied. PART VIII REVOCATION AND COMING INTO FORCE Revocation The Standards for First Nation Development Cost Charges Laws that were established and effective as of June 10, 2009, are revoked. Coming Into Force These Standards are established and in effect as of June 26, 2019. 9
PART IX ENQUIRIES All enquiries respecting these Standards should be directed to: First Nations Tax Commission 321 – 345 Chief Alex Thomas Way Kamloops, BC V2H 1H1 Telephone: (250) 828-9857 10
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.