Amends existing law to revise provisions regarding minimum standards and requirements for development impact fees ordinances.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 626 BY LOCAL GOVERNMENT COMMITTEE AN ACT1 RELATING TO DEVELOPMENT IMPACT FEES; AMENDING SECTION 67-8204, IDAHO CODE,2 TO REVISE PROVISIONS REGARDING MINIMUM STANDARDS AND REQUIREMENTS FOR3 DEVELOPMENT IMPACT FEES ORDINANCES AND TO MAKE TECHNICAL CORRECTIONS;4 AND DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE.5

Be It Enacted by the Legislature of the State of Idaho:6

SECTION 1. That Section 67-8204, Idaho Code, be, and the same is hereby7 amended to read as follows:8 67-8204. MINIMUM STANDARDS AND REQUIREMENTS FOR DEVELOPMENT IMPACT9 FEES ORDINANCES. Governmental entities which that comply with the require-10 ments of this chapter may impose by ordinance development impact fees as a11 condition of development approval on all developments.12 (1) A development impact fee shall not exceed a proportionate share13 of the cost of system improvements determined in accordance with section14 67-8207, Idaho Code. Development impact fees shall be based on actual system15 improvement costs or reasonable estimates of such costs.16 (2) A development impact fee shall be calculated on the basis of levels17 of service for public facilities adopted in the development impact fee ordi-18 nance of the governmental entity that are applicable to existing development19 as well as new growth and development. The construction, improvement, ex-20 pansion, or enlargement of new or existing public facilities for which a de-21 velopment impact fee is imposed must shall be attributable to the capacity22 demands generated by the new development.23 (3) A development impact fee ordinance shall specify the point in the24 development process at which the development impact fee shall be collected.25 The development impact fee may shall be collected no earlier than the com-26 mencement of construction of the development, or the issuance of a building27 permit or a manufactured home installation permit, or as may be agreed by the28 developer and the governmental entity.29 (4) A development impact fee ordinance shall be adopted in accordance30 with the procedural requirements of section 67-8206, Idaho Code.31 (5) A development impact fee ordinance shall include a process whereby32 the governmental agency shall allow the developer, upon request by the de-33 veloper, to provide a written individual assessment of the proportionate34 share of development impact fees under the guidelines established by this35 chapter, which shall be set forth in the ordinance. The individual assess-36 ment process shall permit consideration of studies, data, and any other37 relevant information submitted by the developer to adjust the amount of the38 fee. The decision by the governmental agency on an application for an in-39 dividual assessment shall include an explanation of the calculation of the40 impact fee, including an explanation of factors considered under pursuant41

2 to section 67-8207, Idaho Code, and shall specify the system improvement(s)1 improvements for which the impact fee is intended to be used.2 (6) A development impact fee ordinance shall provide a process whereby3 a developer shall receive, upon request, a written certification of the4 development impact fee schedule or individual assessment for a particular5 project, which shall establish the development impact fee so as long as there6 is no material change to the particular project as identified in the individ-7 ual assessment application, or the impact fee schedule. The certification8 shall include an explanation of the calculation of the impact fee including9 an explanation of factors considered under section 67-8207, Idaho Code. The10 certification shall also specify the system improvement(s) improvements for11 which the impact fee is intended to be used.12 (7) A development impact fee ordinance shall include a provision for13 credits in accordance with the requirements of section 67-8209, Idaho Code.14 (8) A development impact fee ordinance shall include a provision pro-15 hibiting the expenditure of development impact fees except in accordance16 with the requirements of section 67-8210, Idaho Code.17 (9) A development impact fee ordinance may provide for the imposition18 of a development impact fee for system improvement costs incurred subsequent19 to adoption of the ordinance to the extent that new growth and development20 will be served by the system improvements.21 (10) A development impact fee ordinance may exempt all or part of a par-22 ticular development project from development impact fees provided that such23 project is determined to create affordable housing, provided that the public24 policy which that supports the exemption is contained in the governmental25 entity's comprehensive plan and provided that the exempt development's pro-26 portionate share of system improvements is funded through a revenue source27 other than development impact fees.28 (11) A development impact fee ordinance shall provide that development29 impact fees shall only be spent only for the category of system improvements30 for which the fees were collected and either within or for the benefit of the31 service area in which the project is located.32 (12) A development impact fee ordinance shall provide for a refund of33 development impact fees in accordance with the requirements of section34 67-8211, Idaho Code.35 (13) A development impact fee ordinance shall establish for a procedure36 for timely processing of applications for determination by the governmental37 entity regarding development impact fees applicable to a project, individ-38 ual assessment of development impact fees, credits or reimbursements to be39 allowed or paid under pursuant to section 67-8209, Idaho Code, and extraor-40 dinary impact.41 (14) A development impact fee ordinance shall specify when an applica-42 tion for an individual assessment of development impact fees shall be per-43 mitted to be made by a developer or fee payer. An application for an individ-44 ual assessment of development impact fees shall be permitted sufficiently in45 advance of the time that the developer or fee payer may seek a building permit46 or related permits so that the issuance of a building permit or related per-47 mits will not be delayed.48

3 (15) A development impact fee ordinance shall provide for appeals re-1 garding development impact fees in accordance with the requirements of sec-2 tion 67-8212, Idaho Code.3 (16) A development impact fee ordinance must shall provide a detailed4 description of the methodology by which costs per service unit are deter-5 mined. The development impact fee per service unit may shall not exceed6 the amount determined by dividing the costs of the capital improvements7 described in section 67-8208(1)(f), Idaho Code, by the total number of pro-8 jected service units described in section 67-8208(1)(g), Idaho Code. If the9 number of new service units projected over a reasonable period of time is10 less than the total number of new service units shown by the approved land use11 assumptions at full development of the service area, the maximum impact fee12 per service unit shall be calculated by dividing the costs of the part of the13 capital improvements necessitated by and attributable to the projected new14 service units described in section 67-8208(1)(g), Idaho Code, by the total15 projected new service units described in that section.16 (17) A development impact fee ordinance shall include a schedule of de-17 velopment impact fees for various land uses per unit of development. The or-18 dinance shall provide that a developer shall have the right to elect to pay a19 project's proportionate share of system improvement costs by payment of de-20 velopment impact fees according to the fee schedule as full and complete pay-21 ment of the development project's proportionate share of system improvement22 costs, except as provided in section 67-8214(3), Idaho Code.23 (18) After payment of the development impact fees or execution of an24 agreement for payment of development impact fees, additional development25 impact fees or increases in fees may shall not be assessed unless the num-26 ber of service units increases or the scope or schedule of the development27 changes. In the event of an increase in the number of service units or sched-28 ule of the development changes, the additional development impact fees to29 be imposed are shall be limited to the amount attributable to the additional30 service units or change in scope of the development.31 (19) No system for the calculation of development impact fees shall32 be adopted which that subjects any development to double payment of impact33 fees.34 (20) A development impact fee ordinance shall exempt from development35 impact fees the following activities:36 (a) Rebuilding the same amount of floor space of a structure which that37 was destroyed by fire or other catastrophe, providing provided that the38 structure is rebuilt and ready for occupancy within two (2) years of its39 destruction;40 (b) Remodeling or repairing a structure which that does not increase41 the number of service units;42 (c) Replacing a residential unit, including a manufactured home, with43 another residential unit on the same lot, provided that the number of44 service units does not increase;45 (d) Placing a temporary construction trailer or office on a lot;46 (e) Constructing an addition on a residential structure which that does47 not increase the number of service units; and48 (f) Adding uses that are typically accessory to residential uses,49 such as tennis courts or clubhouse clubhouses, unless it can be clearly50

4 demonstrated that the use creates a significant impact on the capacity1 of system improvements.2 (21) A development impact fee will shall be assessed for installation of3 a modular building, manufactured home, or recreational vehicle unless the4 fee payer can demonstrate by documentation, such as utility bills and tax5 records, either:6 (a) That a modular building, manufactured home, or recreational vehi-7 cle was legally in place on the lot or space prior to the effective date8 of the development impact fee ordinance; or9 (b) That a development impact fee has been paid previously for the in-10 stallation of a modular building, manufactured home, or recreational11 vehicle on that same lot or space.12 (22) A development impact fee ordinance shall include a process for13 dealing with a project which that has extraordinary impacts.14 (23) A development impact fee ordinance shall provide for the calcula-15 tion of a development impact fee in accordance with generally accepted ac-16 counting principles. A development impact fee shall not be deemed invalid17 because payment of the fee may result in an incidental benefit to owners or18 developers within the service area other than the person paying the fee.19 (24) A development impact fee ordinance shall include a description of20 acceptable levels of service for system improvements.21 (25) A development impact fee ordinance adopted by a county that im-22 poses a development impact fee for a county courthouse or a county jail shall23 require any cities within the county to collect such impact fee.24 (25) (26) Any provision of a development impact fee ordinance that is25 inconsistent with the requirements of this chapter shall be null and void and26 that provision shall have no legal effect. A partial invalidity of a devel-27 opment impact fee ordinance shall not affect the validity of the remaining28 portions of the ordinance that are consistent with the requirements of this29 chapter.30

SECTION 2. An emergency existing therefor, which emergency is hereby31 declared to exist, this act shall be in full force and effect on and after32 July 1, 2026.33