Amends existing law to allow development impact fees to be used for certain costs associated with certain fire apparatus replacement.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 767 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO DEVELOPMENT IMPACT FEES; AMENDING SECTION 67-8203, IDAHO CODE,2 TO REVISE A DEFINITION; AMENDING SECTION 67-8210, IDAHO CODE, TO REVISE3 A PROVISION REGARDING EARMARKING AND EXPENDITURE OF COLLECTED DEVELOP-4 MENT IMPACT FEES; AND DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE5 DATE.6

Be It Enacted by the Legislature of the State of Idaho:7

SECTION 1. That Section 67-8203, Idaho Code, be, and the same is hereby8 amended to read as follows:9 67-8203. DEFINITIONS. As used in this chapter:10 (1) "Affordable housing" means housing affordable to families whose11 incomes do not exceed eighty percent (80%) of the median income for the ser-12 vice area or areas within the jurisdiction of the governmental entity.13 (2) "Appropriate" means to legally obligate by contract or otherwise14 commit to use by appropriation or other official act of a governmental en-15 tity.16 (3) "Capital improvements" means improvements with a useful life of ten17 (10) years or more, by new construction or other action, which increase the18 service capacity of a public facility. Capital improvements shall include,19 for public safety facilities only, fire apparatus replacement as provided in20 subsection (24)(f) of this section.21 (4) "Capital improvement element" means a component of a comprehensive22 plan adopted pursuant to chapter 65, title 67, Idaho Code, which component23 meets the requirements of a capital improvements plan pursuant to this chap-24 ter.25 (5) "Capital improvements plan" means a plan adopted pursuant to this26 chapter that identifies capital improvements for which development impact27 fees may be used as a funding source.28 (6) "Developer" means any person or legal entity undertaking develop-29 ment, including a party that undertakes the subdivision of property pursuant30 to sections 50-1301 through 50-1334, Idaho Code.31 (7) "Development" means any construction or installation of a building32 or structure, or any change in use of a building or structure, or any change33 in the use, character or appearance of land, which creates additional demand34 and need for public facilities or the subdivision of property that would per-35 mit any change in the use, character or appearance of land. As used in this36 chapter, "development" shall not include activities that would otherwise37 be subject to payment of the development impact fee if such activities are38 undertaken by a taxing district, as defined in section 63-201, Idaho Code,39 or by an authorized public charter school, as defined in section 33-5202A,40 Idaho Code, in the course of carrying out its statutory responsibilities,41

2 unless the adopted impact fee ordinance expressly includes taxing districts1 or public charter schools as being subject to development impact fees.2 (8) "Development approval" means any written authorization from a gov-3 ernmental entity that authorizes the commencement of a development.4 (9) "Development impact fee" means a payment of money imposed as a con-5 dition of development approval to pay for a proportionate share of the cost6 of system improvements needed to serve development. This term is also re-7 ferred to as an impact fee in this chapter. The term does not include the fol-8 lowing:9 (a) A charge or fee to pay the administrative, plan review, or inspec-10 tion costs associated with permits required for development;11 (b) Connection or hookup charges;12 (c) Availability charges for drainage, sewer, water, or transportation13 charges for services provided directly to the development; or14 (d) Amounts collected from a developer in a transaction in which the15 governmental entity has incurred expenses in constructing capital im-16 provements for the development if the owner or developer has agreed to17 be financially responsible for the construction or installation of the18 capital improvements, unless a written agreement is made pursuant to19 section 67-8209(3), Idaho Code, for credit or reimbursement.20 (10) "Development requirement" means a requirement attached to a devel-21 opmental approval or other governmental action approving or authorizing a22 particular development project including, but not limited to, a rezoning,23 which requirement compels the payment, dedication or contribution of goods,24 services, land, or money as a condition of approval.25 (11) "Extraordinary costs" means those costs incurred as a result of an26 extraordinary impact.27 (12) "Extraordinary impact" means an impact that is reasonably deter-28 mined by the governmental entity to:29 (a) Result in the need for system improvements, the cost of which will30 significantly exceed the sum of the development impact fees to be gener-31 ated from the project or the sum agreed to be paid pursuant to a develop-32 ment agreement as allowed by section 67-8214(2), Idaho Code; or33 (b) Result in the need for system improvements that are not identified34 in the capital improvements plan.35 (13) "Fee payer" means that person who pays or is required to pay a de-36 velopment impact fee.37 (14) "Governmental entity" means any unit of local government that is38 empowered in this enabling legislation to adopt a development impact fee or-39 dinance.40 (15) "Impact fee." See development impact fee.41 (16) "Land use assumptions" means a description of the service area and42 projections of land uses, densities, intensities, and population in the ser-43 vice area over at least a twenty (20) year period.44 (17) "Level of service" means a measure of the relationship between ser-45 vice capacity and service demand for public facilities.46 (18) "Manufactured home" means a structure, constructed according to47 HUD/FHA mobile home construction and safety standards, transportable in one48 (1) or more sections, which, in the traveling mode, is eight (8) feet or more49 in width or is forty (40) body feet or more in length, or when erected on site,50

3 is three hundred twenty (320) or more square feet, and which is built on a1 permanent chassis and designed to be used as a dwelling with or without a2 permanent foundation when connected to the required utilities, and includes3 the plumbing, heating, air conditioning, and electrical systems contained4 therein, except that such term shall include any structure that meets all the5 requirements of this subsection except the size requirements and with re-6 spect to which the manufacturer voluntarily files a certification required7 by the secretary of housing and urban development and complies with the stan-8 dards established under 42 U.S.C. 5401 et seq.9 (19) "Modular building" is as defined in section 39-4301, Idaho Code.10 (20) "Present value" means the total current monetary value of past,11 present, or future payments, contributions or dedications of goods, ser-12 vices, materials, construction or money.13 (21) "Project" means a particular development on an identified parcel14 of land.15 (22) "Project improvements" means site improvements and facilities16 that are planned and designed to provide service for a particular devel-17 opment project and that are necessary for the use and convenience of the18 occupants or users of the project.19 (23) "Proportionate share" means that portion of the cost of system im-20 provements determined pursuant to section 67-8207, Idaho Code, which rea-21 sonably relates to the service demands and needs of the project.22 (24) "Public facilities" means:23 (a) Water supply production, treatment, storage and distribution fa-24 cilities;25 (b) Wastewater collection, treatment and disposal facilities;26 (c) Roads, streets and bridges, including rights-of-way, traffic27 signals, landscaping and any local components of state or federal high-28 ways;29 (d) Stormwater collection, retention, detention, treatment and dis-30 posal facilities, flood control facilities, and bank and shore protec-31 tion and enhancement improvements;32 (e) Parks, open space and recreation areas, and related capital im-33 provements; and34 (f) Public safety facilities, including law enforcement, fire stations35 and apparatus, emergency medical and rescue, and street lighting facil-36 ities. Public safety facilities shall include fire apparatus replace-37 ment, as long as such replacement is identified in an adopted capital38 improvement plan, is attributable to the impacts of growth, and no more39 than fifty percent (50%) of the total cost of the replacement is funded40 with development impact fees.41 (25) "Recreational vehicle" means a vehicular type unit primarily de-42 signed as temporary quarters for recreational, camping, or travel use, which43 either has its own motive power or is mounted on or drawn by another vehicle.44 (26) "Service area" means any defined geographic area identified by a45 governmental entity or by intergovernmental agreement in which specific46 public facilities provide service to development within the area defined, on47 the basis of sound planning or engineering principles or both.48 (27) "Service unit" means a standardized measure of consumption, use,49 generation or discharge attributable to an individual unit of development50

4 calculated in accordance with generally accepted engineering or planning1 standards for a particular category of capital improvements.2 (28) "System improvements," in contrast to project improvements, means3 capital improvements to public facilities designed to provide service to a4 service area including, without limitation, the type of improvements de-5 scribed in section 50-1703, Idaho Code.6 (29) "System improvement costs" means costs incurred for construction7 or reconstruction of system improvements, including design, acquisition,8 engineering and other costs attributable thereto, and also including, with-9 out limitation, the type of costs described in section 50-1702(h), Idaho10 Code, to provide additional public facilities needed to serve new growth and11 development and shall include the costs of fire apparatus replacement iden-12 tified in the capital improvements plan that are attributable to the impacts13 of growth pursuant to subsection (24)(f) of this section. For clarifica-14 tion, system improvement costs do not include:15 (a) Construction, acquisition or expansion of public facilities other16 than capital improvements identified in the capital improvements plan;17 (b) Repair, operation or maintenance of existing or new capital im-18 provements;19 (c) Upgrading, updating, expanding or replacing existing capital im-20 provements to serve existing development in order to meet stricter21 safety, efficiency, environmental or regulatory standards;22 (d) Upgrading, updating, expanding or replacing existing capital im-23 provements to provide better service to existing development;24 (e) Administrative and operating costs of the governmental entity un-25 less such costs are attributable to development of the capital improve-26 ments plan, as provided in section 67-8208, Idaho Code; or27 (f) Principal payments and interest or other finance charges on bonds28 or other indebtedness except financial obligations issued by or on be-29 half of the governmental entity to finance capital improvements identi-30 fied in the capital improvements plan.31

SECTION 2. That Section 67-8210, Idaho Code, be, and the same is hereby32 amended to read as follows:33 67-8210. EARMARKING AND EXPENDITURE OF COLLECTED DEVELOPMENT IMPACT34 FEES. (1) An ordinance imposing development impact fees shall provide that35 all development impact fee funds shall be maintained in one (1) or more36 interest-bearing accounts within the capital projects fund. Accounting37 records shall be maintained for each category of system improvements and the38 service area in which the fees are collected. Interest earned on development39 impact fees shall be considered funds of the account on which it is earned,40 and not funds subject to section 57-127, Idaho Code, and shall be subject41 to all restrictions placed on the use of development impact fees under the42 provisions of this chapter.43 (2) Expenditures of development impact fees shall be made only for the44 category of system improvements and within or for the benefit of the service45 area for which the development impact fee was imposed as shown by the capi-46 tal improvements plan and as authorized in this chapter. Development impact47 fees shall not be used for any purpose other than system improvement costs48

5 to create additional improvements to serve new growth and the replacement of1 fire apparatus pursuant to section 67-8203(24)(f), Idaho Code.2 (3) As part of its annual audit process, a governmental entity shall3 prepare an annual report:4 (a) Describing the amount of all development impact fees collected, ap-5 propriated, or spent during the preceding year by category of public fa-6 cility and service area; and7 (b) Describing the percentage of tax and revenues other than impact8 fees collected, appropriated or spent for system improvements during9 the preceding year by category of public facility and service area.10 (4) Collected development impact fees must be expended within eight11 (8) years from the date they were collected, on a first-in, first-out (FIFO)12 basis, except that the development impact fees collected for wastewater13 collection, treatment and disposal and drainage facilities must be expended14 within twenty (20) years. Any funds not expended within the prescribed times15 shall be refunded pursuant to section 67-8211, Idaho Code. A governmental16 entity may hold the fees for longer than eight (8) years if it identifies, in17 writing:18 (a) A reasonable cause why the fees should be held longer than eight (8)19 years; and20 (b) An anticipated date by which the fees will be expended but in no21 event greater than eleven (11) years from the date they were collected.22

SECTION 3. An emergency existing therefor, which emergency is hereby23 declared to exist, this act shall be in full force and effect on and after24 July 1, 2026.25