SB 245 — Impact Fee Amendments

(A) culinary water;

or (B) irrigation water;

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245 (d) a written authorization from a sanitary sewer authority, as defined in Section 10-20-102:

(i) to reserve or provide:

(A) sewer collection capacity;

or (B) treatment capacity;

or (ii) to provide sewer service for a development activity.

(5) "Enactment" means:

(a) a municipal ordinance, for a municipality;

(b) a county ordinance, for a county;

and (c) a governing board resolution, for a special district, special service district, or private entity.

(6) "Encumber" means:

(a) a pledge to retire a debt;

or (b) an allocation to a current purchase order or contract.

(7) "Expense for overhead" means a cost that a local political subdivision or private entity:

(a) incurs in connection with:

(i) developing an impact fee facilities plan;

(ii) developing an impact fee analysis;

or (iii) imposing an impact fee, including any related overhead expenses;

and (b) calculates in accordance with a methodology that is consistent with generally accepted cost accounting practices.

(8) "Hookup fee" means a fee for the installation and inspection of any pipe, line, meter, or appurtenance to connect to a gas, water, sewer, storm water, power, or other utility system of a municipality, county, special district, special service district, or private entity.

(9)(a) "Impact fee" means a payment of money imposed upon new development activity as a condition of development approval to mitigate the impact of the new development on public infrastructure.

(b) "Impact fee" does not mean a tax, a special assessment, a building permit fee, a hookup fee, a fee for project improvements, or other reasonable permit or application fee.

(10) "Impact fee analysis" means the written analysis of each impact fee required by Section 11-36a-303.

(11) "Impact fee facilities plan" means the plan required by Section 11-36a-301.

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245 02-17 10:11 (12) "Level of service" means the defined performance standard or unit of demand for each capital component of a public facility within a service area.

(13)(a) "Local political subdivision" means a county, a municipality, a special district under Title 17B, Limited Purpose Local Government Entities - Special Districts, a special service district under Title 17D, Chapter 1, Special Service District Act, or the Point of the Mountain State Land Authority, created in Section 11-59-201.

(b) "Local political subdivision" does not mean a school district, whose impact fee activity is governed by Section 11-36a-206.

(14) "Private entity" means an entity in private ownership with at least 100 individual shareholders, customers, or connections, that is located in a first, second, third, or fourth class county and provides water to an applicant for development approval who is required to obtain water from the private entity either as a:

(a) specific condition of development approval by a local political subdivision acting pursuant to a prior agreement, whether written or unwritten, with the private entity;

or (b) functional condition of development approval because the private entity:

(i) has no reasonably equivalent competition in the immediate market;

and (ii) is the only realistic source of water for the applicant's development.

(15)(a) "Project improvements" means site improvements and facilities that are:

(i) planned and designed to provide service for development resulting from a development activity;

(ii) necessary for the use and convenience of the occupants or users of development resulting from a development activity;

and (iii) not identified or reimbursed as a system improvement.

(b) "Project improvements" does not mean system improvements.

(16) "Proportionate share" means the cost of public facility improvements that are:

roughly proportionate and reasonably related to the service demands and needs of any development activity.

(17) "Public facilities" means only the following impact fee facilities that have a life expectancy of 10 or more years and are owned or operated by or on behalf of a local political subdivision or private entity:

(a) water rights and water supply, treatment, storage, and distribution facilities;

(b) wastewater collection and treatment facilities;

(c) storm water, drainage, and flood control facilities;

(d) municipal power facilities;

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245 (e) roadway facilities;

(f) parks, recreation facilities, open space, and trails;

(g) public safety facilities;

(h) environmental mitigation as provided in Section 11-36a-205;

or (i) municipal natural gas facilities.

(18)(a) "Public safety facility" means:

(i) a building constructed or leased to house police, fire, or other public safety entities;

or (ii) a fire suppression vehicle costing in excess of $500,000.

(b) "Public safety facility" does not mean a jail, prison, or other place of involuntary incarceration.

(19)(a) "Roadway facilities" means a street or road that has been designated on an officially adopted subdivision plat, roadway plan, or general plan of a political subdivision, together with all necessary appurtenances.

(b) "Roadway facilities" includes associated improvements to a federal or state roadway only when the associated improvements:

(i) are necessitated by the new development;

and (ii) are not funded by the state or federal government.

(c) "Roadway facilities" does not mean federal or state roadways.

(20)(a) "Service area" means a geographic area designated by an entity that imposes an impact fee on the basis of sound planning or engineering principles in which a public facility, or a defined set of public facilities, provides service within the area.

-(a) 1the -state; Senate Committee Amendments

(b) a school district;

or (c) a charter school.

(22)(a) "System improvements" means:

(i) existing public facilities that are:

(A) identified in the impact fee analysis under Section 11-36a-304;

and (B) designed to provide services to service areas within the community at large;

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245 02-17 10:11 (ii) future public facilities identified in the impact fee analysis under Section 11-36a-304 that are intended to provide services to service areas within the community at large.

(b) "System improvements" does not mean project improvements.

Section 2.

Section 11-36a-301 is amended to read:

11-36a-301 .

Impact fee facilities plan.

(1) Before imposing an impact fee, [each] a local political subdivision or private entity shall, except as provided in Subsection (3), prepare an impact fee facilities plan:

(a) to determine the public facilities required to serve development resulting from new development activity[.] ;

(b) that designates a service area for each impact fee the local political subdivision or private entity imposes;

and (c) that demonstrates that the geographic area included in each service area is necessary to include in the service area based on specific planning or engineering principles.

(2) A municipality or county need not prepare a separate impact fee facilities plan if the general plan required by Section 10-20-401 or 17-79-401, respectively, contains the elements required by Section 11-36a-302.

(3) A local political subdivision or a private entity with a population, or serving a population, of less than 5,000 as of the last federal census that charges impact fees of less than $250,000 annually need not comply with the impact fee facilities plan requirements of this part, but shall ensure that:

(a) the impact fees that the local political subdivision or private entity imposes are based upon a reasonable plan that otherwise complies with the common law and this chapter;

and (b) each applicable notice required by this chapter is given.

Section 3.

Section 11-36a-601 is amended to read:

11-36a-601 .

Accounting of impact fees.

A local political subdivision that collects an impact fee shall:

(1) establish a separate interest bearing ledger account for each service area and for each type of public facility for which an impact fee is collected;

(2) deposit a receipt for an impact fee in the appropriate ledger account established under Subsection (1);

(3) retain the interest earned on each fund or ledger account in the fund or ledger account;

(4) at the end of each fiscal year, prepare a report that:

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245 (a) for each fund or ledger account, shows:

(i) the source and amount of all money collected, earned, and received by the fund or ledger account during the fiscal year;

and (ii) each expenditure from the fund or ledger account;

(b) accounts for all impact fee funds that the local political subdivision has on hand at the end of the fiscal year;

(c) identifies the impact fee funds described in Subsection (4)(b) by:

(i) the year in which the impact fee funds were received;

(ii) the project from which the impact fee funds were collected;

(iii) the project for which the impact fee funds are budgeted;

and (iv) the projected schedule for expenditure;

and (d) is:

(i) in a format developed by the state auditor;

(ii) certified by the local political subdivision's chief financial officer;

and (iii) transmitted to the state auditor within 180 days after the day on which the fiscal year ends.

Section 4.

Section 11-36a-602 is amended to read:

11-36a-602 .

Expenditure of impact fees.

(1) A local political subdivision may expend an impact [fees] fee only for a system improvement:

(a) identified in the adopted impact fee facilities plan when the local political subdivision collected the impact fee;[ and] (b) for the [specific ]public facility type for which the [fee was collected.] local political subdivision collects the impact fee;

and (c) within the service area for which the local political subdivision collects the impact fee.

(2)(a) Except as provided in Subsection (2)(b), a local political subdivision shall expend or encumber an impact fee collected with respect to a lot:

(i) for a permissible use;

and (ii) within six years after the impact fee with respect to that lot is collected.

(b) A local political subdivision may hold the fees for longer than six years if it identifies, in writing:

(i) an extraordinary and compelling reason why the fees should be held longer than six years;

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245 02-17 10:11 (ii) an absolute date by which the fees will be expended.

Section 5.

Effective Date.

This bill takes effect on May 6, 2026.

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