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1 STATE OF OKLAHOMA
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2 2nd Session of the 60th Legislature (2026)
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3 SENATE BILL 2155 By: Thompson
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6 AS INTRODUCED
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7 An Act relating to cities and towns; amending 62 O.S.
7 2021, Section 895, which relates to municipal
8 development fees; permitting municipalities to
8 consider the competitiveness of development fee
9 schedules when imposing or increasing development
9 fees; clarifying uniformity of development fees among
10 municipalities is not required; requiring periodic
10 review of municipal development fee schedules; and
11 providing an effective date.
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14 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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15 SECTION 1. AMENDATORY 62 O.S. 2021, Section 895, is
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16 amended to read as follows:
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17 Section 895. A. Municipalities that adopt ordinances,
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18 resolutions, or regulations for the implementation and collection of
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19 development fees shall provide that such development fees are
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20 adopted and governed pursuant to the provisions of this section. As
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21 used in this section:
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22 1. "Development fee" means any payment of money imposed, in
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23 whole or in part, as a condition of approval of any building permit,
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24 plat approval, or zoning change, to the extent the fee is to pay for
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1 public infrastructure systems that are attributable to new
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2 development or to expand or modify existing development;
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3 2. "Expanded or modified development" is one in which the
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4 expansion or modification results in an increased demand or
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5 increased impact upon the public infrastructure system as compared
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6 to the demand or impact prior to the expansion or modifications;
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7 3. "Public infrastructure system" includes any real property
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8 improvement, fixture, or accession that is included within, but not
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9 limited to, any of the following categories of public systems:
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10 a. water systems, including supply, production,
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11 treatment, and distribution facilities,
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12 b. wastewater systems, including collection, treatment,
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13 and disposal facilities,
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14 c. street systems, including roads, streets, boulevards,
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15 bridges, sidewalks, bicycle routes, drainage, traffic
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16 signals and systems, traffic control devices and
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17 signage, traffic calming devices, landscaping
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18 associated with street rights-of-way, and any local
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19 components of county, state, or federal highways to
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20 the extent and to the proportionate cost that the
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21 local components are not funded by state or federal
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22 grants or other state or federal permanent funding
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23 sources,
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1 d. storm water systems, including collection, retention,
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2 detention, treatment, channelization, disposal,
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3 discharge, flood control, and bank and shoreline
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4 protection facilities,
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5 e. parks systems, including parks, open spaces, trails,
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6 bicycle paths, and natural recreation areas and
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7 related facilities,
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8 f. public safety systems, including police, fire,
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9 emergency medical, and rescue facilities,
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10 g. solid waste systems, including facilities,
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11 h. public transportation systems, including facilities,
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12 and
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13 i. public capital improvement communications facilities;
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14 and
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15 4. "Public infrastructure system costs" means capital
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16 improvements that have a projected useful life of at least ten (10)
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17 years or more, and that result in an increase or expansion to the
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18 functional service capacity of that public infrastructure system.
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19 B. New development and expanded or modified existing
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20 development may only be charged the development fee for capital
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21 improvement costs for increases or expansion to the capacity of
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22 public infrastructure systems attributable to that development.
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23 1. Development fees shall not exceed a clear, ascertainable,
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24 and reasonably determined proportionate share of the cost of capital
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1 improvement to the public infrastructure system attributable to the
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2 expansion or increase in functional service capacity generated, or
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3 to be generated by, the development being charged the fee. There
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4 shall be a clearly established functional nexus between the purpose
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5 and amount of the development fee being charged and the development
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6 against which the fee is charged. In determining the development
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7 fee, the municipality shall make a documented effort to quantify the
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8 projected impact from development and determine that the proposed
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9 development fee is reasonably and roughly proportional to the nature
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10 and extent of the impact of development.
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11 2. Development fees cannot be adopted or used to fund repairs,
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12 maintenance, restorations, refurbishments, alterations,
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13 improvements, or fixes to existing public infrastructure systems in
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14 any way that does not result in an increase or expansion in the
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15 functional service capacity of the system which is available to
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16 serve new or expanded existing growth and development in the
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17 applicable service area.
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18 3. The development fees shall be based on actual system
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19 improvement costs or reliable, ascertainable and reasonable
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20 projected estimates of the costs. Any estimates of costs shall be
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21 based upon factual and historically realized costs for similar
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22 system capital improvements.
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23 4. Development fees may only be imposed to recover or fund the
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24 costs of public infrastructure system capital improvements,
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1 including, but not limited to, the cost of real property interest
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2 acquisitions, rights-of-ways, capital improvements, design,
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3 construction, inspection, and capital improvement construction
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4 administration, related to one or more public infrastructure
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5 systems.
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6 C. A municipal development fee ordinance, resolution, or
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7 regulation shall provide for the following:
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8 1. A schedule of development fees specifying the development
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9 fee for various land uses per unit of development, the purpose for
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10 the development fee, and termination of the development fee when the
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11 applicable public infrastructure system has been fully funded and
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12 the expanded or modified development has no additional impact on the
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13 public infrastructure system; and
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14 2. A component capital improvement plan that:
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15 a. lists public infrastructure system capital projects or
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16 facility expansions that are necessitated by
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17 development of various land uses in designated areas,
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18 b. provides reasonable notice to developers of specific
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19 public infrastructure system impacts from development
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20 of various land uses within the area of the
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21 development, and
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22 c. delineates the property locations that are clearly
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23 served by the public infrastructure system that will
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24 be funded through the development fee.
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1 In the alternative, a municipality may establish one or more
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2 service areas for the collection of development fees. As used in
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3 this section, "service area" means a geographic area defined by a
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4 municipality in which a defined public infrastructure system
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5 provides service to developments within that service area. Service
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6 areas shall be carefully drawn so as to include only property
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7 locations that are clearly served by the cost of capital
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8 improvements that increase or expand the functional service capacity
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9 of the public infrastructure system that will be funded through the
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10 development fee that is associated with the service area. The
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11 determinations regarding the establishment of one or more service
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12 areas will be a matter of legislative determination and discretion.
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13 Different public infrastructure systems may have different and
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14 separately defined service areas unique to each system's coverage.
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15 The development fees within a particular service area may be
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16 different as applied to different types of land uses; and
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17 3. An adoption process that provides for at least the following
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18 before any development fees, capital improvement plan, service plan,
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19 or creation of service areas shall become effective:
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20 a. a public hearing before the municipal planning
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21 commission. Notice of the time, date and place of the
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22 hearing shall be published in a newspaper of general
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23 circulation in the municipality at least fifteen (15)
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24 days prior to the hearing,
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1 b. a subsequent public hearing before the municipal
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2 governing body. Notice of the time, date and place of
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3 the hearing shall be published in a newspaper of
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4 general circulation in the municipality at least
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5 fifteen (15) days prior to the hearing.
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6 All duly enacted ordinances, resolutions, or regulations
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7 existing at the time of the effective date of this section shall
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8 remain in full force and effect; provided, no existing impact or
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9 development fees shall be amended, modified, or renewed except in
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10 accordance with this act.
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11 D. The development fees collected pursuant to a component
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12 capital improvement plan or within a service area, and any interest
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13 on the funds, shall be spent only for capital improvements that
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14 expand or increase the functional service capacity of that
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15 particular public infrastructure system to serve the area
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16 encompassing the development or only within that service area from
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17 which the funds were collected.
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18 1. Every assessment of a development fee shall be in writing
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19 and a copy shall be provided to the developer and property owner(s)
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20 affected, as such names and addresses of the property owner(s) are
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21 provided by the developer. The assessment shall specify the purpose
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22 or service area for which the development fee is being collected,
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23 the basis for calculation of the assessment, and the amount of the
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1 assessment. No development fee collected for one purpose shall be
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2 devoted to another purpose except as hereinafter provided.
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3 2. If the purpose, component capital improvement plan, or
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4 service area is changed or redrawn, or if a development spans more
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5 than one component capital improvement plan or service area, the
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6 development fees collected prior to the change shall be spent
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7 proportionately pursuant to the new purpose or within the new
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8 component capital improvement plan or service area or areas that
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9 encompass the development at the time of expenditure from which the
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10 fee was originally collected. Any change or expansion in a purpose,
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11 component capital improvement plan, or service area shall be done
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12 through the full hearing process as set forth in paragraph 3 of
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13 subsection C of this section.
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14 E. Each municipality shall present an annual report to its
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15 governing body on:
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16 1. The collection, investment, and expenditure of development-
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17 fee funds as separately reported upon for each development capital
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18 project or service area, and each public infrastructure system for
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19 each development capital project or in each service area;
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20 2. The recovery of costs from development-fee revenues; and
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21 3. Estimates of the timing of system-capacity-expansion
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22 improvements, as such construction is funded by development fees.
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23 If the municipality determines that the development fees as
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24 collected within a service area are no longer needed or desired for
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1 the purpose for which they were collected, the municipality may
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2 either refund the collected fees to the current owners of the
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3 property within the development for which the fees were paid, or
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4 proceed through the hearing process as set forth in paragraph 3 of
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5 subsection C of this section in order to adopt a new purpose for the
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6 fees.
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7 F. Municipalities may establish a process for the collection of
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8 development fees to occur at a point in time no earlier than the
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9 issuance of a building permit.
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10 G. Municipalities may enter into written agreements with
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11 developers to construct capital improvements to expand or increase
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12 the functional service capacity of a public infrastructure system
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13 within the designated development area or to serve a service area
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14 and provide a credit against or an adjustment to payment of all or
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15 part of the development fee for that system and that development.
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16 The credit or adjustment may not exceed the cost of the capital
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17 improvement or the amount of the development fee that would have
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18 been collected from that developer for the development and that
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19 system. No credit or adjustment will be carried over or transferred
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20 to a different development, a subsequent development, a subsequent
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21 change to that development, or against a development fee for a
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22 different system.
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23 H. Nothing in this section will:
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1 1. Preclude a municipality from requiring the developer to
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2 donate or dedicate real property or capital improvements, or to
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3 install, construct, operate, maintain, or repair capital
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4 improvements; or
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5 2. Require a credit against or an adjustment to a development
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6 fee for contribution of, or to the cost of, any real property or
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7 capital improvement provided by a developer if the direct cost of
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8 the specific contribution is not specifically and directly included
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9 in the calculation of the applicable development fees.
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10 I. No credit or adjustment shall be carried over from one
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11 development to a development at a different location. No credit or
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12 adjustment will be carried over from one development to a subsequent
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13 development at the same location, unless the development fee
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14 collected previously is for the same purpose, making any subsequent
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15 collection a repeat charge for the same purpose.
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16 J. Development fees shall be deemed dedicated and restricted
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17 revenues and therefore shall require accounting for development
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18 proceeds as restricted funds. Interest earned on development fees
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19 shall be considered funds of the account on which it is earned and
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20 shall be subject to all restrictions placed on the use of
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21 development fees under the provisions of this section. The
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22 accounting records and details thereof shall be maintained as public
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23 records of the municipality, be accessible to the public through
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24 open records requests, and include at least the following
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1 information, as relates both to each development capital project or
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2 service area and each public infrastructure system for each
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3 development capital project or within each service area:
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4 1. The receipt of development fees;
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5 2. The development capital project or service area from which
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6 the development fee was collected;
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7 3. The accumulation of interest on the development fee funds;
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8 4. The type of public infrastructure system for which the funds
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9 were collected;
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10 5. The cost of the capital improvements to which the
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11 development fees were applied; and
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12 6. The dates when development fee funds were expended to fund,
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13 or applied to reimburse, the cost of capital improvements to public
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14 infrastructure systems.
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15 K. Any ordinance, resolution, or regulation adopted in
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16 compliance with this section which is thereafter challenged in any
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17 future court action shall be reviewed through rational-basis
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18 scrutiny, such that it shall be upheld if it substantially complies
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19 with this section and if the municipality documented reasonably
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20 conceivable facts that provided a rational basis for the adoption.
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21 L. No municipality is required to adopt development fees and it
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22 is within the discretion of the municipality as to whether
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23 development fees should be considered for adoption. Any municipal
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24 development fee ordinance, resolution, or regulation may provide for
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1 appeal to the governing body for exemption of all or part of
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2 particular development projects from development fees if:
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3 1. The projects are determined to create desirable economic
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4 development, quality jobs, a type of desirable land use that is in
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5 short supply within the municipality, or affordable housing; or
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6 2. The exempt development project's proportionate share of the
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7 system expansion improvements is funded through a revenue source
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8 other than development fees.
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9 M. Any payment of a development fee by a payor shall not be
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10 deemed to have waived the standing or rights of the payor to later
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11 challenge or protest the payment as being invalid and not required.
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12 N. A municipality may not recover the public infrastructure
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13 system costs as a development fee by way of connection fees, hook-up
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14 fees or other fees in any manner that results in charges beyond the
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15 public infrastructure system cost that the development fee already
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16 collected. Any connection fees, hook-up fees or any other fees
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17 charged by a municipality as related to the cost of capital
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18 improvements necessary to increase or expand the functional service
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19 capacity of public infrastructure systems shall be determined
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20 relative to the functional service capacity actually being provided
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21 or made available to the fee payor, and any amounts in excess
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22 thereof shall be considered development fees and may only be applied
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23 if put forth in accordance with this section. Nothing herein shall
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24 prevent a municipality to separately impose and collect connection
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1 fees, hook-up fees or any other fees that are reasonably related in
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2 character and amount charged to the costs of regulation of the
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3 activities for which the fees were enacted or enforcement of
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4 municipal health or safety codes.
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5 O. This section shall not prohibit municipalities from self-
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6 funding capital improvements by use of pay-back agreements utilizing
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7 recoupment districts or lease-purchase agreements in order to
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8 finance improvements to public infrastructure systems, by borrowing
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9 or on a cash basis, so long as such procedures are utilized in a
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10 manner that is consistent with the requirements of this section to
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11 the extent such procedures pertain to development fees. Nothing in
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12 this section shall limit, regulate, or prohibit a municipality from
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13 investing public resources in public infrastructure systems in
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14 anticipation of development, recovering those public resources
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15 through proportional reimbursement payments equal to the total cost
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16 of the public investment in those public infrastructure systems, and
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17 subsequently expending the proceeds from those reimbursement
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18 payments for any purpose determined by the jurisdiction.
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19 P. A municipality that imposes or increases a development fee
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20 may consider whether the total development fee schedule remains
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21 reasonably competitive with those imposed by comparable communities.
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22 Q. Nothing in this section shall be construed to require
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23 uniformity of development fees among municipalities or to prohibit
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24 reasonable variation based on local conditions.
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1 R. Municipalities shall periodically review their development
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2 fee schedules, no less than once every five (5) years, to assess
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3 ongoing competitiveness and alignment with growth and infrastructure
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4 needs.
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5 SECTION 2. This act shall become effective November 1, 2026.
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7 60-2-3143 YG 1/15/2026 2:03:38 PM
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Req. No. 3143 Page 14Every fact on this page links to its source, starting with the official bill record.