House Bill 626 rewrites Section 67-8204 of the Idaho Code to reorder and clarify the minimum standards that local development impact fee (DIF) ordinances must include. The amended text tightens up procedural requirements (methodology, accounting standards, credits, refunds, appeals) and spells out administrative processes for individual assessments and certifications requested by developers.
For practitioners, the change matters because it increases the level of detail local governments must document and publish in their DIF ordinances and creates clearer procedural hooks for developers to challenge or lock in fees. The bill also contains targeted exemptions and intergovernmental collection duties that can affect how counties and cities divide revenue-collection tasks and how affordable housing projects are treated under local DIF programs.
At a Glance
What It Does
Revises the statutory minimum content of development impact fee ordinances, requiring explicit methodology, accounting standards, procedures for individual assessments and certifications, credits, refunds, and appeals. It limits permissible uses of collected fees to specified categories and service areas.
Who It Affects
Counties and cities that adopt DIF ordinances, developers and fee payers (including modular/manufactured-home installers), affordable housing providers seeking exemptions, and municipal finance and planning staff who must prepare and defend fee calculations.
Why It Matters
The bill raises documentation and procedural requirements that make DIFs more transparent and legally defensible, while also creating new administrative responsibilities and potential points of dispute between developers and local governments.
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What This Bill Actually Does
The amended §67-8204 sets the baseline for what a local development impact fee ordinance must contain. It requires that fees reflect a proportionate share of system improvement costs (as determined under related statutory provisions) and that ordinances adopt and publish acceptable levels of service.
Localities must base fees on actual costs or reasonable estimates and provide a written methodology for how per‑service‑unit costs are calculated.
The statute directs local governments to include procedures allowing developers to request an individual assessment of their project’s proportionate share. The ordinance must permit developers to submit studies or data to adjust fee amounts, and the agency’s decision on an assessment must explain the calculation and identify the system improvements for which fees are intended.
The ordinance must also provide a written certification of the fee or assessment upon request.On fiscal controls, the amendment requires that impact fees be tracked and spent only for the category of improvements and the service area for which they were collected, and that fee accounting follow generally accepted accounting principles. Ordinances must include provisions for credits, reimbursements, refunds and appeals under the code sections referenced elsewhere in statute.
The text also restates prohibitions on double payment and lists routine exemptions for limited reconstruction, like rebuilding after a catastrophe or repairs that do not increase service units.The amendment includes several operational and administrative pieces: a process for extraordinary-impact projects, specific treatment for modular/manufactured buildings and recreational vehicles (tied to documentation of prior placement or prior payment), a requirement that ordinances specify the timing of fee collection, and a severability clause. The act declares an emergency and sets an effective date for implementation.
The Five Things You Need to Know
The statute caps the fee per service unit by formula: divide the costs of the capital improvements described in 67-8208(1)(f) by the total projected service units in 67-8208(1)(g) (and, if projected new service units are lower, limit the numerator to improvements attributable to those projected units).
An ordinance must specify when fees are collected and may not collect them earlier than commencement of construction, issuance of a building permit, or issuance of a manufactured-home installation permit—unless the developer and governmental entity agree otherwise.
When a developer requests a written certification of the fee or an individual assessment, the certification fixes the fee so long as there is no material change to the project as identified in the application; the individual-assessment decision must explain the calculation and specify the system improvement(s) the fee will fund.
Local governments may exempt all or part of a project from DIFs for projects determined to create affordable housing only if the exemption is supported by the governmental entity’s comprehensive plan and the project’s proportionate share is funded from non‑DIF revenue sources.
If a county imposes a DIF for a county courthouse or jail, the county’s ordinance must require any cities within the county to collect that impact fee on the county’s behalf.
Section-by-Section Breakdown
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Proportionate-share cap and basis for fees
These paragraphs anchor fee limits to a proportionate‑share standard tied to other statutory sections and require fees to be based on actual costs or reasonable estimates. Practically, local finance staff must link capital improvement lists to land‑use assumptions and demonstrate how growth drives capacity needs; auditors will expect a clear chain of reasoning from LOS (levels of service) to the capital list to the fee calculation.
Collection timing, individual assessments, and certifications
The bill requires ordinances to set when fees are collected and to provide a developer-initiated individual‑assessment process plus a certification upon request. From an implementation standpoint this creates administrative workflow requirements: receipt and review of developer studies, written decisions explaining calculations, and a certification mechanism that local counsel will likely use to limit future challenges—so recordkeeping and notice practices must be formalized.
Credits, expenditure restrictions, refunds and appeals
The amendment incorporates cross‑references to statutory rules on credits (67‑8209), expenditure limitations (67‑8210), refunds (67‑8211) and appeals (67‑8212). The practical impact is twofold: finance offices must design internal controls to segregate DIF monies by category/service area, and planning/legal teams must ensure ordinances map credits and reimbursement timing to avoid double recovery or disputes over eligible expenditures.
Methodology, per‑service‑unit calculations, and fee schedules
The statute requires a detailed methodology for determining cost per service unit and a public fee schedule for common land uses. While the bill does not prescribe a single model, it elevates documentation standards and ties maximum fees to documented capital costs and projected service units—placing the evidentiary burden on local governments to justify rates under scrutiny.
Enumerated exemptions and special-case rules
The ordinance must list several specific exemptions (rebuilding after catastrophe within two years, non‑increasing remodels, replacement on same lot, temporary construction trailers, certain residential additions, accessory uses unless they significantly impact capacity). It also treats modular/manufactured buildings and RVs distinctly, allowing assessment only when prior occupancy or prior DIF payment cannot be documented—so permit and tax records become central evidence in fee determinations.
Service-area limits, intergovernmental collection, severability, effective date
The bill reiterates that fees are spent only for the category and service area that generated them and adds a clause forcing cities to collect county courthouse/jail DIFs where counties impose them. It includes a severability provision and an emergency declaration making the act effective July 1, 2026, which compresses the timetable for local ordinance updates and intergovernmental coordination.
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Explore Government in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Developers who request individual assessments — the bill requires written decisions that explain calculations and specify targeted system improvements, giving developers clearer grounds to plan and to contest fees.
- Affordable housing projects that meet the statute’s conditions — the statute allows exemptions if supported by the local comprehensive plan and funded from non‑DIF sources, enabling some projects to avoid fees.
- Local governments with robust finance and planning capacity — clearer methodological requirements and GAAP accounting make DIF programs more defensible and easier to audit, reducing legal risk where documentation is strong.
- Fee payers generally — the requirement for detailed methodology, GAAP accounting, and explicit expenditure limits increases transparency about how fees are calculated and spent.
Who Bears the Cost
- Smaller or resource‑constrained local governments — they must develop detailed methodologies, process individual assessments, produce certifications, and maintain GAAP‑compliant accounting, which increases administrative costs.
- Taxpayers or other revenue sources — localities that exempt affordable housing must secure alternative funding, shifting costs to general funds or other sources if they choose to implement exemptions.
- Municipal finance and permitting staff — requiring cities to collect certain county DIFs (courthouse/jail) creates extra collection and remittance work and coordination burdens between jurisdictions.
- Developers seeking certainty on complex or changing projects — while certifications help, the ordinance permits additional fees if service units increase or scope changes, so projects that expand still face incremental charges.
Key Issues
The Core Tension
The central dilemma is between enhancing transparency/legal defensibility of DIF programs (through detailed methodology, GAAP accounting, written assessments and certifications) and the administrative and fiscal burdens those requirements place on local governments and other payers; the bill makes DIFs fairer and more contestable but also more costly to administer, and it forces policymakers to choose how to reallocate the costs of exemptions such as for affordable housing.
The amendment walks a tight line between transparency and administrative complexity. Requiring detailed methodologies, GAAP accounting, and written decisions improves legal defensibility but creates material new workloads for local governments—especially smaller jurisdictions without dedicated DIF analysts.
The statute points repeatedly to other code sections for mechanics (67‑8207, 67‑8208, 67‑8209, etc.), so local implementation will depend on consistent cross‑referencing and interpretation of those sections; any vagueness there will shift disputes into contested appeals.
The affordable‑housing carve‑out is conditional: an exemption is available only if the comprehensive plan supports it and the project’s share is funded from non‑DIF sources. That creates a policy trade‑off: jurisdictions that want to incentivize affordability must identify and secure alternative funding, or else forgo DIF revenue.
Finally, requiring cities to collect certain county DIFs (for courthouses/jails) resolves a revenue‑collection gap but may generate intergovernmental friction and additional administrative cost for municipal permitting systems.
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