Substitute House Bill No. 7148 seeks to regulate accessory commercial units (ACUs) in residential areas by introducing a new definition for ACUs as structures used for commercial purposes that are subordinate to existing residential uses on the same lot. The bill repeals the previous definition of "affordable accessory apartment" and other related terms in section 8-1a of the general statutes, while adding new definitions such as "mixed-use development" and "middle housing." It mandates that municipalities designate at least 33% of their residentially zoned land for ACUs, allowing one unit per lot as of right, and outlines conditions for their construction, including exemptions from certain zoning restrictions and a prohibition on drive-through facilities.

Additionally, the bill streamlines the approval process for ACUs by allowing them to be approved without public hearings or discretionary zoning actions, requiring municipalities to establish a permit application and review process to be completed within 65 days. It also prevents municipalities and related authorities from treating ACUs as new uses for utility connection fees or capacity charges, which could impact revenue. The legislation restricts municipalities from imposing excessive height or design standards on ACUs and limits the types of commercial activities permitted within these units, ultimately aiming to facilitate their development while minimizing local regulatory barriers.