The bill establishes new regulations regarding the imposition of exaction or mitigation fees for affordable or workforce housing in the context of residential and commercial development projects. It creates definitions for key terms, such as "affordable or workforce housing exaction or mitigation fee," and outlines the conditions under which land use permitting authorities can impose these fees. Specifically, the bill mandates that any fees must be reasonably proportional to the impact of the development, as determined by an exaction and mitigation nexus study. It also specifies that the maximum fee cannot exceed four percent of the total construction costs or the percentage determined by the nexus study, whichever is lower, and exempts certain square footage from being charged.

Additionally, the bill outlines a process for applicants to receive notice of these fees and to request an individualized determination of the fee amount. It establishes a timeline for the permitting authority to respond and provides for an appeal process, including the option for applicants to challenge the fees in court. The bill also amends existing statutes to allow cities and counties to impose these fees, provided there is a legitimate governmental interest and that the fees are proportional to the development's impact. The provisions of this act will apply to permit applications submitted on or after July 1, 2025, with the act itself becoming effective on that date.

Statutes affected:
Introduced: 15-1-103, 18-2-101