AN ACT AUTHORIZing counties and CITies to IMPOSE impact FEES.

The General Assembly of North Carolina enacts:

SECTION 1.  Part 3 of Article 13 of Chapter 160D of the General Statutes is amended by adding a new section to read as follows:

§ 160D‑1321.  Impact fees.

(a)        Imposition of Impact Fee. – A local government may impose impact fees upon all new construction within its corporate limits for the purpose of placing an equitable share of the cost of providing new community service facilities upon developers and inhabitants of newly developed areas. If the local government is a city, it may also impose impact fees upon all new construction within its extraterritorial jurisdiction under G.S. 160D‑202.

(b)        Adopt Ordinances. – A local government may adopt ordinances to exercise the authority granted by this section. Before enacting any ordinance to exercise the authority granted by this section, a local government shall hold a public hearing on the ordinance. Notice of the public hearing shall be given in accordance with the provisions of G.S. 160D‑601.

(c)        Amount of Impact Fee. – The amount of each impact fee imposed under this section shall be uniform and based upon the capital costs to be incurred by the local government as a result of the new construction. In establishing the impact fee, the local government may establish zones within which the costs of providing community service facilities are estimated. Funds for each community service facility for which an impact fee is collected shall be placed in a separate capital reserve fund established and maintained as provided in Part 2 of Article 3 of Chapter 159 of the General Statutes. An ordinance adopted under this section shall provide for credits against required impact fees when a developer installs improvements of a type that generally would be paid for by the local government out of a capital reserve account funded by impact fees.

(d)       Challenge to Impact Fee. – To challenge an impact fee, a developer shall pay the amount charged by the local government, clearly identify that payment is made under protest, and give notice of appeal within 30 days after the date that payment under protest is made. The governing body of the local government shall designate an individual or the board of adjustment appointed pursuant to G.S. 160D‑302 to hear appeals under this subsection. The provisions of Article 4 of Chapter 160D of the General Statutes shall apply to appeals under this section, and the decision on the appeal is subject to review by the superior court in the nature of certiorari as provided in G.S. 160D‑1402.

(e)        Effect on Local Acts. – This section supplements but does not supplant the authority of a local government to levy an impact fee under a local act.

(f)        Definitions. – The following definitions apply in this section:

(1)        Capital costs. – Costs spent for developing community service facilities. Capital costs are limited to capital outlay items listed in the Uniform Accounting System for Local Government in North Carolina procedural manual prepared by the North Carolina Local Government Commission.

(2)        Community services facilities. – The following public facilities or improvements provided or established by the local government or in conjunction with other units of government:

a.         Drainage projects.

b.         Parks, open spaces, and recreational facilities.

c.         Streets, sidewalks, thoroughfare rights‑of‑way, and public transit stations and capital equipment.

d.         Emergency medical services facilities.

e.         Fire and police stations.

f.          Schools.

g.         Cultural facilities, including libraries.

h.         Solid waste collection, handling, disposal, and recycling.

(3)        Developer. – An individual, corporation, partnership, organization, association, firm, political subdivision, or other legal entity constructing or creating new construction.

(4)        Impact fee. – The charge imposed upon new construction under this section.

(5)        Local government. – A city or county.

(6)        New construction. – Any new development, construction, or installation for which a building or zoning permit, a certification, or any other type of governmental approval is required. New construction includes the installation of a mobile home, factory‑built housing, or modular housing. New construction does not include (i) renovation and repair of existing structures, structures incidental to accessory uses, or additions, unless the renovation, repairs, or additions will cause an increase in off‑street parking requirements or a change in occupancy as occupancy is defined by the North Carolina State Building Code and (ii) fences, billboards, poles, pipelines, transmission lines, advertising signs, or similar structures that do not generate a need for community service facilities.

SECTION 2.  This act becomes effective July 1, 2021.