Author’s Note: This new law raises a number of difficult interpretive questions. Many thanks to everyone who shared insights and perspectives on its meaning and application, especially my colleagues Adam Lovelady, Jim Joyce, and Taylor Morris.
Development-related fees have received increased attention from the North Carolina General Assembly in recent years. The legislature created a detailed statutory framework for water and sewer system development fees, including requirements for how those fees are calculated, adopted, and spent. It also has placed additional limits on building permit and inspection fees and required local governments to report information about the collection and use of those fees.
S.L. 2026-59 continues that focus. Section 49, which took effect August 11, 2026, adds new requirements governing the disclosure and administration of certain fees associated with development. It adds definitions to G.S. 160D-102 and enacts G.S. 160D-402.1, which requires local governments to (1) publish certain development-related fees and information about how the fees are calculated; (2) report information on fees and collections annually to the Local Government Commission (LGC); and (3) provide project-specific fee estimates and final, binding fee statements for development approvals.
The new law applies to fees imposed for the administration and enforcement of Chapter 160D and Article 8 of Chapter 162A, and to certain development-related fees authorized by local act. It does not replace the existing rules governing the underlying fees or authorize new fees. Chapter 160D continues to govern fees related to development and development regulations, Article 8 of Chapter 162A continues to govern water and sewer system development fees, and local acts continue to govern impact, facility, and similar fees. Section 49(c) expressly preserves existing statutory and constitutional limits on local fee authority. The new law adds additional disclosure requirements related to what the fees are, how they are calculated, and how they are applied to a particular development application.
The new law is not clear in several important respects. Among other things, there are questions about which fees are subject to each requirement, how much information must be published to explain how a fee was calculated, which fees must be included in a project-specific estimate and final fee statement, and how the estimate process works when a development project requires multiple approvals. This post works through those questions separately for each of the law’s three requirements.
It is worth emphasizing that the new requirements took effect August 11, 2026. Cities and counties should immediately review the fees they currently impose, determine which are covered by the new law, prepare the required fee schedule and supporting information, and establish procedures for providing estimates and final fee statements. That work will require coordination among planning and development staff, finance staff, management, IT, and the local government’s attorney because the new requirements involve both legal judgments about which fees are covered and practical decisions about how those fees are calculated, tracked, disclosed, and collected.
Which Local Governments Are Subject to the New Law?
The new requirements in G.S. 160D-402.1 apply to a “local government,” which Chapter 160D defines as a city or county. See G.S. 160D-102(22). The limitation to cities and counties is important. Other governmental entities may administer development-related programs or impose fees associated with development, but G.S. 160D-402.1 applies only to a “local government” as defined by Chapter 160D.
What Does the New Law Require?
The new law adds three principal requirements:
- Publication of fee information, including how the fees are calculated;
- Annual reporting to the LGC; and
- Project-specific fee estimates and final fee statements.
The scope of each requirement is considered separately.
1. Publish the Fee Schedule and Supporting Information
Each city and county must “prominently” display its current fee schedules on its official website. The new law specifies both which fees must be included in the schedules and what information must accompany those fees. But there are significant questions about the scope of both requirements.
Which Fees Are Included?
The statute requires a “fee schedule” to include:
a statement of all current fees that may be collected by a local government for the administration and enforcement of provisions set forth in this Chapter [160D] and Article 8 of Chapter 162A of the General Statutes and impact fees, facility fees, and other fees authorized by local act, applicable to each project category and purpose, including the data and methodologies used to calculate the fee rates.
The scope of these categories raises several interpretive questions. A threshold point, however, is that the required fee schedules cover only fees imposed by the city or county publishing the schedules. It is not a comprehensive list of every governmental charge that a developer may incur on a particular project.
A single development project may involve fees imposed by several different governmental entities. A developer might, for example, pay regulatory fees to a city, other regulatory fees to a county, and an SDF to a separate water and sewer provider. Each city and county is responsible for publishing its own covered fees; neither is required to include fees imposed by another governmental entity. And the separate water and sewer provider is not subject to the new provisions.
This distinction is particularly important for SDFs. Article 8 authorizes SDFs to be imposed by several types of water and sewer providers, including cities and counties, but also water and sewer authorities, county water and sewer districts, metropolitan water and/or sewerage districts, sanitary districts, and certain other entities. The new fee schedule requirements apply to covered fees imposed by a city or county, but not to fees imposed by a separate local government utility provider (aka public authority).
Chapter 160D Fees
The first category of fees that must be included in the fee schedules are those collected for the administration and enforcement of Chapter 160D. The clearest covered fees are the regulatory fees cities and counties charge to administer and enforce their development regulations. Depending on the programs administered by a particular city or county, these may include fees for rezoning and conditional zoning applications, special use permits, variances and appeals, subdivision and plat review, site or development plan review, zoning permits, building permits and inspections, certificates of appropriateness, and similar regulatory activities.
G.S. 160D-402 provides useful context. It identifies activities involved in administering and enforcing development regulations, including receiving and processing applications, providing required notices, reviewing applications for compliance, conducting inspections, issuing certificates, enforcing development regulations, and maintaining records. It also authorizes reasonable fees for the support, administration, and implementation of programs authorized by Chapter 160D. These are the types of regulatory activities most naturally encompassed by the new law’s reference to fees for the administration and enforcement of Chapter 160D.
Existing limits on these fees continue to apply. In Homebuilders Association of Charlotte, Inc. v. City of Charlotte, 336 N.C. 37, 442 S.E.2d 45 (1994), the North Carolina Supreme Court required a reasonable relationship between a regulatory fee and the cost of the regulatory activity. Building permit and inspection fees are subject to additional restrictions. G.S. 160D-402(d) limits the use of fees collected by a building inspection department for administration and enforcement of Article 11 to supporting the administration and operations of that department. (G.S. 160D-1102(c) also imposed specific reporting requirements for building-code-enforcement revenues and expenditures for reports due in 2023, 2024, and 2025.) S.L. 2026-59 adds new disclosure and procedural requirements but does not change these existing rules governing the authority for, amount, or use of Chapter 160D fees.
A harder question is whether the fee schedules must include monetary obligations that arise through a Chapter 160D process but are not themselves regulatory fees. Subdivision regulations, for example, may authorize payments in lieu of required improvements or land dedication. Conditional zoning and development agreements also may include project-specific monetary obligations.
There is a reasonable argument that these payments fall outside the fee schedule requirement. They are different from application, plan-review, permit, and inspection fees and generally are not imposed to cover the cost of administering or enforcing Chapter 160D. But the statute does not define the limits of “fees for the administration and enforcement” of Chapter 160D or address payments in lieu, conditional-zoning obligations, development-agreement payments, or similar charges directly. The scope of the requirement therefore is not entirely clear, and local governments should work with their attorneys to determine which charges to include.
The wording also creates a broader interpretive issue. The statute uses similar “administration and enforcement” language for fees under Article 8 of Chapter 162A, even though system development fees are not administrative or enforcement fees in the ordinary sense. As discussed next, that makes the statutory language difficult to apply consistently and counsels some caution in drawing a sharp line around the Chapter 160D fee category.
Article 8 of Chapter 162A Fees
The second category relates to Article 8 of Chapter 162A, which governs water and sewer system development fees (SDFs). An SDF is a charge to new development for a proportionate share of certain capital costs of providing water or sewer capacity. It must be supported by a professional analysis using a methodology authorized by Article 8.
The wording of the new law creates an interpretive problem. As indicated above, it refers to fees collected “for the administration and enforcement” of Article 8. But Article 8 does not provide for a separate fee to administer or enforce its requirements. The fee it authorizes is the SDF itself, and an SDF is not an administrative or enforcement charge. It is a capital charge imposed on new development.
A narrow reading of “fees for the administration and enforcement” of Article 8 therefore produces an odd result; there appear to be no Article 8 fees that fit that description. That would leave the statute’s express reference to Article 8 with little or no practical effect. For that reason, the more likely reading is that the legislature intended the fee schedules to include SDFs imposed under Article 8 by the city or county.
That reading does not bring every water or sewer charge associated with development into the fee schedule. Meter and service-line installation charges, actual-cost tap or hookup charges, utility deposits, contractual charges, regular water and sewer rates, and similar charges are imposed under separate authority and for different purposes. They do not become Article 8 fees merely because they are charged in connection with new development.
As mentioned above, the Article 8 analysis also may bear on the scope of the Chapter 160D category. The new law uses the same phrase (fees “for the administration and enforcement”) for both Chapter 160D and Article 8. If that phrase must be read broadly enough in the Article 8 context to include SDFs, there is an argument that it should also be read more broadly in the Chapter 160D context, potentially reaching some fees or monetary obligations beyond traditional regulatory fees.
There is an important difference between the two contexts, however. “Administration and enforcement” has a much more natural meaning in Chapter 160D. Chapter 160D uses that terminology to describe the regulatory work of processing applications, reviewing development proposals, conducting inspections, issuing permits and approvals, and enforcing development regulations. It also expressly authorizes fees to support those activities. Article 8 has no comparable category of administrative and enforcement fees.
The phrase therefore may operate differently in the two statutory contexts. It may refer principally to regulatory fees under Chapter 160D while necessarily encompassing SDFs under Article 8 because otherwise the express reference to Article 8 would have little apparent application. But the use of the same phrase for both makes it difficult to be definitive about the narrower Chapter 160D reading. There remains an argument that the Chapter 160D category extends to at least some other development-related monetary obligations authorized or governed by that Chapter.
Impact, Facility, and Other Local-Act Fees
The third category consists of impact fees, facility fees, and other fees authorized by local act. Unlike the first two categories, the statutory language does not qualify these fees with the phrase “for the administration and enforcement.”
Cities and counties do not have general authority to impose an impact fee simply because new development creates additional infrastructure or service needs. Where a city or county has specific local-act authority to impose such a fee, the local act determines the scope of that authority and any limitations on calculation, collection, or use.
S.L. 2026-59 includes these fees within the new definition of “fee schedule,” but it does not expand or otherwise alter the underlying local-act authority.
Other Development-Related Charges
The categories above do not include every charge a developer may pay in connection with a development project. And the name of a charge does not determine whether it is covered. Terms such as “connection fee,” “facility fee,” “review fee,” or “fee in lieu” may describe very different charges in different jurisdictions. The key questions are what the charge is for, who is charging it, and the legal authority under which it is imposed. To restate, the law only applies to fees imposed for the administration and enforcement of Chapter 160D, Article 8 of Chapter 162A, and to impact fees, facility fees, and other fees authorized by local act.
What Data and Methodology Must Be Published?
For many cities and counties, publishing the amounts of development fees will not be new. The more significant change is that the published fee schedule also must include the “data and methodologies used to calculate the fee rates.” The statute does not define those terms or specify the level of detail required. It also does not define “fee,” and the new provisions sometimes appear to use that term to refer to a fee or rate established by the local government and elsewhere to the amount ultimately charged to an applicant for a particular project. That leaves some uncertainty about exactly what must be published.
Narrow Interpretation
There is a range of possible interpretations. At the narrowest end, “data and methodologies” could refer only to the information and formula needed to determine the amount an applicant will pay for a particular project. A fee schedule might state, for example, that an application fee is $500 per application or that a subdivision review fee is $500 plus $25 per lot. This reading has some connection to the statute’s broader focus on giving applicants advance information about development costs. It also would provide the information necessary to calculate the charge for a particular application.
There are several reasons, however, to question whether that reading fully captures what the General Assembly intended. First, the statute requires publication of the data and methodologies used to calculate the “fee rates.” That phrasing more naturally refers to how the local government determined the rate itself, rather than merely how an established rate is applied to a particular project.
Second, many local government fee schedules already provide the information necessary to calculate the amount charged to an applicant. They commonly state fees as a fixed amount per application, an amount per lot, an amount per square foot, or another similar formula. If “data and methodologies” meant only that information, the new requirement would add relatively little to what a conventional fee schedule already contains. The statute’s separate reference to the data and methodologies used to calculate fee rates suggests that something more is contemplated.
Third, system development fees are expressly among the fees addressed by the new law, and the existing SDF statutes use “methodology” in a materially different way. An SDF analysis must use one or more authorized methodologies to determine the underlying fee amount. It must identify relevant facts and data, apply the selected methodology to that information, and calculate a maximum fee per service unit. A separate conversion table is then used to determine the fee applicable to particular categories of development. In that statutory scheme, the methodology concerns how the fee rate is developed; applying that rate to a particular development is a separate step.
The SDF statutes do not control the meaning of the new fee-schedule requirement, but they provide useful context for terminology the General Assembly has used in a closely related setting. They make the narrowest interpretation—that “methodology” refers only to the arithmetic for applying an established fee rate to a project—less persuasive.
Broad Interpretation
At the other end of the spectrum, the new requirement could be read very broadly to require publication of all the data, calculations, assumptions, and supporting documentation used to establish each fee rate. For a regulatory fee based on staff costs, that could include individual salary and benefit information, overhead allocations, workload assumptions, estimates of application volume, estimates of staff time, and the calculations and source materials used to derive each of those figures.
There is textual support for a relatively broad reading. The statute expressly refers to the “data” used to calculate fee rates and to the “methodologies used to develop fees and rates,” without expressly limiting the amount of underlying information that must be disclosed.
But the SDF statutes again provide a useful comparison in the other direction. When the General Assembly wanted an SDF analysis to contain detailed supporting documentation, it said so expressly. The SDF provisions require documentation in reasonable detail of the facts and data, assumptions, reasoning, interim calculations, limiting conditions, and other components of the analysis. The new fee-schedule provision contains none of those specifications. It requires disclosure of the data and methodologies used to calculate fee rates, but it does not expressly require publication of a cost study, every underlying record, or every intermediate calculation.
Middle Interpretation
The most plausible interpretation therefore appears to fall between those two ends of the spectrum. On this reading, a local government must disclose enough of the principal data and methodology to explain how the fee rate was derived, rather than merely state the rate and explain how it applies to a project. But it need not necessarily reproduce every source document, assumption, intermediate calculation, or supporting record used in developing the rate.
For example, suppose a city charges a $500 application fee based on an estimate that review requires five hours of staff time at an average fully loaded cost of $100 per hour. Identifying those principal inputs and the calculation (five hours multiplied by $100 per hour) would explain how the $500 fee rate was derived. Whether the published fee schedule also must disclose all the information used to develop the five-hour estimate or every component used to calculate the $100 hourly cost is less clear.
The statute ultimately does not specify exactly where the required disclosure falls along this spectrum. A broader interpretation remains possible because the statute expressly requires disclosure of the “data” used to calculate fee rates and does not expressly limit that term. A narrower interpretation is also plausible, particularly in light of the statute’s broader emphasis on predictability for applicants.
Practical Challenges
Assuming the middle reading, the practical challenge may be greatest for older Chapter 160D fees. A city or county may have an application, permit, or inspection fee that has been carried forward for years without readily available documentation showing how the amount was originally calculated. The new law does not say that the absence of historical documentation automatically invalidates the fee. It does, however, require publication of the data and methodology used to calculate covered fee rates, while the existing requirement that a Chapter 160D regulatory fee be reasonable continues to apply. If the basis for an existing fee cannot be identified, compliance with the new disclosure requirement may require developing a supportable current calculation for the fee and, depending on the result, revisiting the fee amount.
The statute also requires the fee schedule to identify covered fees applicable to each “project category and purpose.” Neither term is defined. The language does not appear to require cities and counties to adopt a new standardized classification system. It does suggest, however, that the schedule should be organized with enough detail for an applicant to determine when a fee applies and what the fee is intended to cover.
Finally, Section 49(c) provides that the new law does not require disclosure of information protected from public disclosure under G.S. 132-1.2. That provision confirms that otherwise-protected information need not be published, but it does not itself define the level of data or methodological detail that must be disclosed.
Adopting and Updating the Fees
G.S. 160D-402.1(a) requires a city or county to update its website within 30 days after “the adoption of any ordinance amending the fees, rates, or methodologies.” This language raises a practical issue about how covered development fees are adopted.
For SDFs, the process is already clear. Cities and counties must adopt the fees, or incorporate them by reference, as part of their utility ordinances. See G.S. 160A-312 (cities); G.S. 153A-275 (counties).
Other development fees are often treated differently. Many cities and counties maintain a consolidated fee schedule and approve it as part of the annual budget process. The fee schedule may be attached to the budget ordinance, incorporated by reference, or approved at the same meeting. But that does not make the individual fees legally part of the budget ordinance. G.S. 159-13 specifies what may be included in a budget ordinance, and individual development fees are not among those items.
The new law does not expressly say that every covered fee must be adopted by ordinance. Its reference to an ordinance “amending the fees, rates, or methodologies,” however, reinforces the importance of using the proper legal vehicle to establish and change these fees. For covered Chapter 160D and local-act development fees, the cleaner approach is to adopt the fees through a separate fee ordinance rather than relying on the budget ordinance. The governing board can adopt both ordinances at the same meeting, and the same fee schedule can be included in the budget materials, but the fee ordinance should constitute the legal action establishing the fees.
There is a related procedural rule for certain subdivision fees. Under G.S. 160D-805, a city or county generally must provide notice and an opportunity for public comment before imposing a new fee, or increasing an existing fee, that applies solely to subdivision development. That additional procedure does not apply if the new or increased fee is included in the proposed budget submitted under G.S. 159-12.
That exception can be confusing because it refers to putting the fee in the proposed budget. It does not mean that the fee may be legally adopted as part of the budget ordinance. The two statutes address different steps. G.S. 160D-805 addresses the notice and public-comment process before adoption; G.S. 159-13 governs what may be included in the budget ordinance itself. A qualifying subdivision fee can therefore be included in the proposed budget for purposes of G.S. 160D-805 and then separately adopted through the fee ordinance.
Finally, whatever adoption process is used, the published fee schedule must remain current. If an ordinance changes a covered fee or rate, or a methodology used to develop a fee or rate, the city or county must update the fee schedule on its official website within 30 days after the ordinance is adopted.
2. Report Annually to the LGC
Each city and county must submit an annual report to the LGC that includes its fee schedule, fee collections, and information about its compliance with G.S. 160D-402.1. The LGC, in turn, must publish and prominently display a statewide report of local governments’ current fee schedules on its website.
The statute leaves much of the reporting process to be worked out. It does not establish a reporting date or period, prescribe a reporting format, or specify how fee collections must be reported, including whether collections must be reported by individual fee, fee category, project category, or in some other manner. Cities and counties will need to follow LGC guidance on these details.
The requirement does have an immediate practical implication. Cities and counties will need records that allow them to identify and report collections from the fees covered by G.S. 160D-402.1. Depending on the reporting format ultimately required by the LGC, that may require changes to how development-fee revenues are coded, tracked, or summarized in the accounting system. Cities and counties should review their current practices now to determine whether covered fee collections can be readily identified rather than waiting until the first annual report is due.
3. Provide a Fee Estimate and Final Fee Statement for Development Approvals
The new law also creates a project-specific process for disclosing fees associated with a development application. Within 10 business days after an applicant submits a completed application, and before issuing the development approval, the city or county must provide the applicant with its current fee schedule and a written fee estimate. When the development approval is issued, the city or county must provide a final fee statement stating the exact fees due.
The details are more complicated. The statute ties these requirements to a “development approval,” uses broader references to “all fees” for the applicant’s “project,” and does not fully explain which fees must be included or how the process applies when a project requires multiple approvals.
What Triggers the Estimate and Final Statement?
The process begins with a completed application for a “development approval.” That is an existing defined term in Chapter 160D. See G.S. 160D-102(13). It generally refers to a written administrative or quasi-judicial approval required before development or a particular development activity may proceed. Examples include zoning permits, site plan approvals, special use permits, variances, certificates of appropriateness, subdivision or plat approvals, development agreements, and building permits.
Legislative decisions are different. Conditional zoning, for example, is a legislative zoning map amendment rather than a development approval. A conditional zoning application fee may belong on the published fee schedule because it is a fee associated with administering Chapter 160D, but the conditional zoning decision itself does not appear to trigger the project-specific estimate and final-statement process.
For an application that does result in a development approval, the statute appears to contemplate a single sequence. Once the completed application is submitted, the city or county has 10 business days to provide the fee schedule and estimate. When the approval is issued, it provides the final fee statement.
A building permit provides a straightforward example. After receiving a completed application, the city or county estimates the applicable permit and review fees and identifies the assumptions used in the calculation. When the permit is issued, it provides a final statement of the exact fees due. The same process can apply to a subdivision approval, site plan approval, special use permit, variance, or other development approval.
How Broad Is the Estimate?
A more difficult question is how much of the development project each estimate must cover. The definition of “fee estimate” refers to “all fees” that may reasonably be assessed in the fee statement for the applicant’s “project.” Read alone, that language could suggest an estimate of all fees that the city or county expects to impose over the course of the entire development project.
Other provisions point toward an approval-by-approval approach. The estimate is triggered by a completed application, must precede a development approval, and is followed by a final fee statement when that approval is issued. The statutory process therefore appears to center on the particular application and approval.
Consider a 50-lot subdivision. The preliminary plat (a development approval) will trigger an estimate of the preliminary plat review fees, followed by a final statement when the preliminary plat is approved. As the development moves through horizontal construction, there will be final plat approval, potentially in phases. This will trigger additional fee estimates and fee statements. Construction of the homes will later require 50 building permits. It is not apparent that the city or county could meaningfully estimate all those future permit fees when the preliminary plat application is submitted.
A reasonable reading is that the estimate covers fees associated with the application and development approval that trigger it, with the process repeating as later applications are submitted. But the statute does not expressly adopt this approval-by-approval approach. Its references to “all fees” and the applicant’s “project” leave room for a broader interpretation.
A project may involve city zoning and subdivision approvals, county building-code enforcement, and water or sewer service from a separate authority. G.S. 160D-402.1 does not appear to require one local government to estimate fees imposed by another. Each city or county should be responsible for the fees it imposes or collects in connection with the relevant application and approval.
Which Fees Belong in the Estimate and Final Statement?
There is a separate ambiguity about which types of fees must be included. The definition of “fee estimate” refers to “all fees” that may reasonably be assessed in the “fee statement.” A “fee statement,” in turn, is defined as an itemized statement of fees applicable to the applicant’s particular project “pursuant to this Chapter”—Chapter 160D.
That language points most directly to Chapter 160D fees associated with the development approval. SDFs and local-act fees are less certain. Even if an SDF imposed by a city or county is included in the published fee schedule, an SDF is imposed pursuant to Article 8 of Chapter 162A, not Chapter 160D. Likewise, a local-act fee derives its authority from the applicable local act. The definition of “fee statement” therefore provides an argument that neither belongs in the estimate or final statement.
Other language points in the opposite direction. G.S. 160D-402.1(c) requires the city or county to provide both the broader fee schedule and the fee estimate after receiving a completed application. More significantly, it prohibits the city or county from requiring payment of “any fees specified in subsection (a)” before providing the estimate. Subsection (a) is the fee-schedule provision and potentially includes Chapter 160D fees, SDFs, and local-act fees.
The statute does not clearly explain how these provisions fit together. Chapter 160D fees tied to the particular development approval are the clearest fees to include in the estimate and final statement. It is less clear whether the city or county also must include any SDFs or local-act fees that may apply to the project.
What Level of Detail Must Be Included in the Estimate?
The estimate must identify the assumptions applied to the category or purpose of the fees to be charged. Those assumptions should identify the project characteristics used to calculate the estimated amount.
For example, if a subdivision fee depends on the number of lots, the estimate should state the number of lots used in the calculation. If a building permit fee depends on square footage, construction value, number of units, or another project characteristic, the estimate should identify that assumption.
Identifying the assumptions is particularly important because a material change to the project requires a revised estimate. The city or county must provide the revised estimate within 10 business days after receiving the updated project information.
The statute does not define “material change.” A practical reading is that a change is material when it affects an applicable fee or an assumption used to calculate it. If an estimate is based on a 40-lot subdivision and the applicant changes the proposal to 60 lots, for example, a revised estimate would likely be required.
Fees Cannot Be Required Before the Estimate
The timing requirement may require a significant change in current practice. A city or county may not require payment of “any fees specified in subsection (a)” before providing the required fee estimate. For local governments that currently collect an application or permit fee when the application is submitted, payment may therefore have to be delayed until after the application is determined to be complete and the estimate is provided.
For a simple permit, the delay may be minimal. Staff may be able to determine completeness, calculate the fee, provide the estimate, and collect payment in quick succession. For a more complicated application, staff may need to review substantial materials before determining that the application is complete and calculating the applicable fees.
This makes the statutory trigger of a “completed application” important. The statute does not define that term. Cities and counties should have a consistent process for determining and documenting when an application is complete because that date starts the 10-business-day period for providing the estimate. The North Carolina Supreme Court has recognized that local governments may establish their own standards for when a permit application is complete. As the court explained, “local governments are empowered to enact their own permitting ordinances, so whether an application has been ‘completed’ or ‘submitted’ will always vary from locality to locality—and even from ordinance to ordinance.” Ashe Cnty. v. Ashe Cnty. Plan. Bd., 387 N.C. 159, 175 (2025). If the local ordinance does not establish a standard, however, the court explained that a “complete application” does not mean a full and final application. Instead, it means an application that the permitting authority has accepted as adequate to begin its compliance review. Id.
The no-payment rule creates an additional question for SDFs. Article 8 already specifies when an SDF may be collected, and the new law does not expressly change those collection points. If an SDF is a fee “specified in subsection (a),” however, G.S. 160D-402.1(c) arguably adds another condition: the city or county must provide the required estimate before requiring payment at the otherwise permissible Article 8 collection point. That issue ultimately depends on how broadly the new law's SDF provisions are interpreted.
The Final Fee Statement and the Cap on Fees
When the development approval is issued, the city or county must provide a written final fee statement stating the exact fees due. The statement is binding on the city or county, and the total generally may not exceed the amount in the most recent estimate.
This gives the estimate real legal effect. If a county estimates $8,000 in fees for a building permit but later determines that the applicable fees should have been $8,700, the statute does not provide an exception simply because the original estimate contained a calculation error. Absent a statutory basis for increasing the amount, the county appears to be limited to the $8,000 estimate.
The new law allows for two exceptions. First, a material change to the project can produce a revised estimate. The final statement is measured against the most recent estimate. If an estimate was based on a 20,000-square-foot building and the applicant later increases it to 25,000 square feet, the city or county may issue the required revised estimate based on the changed project and use that estimate when determining the final amount.
Second, the final fees may exceed the most recent estimate if the governing board adopts a new fee schedule by ordinance. That provision removes the cap created by the earlier estimate; it does not necessarily determine whether a newly adopted fee applies to a particular pending application. Other law, including rules governing vested or other protected development rights, may still determine which fee may lawfully be charged.
Some Situations Remain Unaddressed
The statute does not address every circumstance that may arise after an estimate or approval. Some fees arise only because of later events. A failed inspection, for example, may result in a reinspection fee that could not have been known when the original permit was issued. That is different from a fee that applied to the original approval but was mistakenly omitted from the estimate. The statute does not expressly address how the cap applies to these later-arising fees.
The statute also requires a final fee statement when a development approval is issued on the application. It does not specify a final-statement requirement for an application that is denied or withdrawn.
These unresolved issues reinforce the importance of treating the estimate as part of the particular application and approval process: identify the fees being estimated, state the assumptions used, revise the estimate when the project materially changes, and provide the final statement when the approval is issued.
Timeline of Fee Estimate, Fee Statement, and Fee Collection
The new requirements operate in a sequence tied to the application and approval process:
| Point in the process | What happens |
| Applicant submits a completed application | This starts the 10-day clock for the initial fee estimate. |
| Within 10 days after submission of the completed application | The city or county must provide the applicant with the current fee schedule and a fee estimate. The statute requires this information to be provided before the development approval. |
| City or county provides the fee estimate | The city or county may then require payment of fees identified in the fee schedule. It may not require payment of those fees before providing the estimate. |
| Project materially changes and the applicant provides updated project information | This starts a new 10-day clock for a revised estimate. |
| Within 10 days after receiving the updated project information | The city or county must provide the applicant with a revised fee estimate. |
| Development approval is issued on the application | The city or county must provide the applicant, in writing, a final and binding statement of the exact fees due. The amounts generally cannot exceed those reflected on the latest fee estimate. |
This sequence creates three important timing rules. First, the initial estimate is due within 10 days after submission of a completed application. Second, the city or county may not require payment of covered fees before it provides the estimate. Third, when the development approval is issued, the applicant must receive a final, binding statement stating the exact fees due.
A material change to the project adds another step. Once the applicant provides updated project information reflecting the change, the city or county has 10 days to provide a revised estimate. Because the final fee statement generally may not exceed the most recent estimate, keeping the estimate current as a project changes may be particularly important.
Enforcement
The new law allows an applicant to bring a civil action in superior court in the county where the project is located to compel a city or county to comply with G.S. 160D-402.1. The statute also preserves other remedies available under Article 14 of Chapter 160D.
The express remedy is therefore one to compel compliance with the new requirements. The new provision does not itself establish a separate monetary penalty or damages remedy for a violation.
The new section also does not say whether a fee collected before the required estimate is automatically invalid or refundable. G.S. 160D-106 separately requires refunds, with interest, for certain illegally imposed development taxes, fees, and monetary contributions. Whether collecting an otherwise authorized fee too early under G.S. 160D-402.1 makes it an “illegal fee” under G.S. 160D-106 is not resolved by Section 49.
What Cities and Counties Should Do Now
The new requirements are already in effect. Although several important questions remain unresolved, cities and counties should not wait for additional guidance to begin complying. The following are immediate action items:
- Identify the fees covered by the new law. Review all development-related charges imposed by the city or county and determine which Chapter 160D fees, city- or county-imposed SDFs, and local-act fees belong in the published fee schedules.
- Review how each covered fee was calculated. For each fee, identify the legal authority for the charge and the data and methodology used to establish the rate.
- Prepare and publish the required fee schedules. Make sure the schedules identify the fees by project category and purpose and include the required information about how the fee rates were calculated. The schedule must be prominently displayed on the city’s or county’s official website.
- Review how fees are legally adopted. Do not rely on inclusion in the budget ordinance as the legal action establishing individual development fees. Consider adopting covered Chapter 160D and local-act fees through a separate fee ordinance, even if the fee ordinance and budget ordinance are considered at the same meeting. Continue to follow the separate statutory requirements governing adoption of SDFs.
- Create a process for determining when an application is complete. The submission of a completed application starts the 10-business-day period for providing the fee estimate. Staff should have a consistent way to determine and document when that occurs.
- Change fee-collection procedures where necessary. Review any practice of collecting application, permit, or other covered fees when an application is submitted. The new law prohibits requiring payment of fees identified in the fee schedule before the required estimate has been provided.
- Build the estimate and final-statement requirements into the approval process. For each covered development approval, identify who will prepare the initial estimate, track the 10-business-day deadline, issue a revised estimate after a material project change, and provide the final, binding fee statement when the approval is issued. Because the final amount generally cannot exceed the most recent estimate, the estimate should be treated as more than an informational document.
- Prepare for annual LGC reporting. Make sure the accounting system can identify collections from covered fees. The LGC has not yet specified the reporting format or level of detail, but cities and counties should be able to identify the relevant collections when reporting begins.
- Assign responsibility for keeping the information current. Establish a process for updating the online fee schedule within 30 days after an ordinance changes a covered fee, rate, or methodology and for communicating fee changes to the staff responsible for estimates and final statements.
Implementing these requirements will require coordination across departments. The most useful first step is to map the city’s or county’s existing development fees and current application and collection processes against the new requirements. That exercise should reveal both the changes that can be made immediately and the interpretive questions that require legal judgment.
