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Bill Summary · HB 298

HB 298 — Local Governments / System Development Fees (Summary)

Status: Regular Message Sent to Senate
Introduced: August 25, 2025
Primary subject areas: Fees, Infrastructure, Local Government, Utilities (Water & Sewer Systems)

Main purpose

HB 298 amends the timing and payment options for system development fees (SDFs) charged by local governments for new development connecting to water/sewer systems. It creates a discretionary option allowing certain nonresidential projects to pay their SDFs in installments rather than in a single up-front payment.

Key provisions

  • Amends G.S. 162A-213 (Time for collection of system development fees).
  • Adds a new subsection (b1) allowing local governmental units to accept installment payments for SDFs for new nonresidential developments where the calculated increased wastewater (or water) flow rate is between 325 and 2,500 gallons per day (gpd).
  • Installment plan requirements:
    • Interest may accrue on unpaid installments at a rate not greater than the rate established by the Secretary of Revenue under G.S. 105-241.21 on the date of connection.
    • Installment payments must be spread over a period of three years or less.
    • The three-year period is measured from the time of application for a building permit or the time of application for connection to the service/facilities, whichever occurs first.
  • The provision is permissive: a local governmental unit “may” (not must) offer installment payment plans.
  • Effective date: the act becomes effective when enacted and applies to SDFs imposed on or after that date.

Who is affected

  • Nonresidential developers and property owners whose projects generate an increased flow between 325 and 2,500 gpd (e.g., mid‑sized commercial or institutional developments).
  • Local governmental units and municipal/regional water and sewer utilities that establish and collect SDFs.
  • Local permitting and finance departments (administration of installment plans).
  • Potentially lenders, contractors, and purchasers involved in such projects.

Practical and fiscal implications

  • For developers: reduces the up-front capital barrier by spreading SDF costs over up to three years.
  • For local governments/utilities: may require new administrative systems to bill, track interest, enforce delinquencies, and record liens; short-term cash receipts for utility capital projects could be delayed.
  • Interest cap tied to an existing statutory rate limits additional revenue from financing charges.
  • The change is targeted (flow-rate band) and discretionary, so local adoption and impact will vary.

Procedural / timeline notes

  • As introduced, the bill amends an existing statutory collection rule and, if enacted, applies to SDFs imposed on or after the effective date (upon enactment). Local governments choosing to offer installment plans will need to adopt appropriate local procedures or ordinances to implement the option.

Compiled from official sources — confirm details with the bill’s official record.

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