Impact fee to pay cost of street project: Ordinance to cumulatively increase fee on automatic basis to adjust for inflation; time at which such increases become effective

1. The governing body of a local government which imposes an impact fee to pay the cost of constructing a street project may include a provision in the ordinance imposing the impact fee or adopt a separate ordinance providing that each year in which the governing body does not adopt any revisions to the land use assumptions or capital improvements plan or otherwise increase the impact fee, the current amount of the impact fee is cumulatively increased: (a) By a percentage equal to the average percentage of increase in the Consumer Price Index for West Urban Consumers for the preceding 5 years; or (b) By 4.5 percent, Ê whichever is less. 2. Upon inclusion of a provision in the ordinance imposing the impact fee or the adoption of a separate ordinance authorized by subsection 1, no further action by the governing body is necessary to effectuate the annual increases. 3. Each increase authorized pursuant to this section becomes effective 1 year after: (a) The date upon which the impact fee initially becomes effective; (b) The date the governing body adopts a revised capital improvements plan; or (c) The effective date of any previous increase in the impact fee pursuant to this section, Ê whichever occurs last.