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Colorado Revised Statutes Title 29. Government Local § 29-35-405. Accessory dwelling unit fee reduction and encouragement grant program--created--application--criteria--awards--fund--reporting requirements--rules--definitions--repeal

Current as of January 01, 2025 | Updated by Findlaw Staff

<This section effective until December 31, 2030.>

(1) The accessory dwelling unit fee reduction and encouragement grant program is created in the department to provide grants to accessory dwelling unit supportive jurisdictions for activities that promote the construction of accessory dwelling units, including but not limited to, offsetting costs incurred in connection with developing pre-approved accessory dwelling unit plans, providing technical assistance to persons converting or constructing accessory dwelling units, or waiving, reducing, or providing financial assistance for accessory dwelling unit associated fees and other required costs.

(2) Grant recipients may use the money received through the grant program to offset both eligible costs and the cost of waiving, reducing, or providing financial assistance for reasonable and necessary accessory dwelling unit fees and other required costs for:

(a) Low- and moderate-income households;

(b) Affordable accessory dwelling units;

(c) Accessible or visitable accessory dwelling units;

(d) Accessory dwelling units used as long-term rentals for members of the local workforce; or

(e) Accessory dwelling units used to support other demonstrated housing needs in the community.

(3) The department shall administer the grant program and, subject to available appropriations, provide technical assistance, develop a toolkit to support local governments in encouraging accessory dwelling unit construction, receive grant applications and award grants as provided in this section.

(4) To receive a grant, an accessory dwelling unit supportive jurisdiction must submit an application to the department in accordance with the policies and procedures developed by the department pursuant to subsection (9) of this section. At a minimum, the application must include the following:

(a) A copy of the certificate issued by the department pursuant to section 29-35-104 certifying that the local government is an accessory dwelling unit supportive jurisdiction;

(b) The number of accessory dwelling units that the local government has permitted and when the local government permitted those accessory dwelling units;

(c) The type and costs of fees and other eligible costs that the local government is proposing to use a grant award to pay for;

(d) The number of accessory dwelling units that the local government expects to support with a grant award and the period for which the local government intends to support those accessory dwelling units; and

(e) Information about the types of households and accessory dwelling units that the local government intends to support with a grant award, such as whether the local government intends to support low- and moderate-income households, affordable accessory dwelling units, accessible or visitable accessory dwelling units, accessory dwelling units for housing the local workforce, or accessory dwelling units supporting other demonstrated housing needs in the community.

(5) The department shall review the applications received pursuant to subsection (4) of this section. In awarding grants, the department shall give priority to local governments that:

(a) Impose accessory dwelling unit fees and costs that are reasonable and necessary;

(b) Have demonstrated a significant commitment to further construction and conversion of accessory dwelling units through the adoption of strategies described in section 29-35-104(1)(a)(II); and

(c) Provide offsets for, or waive a greater number of accessory dwelling unit fees for:

(I) Low- and moderate-income households; or

(II) Accessory dwelling units that are rented to low- and moderate-income households.

(6) In awarding a grant, the department shall award a local government an amount equal to no more than fifteen thousand dollars per accessory dwelling unit permitted by the local government, to be reimbursed based on the number of permitted accessory dwelling units.

(7)(a) The accessory dwelling unit fee reduction and encouragement grant program fund is created in the state treasury. The fund consists of any money that the general assembly may transfer or appropriate to the fund and gifts, grants, or donations credited to the fund. The state treasurer shall credit all interest and income derived from the deposit and investment of money in the fund to the fund.

(b) Subject to annual appropriation by the general assembly, the department may expend money from the fund for the purpose of implementing and administering the grant program.

(c) On or before June 30, 2024, the state treasurer shall transfer five million dollars from the general fund to the fund.

(8) In accordance with the policies and procedures developed by the department pursuant to subsection (9) of this section, each local government that receives a grant through the grant program shall submit a report to the department. At a minimum, the report must include the following information:

(a) The number of accessory dwelling units with accessory dwelling unit fees or costs that local governments waived, reduced, or provided financial assistance for in the past year;

(b) The total amount of eligible costs that local governments incurred and were reimbursed for through the grant program in the past year in connection with the grant program;

(c) The number of the accessory dwelling units described in subsection (8)(a) of this section that were built in the past year that were built by low- and moderate-income households, that are affordable accessory dwelling units, and that are visitable or accessible accessory dwelling units;

(d) The number of accessory dwelling units that are factory-built residential structures, as defined in section 24-32-3302(10); and

(e) The number of accessory dwelling unit permits awarded, denied, or in progress in the local government's jurisdiction.

(9) The department shall implement the grant program in accordance with this section. The department shall develop, in consultation with the department of transportation, the Colorado energy office, and the Colorado office of economic development, policies and procedures both as required in this section and as may be necessary to implement the grant program.

(10) As used in this section, unless the context otherwise requires:

(a) “Accessory dwelling unit fee” means a reasonable and necessary fee collected or required by a local government in connection with the construction or conversion of an accessory dwelling unit. Such a fee may include impact fees.

(b)(I) “Eligible costs” means costs incurred by a local government and determined by the department to be incurred in connection with developing pre-approved accessory dwelling unit plans, providing technical assistance to persons converting or constructing accessory dwelling units, or other reasonable and necessary fees levied by or costs borne by the local government for the construction or conversion of an accessory dwelling unit.

(II) Notwithstanding subsection (10)(b)(I) of this section, in order for costs incurred by a local government in connection with developing pre-approved accessory dwelling unit plans to qualify as eligible costs, at least one such pre-approved accessory dwelling unit plan must be for an accessible or visitable accessory dwelling unit.

(c) “Fund” means the accessory dwelling unit fee reduction and encouragement grant program fund created in subsection (7) of this section.

(d) “Grant program” means the accessory dwelling unit fee reduction and encouragement grant program created in this section.

(11) This section is repealed, effective December 31, 2030.

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Cite this article: FindLaw.com - Colorado Revised Statutes Title 29. Government Local § 29-35-405. Accessory dwelling unit fee reduction and encouragement grant program--created--application--criteria--awards--fund--reporting requirements--rules--definitions--repeal - last updated January 01, 2025 | https://codes.findlaw.com/co/title-29-government-local/co-rev-st-sect-29-35-405/

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