(1) The establishment of permit fees shall be left to the city, county, or town. A list of current permit fees must be submitted to the department when the fees are first established or subsequently amended.

(2) Permit fees must only be used for those costs related to building code enforcement activities, except for the building codes education fund as provided in 50-60-116, MCA, with building codes being only those codes adopted by the department in subchapters 1, 3, 4, and 15 of ARM Title 24, chapter 301. It is not intended that permit fees be used to support fire departments, planning, zoning, or other activities, except to the extent that employees in those programs provide direct plan review, inspection, or other building code enforcement services for the city, county, or town's building code enforcement programs. Permit fees shall not be used to support the inspection of existing buildings for maintenance or for abatement of dangerous buildings.

(3) Costs related to building code enforcement activities include:

(a) those necessary and reasonable costs directly related and specifically identifiable to the enforcement of codes adopted by the city, county, or town as provided by 50-60-302, MCA; and

(b) a proportionate share of the city, county, or town's indirect costs, which are those costs incurred for common or joint purposes that benefit more than one program or activity. Indirect costs shall be treated as provided by 50-60-106(2)(g)(i), MCA.

(4) The cities, counties, and towns must maintain a system and adequate records to:

(a) document that permit fees are only used for those costs related to building code enforcement activities, as defined in (2) and (3) above;

(b) document the amount by which revenues from permit fees differs from the costs related to building code enforcement activities each year;

(c) document the amount maintained as a reserve and the percentage of the costs of building code enforcement activities that the reserve represents;

(d) document that any reserve is utilized only for the cost of building code enforcement activities; and

(e) document that permit fees were reduced as required in (5) in the event the reserve exceeds the maximum reserve allowed in (5).

(5) Permit fees collected in a given year in excess of the costs of administering city, county, or town building code enforcement programs shall be placed in reserve to be used in subsequent years, provided that the reserve amount does not exceed the amount needed to support the building code enforcement programs for 12 months. Fees must be reduced if necessary to avoid creation of excess reserve.