Valley County Code (VCC) specifies the Donnelly Impact area regulations as follows, and as such, the city hereby incorporates these stipulations to be a part of this title:

VCC Section 7-3-1: PURPOSE AND INTENT: The purpose for establishing this area of impact is to identify a logical urban fringe area adjoining the city of Donnelly, Idaho. The governing bodies of the city of Donnelly and Valley County recognize the importance of planning for future growth in the area of impact and understand that the delivery of most public services is, or will be, associated with the city of Donnelly. The area of impact is comprised of land that may reasonably be expected to be annexed into the city of Donnelly in the next five years and meets the criteria in IC 67-6526. The urban fringe area is experiencing growth and development pressures that must be managed in order to provide for planned, orderly, and efficient growth. Furthermore, it is the intent of this agreement to:

VCC Section 7-3-2: GEOGRAPHIC AREA OF IMPACT: The officially adopted and agreed upon area of impact boundary is established by Valley County and is set forth on the map titled "City Of Donnelly Impact Area". The Donnelly impact area is defined as that unincorporated landmass which lies contiguous to the city of Donnelly, Idaho, having as its closest boundary to the city, the limits of said city, as they now exist or as they may be altered by future annexation of land to the city of Donnelly, and having as its outermost boundary a defined line positioned and described in exhibit A.

VCC Section 7-3-3: CHANGES IN AREA OF IMPACT OUTERMOST BOUNDARIES: In the event the city of Donnelly or Valley County desires to alter the outermost boundaries of the city impact area, or to change the jurisdiction over said area, it shall do so in accordance with Idaho Code 67-6526.

VCC Section 7-2-4: JURISDICTION AND DEVELOPMENT REVIEW: All matters beyond the city limits of Donnelly within the area of impact concerning zoning and subdivisions shall be under the guidance of the Valley County planning and zoning commission with the Valley County board of commissioners having final permitting authority. Notice of all developments shall be submitted to the city of Donnelly for review and comment. Valley County shall take into consideration all comments in relationship to the future land use map so long as responses are received in a timely manner.

VCC Section 7-3-5: APPLICATION FOR ANNEXATION REQUIREMENT: When property located within the Donnelly impact area is contiguous to the city of Donnelly and the owner or their agent desires to change the principal land use, the owner must first apply for annexation into the city. A property owner may not purposefully circumvent this requirement by creating a strip of undeveloped land, as determined by the Administrator of Valley County. If the annexation is denied, then the owner may proceed with an application to Valley County in accordance with this agreement.

VCC Section 7-3-6: COMPREHENSIVE PLAN: The Valley County comprehensive plan and subsequent amendments thereto as officially adopted by Valley County shall apply within the Donnelly impact area as set forth in Idaho Code title 67, chapter 65. A specific section describing the uses envisioned in the impact area will be included in the plan and depicted on an attached future land use map.

VCC Section 7-3-7: ZONING: The Valley County land use and development ordinance and subsequent amendments thereto as officially adopted by Valley County shall apply within the Donnelly impact area as set forth in Idaho Code title 67, chapter 65. All permits within the impact area including, but not necessarily limited to, zone changes, variances, records of survey, conditional use permits, special use permits, and planned unit developments, shall be reviewed by the Valley County Planning and Zoning Commission with final approval authority resting with the Valley County Board of Commissioners.

VCC Section 7-3-8: SUBDIVISION: The Valley County subdivision ordinance and subsequent amendments thereto as officially adopted by Valley County shall apply within the Donnelly impact area as set forth in Idaho Code title 67, chapter 65. Valley County shall modify their subdivision regulations to accommodate different standards in accordance with the city of Donnelly upon request and review.

VCC Section 7-3-9: JOINT REVIEW AND TIME LINES FOR ACTION:

VCC Section 7-3-10: PUBLIC IMPROVEMENT STANDARDS: All public improvements within the city of Donnelly impact area should be designed and constructed according to the city standards for future annexation consideration when appropriate. Valley County should consider adopting city of Donnelly public improvement standards for use within the impact area if changes or annexation are requested. City of Donnelly water and sewer service may be available subject to city of Donnelly service extension policies and city code requirements being met. All costs associated with upgrading or extending main lines and/or connecting to city services will be paid by the landowner or developers according to the city code and fee schedule.

VCC Section 7-3-11: BUILDING CODES, PERMIT REQUIREMENTS: All building code administration within the Donnelly impact area will be conducted by Valley County outside of the present city limits.

VCC Section 7-3-12: APPROACH PERMITS: Approach permits, when required, shall be obtained from the Valley County road department or the Idaho transportation department prior to construction of project improvements. Permit requirements must be completed prior to recordation of a final plat or final occupancy of a structure.

VCC Section 7-3-13: FLOODPLAIN ORDINANCE: The floodplain ordinance adopted by Valley County shall apply within the Donnelly impact area and shall be administered by Valley County.

VCC Section 7-3-14: PUBLIC STREET MAINTENANCE: Maintenance of public streets within the Donnelly impact area shall be the responsibility of Valley County unless otherwise stipulated by written agreement between the county and city.

VCC Section 7-3-15: AMENDMENTS: This agreement shall not be amended, supplanted or repealed except pursuant to the Idaho Code 67-6526.