CHAPTER 395. FINANCING CAPITAL IMPROVEMENTS REQUIRED BY NEW DEVELOPMENT IN MUNICIPALITIES, COUNTIES, AND CERTAIN OTHER LOCAL GOVERNMENTS
LOCAL GOVERNMENT CODE
TITLE 12. PLANNING AND DEVELOPMENT
SUBTITLE C. PLANNING AND DEVELOPMENT PROVISIONS APPLYING TO MORE
THAN ONE TYPE OF LOCAL GOVERNMENT
CHAPTER 395. FINANCING CAPITAL IMPROVEMENTS REQUIRED BY NEW
DEVELOPMENT IN MUNICIPALITIES, COUNTIES, AND CERTAIN OTHER LOCAL
GOVERNMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 395.001. DEFINITIONS. In this chapter:
(1) "Capital improvement" means any of the following facilities
that have a life expectancy of three or more years and are owned
and operated by or on behalf of a political subdivision:
(A) water supply, treatment, and distribution facilities;
wastewater collection and treatment facilities; and storm water,
drainage, and flood control facilities; whether or not they are
located within the service area; and
(B) roadway facilities.
(2) "Capital improvements plan" means a plan required by this
chapter that identifies capital improvements or facility
expansions for which impact fees may be assessed.
(3) "Facility expansion" means the expansion of the capacity of
an existing facility that serves the same function as an
otherwise necessary new capital improvement, in order that the
existing facility may serve new development. The term does not
include the repair, maintenance, modernization, or expansion of
an existing facility to better serve existing development.
(4) "Impact fee" means a charge or assessment imposed by a
political subdivision against new development in order to
generate revenue for funding or recouping the costs of capital
improvements or facility expansions necessitated by and
attributable to the new development. The term includes amortized
charges, lump-sum charges, capital recovery fees, contributions
in aid of construction, and any other fee that functions as
described by this definition. The term does not include:
(A) dedication of land for public parks or payment in lieu of
the dedication to serve park needs;
(B) dedication of rights-of-way or easements or construction or
dedication of on-site or off-site water distribution, wastewater
collection or drainage facilities, or streets, sidewalks, or
curbs if the dedication or construction is required by a valid
ordinance and is necessitated by and attributable to the new
development;
(C) lot or acreage fees to be placed in trust funds for the
purpose of reimbursing developers for oversizing or constructing
water or sewer mains or lines; or
(D) other pro rata fees for reimbursement of water or sewer
mains or lines extended by the political subdivision.
However, an item included in the capital improvements plan may
not be required to be constructed except in accordance with
Section 395.019(2), and an owner may not be required to construct
or dedicate facilities and to pay impact fees for those
facilities.
(5) "Land use assumptions" includes a description of the service
area and projections of changes in land uses, densities,
intensities, and population in the service area over at least a
10-year period.
(6) "New development" means the subdivision of land; the
construction, reconstruction, redevelopment, conversion,
structural alteration, relocation, or enlargement of any
structure; or any use or extension of the use of land; any of
which increases the number of service units.
(7) "Political subdivision" means a municipality, a district or
authority created under Article III, Section 52, or Article XVI,
Section 59, of the Texas Constitution, or, for the purposes set
forth by Section 395.079, certain counties described by that
section.
(8) "Roadway facilities" means arterial or collector streets or
roads that have been designated on an officially adopted roadway
plan of the political subdivision, together with all necessary
appurtenances. The term includes the political subdivision's
share of costs for roadways and associated improvements
designated on the federal or Texas highway system, including
local matching funds and costs related to utility line relocation
and the establishment of curbs, gutters, sidewalks, drainage
appurtenances, and rights-of-way.
(9) "Service area" means the area within the corporate
boundaries or extraterritorial jurisdiction, as determined under
Chapter 42, of the political subdivision to be served by the
capital improvements or facilities expansions specified in the
capital improvements plan, except roadway facilities and storm
water, drainage, and flood control facilities. The service area,
for the purposes of this chapter, may include all or part of the
land within the political subdivision or its extraterritorial
jurisdiction, except for roadway facilities and storm water,
drainage, and flood control facilities. For roadway facilities,
the service area is limited to an area within the corporate
boundaries of the political subdivision and shall not exceed six
miles. For storm water, drainage, and flood control facilities,
the service area may include all or part of the land within the
political subdivision or its extraterritorial jurisdiction, but
shall not exceed the area actually served by the storm water,
drainage, and flood control facilities designated in the capital
improvements plan and shall not extend across watershed
boundaries.
(10) "Service unit" means a standardized measure of consumption,
use, generation, or discharge attributable to an individual unit
of development calculated in accordance with generally accepted
engineering or planning standards and based on historical data
and trends applicable to the political subdivision in which the
individual unit of development is located during the previous 10
years.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 1989, 71st Leg., ch. 566, Sec. 1(e), eff.
Aug. 28, 1989; Acts 2001, 77th Leg., ch. 345, Sec. 1, eff. Sept.
1, 2001.
SUBCHAPTER B. AUTHORIZATION OF IMPACT FEE
Sec. 395.011. AUTHORIZATION OF FEE. (a) Unless otherwise
specifically authorized by state law or this chapter, a
governmental entity or political subdivision may not enact or
impose an impact fee.
(b) Political subdivisions may enact or impose impact fees on
land within their corporate boundaries or extraterritorial
jurisdictions only by complying with this chapter, except that
impact fees may not be enacted or imposed in the extraterritorial
jurisdiction for roadway facilities.
(c) A municipality may contract to provide capital improvements,
except roadway facilities, to an area outside its corporate
boundaries and extraterritorial jurisdiction and may charge an
impact fee under the contract, but if an impact fee is charged in
that area, the municipality must comply with this chapter.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.012. ITEMS PAYABLE BY FEE. (a) An impact fee may be
imposed only to pay the costs of constructing capital
improvements or facility expansions, including and limited to
the:
(1) construction contract price;
(2) surveying and engineering fees;
(3) land acquisition costs, including land purchases, court
awards and costs, attorney's fees, and expert witness fees; and
(4) fees actually paid or contracted to be paid to an
independent qualified engineer or financial consultant preparing
or updating the capital improvements plan who is not an employee
of the political subdivision.
(b) Projected interest charges and other finance costs may be
included in determining the amount of impact fees only if the
impact fees are used for the payment of principal and interest on
bonds, notes, or other obligations issued by or on behalf of the
political subdivision to finance the capital improvements or
facility expansions identified in the capital improvements plan
and are not used to reimburse bond funds expended for facilities
that are not identified in the capital improvements plan.
(c) Notwithstanding any other provision of this chapter, the
Edwards Underground Water District or a river authority that is
authorized elsewhere by state law to charge fees that function as
impact fees may use impact fees to pay a staff engineer who
prepares or updates a capital improvements plan under this
chapter.
(d) A municipality may pledge an impact fee as security for the
payment of debt service on a bond, note, or other obligation
issued to finance a capital improvement or public facility
expansion if:
(1) the improvement or expansion is identified in a capital
improvements plan; and
(2) at the time of the pledge, the governing body of the
municipality certifies in a written order, ordinance, or
resolution that none of the impact fee will be used or expended
for an improvement or expansion not identified in the plan.
(e) A certification under Subsection (d)(2) is sufficient
evidence that an impact fee pledged will not be used or expended
for an improvement or expansion that is not identified in the
capital improvements plan.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 1995, 74th Leg., ch. 90, Sec. 1, eff. May
16, 1995.
Sec. 395.013. ITEMS NOT PAYABLE BY FEE. Impact fees may not be
adopted or used to pay for:
(1) construction, acquisition, or expansion of public facilities
or assets other than capital improvements or facility expansions
identified in the capital improvements plan;
(2) repair, operation, or maintenance of existing or new capital
improvements or facility expansions;
(3) upgrading, updating, expanding, or replacing existing
capital improvements to serve existing development in order to
meet stricter safety, efficiency, environmental, or regulatory
standards;
(4) upgrading, updating, expanding, or replacing existing
capital improvements to provide better service to existing
development;
(5) administrative and operating costs of the political
subdivision, except the Edwards Underground Water District or a
river authority that is authorized elsewhere by state law to
charge fees that function as impact fees may use impact fees to
pay its administrative and operating costs;
(6) principal payments and interest or other finance charges on
bonds or other indebtedness, except as allowed by Section
395.012.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.014. CAPITAL IMPROVEMENTS PLAN. (a) The political
subdivision shall use qualified professionals to prepare the
capital improvements plan and to calculate the impact fee. The
capital improvements plan must contain specific enumeration of
the following items:
(1) a description of the existing capital improvements within
the service area and the costs to upgrade, update, improve,
expand, or replace the improvements to meet existing needs and
usage and stricter safety, efficiency, environmental, or
regulatory standards, which shall be prepared by a qualified
professional engineer licensed to perform the professional
engineering services in this state;
(2) an analysis of the total capacity, the level of current
usage, and commitments for usage of capacity of the existing
capital improvements, which shall be prepared by a qualified
professional engineer licensed to perform the professional
engineering services in this state;
(3) a description of all or the parts of the capital
improvements or facility expansions and their costs necessitated
by and attributable to new development in the service area based
on the approved land use assumptions, which shall be prepared by
a qualified professional engineer licensed to perform the
professional engineering services in this state;
(4) a definitive table establishing the specific level or
quantity of use, consumption, generation, or discharge of a
service unit for each category of capital improvements or
facility expansions and an equivalency or conversion table
establishing the ratio of a service unit to various types of land
uses, including residential, commercial, and industrial;
(5) the total number of projected service units necessitated by
and attributable to new development within the service area based
on the approved land use assumptions and calculated in accordance
with generally accepted engineering or planning criteria;
(6) the projected demand for capital improvements or facility
expansions required by new service units projected over a
reasonable period of time, not to exceed 10 years; and
(7) a plan for awarding:
(A) a credit for the portion of ad valorem tax and utility
service revenues generated by new service units during the
program period that is used for the payment of improvements,
including the payment of debt, that are included in the capital
improvements plan; or
(B) in the alternative, a credit equal to 50 percent of the
total projected cost of implementing the capital improvements
plan.
(b) The analysis required by Subsection (a)(3) may be prepared
on a systemwide basis within the service area for each major
category of capital improvement or facility expansion for the
designated service area.
(c) The governing body of the political subdivision is
responsible for supervising the implementation of the capital
improvements plan in a timely manner.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 2, eff.
Sept. 1, 2001.
Sec. 395.015. MAXIMUM FEE PER SERVICE UNIT. (a) The impact fee
per service unit may not exceed the amount determined by
subtracting the amount in Section 395.014(a)(7) from the costs of
the capital improvements described by Section 395.014(a)(3) and
dividing that amount by the total number of projected service
units described by Section 395.014(a)(5).
(b) If the number of new service units projected over a
reasonable period of time is less than the total number of new
service units shown by the approved land use assumptions at full
development of the service area, the maximum impact fee per
service unit shall be calculated by dividing the costs of the
part of the capital improvements necessitated by and attributable
to projected new service units described by Section 395.014(a)(6)
by the projected new service units described in that section.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 3, eff.
Sept. 1, 2001.
Sec. 395.016. TIME FOR ASSESSMENT AND COLLECTION OF FEE. (a)
This subsection applies only to impact fees adopted and land
platted before June 20, 1987. For land that has been platted in
accordance with Subchapter A, Chapter 212, or the subdivision or
platting procedures of a political subdivision before June 20,
1987, or land on which new development occurs or is proposed
without platting, the political subdivision may assess the impact
fees at any time during the development approval and building
process. Except as provided by Section 395.019, the political
subdivision may collect the fees at either the time of
recordation of the subdivision plat or connection to the
political subdivision's water or sewer system or at the time the
political subdivision issues either the building permit or the
certificate of occupancy.
(b) This subsection applies only to impact fees adopted before
June 20, 1987, and land platted after that date. For new
development which is platted in accordance with Subchapter A,
Chapter 212, or the subdivision or platting procedures of a
political subdivision after June 20, 1987, the political
subdivision may assess the impact fees before or at the time of
recordation. Except as provided by Section 395.019, the political
subdivision may collect the fees at either the time of
recordation of the subdivision plat or connection to the
political subdivision's water or sewer system or at the time the
political subdivision issues either the building permit or the
certificate of occupancy.
(c) This subsection applies only to impact fees adopted after
June 20, 1987. For new development which is platted in accordance
with Subchapter A, Chapter 212, or the subdivision or platting
procedures of a political subdivision before the adoption of an
impact fee, an impact fee may not be collected on any service
unit for which a valid building permit is issued within one year
after the date of adoption of the impact fee.
(d) This subsection applies only to land platted in accordance
with Subchapter A, Chapter 212, or the subdivision or platting
procedures of a political subdivision after adoption of an impact
fee adopted after June 20, 1987. The political subdivision shall
assess the impact fees before or at the time of recordation of a
subdivision plat or other plat under Subchapter A, Chapter 212,
or the subdivision or platting ordinance or procedures of any
political subdivision in the official records of the county clerk
of the county in which the tract is located. Except as provided
by Section 395.019, if the political subdivision has water and
wastewater capacity available:
(1) the political subdivision shall collect the fees at the time
the political subdivision issues a building permit;
(2) for land platted outside the corporate boundaries of a
municipality, the municipality shall collect the fees at the time
an application for an individual meter connection to the
municipality's water or wastewater system is filed; or
(3) a political subdivision that lacks authority to issue
building permits in the area where the impact fee applies shall
collect the fees at the time an application is filed for an
individual meter connection to the political subdivision's water
or wastewater system.
(e) For land on which new development occurs or is proposed to
occur without platting, the political subdivision may assess the
impact fees at any time during the development and building
process and may collect the fees at either the time of
recordation of the subdivision plat or connection to the
political subdivision's water or sewer system or at the time the
political subdivision issues either the building permit or the
certificate of occupancy.
(f) An "assessment" means a determination of the amount of the
impact fee in effect on the date or occurrence provided in this
section and is the maximum amount that can be charged per service
unit of such development. No specific act by the political
subdivision is required.
(g) Notwithstanding Subsections (a)-(e) and Section 395.017, the
political subdivision may reduce or waive an impact fee for any
service unit that would qualify as affordable housing under 42
U.S.C. Section 12745, as amended, once the service unit is
constructed. If affordable housing as defined by 42 U.S.C.
Section 12745, as amended, is not constructed, the political
subdivision may reverse its decision to waive or reduce the
impact fee, and the political subdivision may assess an impact
fee at any time during the development approval or building
process or after the building process if an impact fee was not
already assessed.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 1997, 75th Leg., ch. 980, Sec. 52, eff.
Sept. 1, 1997; Acts 2001, 77th Leg., ch. 345, Sec. 4, eff. Sept.
1, 2001.
Sec. 395.017. ADDITIONAL FEE PROHIBITED; EXCEPTION. After
assessment of the impact fees attributable to the new development
or execution of an agreement for payment of impact fees,
additional impact fees or increases in fees may not be assessed
against the tract for any reason unless the number of service
units to be developed on the tract increases. In the event of the
increase in the number of service units, the impact fees to be
imposed are limited to the amount attributable to the additional
service units.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.018. AGREEMENT WITH OWNER REGARDING PAYMENT. A
political subdivision is authorized to enter into an agreement
with the owner of a tract of land for which the plat has been
recorded providing for the time and method of payment of the
impact fees.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.019. COLLECTION OF FEES IF SERVICES NOT AVAILABLE.
Except for roadway facilities, impact fees may be assessed but
may not be collected in areas where services are not currently
available unless:
(1) the collection is made to pay for a capital improvement or
facility expansion that has been identified in the capital
improvements plan and the political subdivision commits to
commence construction within two years, under duly awarded and
executed contracts or commitments of staff time covering
substantially all of the work required to provide service, and to
have the service available within a reasonable period of time
considering the type of capital improvement or facility expansion
to be constructed, but in no event longer than five years;
(2) the political subdivision agrees that the owner of a new
development may construct or finance the capital improvements or
facility expansions and agrees that the costs incurred or funds
advanced will be credited against the impact fees otherwise due
from the new development or agrees to reimburse the owner for
such costs from impact fees paid from other new developments that
will use such capital improvements or facility expansions, which
fees shall be collected and reimbursed to the owner at the time
the other new development records its plat; or
(3) an owner voluntarily requests the political subdivision to
reserve capacity to serve future development, and the political
subdivision and owner enter into a valid written agreement.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.020. ENTITLEMENT TO SERVICES. Any new development for
which an impact fee has been paid is entitled to the permanent
use and benefit of the services for which the fee was exacted and
is entitled to receive immediate service from any existing
facilities with actual capacity to serve the new service units,
subject to compliance with other valid regulations.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.021. AUTHORITY OF POLITICAL SUBDIVISIONS TO SPEND FUNDS
TO REDUCE FEES. Political subdivisions may spend funds from any
lawful source to pay for all or a part of the capital
improvements or facility expansions to reduce the amount of
impact fees.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.022. AUTHORITY OF POLITICAL SUBDIVISION TO PAY FEES.
(a) Political subdivisions and other governmental entities may
pay impact fees imposed under this chapter.
(b) A school district is not required to pay impact fees imposed
under this chapter unless the board of trustees of the district
consents to the payment of the fees by entering a contract with
the political subdivision that imposes the fees. The contract
may contain terms the board of trustees considers advisable to
provide for the payment of the fees.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
250, Sec. 1, eff. May 25, 2007.
Sec. 395.023. CREDITS AGAINST ROADWAY FACILITIES FEES. Any
construction of, contributions to, or dedications of off-site
roadway facilities agreed to or required by a political
subdivision as a condition of development approval shall be
credited against roadway facilities impact fees otherwise due
from the development.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.024. ACCOUNTING FOR FEES AND INTEREST. (a) The order,
ordinance, or resolution levying an impact fee must provide that
all funds collected through the adoption of an impact fee shall
be deposited in interest-bearing accounts clearly identifying the
category of capital improvements or facility expansions within
the service area for which the fee was adopted.
(b) Interest earned on impact fees is considered funds of the
account on which it is earned and is subject to all restrictions
placed on use of impact fees under this chapter.
(c) Impact fee funds may be spent only for the purposes for
which the impact fee was imposed as shown by the capital
improvements plan and as authorized by this chapter.
(d) The records of the accounts into which impact fees are
deposited shall be open for public inspection and copying during
ordinary business hours.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.025. REFUNDS. (a) On the request of an owner of the
property on which an impact fee has been paid, the political
subdivision shall refund the impact fee if existing facilities
are available and service is denied or the political subdivision
has, after collecting the fee when service was not available,
failed to commence construction within two years or service is
not available within a reasonable period considering the type of
capital improvement or facility expansion to be constructed, but
in no event later than five years from the date of payment under
Section 395.019(1).
(b) Repealed by Acts 2001, 77th Leg., ch. 345, Sec. 9, eff.
Sept. 1, 2001.
(c) The political subdivision shall refund any impact fee or
part of it that is not spent as authorized by this chapter within
10 years after the date of payment.
(d) Any refund shall bear interest calculated from the date of
collection to the date of refund at the statutory rate as set
forth in Section 302.002, Finance Code, or its successor statute.
(e) All refunds shall be made to the record owner of the
property at the time the refund is paid. However, if the impact
fees were paid by another political subdivision or governmental
entity, payment shall be made to the political subdivision or
governmental entity.
(f) The owner of the property on which an impact fee has been
paid or another political subdivision or governmental entity that
paid the impact fee has standing to sue for a refund under this
section.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 1997, 75th Leg., ch. 1396, Sec. 37, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 7.82, eff.
Sept. 1, 1999; Acts 2001, 77th Leg., ch. 345, Sec. 9, eff. Sept.
1, 2001.
SUBCHAPTER C. PROCEDURES FOR ADOPTION OF IMPACT FEE
Sec. 395.041. COMPLIANCE WITH PROCEDURES REQUIRED. Except as
otherwise provided by this chapter, a political subdivision must
comply with this subchapter to levy an impact fee.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.0411. CAPITAL IMPROVEMENTS PLAN. The political
subdivision shall provide for a capital improvements plan to be
developed by qualified professionals using generally accepted
engineering and planning practices in accordance with Section
395.014.
Added by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff. Sept. 1,
2001.
Sec. 395.042. HEARING ON LAND USE ASSUMPTIONS AND CAPITAL
IMPROVEMENTS PLAN. To impose an impact fee, a political
subdivision must adopt an order, ordinance, or resolution
establishing a public hearing date to consider the land use
assumptions and capital improvements plan for the designated
service area.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.043. INFORMATION ABOUT LAND USE ASSUMPTIONS AND CAPITAL
IMPROVEMENTS PLAN AVAILABLE TO PUBLIC. On or before the date of
the first publication of the notice of the hearing on the land
use assumptions and capital improvements plan, the political
subdivision shall make available to the public its land use
assumptions, the time period of the projections, and a
description of the capital improvement facilities that may be
proposed.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.044. NOTICE OF HEARING ON LAND USE ASSUMPTIONS AND
CAPITAL IMPROVEMENTS PLAN. (a) Before the 30th day before the
date of the hearing on the land use assumptions and capital
improvements plan, the political subdivision shall send a notice
of the hearing by certified mail to any person who has given
written notice by certified or registered mail to the municipal
secretary or other designated official of the political
subdivision requesting notice of the hearing within two years
preceding the date of adoption of the order, ordinance, or
resolution setting the public hearing.
(b) The political subdivision shall publish notice of the
hearing before the 30th day before the date set for the hearing,
in one or more newspapers of general circulation in each county
in which the political subdivision lies. However, a river
authority that is authorized elsewhere by state law to charge
fees that function as impact fees may publish the required
newspaper notice only in each county in which the service area
lies.
(c) The notice must contain:
(1) a headline to read as follows:
"NOTICE OF PUBLIC HEARING ON LAND USE ASSUMPTIONS AND CAPITAL
IMPROVEMENTS PLAN RELATING TO POSSIBLE ADOPTION OF IMPACT FEES"
(2) the time, date, and location of the hearing;
(3) a statement that the purpose of the hearing is to consider
the land use assumptions and capital improvements plan under
which an impact fee may be imposed; and
(4) a statement that any member of the public has the right to
appear at the hearing and present evidence for or against the
land use assumptions and capital improvements plan.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.045. APPROVAL OF LAND USE ASSUMPTIONS AND CAPITAL
IMPROVEMENTS PLAN REQUIRED. (a) After the public hearing on the
land use assumptions and capital improvements plan, the political
subdivision shall determine whether to adopt or reject an
ordinance, order, or resolution approving the land use
assumptions and capital improvements plan.
(b) The political subdivision, within 30 days after the date of
the public hearing, shall approve or disapprove the land use
assumptions and capital improvements plan.
(c) An ordinance, order, or resolution approving the land use
assumptions and capital improvements plan may not be adopted as
an emergency measure.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.0455. SYSTEMWIDE LAND USE ASSUMPTIONS. (a) In lieu of
adopting land use assumptions for each service area, a political
subdivision may, except for storm water, drainage, flood control,
and roadway facilities, adopt systemwide land use assumptions,
which cover all of the area subject to the jurisdiction of the
political subdivision for the purpose of imposing impact fees
under this chapter.
(b) Prior to adopting systemwide land use assumptions, a
political subdivision shall follow the public notice, hearing,
and other requirements for adopting land use assumptions.
(c) After adoption of systemwide land use assumptions, a
political subdivision is not required to adopt additional land
use assumptions for a service area for water supply, treatment,
and distribution facilities or wastewater collection and
treatment facilities as a prerequisite to the adoption of a
capital improvements plan or impact fee, provided the capital
improvements plan and impact fee are consistent with the
systemwide land use assumptions.
Added by Acts 1989, 71st Leg., ch. 566, Sec. 1(b), eff. Aug. 28,
1989.
Sec. 395.047. HEARING ON IMPACT FEE. On adoption of the land
use assumptions and capital improvements plan, the governing body
shall adopt an order or resolution setting a public hearing to
discuss the imposition of the impact fee. The public hearing must
be held by the governing body of the political subdivision to
discuss the proposed ordinance, order, or resolution imposing an
impact fee.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.049. NOTICE OF HEARING ON IMPACT FEE. (a) Before the
30th day before the date of the hearing on the imposition of an
impact fee, the political subdivision shall send a notice of the
hearing by certified mail to any person who has given written
notice by certified or registered mail to the municipal secretary
or other designated official of the political subdivision
requesting notice of the hearing within two years preceding the
date of adoption of the order or resolution setting the public
hearing.
(b) The political subdivision shall publish notice of the
hearing before the 30th day before the date set for the hearing,
in one or more newspapers of general circulation in each county
in which the political subdivision lies. However, a river
authority that is authorized elsewhere by state law to charge
fees that function as impact fees may publish the required
newspaper notice only in each county in which the service area
lies.
(c) The notice must contain the following:
(1) a headline to read as follows:
"NOTICE OF PUBLIC HEARING ON ADOPTION OF IMPACT FEES"
(2) the time, date, and location of the hearing;
(3) a statement that the purpose of the hearing is to consider
the adoption of an impact fee;
(4) the amount of the proposed impact fee per service unit; and
(5) a statement that any member of the public has the right to
appear at the hearing and present evidence for or against the
plan and proposed fee.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.050. ADVISORY COMMITTEE COMMENTS ON IMPACT FEES. The
advisory committee created under Section 395.058 shall file its
written comments on the proposed impact fees before the fifth
business day before the date of the public hearing on the
imposition of the fees.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.051. APPROVAL OF IMPACT FEE REQUIRED. (a) The
political subdivision, within 30 days after the date of the
public hearing on the imposition of an impact fee, shall approve
or disapprove the imposition of an impact fee.
(b) An ordinance, order, or resolution approving the imposition
of an impact fee may not be adopted as an emergency measure.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 2001.
Sec. 395.052. PERIODIC UPDATE OF LAND USE ASSUMPTIONS AND
CAPITAL IMPROVEMENTS PLAN REQUIRED. (a) A political subdivision
imposing an impact fee shall update the land use assumptions and
capital improvements plan at least every five years. The initial
five-year period begins on the day the capital improvements plan
is adopted.
(b) The political subdivision shall review and evaluate its
current land use assumptions and shall cause an update of the
capital improvements plan to be prepared in accordance with
Subchapter B.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 6, eff.
Sept. 1, 2001.
Sec. 395.053. HEARING ON UPDATED LAND USE ASSUMPTIONS AND
CAPITAL IMPROVEMENTS PLAN. The governing body of the political
subdivision shall, within 60 days after the date it receives the
update of the land use assumptions and the capital improvements
plan, adopt an order setting a public hearing to discuss and
review the update and shall determine whether to amend the plan.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.054. HEARING ON AMENDMENTS TO LAND USE ASSUMPTIONS,
CAPITAL IMPROVEMENTS PLAN, OR IMPACT FEE. A public hearing must
be held by the governing body of the political subdivision to
discuss the proposed ordinance, order, or resolution amending
land use assumptions, the capital improvements plan, or the
impact fee. On or before the date of the first publication of the
notice of the hearing on the amendments, the land use assumptions
and the capital improvements plan, including the amount of any
proposed amended impact fee per service unit, shall be made
available to the public.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.055. NOTICE OF HEARING ON AMENDMENTS TO LAND USE
ASSUMPTIONS, CAPITAL IMPROVEMENTS PLAN, OR IMPACT FEE. (a) The
notice and hearing procedures prescribed by Sections 395.044(a)
and (b) apply to a hearing on the amendment of land use
assumptions, a capital improvements plan, or an impact fee.
(b) The notice of a hearing under this section must contain the
following:
(1) a headline to read as follows:
"NOTICE OF PUBLIC HEARING ON AMENDMENT OF IMPACT FEES"
(2) the time, date, and location of the hearing;
(3) a statement that the purpose of the hearing is to consider
the amendment of land use assumptions and a capital improvements
plan and the imposition of an impact fee; and
(4) a statement that any member of the public has the right to
appear at the hearing and present evidence for or against the
update.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 345, Sec. 7, eff.
Sept. 1, 2001.
Sec. 395.056. ADVISORY COMMITTEE COMMENTS ON AMENDMENTS. The
advisory committee created under Section 395.058 shall file its
written comments on the proposed amendments to the land use
assumptions, capital improvements plan, and impact fee before the
fifth business day before the date of the public hearing on the
amendments.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.057. APPROVAL OF AMENDMENTS REQUIRED. (a) The
political subdivision, within 30 days after the date of the
public hearing on the amendments, shall approve or disapprove the
amendments of the land use assumptions and the capital
improvements plan and modification of an impact fee.
(b) An ordinance, order, or resolution approving the amendments
to the land use assumptions, the capital improvements plan, and
imposition of an impact fee may not be adopted as an emergency
measure.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.0575. DETERMINATION THAT NO UPDATE OF LAND USE
ASSUMPTIONS, CAPITAL IMPROVEMENTS PLAN OR IMPACT FEES IS NEEDED.
(a) If, at the time an update under Section 395.052 is required,
the governing body determines that no change to the land use
assumptions, capital improvements plan, or impact fee is needed,
it may, as an alternative to the updating requirements of
Sections 395.052-395.057, do the following:
(1) The governing body of the political subdivision shall, upon
determining that an update is unnecessary and 60 days before
publishing the final notice under this section, send notice of
its determination not to update the land use assumptions, capital
improvements plan, and impact fee by certified mail to any person
who has, within two years preceding the date that the final
notice of this matter is to be published, give written notice by
certified or registered mail to the municipal secretary or other
designated official of the political subdivision requesting
notice of hearings related to impact fees. The notice must
contain the information in Subsections (b)(2)-(5).
(2) The political subdivision shall publish notice of its
determination once a week for three consecutive weeks in one or
more newspapers with general circulation in each county in which
the political subdivision lies. However, a river authority that
is authorized elsewhere by state law to charge fees that function
as impact fees may publish the required newspaper notice only in
each county in which the service area lies. The notice of public
hearing may not be in the part of the paper in which legal
notices and classified ads appear and may not be smaller than
one-quarter page of a standard-size or tabloid-size newspaper,
and the headline on the notice must be in 18-point or larger
type.
(b) The notice must contain the following:
(1) a headline to read as follows:
"NOTICE OF DETERMINATION NOT TO UPDATE
LAND USE ASSUMPTIONS, CAPITAL IMPROVEMENTS
PLAN, OR IMPACT FEES";
(2) a statement that the governing body of the political
subdivision has determined that no change to the land use
assumptions, capital improvements plan, or impact fee is
necessary;
(3) an easily understandable description and a map of the
service area in which the updating has been determined to be
unnecessary;
(4) a statement that if, within a specified date, which date
shall be at least 60 days after publication of the first notice,
a person makes a written request to the designated official of
the political subdivision requesting that the land use
assumptions, capital improvements plan, or impact fee be updated,
the governing body must comply with the request by following the
requirements of Sections 395.052-395.057; and
(5) a statement identifying the name and mailing address of the
official of the political subdivision to whom a request for an
update should be sent.
(c) The advisory committee shall file its written comments on
the need for updating the land use assumptions, capital
improvements plans, and impact fee before the fifth business day
before the earliest notice of the government's decision that no
update is necessary is mailed or published.
(d) If, by the date specified in Subsection (b)(4), a person
requests in writing that the land use assumptions, capital
improvements plan, or impact fee be updated, the governing body
shall cause an update of the land use assumptions and capital
improvements plan to be prepared in accordance with Sections
395.052-395.057.
(e) An ordinance, order, or resolution determining the need for
updating land use assumptions, a capital improvements plan, or an
impact fee may not be adopted as an emergency measure.
Added by Acts 1989, 71st Leg., ch. 566, Sec. 1(d), eff. Aug. 28,
1989.
Sec. 395.058. ADVISORY COMMITTEE. (a) On or before the date on
which the order, ordinance, or resolution is adopted under
Section 395.042, the political subdivision shall appoint a
capital improvements advisory committee.
(b) The advisory committee is composed of not less than five
members who shall be appointed by a majority vote of the
governing body of the political subdivision. Not less than 40
percent of the membership of the advisory committee must be
representatives of the real estate, development, or building
industries who are not employees or officials of a political
subdivision or governmental entity. If the political subdivision
has a planning and zoning commission, the commission may act as
the advisory committee if the commission includes at least one
representative of the real estate, development, or building
industry who is not an employee or official of a political
subdivision or governmental entity. If no such representative is
a member of the planning and zoning commission, the commission
may still act as the advisory committee if at least one such
representative is appointed by the political subdivision as an ad
hoc voting member of the planning and zoning commission when it
acts as the advisory committee. If the impact fee is to be
applied in the extraterritorial jurisdiction of the political
subdivision, the membership must include a representative from
that area.
(c) The advisory committee serves in an advisory capacity and is
established to:
(1) advise and assist the political subdivision in adopting land
use assumptions;
(2) review the capital improvements plan and file written
comments;
(3) monitor and evaluate implementation of the capital
improvements plan;
(4) file semiannual reports with respect to the progress of the
capital improvements plan and report to the political subdivision
any perceived inequities in implementing the plan or imposing the
impact fee; and
(5) advise the political subdivision of the need to update or
revise the land use assumptions, capital improvements plan, and
impact fee.
(d) The political subdivision shall make available to the
advisory committee any professional reports with respect to
developing and implementing the capital improvements plan.
(e) The governing body of the political subdivision shall adopt
procedural rules for the advisory committee to follow in carrying
out its duties.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
SUBCHAPTER D. OTHER PROVISIONS
Sec. 395.071. DUTIES TO BE PERFORMED WITHIN TIME LIMITS. If the
governing body of the political subdivision does not perform a
duty imposed under this chapter within the prescribed period, a
person who has paid an impact fee or an owner of land on which an
impact fee has been paid has the right to present a written
request to the governing body of the political subdivision
stating the nature of the unperformed duty and requesting that it
be performed within 60 days after the date of the request. If the
governing body of the political subdivision finds that the duty
is required under this chapter and is late in being performed, it
shall cause the duty to commence within 60 days after the date of
the request and continue until completion.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.072. RECORDS OF HEARINGS. A record must be made of any
public hearing provided for by this chapter. The record shall be
maintained and be made available for public inspection by the
political subdivision for at least 10 years after the date of the
hearing.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.073. CUMULATIVE EFFECT OF STATE AND LOCAL RESTRICTIONS.
Any state or local restrictions that apply to the imposition of
an impact fee in a political subdivision where an impact fee is
proposed are cumulative with the restrictions in this chapter.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.074. PRIOR IMPACT FEES REPLACED BY FEES UNDER THIS
CHAPTER. An impact fee that is in place on June 20, 1987, must
be replaced by an impact fee made under this chapter on or before
June 20, 1990. However, any political subdivision having an
impact fee that has not been replaced under this chapter on or
before June 20, 1988, is liable to any party who, after June 20,
1988, pays an impact fee that exceeds the maximum permitted under
Subchapter B by more than 10 percent for an amount equal to two
times the difference between the maximum impact fee allowed and
the actual impact fee imposed, plus reasonable attorney's fees
and court costs.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.075. NO EFFECT ON TAXES OR OTHER CHARGES. This chapter
does not prohibit, affect, or regulate any tax, fee, charge, or
assessment specifically authorized by state law.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.076. MORATORIUM ON DEVELOPMENT PROHIBITED. A
moratorium may not be placed on new development for the purpose
of awaiting the completion of all or any part of the process
necessary to develop, adopt, or update land use assumptions, a
capital improvements plan, or an impact fee.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 441, Sec. 2, eff.
Sept. 1, 2001.
Sec. 395.077. APPEALS. (a) A person who has exhausted all
administrative remedies within the political subdivision and who
is aggrieved by a final decision is entitled to trial de novo
under this chapter.
(b) A suit to contest an impact fee must be filed within 90 days
after the date of adoption of the ordinance, order, or resolution
establishing the impact fee.
(c) Except for roadway facilities, a person who has paid an
impact fee or an owner of property on which an impact fee has
been paid is entitled to specific performance of the services by
the political subdivision for which the fee was paid.
(d) This section does not require construction of a specific
facility to provide the services.
(e) Any suit must be filed in the county in which the major part
of the land area of the political subdivision is located. A
successful litigant shall be entitled to recover reasonable
attorney's fees and court costs.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.078. SUBSTANTIAL COMPLIANCE WITH NOTICE REQUIREMENTS.
An impact fee may not be held invalid because the public notice
requirements were not complied with if compliance was substantial
and in good faith.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989.
Sec. 395.079. IMPACT FEE FOR STORM WATER, DRAINAGE, AND FLOOD
CONTROL IN POPULOUS COUNTY. (a) Any county that has a
population of 3.3 million or more or that borders a county with a
population of 3.3 million or more, and any district or authority
created under Article XVI, Section 59, of the Texas Constitution
within any such county that is authorized to provide storm water,
drainage, and flood control facilities, is authorized to impose
impact fees to provide storm water, drainage, and flood control
improvements necessary to accommodate new development.
(b) The imposition of impact fees authorized by Subsection (a)
is exempt from the requirements of Sections 395.025,
395.052-395.057, and 395.074 unless the political subdivision
proposes to increase the impact fee.
(c) Any political subdivision described by Subsection (a) is
authorized to pledge or otherwise contractually obligate all or
part of the impact fees to the payment of principal and interest
on bonds, notes, or other obligations issued or incurred by or on
behalf of the political subdivision and to the payment of any
other contractual obligations.
(d) An impact fee adopted by a political subdivision under
Subsection (a) may not be reduced if:
(1) the political subdivision has pledged or otherwise
contractually obligated all or part of the impact fees to the
payment of principal and interest on bonds, notes, or other
obligations issued by or on behalf of the political subdivision;
and
(2) the political subdivision agrees in the pledge or contract
not to reduce the impact fees during the term of the bonds,
notes, or other contractual obligations.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 2001, 77th Leg., ch. 669, Sec. 107, eff.
Sept. 1, 2001.
Sec. 395.080. CHAPTER NOT APPLICABLE TO CERTAIN WATER-RELATED
SPECIAL DISTRICTS. (a) This chapter does not apply to impact
fees, charges, fees, assessments, or contributions:
(1) paid by or charged to a district created under Article XVI,
Section 59, of the Texas Constitution to another district created
under that constitutional provision if both districts are
required by law to obtain approval of their bonds by the Texas
Natural Resource Conservation Commission; or
(2) charged by an entity if the impact fees, charges, fees,
assessments, or contributions are approved by the Texas Natural
Resource Conservation Commission.
(b) Any district created under Article XVI, Section 59, or
Article III, Section 52, of the Texas Constitution may petition
the Texas Natural Resource Conservation Commission for approval
of any proposed impact fees, charges, fees, assessments, or
contributions. The commission shall adopt rules for reviewing the
petition and may charge the petitioner fees adequate to cover the
cost of processing and considering the petition. The rules shall
require notice substantially the same as that required by this
chapter for the adoption of impact fees and shall afford
opportunity for all affected parties to participate.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 82(a), eff. Aug. 28,
1989. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 11.257, eff.
Sept. 1, 1995.
Sec. 395.081. FEES FOR ADJOINING LANDOWNERS IN CERTAIN
MUNICIPALITIES. (a) This section applies only to a municipality
with a population of 105,000 or less that constitutes more than
three-fourths of the population of the county in which the
majority of the area of the municipality is located.
(b) A municipality that has not adopted an impact fee under this
chapter that is constructing a capital improvement, including
sewer or waterline or drainage or roadway facilities, from the
municipality to a development located within or outside the
municipality's boundaries, in its discretion, may allow a
landowner whose land adjoins the capital improvement or is within
a specified distance from the capital improvement, as determined
by the governing body of the municipality, to connect to the
capital improvement if:
(1) the governing body of the municipality has adopted a finding
under Subsection (c); and
(2) the landowner agrees to pay a proportional share of the cost
of the capital improvement as determined by the governing body of
the municipality and agreed to by the landowner.
(c) Before a municipality may allow a landowner to connect to a
capital improvement under Subsection (b), the municipality shall
adopt a finding that the municipality will benefit from allowing
the landowner to connect to the capital improvement. The finding
shall describe the benefit to be received by the municipality.
(d) A determination of the governing body of a municipality, or
its officers or employees, under this section is a discretionary
function of the municipality and the municipality and its
officers or employees are not liable for a determination made
under this section.
Added by Acts 1997, 75th Leg., ch. 1150, Sec. 1, eff. June 19,
1997.
Sec. 395.082. CERTIFICATION OF COMPLIANCE REQUIRED. (a) A
political subdivision that imposes an impact fee shall submit a
written certification verifying compliance with this chapter to
the attorney general each year not later than the last day of the
political subdivision's fiscal year.
(b) The certification must be signed by the presiding officer of
the governing body of a political subdivision and include a
statement that reads substantially similar to the following:
"This statement certifies compliance with Chapter 395, Local
Government Code."
(c) A political subdivision that fails to submit a certification
as required by this section is liable to the state for a civil
penalty in an amount equal to 10 percent of the amount of the
impact fees erroneously charged. The attorney general shall
collect the civil penalty and deposit the amount collected to the
credit of the housing trust fund.
Added by Acts 2001, 77th Leg., ch. 345, Sec. 8, eff. Sept. 1,
2001.