CHAPTER 395. FINANCING CAPITAL IMPROVEMENTS REQUIRED BY NEW DEVELOPMENT IN MUNICIPALITIES, COUNTIES, AND CERTAIN OTHER LOCAL GOVERNMENTS

State Codes and Statutes

Statutes > Texas > Local-government-code > Title-12-planning-and-development > Chapter-395-financing-capital-improvements-required-by-new-development-in-municipalities-counties-an

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;

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.

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.

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.

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.

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.

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.

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.

(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.

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.

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.

(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.

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.

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.

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.

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.

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."

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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

Loading..

Loading, Please Wait!