1-1 AN ACT
1-2 relating to financing capital improvements and facility expansions
1-3 through the assessment of impact fees.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 395.001(4), (8), (9), and (10), Local
1-6 Government Code, are amended to read as follows:
1-7 (4) "Impact fee" means a charge or assessment imposed
1-8 by a political subdivision against new development in order to
1-9 generate revenue for funding or recouping the costs of capital
1-10 improvements or facility expansions necessitated by and
1-11 attributable to the new development. The term includes amortized
1-12 charges, lump-sum charges, capital recovery fees, contributions in
1-13 aid of construction, and any other fee that functions as described
1-14 by this definition. The term does not include:
1-15 (A) dedication of land for public parks or
1-16 payment in lieu of the dedication to serve park needs;
1-17 (B) dedication of rights-of-way or easements or
1-18 construction or dedication of on-site or off-site water
1-19 distribution, wastewater collection or drainage facilities, or
1-20 streets, sidewalks, or curbs if the dedication or construction is
1-21 required by a valid ordinance and is necessitated by and
1-22 attributable to the new development; [or]
1-23 (C) lot or acreage fees to be placed in trust
1-24 funds for the purpose of reimbursing developers for oversizing or
2-1 constructing water or sewer mains or lines; or
2-2 (D) other pro rata fees for reimbursement of
2-3 water or sewer mains or lines extended by the political
2-4 subdivision.
2-5 However, an item included in the capital improvements plan
2-6 may not be required to be constructed except in accordance with
2-7 Section 395.019(2), and an owner may not be required to construct
2-8 or dedicate facilities and to pay impact fees for those facilities.
2-9 (8) "Roadway facilities" means arterial or collector
2-10 streets or roads that have been designated on an officially adopted
2-11 roadway plan of the political subdivision, together with all
2-12 necessary appurtenances. The term includes the political
2-13 subdivision's share of costs for [does not include any] roadways
2-14 and [or] associated improvements designated on the federal or Texas
2-15 highway system, including local matching funds and costs related to
2-16 utility line relocation and the establishment of curbs, gutters,
2-17 sidewalks, drainage appurtenances, and rights-of-way.
2-18 (9) "Service area" means the area within the corporate
2-19 boundaries or extraterritorial jurisdiction, as determined under
2-20 Chapter 42, of the political subdivision to be served by the
2-21 capital improvements or facilities expansions specified in the
2-22 capital improvements plan, except roadway facilities and storm
2-23 water, drainage, and flood control facilities. The service area,
2-24 for the purposes of this chapter, may include all or part of the
2-25 land within the political subdivision or its extraterritorial
2-26 jurisdiction, except for roadway facilities and storm water,
2-27 drainage, and flood control facilities. For roadway facilities,
3-1 the service area is limited to an area within the corporate
3-2 boundaries of the political subdivision and shall not exceed six [a
3-3 distance equal to the average trip length from the new development,
3-4 but in no event more than three] miles[, which service area shall
3-5 be served by the roadway facilities designated in the capital
3-6 improvements plan]. For storm water, drainage, and flood control
3-7 facilities, the service area may include all or part of the land
3-8 within the political subdivision or its extraterritorial
3-9 jurisdiction, but shall not exceed the area actually served by the
3-10 storm water, drainage, and flood control facilities designated in
3-11 the capital improvements plan and shall not extend across watershed
3-12 boundaries.
3-13 (10) "Service unit" means a standardized measure of
3-14 consumption, use, generation, or discharge attributable to an
3-15 individual unit of development calculated in accordance with
3-16 generally accepted engineering or planning standards and based on
3-17 historical data and trends applicable to the political subdivision
3-18 in which the individual unit of development is located during the
3-19 previous 10 years [for a particular category of capital
3-20 improvements or facility expansions].
3-21 SECTION 2. Section 395.014(a), Local Government Code, is
3-22 amended to read as follows:
3-23 (a) The political subdivision shall use qualified
3-24 professionals to prepare the capital improvements plan and to
3-25 calculate the impact fee. The capital improvements plan must
3-26 contain specific enumeration of the following items:
3-27 (1) a description of the existing capital improvements
4-1 within the service area and the costs to upgrade, update, improve,
4-2 expand, or replace the improvements to meet existing needs and
4-3 usage and stricter safety, efficiency, environmental, or regulatory
4-4 standards, which shall be prepared by a qualified professional
4-5 engineer licensed to perform the professional engineering services
4-6 in this state;
4-7 (2) an analysis of the total capacity, the level of
4-8 current usage, and commitments for usage of capacity of the
4-9 existing capital improvements, which shall be prepared by a
4-10 qualified professional engineer licensed to perform the
4-11 professional engineering services in this state;
4-12 (3) a description of all or the parts of the capital
4-13 improvements or facility expansions and their costs necessitated by
4-14 and attributable to new development in the service area based on
4-15 the approved land use assumptions, which shall be prepared by a
4-16 qualified professional engineer licensed to perform the
4-17 professional engineering services in this state;
4-18 (4) a definitive table establishing the specific level
4-19 or quantity of use, consumption, generation, or discharge of a
4-20 service unit for each category of capital improvements or facility
4-21 expansions and an equivalency or conversion table establishing the
4-22 ratio of a service unit to various types of land uses, including
4-23 residential, commercial, and industrial;
4-24 (5) the total number of projected service units
4-25 necessitated by and attributable to new development within the
4-26 service area based on the approved land use assumptions and
4-27 calculated in accordance with generally accepted engineering or
5-1 planning criteria; [and]
5-2 (6) the projected demand for capital improvements or
5-3 facility expansions required by new service units projected over a
5-4 reasonable period of time, not to exceed 10 years;
5-5 (7) a credit for the portion of ad valorem tax and
5-6 utility service revenues generated by new service units during the
5-7 10-year program period that are used for the payment for capital
5-8 improvements, including the payment of debt, that are included or
5-9 could be included in the capital improvement plan; or
5-10 (8) a credit equal to 50 percent of the total cost of
5-11 the capital improvements included in the capital improvement plan.
5-12 SECTION 3. Section 395.015(a), Local Government Code, is
5-13 amended to read as follows:
5-14 (a) The impact fee per service unit may not exceed the
5-15 amount determined by subtracting the amount in Section
5-16 395.014(a)(7) or (8), whichever is greater, from [dividing] the
5-17 costs of the capital improvements described by Section
5-18 395.014(a)(3) and dividing that amount by the total number of
5-19 projected service units described by Section 395.014(a)(5).
5-20 SECTION 4. Section 395.016(d), Local Government Code, is
5-21 amended to read as follows:
5-22 (d) This subsection applies only to land platted in
5-23 accordance with Subchapter A, Chapter 212, or the subdivision or
5-24 platting procedures of a political subdivision after adoption of an
5-25 impact fee adopted after June 20, 1987. The political subdivision
5-26 shall assess the impact fees before or at the time of recordation
5-27 of a subdivision plat or other plat under Subchapter A, Chapter
6-1 212, or the subdivision or platting ordinance or procedures of any
6-2 political subdivision in the official records of the county clerk
6-3 of the county in which the tract is located. Except as provided by
6-4 Section 395.019, if water and wastewater capacity is available, the
6-5 political subdivision may collect the fees [at either the time of
6-6 recordation of the subdivision plat or connection to the political
6-7 subdivision's water or sewer system or] at the time the political
6-8 subdivision issues a [either the] building permit [or the
6-9 certificate of occupancy].
6-10 SECTION 5. Subchapter C, Chapter 395, Local Government Code,
6-11 is amended by adding Section 395.0411 and amending Sections
6-12 395.042-395.045, 395.047, and 395.049-395.051 to read as follows:
6-13 Sec. 395.0411. CAPITAL IMPROVEMENTS PLAN. The political
6-14 subdivision shall provide for a capital improvements plan to be
6-15 developed by qualified professionals using generally accepted
6-16 engineering and planning practices in accordance with Section
6-17 395.014.
6-18 Sec. 395.042. Hearing on Land Use Assumptions AND CAPITAL
6-19 IMPROVEMENTS PLAN. To impose an impact fee, a political
6-20 subdivision must adopt an order, ordinance, or resolution
6-21 establishing a public hearing date to consider the land use
6-22 assumptions and capital improvements plan for [within] the
6-23 designated service area [that will be used to develop the capital
6-24 improvements plan].
6-25 Sec. 395.043. INFORMATION ABOUT LAND USE ASSUMPTIONS AND
6-26 CAPITAL IMPROVEMENTS PLAN AVAILABLE TO PUBLIC. On or before the
6-27 date of the first publication of the notice of the hearing on the
7-1 land use assumptions and capital improvements plan, the political
7-2 subdivision shall make available to the public its land use
7-3 assumptions, the time period of the projections, and a description
7-4 of [the general nature of] the capital improvement facilities that
7-5 may be proposed.
7-6 Sec. 395.044. Notice of Hearing on Land Use Assumptions AND
7-7 CAPITAL IMPROVEMENTS PLAN. (a) Before the 30th day before the
7-8 date of the hearing on the land use assumptions and capital
7-9 improvements plan, the political subdivision shall send a notice of
7-10 the hearing by certified mail to any person who has given written
7-11 notice by certified or registered mail to the municipal secretary
7-12 or other designated official of the political subdivision
7-13 requesting notice of the hearing within two years preceding the
7-14 date of adoption of the order, ordinance, or resolution setting the
7-15 public hearing.
7-16 (b) The political subdivision shall publish notice of the
7-17 hearing [once a week for three consecutive weeks, the first notice
7-18 to appear] before the 30th day [but on or after the 60th day]
7-19 before the date set for the hearing, in one or more newspapers of
7-20 general circulation in each county in which the political
7-21 subdivision lies. However, a river authority that is authorized
7-22 elsewhere by state law to charge fees that function as impact fees
7-23 may publish the required newspaper notice only in each county in
7-24 which the service area lies. [The notice of public hearing may not
7-25 be in the part of the paper in which legal notices and classified
7-26 ads appear and may not be smaller than one-quarter page of a
7-27 standard-size or tabloid-size newspaper, and the headline on the
8-1 notice must be in 18-point or larger type.]
8-2 (c) The notice must contain:
8-3 (1) a headline to read as follows:
8-4 "NOTICE OF PUBLIC HEARING ON LAND USE
8-5 ASSUMPTIONS AND CAPITAL IMPROVEMENTS PLAN RELATING
8-6 TO POSSIBLE ADOPTION OF IMPACT FEES"
8-7 (2) the time, date, and location of the hearing;
8-8 (3) a statement that the purpose of the hearing is to
8-9 consider the land use assumptions and [that will be used to develop
8-10 a] capital improvements plan under which an impact fee may be
8-11 imposed; and
8-12 (4) [an easily understandable map of the service area
8-13 to which the land use assumptions apply; and]
8-14 [(5)] a statement that any member of the public has
8-15 the right to appear at the hearing and present evidence for or
8-16 against the land use assumptions and capital improvements plan.
8-17 Sec. 395.045. Approval of Land Use Assumptions AND CAPITAL
8-18 IMPROVEMENTS PLAN REQUIRED. (a) After the public hearing on the
8-19 land use assumptions and capital improvements plan, the political
8-20 subdivision shall determine whether to adopt or reject an
8-21 ordinance, order, or resolution approving the land use assumptions
8-22 and capital improvements plan.
8-23 (b) The political subdivision, within 30 days after the date
8-24 of the public hearing, shall approve or disapprove the land use
8-25 assumptions and capital improvements plan.
8-26 (c) An ordinance, order, or resolution approving the land
8-27 use assumptions and capital improvements plan may not be adopted as
9-1 an emergency measure.
9-2 Sec. 395.047. HEARING ON [CAPITAL IMPROVEMENTS PLAN AND]
9-3 IMPACT FEE. On adoption of the land use assumptions and
9-4 [completion of the] capital improvements plan, the governing body
9-5 shall adopt an order or resolution setting a public hearing to
9-6 discuss the [adoption of the plan and] imposition of the impact
9-7 fee. The public hearing must be held by the governing body of the
9-8 political subdivision to discuss the proposed ordinance, order, or
9-9 resolution [adopting a capital improvements plan and] imposing an
9-10 impact fee.
9-11 Sec. 395.049. NOTICE OF HEARING ON [CAPITAL IMPROVEMENTS
9-12 PLAN AND] IMPACT FEE. (a) Before the 30th day before the date of
9-13 the hearing on the imposition of an [capital improvements plan and]
9-14 impact fee, the political subdivision shall send a notice of the
9-15 hearing by certified mail to any person who has given written
9-16 notice by certified or registered mail to the municipal secretary
9-17 or other designated official of the political subdivision
9-18 requesting notice of the hearing within two years preceding the
9-19 date of adoption of the order or resolution setting the public
9-20 hearing.
9-21 (b) The political subdivision shall publish notice of the
9-22 hearing [once a week for three consecutive weeks, the first notice
9-23 to appear] before the 30th day [but on or after the 60th day]
9-24 before the date set for the hearing, in one or more newspapers of
9-25 general circulation in each county in which the political
9-26 subdivision lies. However, a river authority that is authorized
9-27 elsewhere by state law to charge fees that function as impact fees
10-1 may publish the required newspaper notice only in each county in
10-2 which the service area lies. [The notice of public hearing may not
10-3 be in the part of the paper in which legal notices and classified
10-4 ads appear and may not be smaller than one-quarter page of a
10-5 standard-size or tabloid-size newspaper, and the headline on the
10-6 notice must be in 18-point or larger type.]
10-7 (c) The notice must contain the following:
10-8 (1) a headline to read as follows:
10-9 "NOTICE OF PUBLIC HEARING ON ADOPTION OF IMPACT FEES"
10-10 (2) the time, date, and location of the hearing;
10-11 (3) a statement that the purpose of the hearing is to
10-12 consider the adoption of an impact fee;
10-13 (4) [an easily understandable map of the service area
10-14 on which the proposed fee will be levied;]
10-15 [(5)] the amount of the proposed impact fee per
10-16 service unit; and
10-17 (5) [(6)] a statement that any member of the public
10-18 has the right to appear at the hearing and present evidence for or
10-19 against the plan and proposed fee.
10-20 Sec. 395.050. ADVISORY COMMITTEE COMMENTS ON [CAPITAL
10-21 IMPROVEMENTS PLAN AND] IMPACT FEES. The advisory committee created
10-22 under Section 395.058 shall file its written comments on the
10-23 proposed [capital improvements plan and] impact fees before the
10-24 fifth business day before the date of the public hearing on the
10-25 imposition of the [plan and] fees.
10-26 Sec. 395.051. APPROVAL OF [CAPITAL IMPROVEMENTS PLAN AND]
10-27 IMPACT FEE REQUIRED. (a) The political subdivision, within 30
11-1 days after the date of the public hearing on the imposition of an
11-2 [capital improvements plan and] impact fee, shall approve or
11-3 disapprove the [adoption of the capital improvements plan and]
11-4 imposition of an impact fee.
11-5 (b) An ordinance, order, or resolution approving the
11-6 [capital improvements plan and] imposition of an impact fee may not
11-7 be adopted as an emergency measure.
11-8 SECTION 6. Section 395.052(a), Local Government Code, is
11-9 amended to read as follows:
11-10 (a) A political subdivision imposing an impact fee shall
11-11 update the land use assumptions and capital improvements plan at
11-12 least every five [three] years. The initial five-year [three-year]
11-13 period begins on the day the capital improvements plan is adopted.
11-14 SECTION 7. Subchapter D, Chapter 395, Local Government Code,
11-15 is amended by adding Section 395.082 to read as follows:
11-16 Sec. 395.082. CERTIFICATION OF COMPLIANCE REQUIRED. (a) A
11-17 political subdivision that imposes an impact fee shall submit a
11-18 written certification verifying compliance with this chapter to the
11-19 attorney general each year not later than the last day of the
11-20 political subdivision's fiscal year.
11-21 (b) The certification must be signed by the presiding
11-22 officer of the governing body of a political subdivision and
11-23 include a statement that reads substantially similar to the
11-24 following: "This statement certifies compliance with Chapter 395,
11-25 Local Government Code."
11-26 (c) A political subdivision that fails to submit a
11-27 certification as required by this section is liable to the state
12-1 for a civil penalty in an amount equal to 10 percent of the amount
12-2 of the impact fees erroneously charged. The attorney general shall
12-3 collect the civil penalty and deposit the amount collected to the
12-4 credit of the housing trust fund.
12-5 SECTION 8. Sections 395.025(b), 395.046, 395.048, and
12-6 395.0515, Local Government Code, are repealed.
12-7 SECTION 9. This Act takes effect September 1, 1999.
12-8 SECTION 10. The importance of this legislation and the
12-9 crowded condition of the calendars in both houses create an
12-10 emergency and an imperative public necessity that the
12-11 constitutional rule requiring bills to be read on three several
12-12 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2045 was passed by the House on May
13, 1999, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 2045 on May 26, 1999, by a non-record
vote; and that the House adopted H.C.R. No. 310 authorizing certain
corrections in H.B. No. 2045 on May 28, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2045 was passed by the Senate, with
amendments, on May 21, 1999, by the following vote: Yeas 26, Nays
4; and that the Senate adopted H.C.R. No. 310 authorizing certain
corrections in H.B. No. 2045 on May 28, 1999, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor