1-1 AN ACT
1-2 relating to financing capital improvements and facility expansions
1-3 through the assessment of impact fees; providing a civil penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subdivisions (4), (8), (9), and (10), Section
1-6 395.001, Local 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
1-25 constructing water or sewer mains or lines; or
2-1 (D) other pro rata fees for reimbursement of
2-2 water or sewer mains or lines extended by the political
2-3 subdivision.
2-4 However, an item included in the capital improvements plan
2-5 may not be required to be constructed except in accordance with
2-6 Section 395.019(2), and an owner may not be required to construct
2-7 or dedicate facilities and to pay impact fees for those facilities.
2-8 (8) "Roadway facilities" means arterial or collector
2-9 streets or roads that have been designated on an officially adopted
2-10 roadway plan of the political subdivision, together with all
2-11 necessary appurtenances. The term includes the political
2-12 subdivision's share of costs for [does not include any] roadways
2-13 and [or] associated improvements designated on the federal or Texas
2-14 highway system, including local matching funds and costs related to
2-15 utility line relocation and the establishment of curbs, gutters,
2-16 sidewalks, drainage appurtenances, and rights-of-way.
2-17 (9) "Service area" means the area within the corporate
2-18 boundaries or extraterritorial jurisdiction, as determined under
2-19 Chapter 42, of the political subdivision to be served by the
2-20 capital improvements or facilities expansions specified in the
2-21 capital improvements plan, except roadway facilities and storm
2-22 water, drainage, and flood control facilities. The service area,
2-23 for the purposes of this chapter, may include all or part of the
2-24 land within the political subdivision or its extraterritorial
2-25 jurisdiction, except for roadway facilities and storm water,
2-26 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. Subsection (a), Section 395.014, Local Government
3-22 Code, is 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:
4-1 (1) a description of the existing capital improvements
4-2 within the service area and the costs to upgrade, update, improve,
4-3 expand, or replace the improvements to meet existing needs and
4-4 usage and stricter safety, efficiency, environmental, or regulatory
4-5 standards, which shall be prepared by a qualified professional
4-6 engineer licensed to perform the professional engineering services
4-7 in this state;
4-8 (2) an analysis of the total capacity, the level of
4-9 current usage, and commitments for usage of capacity of the
4-10 existing capital improvements, which shall be prepared by a
4-11 qualified professional engineer licensed to perform the
4-12 professional engineering services in this state;
4-13 (3) a description of all or the parts of the capital
4-14 improvements or facility expansions and their costs necessitated by
4-15 and attributable to new development in the service area based on
4-16 the approved land use assumptions, which shall be prepared by a
4-17 qualified professional engineer licensed to perform the
4-18 professional engineering services in this state;
4-19 (4) a definitive table establishing the specific level
4-20 or quantity of use, consumption, generation, or discharge of a
4-21 service unit for each category of capital improvements or facility
4-22 expansions and an equivalency or conversion table establishing the
4-23 ratio of a service unit to various types of land uses, including
4-24 residential, commercial, and industrial;
4-25 (5) the total number of projected service units
4-26 necessitated by and attributable to new development within the
5-1 service area based on the approved land use assumptions and
5-2 calculated in accordance with generally accepted engineering or
5-3 planning criteria; [and]
5-4 (6) the projected demand for capital improvements or
5-5 facility expansions required by new service units projected over a
5-6 reasonable period of time, not to exceed 10 years; and
5-7 (7) a plan for awarding:
5-8 (A) a credit for the portion of ad valorem tax
5-9 and utility service revenues generated by new service units during
5-10 the program period that is used for the payment of improvements,
5-11 including the payment of debt, that are included in the capital
5-12 improvements plan; or
5-13 (B) in the alternative, a credit equal to 50
5-14 percent of the total projected cost of implementing the capital
5-15 improvements plan.
5-16 SECTION 3. Subsection (a), Section 395.015, Local Government
5-17 Code, is amended to read as follows:
5-18 (a) The impact fee per service unit may not exceed the
5-19 amount determined by subtracting the amount in Section
5-20 395.014(a)(7) from [dividing] the costs of the capital improvements
5-21 described by Section 395.014(a)(3) and dividing that amount by the
5-22 total number of projected service units described by Section
5-23 395.014(a)(5).
5-24 SECTION 4. Subsection (d), Section 395.016, Local Government
5-25 Code, is amended to read as follows:
5-26 (d) This subsection applies only to land platted in
6-1 accordance with Subchapter A, Chapter 212, or the subdivision or
6-2 platting procedures of a political subdivision after adoption of an
6-3 impact fee adopted after June 20, 1987. The political subdivision
6-4 shall assess the impact fees before or at the time of recordation
6-5 of a subdivision plat or other plat under Subchapter A, Chapter
6-6 212, or the subdivision or platting ordinance or procedures of any
6-7 political subdivision in the official records of the county clerk
6-8 of the county in which the tract is located. Except as provided by
6-9 Section 395.019, if the political subdivision has water and
6-10 wastewater capacity available:
6-11 (1) the political subdivision shall [may] collect the
6-12 fees [at either the time of recordation of the subdivision plat or
6-13 connection to the political subdivision's water or sewer system or]
6-14 at the time the political subdivision issues a [either the]
6-15 building permit;
6-16 (2) for land platted outside the corporate
6-17 boundaries of a municipality, the municipality shall collect
6-18 the fees at the time an application for an individual meter
6-19 connection to the municipality's water or wastewater system is
6-20 filed; or
6-21 (3) a political subdivision that lacks authority to
6-22 issue building permits in the area where the impact fee applies
6-23 shall collect the fees at the time an application is filed for an
6-24 individual meter connection to the political subdivision's water or
6-25 wastewater system [the certificate of occupancy].
6-26 SECTION 5. Subchapter C, Chapter 395, Local Government Code,
7-1 is amended by adding Section 395.0411 and amending Sections 395.042
7-2 through 395.045, 395.047, 395.049, 395.050, and 395.051 to read as
7-3 follows:
7-4 Sec. 395.0411. CAPITAL IMPROVEMENTS PLAN. The political
7-5 subdivision shall provide for a capital improvements plan to be
7-6 developed by qualified professionals using generally accepted
7-7 engineering and planning practices in accordance with Section
7-8 395.014.
7-9 Sec. 395.042. Hearing on Land Use Assumptions AND CAPITAL
7-10 IMPROVEMENTS PLAN. To impose an impact fee, a political
7-11 subdivision must adopt an order, ordinance, or resolution
7-12 establishing a public hearing date to consider the land use
7-13 assumptions and capital improvements plan for [within] the
7-14 designated service area [that will be used to develop the capital
7-15 improvements plan].
7-16 Sec. 395.043. INFORMATION ABOUT LAND USE ASSUMPTIONS AND
7-17 CAPITAL IMPROVEMENTS PLAN AVAILABLE TO PUBLIC. On or before the
7-18 date of the first publication of the notice of the hearing on the
7-19 land use assumptions and capital improvements plan, the political
7-20 subdivision shall make available to the public its land use
7-21 assumptions, the time period of the projections, and a description
7-22 of [the general nature of] the capital improvement facilities that
7-23 may be proposed.
7-24 Sec. 395.044. Notice of Hearing on Land Use Assumptions AND
7-25 CAPITAL IMPROVEMENTS PLAN. (a) Before the 30th day before the
7-26 date of the hearing on the land use assumptions and capital
8-1 improvements plan, the political subdivision shall send a notice of
8-2 the hearing by certified mail to any person who has given written
8-3 notice by certified or registered mail to the municipal secretary
8-4 or other designated official of the political subdivision
8-5 requesting notice of the hearing within two years preceding the
8-6 date of adoption of the order, ordinance, or resolution setting the
8-7 public hearing.
8-8 (b) The political subdivision shall publish notice of the
8-9 hearing [once a week for three consecutive weeks, the first notice
8-10 to appear] before the 30th day [but on or after the 60th day]
8-11 before the date set for the hearing, in one or more newspapers of
8-12 general circulation in each county in which the political
8-13 subdivision lies. However, a river authority that is authorized
8-14 elsewhere by state law to charge fees that function as impact fees
8-15 may publish the required newspaper notice only in each county in
8-16 which the service area lies. [The notice of public hearing may not
8-17 be in the part of the paper in which legal notices and classified
8-18 ads appear and may not be smaller than one-quarter page of a
8-19 standard-size or tabloid-size newspaper, and the headline on the
8-20 notice must be in 18-point or larger type.]
8-21 (c) The notice must contain:
8-22 (1) a headline to read as follows:
8-23 "NOTICE OF PUBLIC HEARING ON LAND USE
8-24 ASSUMPTIONS AND CAPITAL IMPROVEMENTS PLAN RELATING
8-25 TO POSSIBLE ADOPTION OF IMPACT FEES"
8-26 (2) the time, date, and location of the hearing;
9-1 (3) a statement that the purpose of the hearing is to
9-2 consider the land use assumptions and [that will be used to develop
9-3 a] capital improvements plan under which an impact fee may be
9-4 imposed; and
9-5 (4) [an easily understandable map of the service area
9-6 to which the land use assumptions apply; and]
9-7 [(5)] a statement that any member of the public has
9-8 the right to appear at the hearing and present evidence for or
9-9 against the land use assumptions and capital improvements plan.
9-10 Sec. 395.045. Approval of Land Use Assumptions AND CAPITAL
9-11 IMPROVEMENTS PLAN REQUIRED. (a) After the public hearing on the
9-12 land use assumptions and capital improvements plan, the political
9-13 subdivision shall determine whether to adopt or reject an
9-14 ordinance, order, or resolution approving the land use assumptions
9-15 and capital improvements plan.
9-16 (b) The political subdivision, within 30 days after the date
9-17 of the public hearing, shall approve or disapprove the land use
9-18 assumptions and capital improvements plan.
9-19 (c) An ordinance, order, or resolution approving the land
9-20 use assumptions and capital improvements plan may not be adopted as
9-21 an emergency measure.
9-22 Sec. 395.047. HEARING ON [CAPITAL IMPROVEMENTS PLAN AND]
9-23 IMPACT FEE. On adoption of the land use assumptions and
9-24 [completion of the] capital improvements plan, the governing body
9-25 shall adopt an order or resolution setting a public hearing to
9-26 discuss the [adoption of the plan and] imposition of the impact
10-1 fee. The public hearing must be held by the governing body of the
10-2 political subdivision to discuss the proposed ordinance, order, or
10-3 resolution [adopting a capital improvements plan and] imposing an
10-4 impact fee.
10-5 Sec. 395.049. NOTICE OF HEARING ON [CAPITAL IMPROVEMENTS
10-6 PLAN AND] IMPACT FEE. (a) Before the 30th day before the date of
10-7 the hearing on the imposition of an [capital improvements plan and]
10-8 impact fee, the political subdivision shall send a notice of the
10-9 hearing by certified mail to any person who has given written
10-10 notice by certified or registered mail to the municipal secretary
10-11 or other designated official of the political subdivision
10-12 requesting notice of the hearing within two years preceding the
10-13 date of adoption of the order or resolution setting the public
10-14 hearing.
10-15 (b) The political subdivision shall publish notice of the
10-16 hearing [once a week for three consecutive weeks, the first notice
10-17 to appear] before the 30th day [but on or after the 60th day]
10-18 before the date set for the hearing, in one or more newspapers of
10-19 general circulation in each county in which the political
10-20 subdivision lies. However, a river authority that is authorized
10-21 elsewhere by state law to charge fees that function as impact fees
10-22 may publish the required newspaper notice only in each county in
10-23 which the service area lies. [The notice of public hearing may not
10-24 be in the part of the paper in which legal notices and classified
10-25 ads appear and may not be smaller than one-quarter page of a
10-26 standard-size or tabloid-size newspaper, and the headline on the
11-1 notice must be in 18-point or larger type.]
11-2 (c) The notice must contain the following:
11-3 (1) a headline to read as follows:
11-4 "NOTICE OF PUBLIC HEARING ON ADOPTION OF IMPACT FEES"
11-5 (2) the time, date, and location of the hearing;
11-6 (3) a statement that the purpose of the hearing is to
11-7 consider the adoption of an impact fee;
11-8 (4) [an easily understandable map of the service area
11-9 on which the proposed fee will be levied;]
11-10 [(5)] the amount of the proposed impact fee per
11-11 service unit; and
11-12 (5) [(6)] a statement that any member of the public
11-13 has the right to appear at the hearing and present evidence for or
11-14 against the plan and proposed fee.
11-15 Sec. 395.050. ADVISORY COMMITTEE COMMENTS ON [CAPITAL
11-16 IMPROVEMENTS PLAN AND] IMPACT FEES. The advisory committee created
11-17 under Section 395.058 shall file its written comments on the
11-18 proposed [capital improvements plan and] impact fees before the
11-19 fifth business day before the date of the public hearing on the
11-20 imposition of the [plan and] fees.
11-21 Sec. 395.051. APPROVAL OF [CAPITAL IMPROVEMENTS PLAN AND]
11-22 IMPACT FEE REQUIRED. (a) The political subdivision, within 30
11-23 days after the date of the public hearing on the imposition of an
11-24 [capital improvements plan and] impact fee, shall approve or
11-25 disapprove the [adoption of the capital improvements plan and]
11-26 imposition of an impact fee.
12-1 (b) An ordinance, order, or resolution approving the
12-2 [capital improvements plan and] imposition of an impact fee may not
12-3 be adopted as an emergency measure.
12-4 SECTION 6. Subsection (a), Section 395.052, Local Government
12-5 Code, is amended to read as follows:
12-6 (a) A political subdivision imposing an impact fee shall
12-7 update the land use assumptions and capital improvements plan at
12-8 least every five [three] years. The initial five-year [three-year]
12-9 period begins on the day the capital improvements plan is adopted.
12-10 SECTION 7. Section 395.055, Local Government Code, is
12-11 amended to read as follows:
12-12 Sec. 395.055. Notice of Hearing on Amendments to Land Use
12-13 Assumptions, Capital Improvements Plan, or Impact Fee. (a) The
12-14 notice and hearing procedures prescribed by Sections 395.044(a) and
12-15 (b) apply to a hearing on the amendment of land use assumptions, a
12-16 capital improvements plan, or an impact fee. [Before the 30th day
12-17 before the date of the hearing on amendments to the land use
12-18 assumptions, capital improvements plan, or impact fee, the
12-19 political subdivision shall send a notice of the hearing by
12-20 certified mail to any person who has given written notice by
12-21 certified or registered mail to the municipal secretary or other
12-22 designated official of the political subdivision requesting notice
12-23 of the hearing within two years preceding the date of adoption of
12-24 the order or resolution setting the public hearing.]
12-25 (b) [The political subdivision shall publish notice of the
12-26 hearing once a week for three consecutive weeks, the first notice
13-1 to appear before the 30th day but on or after the 60th day before
13-2 the date set for the hearing, in one or more newspapers of general
13-3 circulation in each county in which the political subdivision lies.
13-4 However, a river authority that is authorized elsewhere by state
13-5 law to charge fees that function as impact fees may publish the
13-6 required newspaper notice only in each county in which the service
13-7 area lies. The notice of public hearing may not be in the part of
13-8 the paper in which legal notices and classified ads appear and may
13-9 not be smaller than one-quarter page of a standard-size or
13-10 tabloid-size newspaper, and the headline on the notice must be in
13-11 18-point or larger type.]
13-12 [(c)] The notice of a hearing under this section must
13-13 contain the following:
13-14 (1) a headline to read as follows:
13-15 "NOTICE OF PUBLIC HEARING ON AMENDMENT OF IMPACT FEES"
13-16 (2) the time, date, and location of the hearing;
13-17 (3) a statement that the purpose of the hearing is to
13-18 consider the amendment of land use assumptions and a capital
13-19 improvements plan and the imposition of an impact fee; and
13-20 (4) [an easily understandable description and map of
13-21 the service area on which the update is being prepared; and]
13-22 [(5)] a statement that any member of the public has
13-23 the right to appear at the hearing and present evidence for or
13-24 against the update.
13-25 SECTION 8. Subchapter D, Chapter 395, Local Government Code,
13-26 is amended by adding Section 395.082 to read as follows:
14-1 Sec. 395.082. CERTIFICATION OF COMPLIANCE REQUIRED. (a) A
14-2 political subdivision that imposes an impact fee shall submit a
14-3 written certification verifying compliance with this chapter to the
14-4 attorney general each year not later than the last day of the
14-5 political subdivision's fiscal year.
14-6 (b) The certification must be signed by the presiding
14-7 officer of the governing body of a political subdivision and
14-8 include a statement that reads substantially similar to the
14-9 following: "This statement certifies compliance with Chapter 395,
14-10 Local Government Code."
14-11 (c) A political subdivision that fails to submit a
14-12 certification as required by this section is liable to the state
14-13 for a civil penalty in an amount equal to 10 percent of the amount
14-14 of the impact fees erroneously charged. The attorney general shall
14-15 collect the civil penalty and deposit the amount collected to the
14-16 credit of the housing trust fund.
14-17 SECTION 9. Subsection (b), Section 395.025, and Sections
14-18 395.046, 395.048, and 395.0515, Local Government Code, are
14-19 repealed.
14-20 SECTION 10. This Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 243 passed the Senate on
March 8, 2001, by a viva-voce vote; and that the Senate concurred
in House amendments on May 14, 2001, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 243 passed the House, with
amendments, on May 3, 2001, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor