SB2427 - Relating to the use of impact fees by a political subdivision.

      By: Hall S.B. No. 2427               A BILL TO BE ENTITLED   AN ACT   relating to the use of impact fees by a political subdivision.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 395.001(4), Local Government Code, is   amended to read as follows:                (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 pay the actual costs   of labor, including the cost of surveyors, engineers, and other   similar professionals, and materials for 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 net include:                      [ (A) dedication of land for public parks or   payment in lieu of the dedication to serve park needs;                      [ (B) dedication of rights-of-way or easements or   construction or dedication of on-site or off-site water   distribution, wastewater collection or drainage facilities, or   streets, sidewalks, or curbs if the dedication or construction is   required by a valid ordinance and is necessitated by and   attributable to the new development;                      [ (C) lot or acreage fees to be placed in trust   funds for the purpose of reimbursing developers for oversizing or   constructing water or sewer mains or lines; or                      [ (D) other pro rata fees for reimbursement of   water or sewer mains or lines extended by the political   subdivision. ]          However, an item included in the capital improvements plan   may not be required to be constructed except in accordance with   Section 395.019(2), and an owner may not be required to construct or   dedicate facilities and to pay impact fees for those facilities.          SECTION 2.  Sections 395.012(a), (b), and (d), Local   Government Code, are amended to read as follows:          (a)  An impact fee may be imposed only to pay the costs of   labor and materials for constructing capital improvements or   facility expansions, including and limited to the:                (1)   labor and materials explicitly accounted for in   the  construction contract price;                (2)  surveying and engineering fees; and                (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 labor and materials for     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.          (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 labor and materials for 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.          SECTION 3. Section 395.019, Local Government Code, is   amended to read as follows:          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 labor and   materials 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 for labor and materials for the capital improvements or   facility expansions 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.          SECTION 4.  Section 395.021, Local Government Code, is   amended to read as follows:          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 labor and material   costs for capital improvements or facility expansions to reduce the   amount of impact fees.          SECTION 5.  Section 395.023, Local Government Code, is   amended to read as follows:          Sec. 395.023.  CREDITS AGAINST ROADWAY FACILITIES FEES. Any   labor and material costs for 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.          SECTION 6.  Section 395.079(a), Local Government Code, is   amended to read as follows:          (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 cover the labor   and material costs for [ provide ] storm water, drainage, and flood   control improvements necessary to accommodate new development.          SECTION 7.  The changes in law made by this Act apply only to   an impact fee enacted or imposed on or after the effective date of   this Act. An impact fee enacted or imposed before the effective date   of this Act is governed by the law in effect immediately before the   effective date of this Act, and the former law is continued in   effect for that purpose.          SECTION 8.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution. If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2025.