Relating to the approval of land use assumptions, capital improvement plans, and impact fees.
SB 1883 revises Texas law governing the adoption and increase of local impact fees under Chapter 395 of the Local Government Code. The bill expands public notice and hearing requirements for land use assumptions and capital improvement plans, requires more advance public availability of those materials, and changes timing rules for hearings and updates. It also raises the required share of advisory committee members who must come from the real estate, development, or building industries from 40 percent to 50 percent, and requires representation from the extraterritorial jurisdiction when the fee applies there.
The bill adds a new requirement that a political subdivision conduct an independent financial audit before increasing an existing impact fee or adopting a new fee in a service area where one already exists. The audit must be performed by an independent CPA or public accountant and must detail collections, interest, unspent funds, refunds, waived fees, and calculation errors. The audit must be shared with the advisory committee and discussed at a public hearing, and it must be posted online in advance of key notice and adoption deadlines. The bill also authorizes the attorney general to bring actions on behalf of property owners to contest impact fees or seek refunds, and it repeals Section 395.078 of the Local Government Code.
SB 1883 amends Chapter 395 of the Local Government Code to make impact fee adoption and increases more procedurally demanding for cities, counties, and other political subdivisions. It creates new transparency, audit, and hearing obligations, limits how quickly impact fees may be increased, and strengthens the role of industry representatives and affected-area representation on advisory committees. The bill also gives the attorney general express authority to pursue challenges or refunds on behalf of property owners, potentially increasing enforcement and litigation exposure for local governments that impose impact fees.
The bill appears to have received generally favorable support, as reflected by strong passage margins in both chambers and final concurrence on House amendments. The Senate passed the measure 26-5, and the House passed the amended version 87-32, indicating meaningful but not overwhelming opposition. The final enactment suggests the core framework was acceptable to a majority of lawmakers, though the recorded votes show some persistent concern about the bill’s restrictions on local fee-setting authority.
The main points of contention likely centered on the bill’s tighter controls over local impact fees and the added burdens on political subdivisions. Local governments and supporters of municipal planning flexibility may have objected to the three-year cap on fee increases, the mandatory independent audit, and the expanded attorney general enforcement role. By contrast, property owners, builders, developers, and real estate interests likely supported the bill’s transparency requirements, slower fee growth, and stronger oversight of how impact fee revenue is collected and spent. The amendment votes suggest there was some debate over the bill’s details, but the final version retained the central reforms.