HBA-JLV C.S.S.B. 243 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 243
By: Harris
Land & Resource Management
4/24/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, a city can charge a new development for the cost of
capital improvements related to and used for the new development.  C.S.S.B.
243 requires a political subdivision to credit the new development for a
portion of the ad valorem tax and utility service revenues that will be
generated by the new development, or a credit equal to 50 percent of the
total projected cost of the capital improvements.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.S.B. 243 amends the Local Government Code to set forth provisions
relating to financing capital improvements and facility expansions through
the assessment of impact fees.  The bill provides that a capital
improvements plan must include a plan for awarding a credit for the portion
of ad valorem tax and utility service revenues generated by new service
units during the program period or a credit equal to 50 percent of the
total projected cost of implementing the capital improvements plan (Sec.
395.014). 

The bill modifies the formula used to calculate the maximum impact fee per
service unit by subtracting the alternative credit or the amount of credit
for new ad valorem tax revenue and utility service revenue generated by new
service units from the costs of capital improvements and expansions before
dividing by the total number of service units (Sec. 395.015). 

The bill requires the political subdivision to collect fees at the time the
political subdivision issues a building permit.  The bill also requires a
municipality, for land platted outside the corporate boundaries of the
municipality, to collect fees at the time an application for an individual
meter connection to the municipality's water or wastewater system is filed
(Sec. 395.016). 

The bill requires the political subdivision to provide for a capital
improvements plan to be developed by qualified professionals using
generally accepted engineering and planning practices (Sec. 395.0411).  The
bill modifies provisions to include the capital improvements plan in the
notice and hearing requirements relating to land use assumptions (Secs.
395.042-395.047).  The bill modifies provisions relating to notice and
hearing on and approval of impact fees (Secs. 395.047, 395.049, 395.050,
395.051, and 395.055). The bill deletes provisions prohibiting a notice of
public hearing for land use assumptions, capital improvements plan, or
impact fees from being in the part of the paper in which legal notices and
classified ads appear (Secs. 395.044 and 395.049).  The bill requires a
political subdivision imposing an impact fee to update the land use
assumptions and capital improvements plan at least every five years, rather
than every three years (Sec. 395.052). 

The bill requires a political subdivision that imposes an impact fee to
submit a written certification verifying compliance to the attorney general
each year not later than the last day of the political subdivision's fiscal
year.  The bill provides that the certification must be signed by the
presiding officer of the governing body  of the political subdivision.  The
bill provides that a political subdivision that fails to submit a
certification 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 is required to collect the civil penalty and deposit the
amount collected to the credit of the housing trust fund (Sec. 395.082). 

The bill modifies the definitions of impact fee, roadway facilities,
service area, and service unit.  The term roadway facilities includes a
political subdivision's share of costs for roadways and associated
improvements designated on the federal or Texas highway system (Sec.
395.001). 

The bill repeals provisions relating to impact fee refunds, the capital
improvements plan, public disclosure of plan information,  and
consolidation of land use assumptions and capital improvements plan
(SECTION 9). 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.S.B. 243 modifies the original to require, rather than authorize, a
political subdivision to collect fees at the time the political subdivision
issues a building permit.  The substitute also requires a municipality, for
land platted outside the corporate boundaries of a municipality, to collect
fees at the time of an application for an individual meter connection to
the municipality's water or wastewater system is filed (Sec. 395.016). 

The substitute deletes provisions regarding a notice of public hearing on
amendments to land use assumptions, capital improvements plan, or impact
fees (SECTION 9).