SB1883

Voting and fee limits: approval to impose an impact fee requires two-thirds of the governing body’s members. The existing requirement to approve or disapprove within 30 days after the hearing remains. An adopted fee amount cannot increase for three years after the later of adoption or its most recent increase. However, a government may collect less than the adopted maximum or phase collections up to that maximum over no more than ten years. This is not a promise that every developer’s payment stays unchanged for three years. Final law, Sections 2–3.

Earlier disclosure: specified land-use assumptions, projections and capital-improvement information must be available at least 60 days before the first publication of the hearing notice, rather than merely on or before publication. The corresponding amendment-hearing materials include the proposed amended fee per service unit. Separately, the deadline to adopt an order setting a hearing after receiving updated assumptions and a plan increases from 60 to 120 days. That is the deadline to set the hearing, not necessarily to hold it. Final law, Sections 1, 4–5.

Who advises: the committee still has at least five members appointed by a majority vote. At least 50%, up from 40%, must represent real estate, development or building industries and cannot be government employees or officials. The bill removes the alternative allowing a planning and zoning commission with one industry representative to act as the committee. The requirement for a representative from the extraterritorial area remains when fees apply there. Final law, Section 6; Previous committee rules.

Independent audit before certain fee actions: before increasing an existing fee or adopting a new fee for a service area where a fee was previously adopted, the government must obtain an audit by an independent Texas-licensed certified public accountant or public accountant. The auditor cannot have another service contract with that government or a related entity currently or during the preceding 12 months. The audit must detail, as applicable, collections and interest, unbuilt improvements and their categories, unspent funds, individual fees and allocations, waivers, requested and paid refunds, and errors or omissions in fee credits. Final law, Section 7.

The audit goes to the government and advisory committee, and a public hearing on its results must occur before the covered fee action. It must appear on the government’s website at least 30 days before the specified hearing-notice publication and the order setting the update hearing. Impact-fee money may pay for the required audit. The trigger is not every first-ever fee in a previously uncharged service area. Final law, Section 7.

Enforcement: the attorney general may sue on a property owner’s behalf to contest a fee or recover a refund under existing Section 395.025. That is discretionary authority, not a guaranteed lawsuit or automatic refund. Existing refund conditions include specified service failures and fee money not spent as authorized within ten years. The bill also repeals Section 395.078’s protection against invalidating a fee for notice defects when compliance was substantial and in good faith; it does not declare every fee invalid. Final law, Sections 8–9; Existing refund conditions; Repealed notice protection.

When the changes apply: the audit rule covers new or increased fees adopted on or after September 1, 2025; the two-thirds rule covers imposition approvals on or after that date; and the three-year rule applies to increases adopted on or after that date. The new 60-day disclosure rules apply to the specified hearings held on or after the 90th day after September 1; earlier hearings remain under the prior rules. Final law, Sections 10–14.

What changed during passage: the Senate committee substitute added the independent audit, attorney-general authority, notice-protection repeal and audit transition. The Senate-passed and House committee texts retained those provisions. All five indexed House amendment texts were checked: H21’s audit-payment proposal was withdrawn; H22’s audit-payment language was adopted with H23’s website-publication amendment. H24’s proposed exception for previously scheduled or stepped increases failed. H31’s distinct permission to phase collections up to an adopted maximum over at most ten years was adopted and is in the final law. Introduced; Senate committee; Senate-passed; House committee; Final law; Version index; Amendment index; H21; H22; H23; H24; H31.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Developers and property owners gain more advance information and an audit trail before covered fee changes. Local governments face additional audit, disclosure and voting requirements and less flexibility to raise adopted fees; industry representatives receive a larger required share of advisory seats. These are effects of the legal requirements, not measured savings or a prediction of housing prices. The permitted use of fee collections for audits also means that money can pay those administrative costs. Final law.

The May 18 fiscal note for the bill as passed by the second chamber anticipates no significant state or local-government fiscal implication and assumes state implementation costs can be absorbed with existing resources. It does not price each local audit, estimate changes in fee revenue, or establish that implementation is cost-free. Final-stage fiscal note.