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).