S.B. No. 2427 amends the Local Government Code to clarify the definition and application of impact fees imposed by political subdivisions on new developments. The bill specifies that impact fees are intended to cover the actual costs of labor and materials for capital improvements or facility expansions that are necessary due to new development. It removes previous language that included various types of charges and fees that do not directly relate to the costs of construction, such as land acquisition costs and other pro rata fees. Additionally, the bill allows municipalities to use impact fees as security for debt service on bonds related to capital improvements, provided that the improvements are identified in a capital improvements plan.

The bill also introduces provisions regarding the collection of impact fees in areas where services are not currently available, stipulating that fees can only be collected if the political subdivision commits to commence construction within a specified timeframe. It allows for credits against impact fees for costs incurred by developers for labor and materials related to capital improvements. Furthermore, political subdivisions are authorized to spend funds from any lawful source to reduce the amount of impact fees by covering labor and material costs for necessary improvements. The changes in law will apply only to impact fees enacted or imposed after the bill's effective date.

Statutes affected:
Introduced: Local Government Code 395.001, Local Government Code 395.012, Local Government Code 395.019, Local Government Code 395.021, Local Government Code 395.023, Local Government Code 395.079 (Local Government Code 395)