S.B. No. 1883

	AN ACT
	relating to the approval of land use assumptions, capital
	improvement plans, and impact fees.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 395.043, Local Government Code, is
	amended to read as follows:
	Sec. 395.043.  INFORMATION ABOUT LAND USE ASSUMPTIONS AND
	CAPITAL IMPROVEMENTS PLAN AVAILABLE TO PUBLIC. At least 60 days [On
	or] before the date of the first publication of the notice of the
	hearing on the land use assumptions and capital improvements plan,
	the political subdivision shall make available to the public its
	land use assumptions, the time period of the projections, and a
	description of the capital improvement facilities that may be
	proposed.
	SECTION 2.  Section 395.051(a), Local Government Code, is
	amended to read as follows:
	(a)  The political subdivision, within 30 days after the date
	of the public hearing on the imposition of an impact fee, shall
	approve or disapprove the imposition of an impact fee.  Approval of
	the imposition of an impact fee by a political subdivision requires
	an affirmative vote of two-thirds of the members of the governing
	body of the political subdivision.
	SECTION 3.  Subchapter C, Chapter 395, Local Government
	Code, is amended by adding Section 395.0515 to read as follows:
	Sec. 395.0515.  LIMITATION ON IMPACT FEE INCREASE. A
	political subdivision may not increase the amount of an impact fee
	for three years from the later of the date the fee was adopted or
	most recently increased, if applicable.  Nothing in this section
	prohibits the political subdivision from implementing an impact fee
	collection schedule that allows less than the maximum adopted
	impact fee to be collected or phased in up to the maximum adopted
	impact fee for a period not to exceed ten years, as authorized by
	this chapter.
	SECTION 4.  Section 395.053, Local Government Code, is
	amended to read as follows:
	Sec. 395.053.  HEARING ON UPDATED LAND USE ASSUMPTIONS AND
	CAPITAL IMPROVEMENTS PLAN. The governing body of the political
	subdivision shall, within 120 [60] days after the date it receives
	the update of the land use assumptions and the capital improvements
	plan, adopt an order setting a public hearing to discuss and review
	the update and shall determine whether to amend the plan.
	SECTION 5.  Section 395.054, Local Government Code, is
	amended to read as follows:
	Sec. 395.054.  HEARING ON AMENDMENTS TO LAND USE
	ASSUMPTIONS, CAPITAL IMPROVEMENTS PLAN, OR IMPACT FEE.  A public
	hearing must be held by the governing body of the political
	subdivision to discuss the proposed ordinance, order, or resolution
	amending land use assumptions, the capital improvements plan, or
	the impact fee.  At least 60 days [On or] before the date of the
	first publication of the notice of the hearing on the amendments,
	the land use assumptions and the capital improvements plan,
	including the amount of any proposed amended impact fee per service
	unit, shall be made available to the public.
	SECTION 6.  Section 395.058(b), Local Government Code, is
	amended to read as follows:
	(b)  The advisory committee is composed of not less than five
	members who shall be appointed by a majority vote of the governing
	body of the political subdivision.  Not less than 50 [40] percent of
	the membership of the advisory committee must be representatives of
	the real estate, development, or building industries who are not
	employees or officials of a political subdivision or governmental
	entity.  [If the political subdivision has a planning and zoning
	commission, the commission may act as the advisory committee if the
	commission includes at least one representative of the real estate,
	development, or building industry who is not an employee or
	official of a political subdivision or governmental entity.  If no
	such representative is a member of the planning and zoning
	commission, the commission may still act as the advisory committee
	if at least one such representative is appointed by the political
	subdivision as an ad hoc voting member of the planning and zoning
	commission when it acts as the advisory committee.]  If the impact
	fee is to be applied in the extraterritorial jurisdiction of the
	political subdivision, the membership must include a
	representative from that area.
	SECTION 7.  Subchapter C, Chapter 395, Local Government
	Code, is amended by adding Section 395.059 to read as follows:
	Sec. 395.059.  INDEPENDENT FINANCIAL AUDIT. (a)  Before a
	political subdivision may increase an existing impact fee or adopt
	a new impact fee for a service area where an impact fee had
	previously been adopted, the political subdivision must conduct an
	independent financial audit in accordance with this section.
	(b)  An independent financial audit conducted under this
	section must be performed by an independent auditor who:
	(1)  is a certified public accountant or public
	accountant licensed by the Texas State Board of Public Accountancy;
	and
	(2)  is not, and has not been during the 12 months
	preceding the commencement of the audit, under contract to provide
	any other service to the political subdivision or a related entity
	of the political subdivision.
	(c)  An independent financial audit conducted under this
	section must provide, if applicable, a detailed accounting of:
	(1)  the amount of funds collected from any impact fee
	imposed by the political subdivision in the service area;
	(2)  the amount of interest accumulated under Section
	395.025 on impact fees collected by the political subdivision in
	the service area;
	(3)  any proposed capital improvements or facility
	expansions to be financed from an impact fee collected by the
	political subdivision in the service area that were not
	constructed, as described by Section 395.025, including the
	categories of each improvement and expansion;
	(4)  the amount of funds collected from impact fees by
	the political subdivision in the service area that have not been
	spent;
	(5)  each impact fee collected by the political
	subdivision in the service area;
	(6)  the allocation of each impact fee made to the
	political subdivision in the service area;
	(7)  any waived impact fees in the service area under
	Section 395.016(g);
	(8)  any requested refunds of impact fees in the
	service area under Section 395.025;
	(9)  any impact fees in the service area refunded under
	Section 395.025; and
	(10)  any errors or omissions of credits in impact fee
	calculations for impact fees in the service area.
	(d)  An independent financial audit conducted under this
	section must be submitted to the political subdivision and advisory
	committee described by Section 395.058.  Before the political
	subdivision may increase an existing impact fee or adopt a new
	impact fee for a service area where an impact fee had previously
	been adopted, the political subdivision must hold a public hearing
	on the results of the audit received under this subsection.
	(e)  A political subdivision shall make available to the
	public on the political subdivision's Internet website an
	applicable independent financial audit at least 30 days before:
	(1)  the publication of notice required under Section
	395.044; and
	(2)  the adoption of an order as required under Section
	395.053.
	(f)  A political subdivision may use money collected from an
	impact fee to conduct an audit required under this section.
	SECTION 8.  Section 395.077, Local Government Code, is
	amended by adding Subsection (f) to read as follows:
	(f)  The attorney general may bring an action on behalf of a
	property owner to contest an impact fee or to recover a refund for
	an impact fee under Section 395.025.
	SECTION 9.  Section 395.078, Local Government Code, is
	repealed.
	SECTION 10.  Section 395.059, Local Government Code, as
	added by this Act, applies only to a new impact fee or an increase to
	an existing impact fee adopted on or after the effective date of
	this Act.
	SECTION 11.  Sections 395.043 and 395.054, Local Government
	Code, as amended by this Act, apply only to a land use assumption,
	capital improvement plan, or impact fee that is the subject of a
	public hearing required to be held by Section 395.042 or 395.053 of
	that code, as applicable, that is held on or after the 90th day
	after the effective date of this Act. A land use assumption,
	capital improvement plan, or impact fee subject to a public hearing
	that is held before the 90th day after the effective date of this
	Act is governed by the law in effect immediately before the
	effective date of this Act, and the former law is continued in
	effect for that purpose.
	SECTION 12.  Section 395.051(a), Local Government Code, as
	amended by this Act, applies only to the approval of the imposition
	of an impact fee on or after the effective date of this Act.
	SECTION 13.  Section 395.0515, Local Government Code, as
	added by this Act, applies only to the increase of the amount of an
	impact fee that is adopted on or after the effective date of this
	Act.
	SECTION 14.  This Act takes effect September 1, 2025.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 1883 passed the Senate on
	April 23, 2025, by the following vote: Yeas 26, Nays 5; and that
	the Senate concurred in House amendments on May 21, 2025, by the
	following vote: Yeas 26, Nays 5.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 1883 passed the House, with
	amendments, on May 16, 2025, by the following vote: Yeas 87,
	Nays 32, one present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor