Impact fees are heavily regulated by Texas Local Government Code Chapter 395 See Texas Legislature Online, http://www.capitol.state.tx.us (visited 7/23/07). “Impact fees’ that are regulated by Chapter 395, are defined as “a charge or assessment imposed by a political subdivision against new development in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development. The term includes amortized charges, lump-sum charges, capital recovery fees, contributions in aid of construction, and any other fee that functions as described by this definition.” However, the term, as defined, specifically excludes:

(1) dedication of land for public parks or payment in lieu of the dedication to serve park needs;
(2) dedication of rights-of-way or easements or construction or dedication of on-site or off-site water distribution, wastewater collection or drainage facilities, or streets, sidewalks, or curbs if the dedication or construction is required by a valid ordinance and is necessitated by and attributable to the new development;
(3) lot or acreage fees to be placed in trust funds for the purpose of reimbursing developers for oversizing or constructing water or sewer mains or lines; or
(4) the pro rata fees for reimbursement of water or sewer mains or lines extended by the political subdivision. Texas Local Gov’t Code ?395.001

The chapter establishes many requirements for impact fees and limits the amount of the fees. The capital improvement plan must include a plan for awarding either:

(1) a credit for the portion of ad valorem tax and utility service revenues generated by new service units during the program period that is used for the payment of improvements, including the payment of debt, that are included in the capital improvements plan; or
(2) a credit equal to 50 percent of the total projected cost of implementing the capital improvements plan. Id. at ?395.014 The impact fees that may be charged are limited accordingly. Id at 395.014. For additional requirements for impact fees and exactions outside the statutory definition, see Development Exactions.

Baytown Texas Example – “If the new development is platted before the adoption of an impact fee and a valid building permit is issued within one year of the adoption of the impact fee, no impact fees may be collected.”

Municipal Research and Services Center. (1998). Impact Fee Information Part 1 Sample Ordinances. Seattle, Washington: Author. [Online] http://www.mrsc.org/library/compil/cpimpact1.htm. This report contains impact fee ordinances from select Washington state communities. The ordinances are organized by impact fee type into categories for multiple capital facilities, schools, transportation, community parks and roads, and park and recreation facilities.

Municipal Research and Services Center. (1999). Impact Fee Information Part 2 General Information. Seattle, Washington: Author. [Online] http://www.mrsc.org/library/compil/cpimpact2.htm. This report contains a listing of publications about impact fees. The publications are divided into three categories: overview articles, ordinances and fee schedules, and rate studies.

Nelson, Arthur C. (Ed.). (1988). Development Impact Fees. Chicago, Illinois: Planners Press. This Planners Press book covers the history of impact fees, includes four case studies on communities that have implemented impact fees, reviews legal considerations, and discusses how to calculate impact fees. Several model impact fee-enabling statutes and ordinances are provided. The book also explores common concerns related to impact fees including affordable housing effects and the possibility of laying disproportionate burdens on new residents.

National Impact Fee Roundtable, Inc. http://www.impactfee.org/home The purpose of NIFR is to advance the theory and practice of impact fees and public infrastructure finance. The further purposes of NIFR are to: (1) encourage the exchange of ideas, information, and expertise between and among NIFR members and the general public; (2) educate and guide new impact fee and public finance practitioners, the general public, and other stakeholders; and (3) provide an opportunity for professional growth and development for members of NIFR and the general public.