Impact Fees (Oppose – Preemption) 

Impact Fees (Oppose – Preemption) 

CS/CS/SB 324 (Young) and CS/CS/CS/HB 697 (Miller) prohibit local governments from collecting impact fees prior to the issuance a building permit for the property that is subject to the fee. In addition, the dual rational nexus test is codified in the bills. The rational nexus test requires that the expenditures of funds collected by an impact fee and the benefits that are accrued to the new construction (both residential and commercial) should be reasonably connected to the need for additional capital used for a major facility, and should be connected to the increased impact caused by said new construction. The legislation requires impact fees be connected to (have a rational nexus with) the money spent from the funds collected, and be connected to the benefits of the new residential commercial construction. The bills require local governments to specifically earmark funds collected by the impact fees for use in acquiring, constructing or improving capital facilities to benefit the “new users.” The legislation prohibits the use of impact fee revenues to pay existing debt or for prior approved projects, unless the expenditure is reasonably connected to, or has a rational nexus with, the increased impact generated by the new residential or commercial construction. The bills, were amended in committee to address local government concerns by exempting water and sewer connection fees from the provisions of the bills. CS/CS/CS/HB 697 revises “sector plan” laws for large developments of more than 5,000 acres by prohibiting a local government requiring a developer to contribute or pay for land acquisition or construction or expansion of public facilities unless the local government has enacted an ordinance that requires developers of other developments not within the sector planning area to do the same. The bills provide that, within 30 days of receipt of an application for approval of a detailed specific area plan or related development order for a sector plan, a local government must review the application for completeness. (Cruz)