What are Impact Fees?
Impact Fees are authorized under Chapter 395 of the Texas Local Government Code.

Texas Local Government Code defines impact fees 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”

As it relates to Impact Fees, “new development” shall mean the subdivision of land; the construction, reconstruction, redevelopment, conversion, structural, alteration, relocation, or enlargement of any structure; or any use or expansion of the use of land; any of which increases the number of service units.

Impact Fees do not include:
  • Dedication of land for public parks or payment in lieu of the dedication to serve park needs
  • 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
  • Lot or acreage fees to be placed in trust funds for the purpose of reimbursing developers for oversizing or constructing water mains, sewer mains or lines
  • Other pro rata fees for reimbursement of water or sewer mains or lines extended by the political subdivision

Show All Answers

1. The information in these FAQs is adapted from Chapter 395 of the Texas Local Government Code
2. What are Impact Fees?
3. Who is authorized to enact or impose Impact Fees?
4. What are Roadway Impact Fees?
5. What are Utility Impact Fees?
6. Who pays Impact Fees?
7. When must Impact Fees be paid?
8. What is a "Service Area" for Roadway Impact Fees?
9. What is a "Service Area" for Utility Impact Fees?
10. What is the general process for updating Impact Fees?
11. What are Land Use Assumptions?
12. What is a Capital Improvements Plan?
13. What is a Service Unit?
14. What are Impact Fee Credits?