Site work for a water / sewer project in Georgetown, Texas. Conceptual plans call for site work for a water / sewer project.

https://www.kxan.com/news/texas-politics/who-should-pay-for-growth-texas-cities-developers-debate-impact-fees/amp/ AUSTIN (KXAN) — Months before lawmakers are set to return to Texas Capitol for the 90th Texas Legislature, cities, developers and advocacy groups are already pushing their priorities. Among the issues expected to draw attention are impact fees. Impact fees are one-time charges paid by developers to help cover the cost of infrastructure needed to support new development. That can include water and wastewater infrastructure, roads and drainage improvements. During a July interim hearing of the Texas House Committee on Land & Resource Management, Georgetown officials urged lawmakers to preserve cities’ ability to use impact fees. In an interview with KXAN, Georgetown Mayor Josh Schroeder said impact fees help ensure growth pays for itself. “Our residents, over 70% of them, believe that the new development should pay 100% of their impact on the systems,” Schroeder said. “If new development doesn’t pay for existing users, ratepayers, taxpayers are going to pay for it.” Schroeder said Georgetown currently has about $1.7 billion in planned capital improvement projects, while only a fraction of those costs can be covered through impact fees. “There’s already movement and action that’s going to limit our ability to charge impact fees, and we foresee that happening again this [upcoming legislative] session,” Schroeder said. Texas lawmakers scrutinize $3.3 billion cost of data center tax incentives The city of Taylor also echoed Georgetown’s concerns, arguing impact fees help prevent existing residents from absorbing the costs associated with rapid growth. “The question that the Legislature should be considering is who should foot the bill on new development,” said Daniel Seguin, the communications director for the city of Taylor. “From our perspective, and from a position at the city of Taylor, we believe that new development should foot the bill.” The debate comes after lawmakers approved Senate Bill 1883 during the 2025 legislative session. Authored by Texas State Sen. Paul Bettencourt, R-Houston, the law added new transparency and oversight requirements for cities that impose impact fees. Among the changes: A two-thirds vote of a city council or governing body is required to adopt an impact fee. Cities cannot increase impact fees for three years after adopting or increasing them. Cities must conduct an independent financial audit before increasing certain impact fees. Cities must publicly release land-use assumptions and capital improvement plans at least 60 days before a hearing. Bettencourt said he filed the legislation after seeing what he described as “excessive” impact-fee increases in some communities. “It’s a process that’s just one tool. The impact fee ‘tool’ was being overused. Developers felt like it turned into a bludgeon,” Bettencourt said. “That’s why that bill was passed — to stop it.” While some cities argue impact fees help ensure new growth pays for itself, Bettencourt said impact fees were never intended to cover the full cost of growth. “Impact fees were never designed to pay for all of growth,” Bettencourt said. “When you look at a city, they’ve got not only impact fees … [they’ve] got property taxes and sale taxes, and that’s what new growth does.” Sunshine Kapus, founder and CEO of Sunrise Development Group, said developers generally recognize the need for infrastructure investment but expressed concern about how fees can affect housing costs and project feasibility. “[Impact fees] doesn’t make it more affordable, it makes it more expensive,” Kapus said. “But we need the services.” Kapus said sudden fee increases or uncertainty can make it more difficult for developers to budget projects and that home prices can reflect those costs. “There’s a balance that needs to be stuck,” Kapus said. “You can’t just put all the growth on new residential construction and give all the incentives to commercial businesses.” Bettencourt agreed that finding the right balance is important and said future discussions should be guided by data. “If data shows us that we need to make changes, great, we can make changes,” Bettencourt said. The 90th regular session of the Texas Legislature convenes January 2027. -------------------------------------------- A detailed scope has not been identified. The project is included in the City's 2026-2030 Capital Improvement Program (CIP). As of October 27, 2025, further details have not yet been identified. *Project information has been obtained through a public capital improvement plan (CIP). A CIP is a financial schedule for short- and long-range projects which is updated regularly. Information listed in the CIP often evolves based on funding availability and the project details, including timeline and value, are subject to change. The content management team will continue to pursue additional details as they become available.