According to the Legislative Budget Board (LBB), HB 2225 is not expected to have any fiscal impact on the state budget. The proposed changes to the procedures for adopting and amending land use assumptions, capital improvement plans, and impact fees under Chapter 395 of the Local Government Code would not necessitate any state-level expenditures or affect state revenue streams.

At the local level, the bill is similarly expected to have no significant fiscal impact on cities, counties, or other political subdivisions. Although the bill imposes new procedural requirements—such as longer public notice periods, advisory committee composition mandates, and restrictions on how frequently impact fees can be increased—these are not anticipated to result in substantial new costs. Local governments already conduct hearings and manage planning processes under current law, and the added requirements are considered procedural refinements rather than cost drivers.

However, it is worth noting that while the LBB projects no significant cost, the five-year moratorium on fee increases could have indirect financial implications for fast-growing jurisdictions that rely on impact fees to fund infrastructure expansion. These effects would depend on local growth dynamics and infrastructure funding models, and they are likely to vary by community. Nevertheless, the LBB concludes that these potential effects do not rise to the level of a significant fiscal impact.

HB 2225 makes substantive, pro-liberty reforms to the process by which political subdivisions adopt and administer impact fees under Chapter 395 of the Texas Local Government Code. The bill meaningfully advances the principles of limited government, individual liberty, free enterprise, and private property rights by strengthening procedural safeguards, increasing transparency, and tightening restrictions on local fee-setting authority.

The bill enhances public accountability by requiring that land use assumptions and capital improvement plans be made available to the public at least 60 days before the first publication of notice for a hearing. This ensures that citizens and stakeholders have adequate time to understand and respond to proposed infrastructure plans and development-related fees. It also extends the window for public hearings on updated assumptions and plans from 60 to 120 days, giving local officials and communities more time for deliberation.

One of the most liberty-forward elements of HB 2225 is the five-year moratorium on increasing impact fees after their adoption or most recent increase. This provision introduces valuable long-term predictability into local development finance and helps shield property owners, builders, and homebuyers from unpredictable and burdensome fee hikes. Far from being a drawback, the extended freeze serves as a meaningful check on the routine use of development fees as a backdoor revenue tool, especially in areas where accountability for capital expenditures is often lacking.

The bill also improves the integrity of advisory committees by raising the minimum share of members from the private sector, from 40% to 50%, and removing the provision that allowed planning and zoning commissions to serve in this role. This ensures a higher level of independence and real-world expertise in evaluating whether proposed impact fees are necessary, equitable, and economically sound.

While the bill is strong overall, one area still merits a modest amendment: the lack of a requirement for an independent or formal financial analysis prior to the imposition or increase of an impact fee. Including a provision that requires a professional justification, such as an audit or fiscal impact study, would ensure that fee decisions are based on objective evidence rather than political discretion. This change would further enhance transparency and public confidence without weakening any of the bill’s key protections.

In conclusion, HB 2225 is a principled reform bill that deserves support. It promotes transparency, curbs arbitrary fee increases, and elevates the role of property owners and private-sector stakeholders in the policy process. As such, Texas Policy Research recommends that lawmakers vote YES on HB 2225 while also recommending an amendment as described above to strengthen the bill further with targeted improvements to fiscal oversight.

• Individual Liberty: The bill enhances individual liberty by increasing transparency and public access to key documents that underlie development-related decisions. By requiring that land use assumptions and capital improvement plans be made available at least 60 days prior to a public hearing, the bill gives property owners, residents, and stakeholders ample time to review and respond to government proposals that may directly affect their financial obligations and land use rights. This procedural clarity supports the individual's right to participate meaningfully in local governance and defend their interests against opaque or rushed decision-making.
• Personal Responsibility: While this is not a central focus of the bill, the bill does promote personal responsibility indirectly by elevating the role of private-sector professionals on capital improvements advisory committees. These individuals—drawn from the real estate, development, or building industries—are typically directly accountable for managing costs, infrastructure demands, and long-term investments. By ensuring that these stakeholders comprise at least 50% of the advisory body, the bill helps ensure that those with hands-on, real-world responsibilities have a meaningful role in shaping development finance policies.
• Free Enterprise: The bill creates a more stable and predictable regulatory environment for developers and builders, which is essential for free enterprise. The bill imposes a five-year moratorium on increasing impact fees after they are adopted or most recently raised, protecting businesses from unexpected cost escalations that can undermine project feasibility or investment planning. It also limits government discretion by requiring a three-fourths supermajority vote to impose new impact fees. These provisions make it harder for local governments to use fees as a routine revenue source, thereby reducing regulatory burdens that can deter market activity and innovation.
• Private Property Rights: Impact fees can significantly affect the cost and practical use of property, particularly for new housing or commercial developments. By introducing greater procedural safeguards and requiring broader support to impose such fees, the bill protects landowners from arbitrary or poorly justified financial encumbrances tied to development. More accessible planning documents, a longer fee freeze, and more private representation in advisory roles all serve to protect property owners from governmental overreach and ensure that their rights are not infringed through backdoor taxation or non-transparent planning.
• Limited Government: The bill exemplifies the principle of limited government by tightening the conditions under which political subdivisions can impose or increase impact fees. The supermajority voting requirement and fee freeze reduce the likelihood that local governments can raise fees casually or for short-term budgetary convenience. The bill also dismantles the loophole that allowed politically appointed planning and zoning commissions to double as advisory committees, replacing them with more independent, industry-representative bodies. These reforms serve to constrain governmental authority and shift power back toward citizens and private stakeholders.

• SB 1883 (Similar To)