According to the Legislative Budget Board (LBB), SB 1253 is not expected to have any fiscal impact on the State of Texas. This means that the bill does not require additional state funding, nor does it impose direct costs on state agencies or state-level programs. The bill primarily affects local political subdivisions by requiring them to offer impact fee credits to builders and developers who invest in water conservation and reuse projects.

For local governments, there could be a financial impact due to the reduction in impact fee revenue. These fees are typically used to fund public water and wastewater infrastructure. By granting credits, municipalities and other political subdivisions may experience a decrease in collected impact fees, potentially requiring adjustments to their revenue models or alternative funding sources to maintain infrastructure investments. However, these costs could be offset by long-term savings from reduced demand on water and wastewater facilities and improved water sustainability efforts.

The overall fiscal effect on local governments will likely vary by jurisdiction, depending on the volume of development projects qualifying for credits and the extent to which these credits reduce total impact fee collections. Political subdivisions may need to develop new administrative procedures for calculating and verifying these credits, which could result in minor implementation costs. However, the long-term benefits of increased water conservation may help mitigate these expenses over time.

SB 1253 offers a practical, incentive-based approach to promoting water conservation and efficiency in new developments. Under current law, developers pay impact fees to local governments to offset the cost of expanding water and wastewater infrastructure. This bill reduces financial barriers for builders who incorporate water-saving technologies by granting them credits against these fees, encouraging market-driven sustainability rather than imposing regulatory mandates.

The bill aligns with core liberty principles, including private property rights, free enterprise, and limited government. It allows developers to adopt conservation methods voluntarily, fostering innovation and economic efficiency while reducing long-term infrastructure costs. By shifting away from rigid government-imposed costs toward an incentive model, SB 1253 ensures that builders, rather than taxpayers, bear the responsibility for conservation efforts while still benefiting from lower costs.

While some local governments may experience reduced impact fee revenue, this financial shift is likely offset by lower infrastructure demands due to improved water efficiency. Additionally, no fiscal impact on the state is anticipated. The bill also supports housing affordability, as lower development costs may lead to lower home prices, benefiting Texas homeowners and renters alike.

SB 1253 seems to strike a balance between business-friendly policies and responsible water management, making it a strong candidate for legislative approval. As such, Texas Policy Research recommends that lawmakers vote YES on SB 1253.

• HB 3875 (Same As)