Impact Fees in Texas: Practical Steps to Protect Your Rights Before, During, and After Permitting
Our recent post explained how Nollan, Dolan, and Sheetz— along with chapter 395 of the Texas Local Government Code— limit what municipalities can legally charge developers in impact fees.
Knowing the law matters, but acting on it requires a concrete strategy. Here's how to protect yourself at key stages of your development project.
Before You Buy Land
Due diligence shouldn't stop at the title commitment. Request the municipality's current impact fee schedule and the underlying capital improvements plan (CIP) that supports it. Then have the city confirm in writing the amount of impact fees and assessments that will be charged for your project under existing rules—and whether changes to the rules or fee schedules are in the works.
Identify whether the city has conducted recent land use assumption studies, as Texas law requires. Outdated or missing studies are a red flag — and a major leverage point for developers.
At the Permit Stage
When a fee or assessment is charged, don't just pay it and move on. Ask for the documentation connecting the fee to your project's specific impact. Under the U.S. Supreme Court’s decision in Sheetz, even standardized legislative fee schedules must satisfy the essential nexus and rough proportionality tests described in our last post. Request the engineering data and demand a written explanation of how the fee amount was calculated relative to your development's actual impact.
Engage the Advisory Committee Process
Texas's 2025 amendments to chapter 395 of the Local Government Code strengthened the capital improvements advisory committee process and expanded industry representation.
Show up. Submit written comments. A developer's participation during the fee-adoption process creates a record and signals to the municipal actors that you will hold them accountable.
Challenge Excessive Fees
If a fee or assessment still seems disproportionate, consult counsel immediately. Texas law has deadlines for challenging a municipality’s actions on your project. A formal challenge supported by your own independent traffic or infrastructure study can help your case.
The Bottom Line
Protecting your rights isn't passive. Document everything, engage early, and don't treat any impact fee as a foregone conclusion.
This post is for informational purposes only and does not constitute legal advice.
