Local leaders are scrambling to accommodate a new Texas law that prevents cities from using the cost of construction to determine the cost of residential and commercial building permits and inspections.
Some officials, meanwhile, said the new law is example of the state eliminating municipalities’ ability to regulate local issues and speculated the rationale behind it was to shield the real value of new construction from tax appraisers.
House Bill 852 took effect immediately after Gov. Greg Abbott signed it May 21, shortly after both houses of the Texas Legislature approved it. No representative from Galveston County opposed the measure and none responded to requests for comment.
Under the new legislation, city administrators can’t consider the value of a dwelling or the cost of improving a home when pricing the permits or inspections.
The new law is an attempt to end hidden fees on homeowners and builders by changing the way building permits are structured, according to a statement on state Rep. Justin Holland’s website. Holland is Republican and real estate broker representing Rockwall County and part of Collin County.
The value of a house is just one of many methods cities across the state use to calculate building fees, but it’s one used by several county municipalities.
Cities in the north county will likely need to substantially change their fee structures, officials said.
In response to the new legislation, the League City Council on Tuesday will consider changing how the city determines charges for permit fees. They’ll discuss switching from a system based on home valuations to one based on the square footage of a building, said David Hoover, the city’s director of planning and development.
League City expects to collect almost $3 million in building permits, but doesn’t expect that to change even with the necessary changes to the city fees, Hoover said.
Meanwhile, Friendswood in July will consider new options for the city’s permitting fee structure after researching several different options, said Jeff Newpher, spokesman for the city.
But the move is just another example of the state imposing restrictions on how cities operate, League City Mayor Pat Hallisey said.
“Every time you turn around, they’re changing the laws,” Hallisey said. “I don’t understand the law, and no one is doing a good job of explaining it.”
Cities and the state should be on the same page, Hallisey said.
“But every day, I feel further and further away from those in state government,” he said. “Yet, we rely on those guys.”
Because the bill prevents cities from determining specific values of structures during construction, it prevents central appraisal districts from using that information for tax purposes.
“I’ve told them, they need to clean up their own house before they get to ours,” Hallisey said.
The city of Galveston also has changed its fee structures.
“We are no longer charging any fees based on the value of the work,” said Marissa Barnett, spokeswoman for the city of Galveston. “We are charging our flat fees and planning review fees.”
Last year, building fees brought in $599,119.74, Barnett said.
Administrators are reviewing permitting fees and could bring the result to the city council this month, Barnett said.
“The overall effect remains to be seen,” Barnett said. “The cost of the services provided through the fees should be more fair because the codes we enforce are constant regardless of the job cost to the builder.”
Officials in Santa Fe hadn’t heard of the bill but would investigate its potential effects on the city, a spokesman said.
Texas City officials didn’t respond to requests for comment, but the city website indicates the city is revising its permit fees.