I’ve had several clients contact me recently with the similar and familiar problem where municipalities or other regulatory authorities attempt to change the rules for permitting signs after the submission of the permit application. This tactic usually takes the form of the city simply trying to expedite the passage of an ordinance prohibiting new signs once it gets wind of an operator applying for a permit. Another version of the strategy is for the city to attempt to annex land or otherwise expand its geographical jurisdiction to include the site where construction has commenced on the proposed sign. In either case, almost all states, and certainly my State of Texas, would consider the permit application vested when it was submitted,  and that subsequent regulatory efforts to prohibit the sign by amending or expanding the prohibitory ordinance would be barred as unconstitutional retroactive legislation.

In Texas, the Legislature passed in 1999 the so-called Vesting Statute, which basically requires a regulatory authority to consider the grant or denial of a permit application based on the law that existed when the application was submitted.  “The effect of vested rights under Chapter 245 of the Local Government Code is to ‘freeze’ the land use regulations as they existed at the time the first permit application was filed through completion of the ‘project;’ in other words, a project with vested rights is not subject to intervening regulations or changes after the vesting date.” City of San Antonio v. Rogers Shavano Ranch, Ltd., 383 S.W.3d 234, 245 (Tex. App.—San Antonio 2012, pet. denied). Under Section 245.002(a-1) of the Texas Local Government Code, “Rights to which a permit applicant is entitled under this chapter accrue on the filing of an original application or plan for development or plat application that gives the regulatory agency fair notice of the project and the nature of the permit sought.” “Each regulatory agency shall consider the approval, disapproval, or conditional approval of an application for a permit solely on the basis of any orders, regulations, ordinances, rules, expiration dates, or other properly adopted requirements in effect at the time: (1) the original application for the permit is filed for review for any purpose, including review for administrative completeness . . ..” Tex. Loc. Gov’t Code § 245.002(a)(1).

The Texas statute also addresses the common situation where an operator has commenced construction or other development of his sign, when no regulations existed or otherwise prohibited him from doing so. The statute goes on to provide that such efforts are also vested, and can’t be defeated by a city’s subsequent expansion of geographical jurisdiction: “Progress towards completion of a project includes:

(1) an application for a final plat or plan is submitted to a regulatory agency;

(2) a good-faith attempt is made to file with a regulatory agency an application for a permit necessary to begin or continue towards completion of the project;

(3) costs have been incurred for developing the project including, without limitation, costs associated with roadway, utility, and other infrastructure facilities designed to serve, in whole or in part, the project (but exclusive of land acquisition) in the aggregate amount of five percent of the most recent appraised market value of the real property on which the project is located;

(4) fiscal security is posted with a regulatory agency to ensure performance of an obligation required by the regulatory agency; or

(5) utility connection fees or impact fees for the project have been paid to a regulatory agency.” Tex. Loc. Gov’t Code § 245.005(c).

This Texas statute, in turn, was derived from Article 1, Section 16 of the Texas Constitution, which prohibits ex post facto or retroactive laws, and provides: “No bill of attainer, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made.” Almost every State in the Nation has adopted similar common sense rules prohibiting the gamesmanship often undertaken by municipalities to belatedly prohibit the permission to erect signs after the operator’s rights have become vested in the submission of his application or commencement of his construction efforts.

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