BILL ANALYSIS C.S.H.B. 1357 By: Alexander May 6, 1995 Committee Report (Substituted) BACKGROUND Current law provides no regulation of eminent domain proceedings or condemnation hearings. Many municipalities, especially larger cities, do not offer fair market value for land or easements encumbered through eminent domain. Because these municipalities often have their own legal departments dealing with these proceedings, private landowners are often at a financial disadvantage in condemnation court. Private landowners must hire their own legal representation and pay for all condemnation proceedings because a municipality refuses to pay fair market value for the property. Currently, even if landowners win a judgment in a condemnation case, they still lose financially through attorney's fees and court costs. PURPOSE This bill would require municipalities or state agencies which initiate eminent domain proceedings to offer the greater of either the local market value as determined in a special commissioners hearing or 70% of the fair market value as determined by the ad valorem tax appraisal. If, upon completion of a condemnation hearing, the award in the hearing exceeds the amount offered by the condemnor, then the condemnor must pay the costs of the landowner. However, if the award is equal to or lower than the pre-hearing offer, then the landowner must pay the court costs. If the commissioner's award is is appealed by the condemnor, and the court awards greater damages than the commissioners awarded, then the condemnor would be liable for the costs and attorney's fees incurred by the landowner in the appeal. Because municipalities and state agencies initiate condemnation hearings, and landowners cannot choose to not sell condemned land, landowners are not liable for attorney's fees in appeals. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1 Amends Section 21.042(b), Property Code, to indicate that if an entire tract or parcel of land is condemned, then the landowner is entitled to the greater of the local market value at the time of the special commissioners' hearing or 70 percent of the appraised value of the property determined under Chapter 23, Tax Code. SECTION 2 Amends Section 21.047, Tax Code, by changing Subsection (a) to require that if, in condemnation proceedings, the special commissioners award damages greater than the amount offered before the proceedings began, then the condemnor must pay all costs. If the decision of the commissioner's court is appealed by the condemnor, and the court awards greater damages than the commissioners, then the condemnor shall be liable for the landowner's costs and attorney's fees. If the commissioners' award or the court's determination is equal to or lower than the amount the condemnor offered before the proceedings began, then the landowner must pay the court costs. Subsection (b) states that a condemnor must pay initial costs of serving notice to property owners. If the property owner is ordered to pay costs in a hearing, then the condemnor can recover the costs of serving this notice as part of costs. Subsection (c) states that a court which presides over condemnation proceedings may tax $10 or more as a fee for each special commissioner as part of court costs. SECTION 3 Makes application of this Act prospective only. SECTION 4 Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE In SECTION 1, the substitute clarifies that the bill applies to condemnations by municipalities or state agencies. The substitute also makes technical changes in the organization of the section. In SECTION 2, the substitute provides that the condemnor can only be liable for attorney's fees in situations where the condemnor appeals the commissioners' award, and the court awards greater damages than the commissioners awarded. The original bill provided that the condemnor could be liable for attorney's fees in situations where the landowner appealed the commissioners' award. SUMMARY OF COMMITTEE ACTION H.B. 1357 was considered by the committee in a public hearing on April 18, 1995. The following persons testified against the bill: Ed Snyder, representing the City of Plano and the Texas Municipal League; and William Wood, representing the City of San Antonio. The following person testified neutrally on the bill: William Burnett, representing the Texas Department of Transportation. The bill was left pending. H.B. 1357 was considered by the committee in a public hearing on May 2, 1995. The bill was left pending. H.B. 1357 was considered by the committee in a formal meeting on May 5, 1995. The committee considered a complete substitute for the bill. The substitute was adopted without objection. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed and be sent to the Committee on Local and Consent Calendars, by a record vote of 6 ayes, 0 nays, 0 pnv, 3 absent.