BILL ANALYSIS
C.S.S.B. 14
By: Bivins/et al. (Combs/et al.)
April 28, 1995
Committee Report (Substituted)
BACKGROUND
The "takings clause" of the Fifth Amendment of the U.S.
Constitution prohibits the governmental taking of private property
for public use without just compensation. The Texas Constitution
contains a similar provision in Art. 1, Sec. 17.
A government can take private property in two ways: (1) by
exercising its power of eminent domain through a process known as
condemnation; or (2) by applying laws or regulations that are
overly confiscatory or restrictive of the owner's use of his
property.
In addressing the "taking" issue, courts must balance legitimate
public goals with fundamental rights. Courts are currently limited
to applying broad constitutional language to specific factual
situations.
In Texas, governmental entities are not required to evaluate the
effect of their administrative and regulatory actions on
constitutionally-protected property rights. Also, there is no
statutory cause of action for private property owners who believe
governmental actions have resulted in a reduction in the market
value of their property.
To date, 12 states have passed private property rights laws:
Arizona, Delaware, Idaho, Indiana, Mississippi, Missouri, North
Carolina, Tennessee, Utah, Virginia, Washington and West Virginia.
Recently, the U.S. House of Representatives passed House Resolution
925 which requires the federal government to compensate private
property owners for the effects of certain regulatory restrictions.
PURPOSE
As proposed, the bill sets forth regulations regarding state
governmental or political subdivision actions regarding private
real property.
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, but in SECTION 1, Subchapter C,
the bill does direct the attorney general to prepare guidelines to
assist governmental entities in identifying actions that may result
in a taking.
SECTION BY SECTION ANALYSIS
SECTION 1 Amends Subtitle A, Title 10, Government Code, by
adding Chapter 2007, as follows:
CHAPTER 2007. GOVERNMENTAL ACTION AFFECTING PRIVATE
PROPERTY RIGHTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2007.001. SHORT TITLE: Private Real Property Rights
Preservation Act.
Sec. 2007.002 DEFINITIONS.
Defines "governmental entity", "market value", "owner",
"private real property", and "taking."
"Taking" is defined as: (A) a governmental action that
affects private property in a manner that requires
compensation under the United States Constitution or
Section 17 or 19, Article I, of the Texas Constitution;
or (B) a governmental action taken or the enforcement
of a governmental action taken on or after September 1,
1995, that affects private real property in a manner
that restricts or limits a right to private real
property that would otherwise exist in the absence of
the governmental action, and is the cause of a reduction
in the market value of the affected private real
property of at least 25 percent.
Sec. 2007.003. APPLICABILITY.
(a) Applies this chapter only to the adoption or
issuance of an ordinance, rule, or similar measure; a
governmental action (action) that imposes a physical
invasion, dedication, or exaction of private real
property (property); and certain actions by a
municipality that have effect in the municipality's
extraterritorial jurisdiction.
(b) Sets forth actions to which this chapter does not
apply.
Sec. 2007.004. WAIVER OF GOVERNMENTAL IMMUNITY; PERMISSION TO
SUE.
(a) Provides that sovereign immunity of a political
subdivision to suit and liability is waived and
abolished.
(b) Provides that sovereign immunity of a state agency
to liability is waived and abolished, but immunity to
suit for compensation of a state agency is reserved and
must be granted by legislative resolution.
(c) Provides that sovereign immunity to suit is waived
and abolished in relation to a state agency for: (1)
the determination of whether an action is a taking in
a final decision or order, or appeal thereof, issued in
a contested case; (2) the invalidation of an action in
a final decision or order, or appeal thereof, issued in
a contested case; and (3) the invalidation of an action
for failure to prepare a takings impact assessment.
(d) States that a person is not authorized to execute
a judgment against property of the state or a
governmental entity.
Sec. 2007.005. ALTERNATIVE DISPUTE RESOLUTION.
Applies Chapter 154, Civil Practice and Remedies Code,
to a suit filed under this chapter.
Sec. 2007.006. CUMULATIVE REMEDIES.
(a) Provides that the provisions of this chapter are not
exclusive, and that the remedies are in addition to
other procedures provided by law.
(b) Prohibits a person from recovering under this
chapter and also under another law or in an action at
common law for the same economic loss.
SUBCHAPTER B. ACTION TO DETERMINE TAKING
Sec. 2007.021. SUIT AGAINST POLITICAL SUBDIVISION.
(a) Authorizes a property owner to bring suit under this
subchapter to determine whether an action of a political
subdivision results in a taking, and prescribes the
court in which the suit must be filed.
(b) Provides for a two-year statute of limitations.
Sec. 2007.022. ENTITLEMENT TO COMPENSATION FROM POLITICAL
SUBDIVISION.
(a) Provides that the determination of a taking is a
question of fact.
(b) Provides that if a taking is found by the trier of
fact, then the property owner is entitled to
compensation as provided by this subchapter.
Sec. 2007.023. JUDGMENT AGAINST POLITICAL SUBDIVISION.
States that a judgment in favor of a property owner
shall: (1) establish the amount of compensation owed;
(2) order the political subdivision to certify whether
all compensation has been paid; and (3) enjoin the
political subdivision from enforcing the action against
the property owner until the date the political
subdivision certifies that all compensation has been
paid.
Sec. 2007.024. ADMINISTRATIVE PROCEEDING AGAINST STATE
AGENCY.
Authorizes a property owner to file a contested case
with a state agency to determine whether an action of
a state agency results in a taking, provides for a 180-day statute of limitations, and establishes that a
contested case under this section is subject to Chapter
2001.
Sec. 2007.025. ENTITLEMENT TO REMEDY AGAINST A STATE AGENCY.
(a) States that the determination of a taking is a
question of fact.
(b) Provides that if the trier of fact in a contested
case finds that the action of a state agency is a taking
under this chapter, then the property owner is entitled
to, and the state agency is liable for: (1)
invalidation of the governmental action; or (2)
compensation for a taking as provided by this
subchapter.
Sec. 2007.026. FINAL DECISION OR ORDER AND APPEAL.
(a) States that a final decision issued under Section
2007.024 shall order the agency to rescind the action
as applied to the property owner, except as provided by
Subsection (c).
(b) Provides that a property owner may recover
compensation under Section 2007.025(b)(2) only if waiver
of immunity to suit for compensation is granted by the
legislature, and also provides that the compensation may
be paid only from an express appropriation.
(c) States that if the legislature has waived sovereign
immunity to suit for compensation, then the final
decision or order shall: (1) establish the amount of
compensation owed; (2) order the state agency to certify
whether all compensation has been paid; and (3) enjoin
the state agency from enforcing the action against the
property owner until the date the political subdivision
certifies that all compensation has been paid.
(d) Provides for judicial review of a decision or order
in a contested case.
Sec. 2007.027. COMPENSATION AND COSTS.
Outlines the compensation and costs recoverable by a
prevailing property owner including the determination
of market value, the compensation for temporary takings,
and the award of court costs and attorney's fees.
SUBCHAPTER C. REQUIREMENTS FOR PROPOSED GOVERNMENTAL
ACTION
Sec. 2007.041. GUIDELINES.
(a) Requires the attorney general to prepare guidelines
to assist governmental entities in identifying and
evaluating governmental actions that may result in a
taking.
(b) Requires the attorney general to file the guidelines
with the secretary of state for publication in the Texas
Register.
(c) Requires the attorney general to review the
guidelines annually and revise them to ensure
consistency with legislative actions and judicial
decisions of the U.S. Supreme Court and the supreme
court of this state.
(d) Authorizes a person to make comments to the attorney
general concerning the guidelines. Requires the
attorney general to consider the comments in the annual
review process.
(e) Provides that material provided to the attorney
general is public information.
Sec. 2007.042. PUBLIC NOTICE.
(a) Requires a political subdivision that proposes to
engage in an action that may result in a taking to
provide at least 30 days' notice of its intent by
providing a notice published in a newspaper published
in the county in which the property is located.
Requires the political subdivision to publish a notice
in an adjacent county if a newspaper of general
circulation is not published in that county. Requires
the political subdivision to include in the notice a
copy of the takings impact assessment that was prepared
by the political subdivision.
(b) Requires a state agency that proposes to engage in
a governmental action that may result in a taking to:
(1) provide notice as required by Section 2001.023;
and
(2) file with the secretary of state for
publication in the Texas Register a copy of the
takings impact assessment that was prepared by the
agency as required by this subchapter.
Sec. 2007.043. TAKINGS IMPACT ASSESSMENT.
(a) Requires a governmental entity to prepare a written
takings impact assessment ("assessment") that complies
with the evaluation guidelines developed by the attorney
general before the governmental entity provides public
notice.
(b) Provides that a political subdivision is not
required to prepare an assessment for an action taken
that is reasonably taken to fulfill an obligation
mandated by state law but must prepare instead a
statement describing the mandate and citing the statute
or rule under which the mandate is imposed.
(c) Sets forth requirements for the assessment, which
include describing the purpose of the proposed action,
determining whether the action will constitute a taking,
and describing reasonable alternatives for the action.
(d) Provides that an assessment prepared under this
section is public information.
Sec. 2007.044. SUIT TO INVALIDATE GOVERNMENTAL ACTION.
(a) Provides that an action requiring an assessment is
void if an assessment is not prepared. Authorizes a
property owner affected by an action taken without the
preparation of an assessment to bring suit for a
declaration of the invalidity of the action.
(b) Requires the suit to be filed in a court described
by Section 2007.023(a).
(c) Requires the court to award attorney's fees and
court costs to a property owner who prevails in an
action under this section.
Sec. 2007.045. STATE AGENCY RULEMAKING.
Requires a state agency that proposes to adopt a rule
that may result in a taking as indicated by the
assessment to update the assessment if the rule is not
adopted within 180 days after the notice is given.
SECTION 2 Amends Section 2002.011, Government Code, relating to
the Texas Register, to make conforming changes.
SECTION 3 Amends Subchapter B, Chapter 23, Tax Code, by adding
Section 23.11, as follows:
Sec. 23.11. GOVERNMENTAL ACTION THAT CONSTITUTES
TAKING. Requires the effect of an action on the market
value of property to be taken into consideration by the
chief appraiser in determining the market value of the
property.
SECTION 4 Requires the attorney general to file the guidelines for
publication by January 1, 1996.
SECTION 5 Requires the comptroller to report to the governor,
lieutenant governor, speaker of the house, and attorney
general regarding state agency compliance with the
assessment procedures and make recommendations for
improvements before the 75th Legislature convenes. The
report is limited to review of procedural compliance.
SECTION 6 (a) Effective date: September 1, 1995.
(b) Effective date of Sections 2007.042 and 2007.043:
January 1, 1996.
SECTION 7 Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
In addition to reordering and renumbering some sections of the
measure, the substitute makes substantial changes in the following
general areas.
Applicability. Both the substitute and the original apply to
certain actions by a municipality in its extraterritorial
jurisdiction ("ETJ"), but the substitute defines the applicable
actions differently. The original bill applies to an action in the
ETJ unless the municipality imposes identical requirements
throughout the entire municipality and its ETJ, or unless the
purpose of the action is to protect a "sole source" aquifer. The
substitute applies to an action in a municipality's ETJ if the
municipality does not impose identical requirements throughout the
entire ETJ.
The original bill specifically mentioned enforcement actions in the
applicability section of the measure, but the substitute
incorporates enforcement actions in the definition of a taking.
The substitute does not apply to municipal zoning or actions by a
joint airport board. Also, the original bill did not apply to
certain actions by the Public Utility Commission of Texas, but this
provision was removed in the substitute.
Definition of Taking. The substitute defines a taking in terms of
a 25 percent reduction in market value whereas the original bill
used a figure of 20 percent. Also, the substitute is prospective
in that it limits a taking to governmental actions taken on or
after September 1, 1995, or the enforcement of governmental actions
taken on or after September 1, 1995. Governmental actions include
the adoption or issuance of ordinances, rules, orders, regulations
or similar measures, or the imposition of an actual physical
invasion or dedication. The substitute does not include
enforcement of past or existing rules, regulations, or other
similar measures. The original bill did apply to the enforcement
of existing rules.
Waiver of Immunity. The substitute has a more limited waiver of
immunity than the original bill. Sovereign immunity of a political
subdivision is waived as to suit and liability. Sovereign immunity
of a state agency to liability is waived, but immunity to suit for
compensation from a state agency is reserved, and a waiver must be
granted by legislative resolution. The substitute also
specifically states the actions for which sovereign immunity to
suit is waived.
Administrative Proceeding Against State Agency. The substitute
sets up a separate procedure for pursuing a recovery from a state
agency as opposed to a political subdivision. The original bill
used the same procedure for both, which was to file suit in a
district court. The substitute provides for an administrative
proceeding in which a property owner may file a contested case to
determine if a state agency action is a taking. If a property
owner prevails against a state agency, then the owner is entitled
to invalidation of the action or compensation for a taking.
The substitute provides that the final decision in a contested case
shall order the agency to rescind the action as applied to the
prevailing property owner. The property owner may recover
compensation only if waiver of immunity to suit for compensation is
granted.
Compensation. The substitute provides that the final judgment
awarding compensation in a suit against either a state agency or a
political subdivision shall: (1) establish the amount of
compensation owed; (2) order the governmental entity to certify
whether all compensation owed has been paid; and (3) enjoin the
governmental entity from enforcing the action as applied to the
prevailing owner until all compensation owed has been paid. The
original bill provided that the governmental action would be
permanently enjoined if all compensation owed was not paid within
3 years. This provision is not included in the substitute. Also,
the original bill provided that the state would be liable for
compensation owed as the result of takings by political
subdivisions that occurred as the result of compliance with state
mandates. This provision is not included in the substitute.
Takings Impact Assessments. The original bill provided that a
political subdivision must include in its public notice a
reasonably specific summary of the takings impact assessment
performed for that particular action. The substitute provides that
the notice shall include a copy of the takings impact assessment.
In SECTION 5 of the bill, the substitute specifically states that
the comptroller's report shall be limited to an analysis of the
procedural compliance of state agencies with the assessment
requirements of the Act. The report is not to include qualitative
reviews or evaluations of state agency actions. This was not clear
in the original bill.
SUMMARY OF COMMITTEE ACTION
S.B. 14 was considered by the committee in a formal meeting on
April 24, 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 by a record vote of
8 ayes, 0 nays, 0 pnv, 1 absent.