GEC H.B. 1665 75(R)    BILL ANALYSIS


BUSINESS & INDUSTRY
H.B. 1665
By: Oliveira
4-3-97
Committee Report (Amended)



BACKGROUND 

The Property Code does not require the seller of unimproved real property
to disclose to a potential buyer the location of subsurface pipelines.  As
agricultural land is being converted for residential purposes, buyers are
often unaware of potentially hazardous underground pipelines underneath
the property being bought.  

PURPOSE

H.B. 1665 requires that a seller of unimproved real property to disclose
to the buyer in writing a notice indicating the location of subsurface
transportation pipelines.  This includes pipelines for natural gas,
natural gas liquids, synthetic gas, liquified petroleum gas, petroleum
product and hazardous waste.  The seller must also show the location of
injection wells, tanks, or facilities used for the storage or disposal of
a hazardous waste.   

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 Subchapter A, Chapter 5, Property Code by adding Section
5.010 as follows: 

Section 5.010. SELLER'S DISCLOSURE OF LOCATION OF CONDITIONS UNDER SURFACE
OF UNIMPROVED REAL PROPERTY.  

(a) Requires that a seller of unimproved real property for residential
purposes to disclose in writing, the location of  subsurface conditions to
the buyer of  unimproved real property.    

 (1) Defines the type of subsurface pipelines that need disclosure.

(b)  Requires that the notice state the information to the best of the
seller's belief and knowledge, and must be revealed to the buyer on or
before the execution of contract for purchase. 

(c)  If the parties enter into the contract without proper notice, the
purchaser may terminate the contract no later than seven days after the
effective date of the contract. 

(d) Defines the application of the provision.

(e) Defines "hazardous substance."

SECTION 2 Effective date of the legislation.

SECTION 3 Emergency Clause.

 EXPLANATION OF AMENDMENTS

Committee Amendment #1 amends HB 1665, on page 1, lines 9-20, by striking
(a) and inserting the following: 
 (a) A seller of unimproved real property to be used for residential
purposes shall provide to the purchaser of the property a written notice
disclosing the location of a transportation pipeline, including a pipeline
for the transportation of natural gas, natural gas liquids, synthetic gas,
liquified petroleum gas, petroleum or a petroleum product, or a hazardous
substance. 

Committee Amendment #2 amends HB 1665, on page 2, between lines 13 and 14
by adding the following: 
 (f) A seller is not required to give the notice if:
  (1) the seller is obligated under an earnest money contract to furnish a
title   insurance commitment to the buyer prior to closing; and 
  (2) the buyer is entitled to terminate the contract if the buyer's
objections to title   as permitted by the contract are not cured by the
seller prior to closing.