SLC C.S.H.B. 3338 75(R)BILL ANALYSIS LAND & RESOURCE MANAGEMENT C.S.H.B. 3338 By: Hilbert 4-30-97 Committee Report (Substituted) BACKGROUND In recent years condemners have made an economic decision on whether or not to comply with the steps outlined in state law in order to condemn property. It can be argued by some that Sec. 21.017 of the Texas Property Code, as now written, gives condemners that option. For example, if a condemnor is moving forward to construct a pipeline and has secured all of the right-of-way for it except across the land of one property owner, the contractor has two choices: (1) enter the property illegally and quickly complete the construction of the pipeline, thereby avoiding the payment of delay damages to the contractor and foregoing lost revenues that otherwise would be caused by any delay in the pipeline's operation; or (2) follow the procedural steps to condemn and acquire the property legally. Prior to changes in the state's tort reform laws, the condemnor had great "economic incentive" to stay off a person's property it had no right to be on. Because damages are now limited in a trespass case, the condemnor has the option of making an economic decision to go ahead and trespass on the land that has yet to be properly condemned. In many cases the delay damages in lost revenue to the condemnor will not exceed what the property owner would have received in the trespass case. PURPOSE HB 3338 provides an incentive for condemners to follow the statutory procedures to acquire an interest in 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 21.017, Property Tax Code, as follows: Sec. 21.017. ALTERNATIVE PLEADING TO CONDEMN. (a) States that an entity that is a party to a suit covered under Sec. 21.003 of the property code may assert a claim to the property or, alternatively, seek to condemn the property. (b) A plea under this section is not an admission of an adverse party's title to the property in controversy. (c) Sets forth who may enter and use property that is the subject of the proceeding. (d) States that if the court determines that a party described by (a) does not own the property, the court shall award the property owner certain compensations, which are set forth in the Act. (e) States that this section does not apply to a party as defined in (a) that has acquired an interest in one's property, but has in good faith mislocated the improvement it has constructed on the property outside the boundaries of the property it has acquired. SECTION 2. The change in law made by this Act applies to any pending suit on the effective date of this Act and any suit filed after the effective date of this Act. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1.The committee substitute retains Sec. 21.017 (a) and (b) of the Property Code, unlike the original bill. The committee substitute accomplishes it goal by simply adding Section (c), (d) and (e) to the existing Sec. 21.017. Sec. 21.017(a) in the original bill rewrote section (a) in full to provide that written permission of the property owner was necessary before a condemnor entered and used the condemned property for a public purpose. In the substitute, the current statutory law is not changed. Sec. 21.017(b) in the original bill rewrote section (b) in full to provide for a plea in the alternative to condemn. A plea in the alternative means that a condemnor need not be displaced from possession of the property in dispute just because it is held that the condemnor does not own an interest in the property. If it is found that the condemnor does not own an interest in the disputed property, the condemnor can seek to condemn the property in the very same proceeding. In the substitute, the current statutory law is not changed. Sec. 21.017(c) in the original bill was created to allow a condemnor with a good faith claim on property to avoid the procedural condemnation steps outlined in Sec. 21.014 through 21.016 of the current law. In the substitute, Sec. 21.017(c) is added to provide that written permission of the property owner is necessary before a condemnor enters and uses the condemned property for a public purpose. This section serves the same purpose as Sec. 21.017(a) of the original bill. Sec. 21.017(d) in the original bill states that a plea in the alternative to condemn (outlined in Sec. 210.17(b) of the original bill) is not an admission of the adverse party's title to the property. In the substitute, Sec. 21.017(d) provides that if a condemnor does not own title to the property in dispute, then the court will award damages for wrongful possession and use plus reasonable attorney's fees. This section serves the same purpose as Sec. 21.017(e) of the original bill. Sec. 21.017(e) provided that if a condemnor does not own title to the property in dispute, then the court will award damages for wrongful possession and use plus reasonable attorney's fees. This section serves the same purpose as Sec. 21.017(d) of the substitute bill. In the substitute, Sec. 21.017(e) provides this section will not apply to a party who, in good faith, has mislocated any improvements outside of property that it has acquired. SECTION 2. The original bill does not have a SECTION 2. The substitute adds SECTION 2, which states that the Act applies to any pending suits.