LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 29, 1997
TO: Honorable Fred M. Bosse, Chair IN RE: House Bill No. 1794, Committee Report 1st House, Substituted
Committee on Land and Resource Management By: Krusee
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1794 ( Relating
to assessment of damages in a condemnation proceeding.) this
office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB1794-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a
net impact of $0 to General Revenue Related Funds through the
biennium ending August 31, 1999.
Fiscal Analysis
The bill would allow a property owner to establish the value
of an entire tract or parcel of real property that has been
condemned as of the date of the first offer made by the condemnor
to acquire a tract or parcel of real property for the same project.
Currently, the damage to the property is the local value of
the property at the time of the special commissioner's court
hearing.
In the City of Austin v. Westgate case, the Supreme
Court of Texas held that a landowner was entitled to additional
damages based on a decrease in the property value from the date
of a newspaper article referencing the highway project (public
intent) until the date of the Special Commissioner's hearing.
Methodolgy
For purposes of this estimate, the Texas Department of Transportation
(TxDOT) assumes that the expression of public intent is equivalent
to the first offer for the first parcel in the project to be
acquired. The department estimate also assumes that one-half
of owners would elect to establish an earlier date of valuation
as provided by the proposed legislation.
Damages awarded
in the Westgate case represent a 25 percent increase to the
property value due to project influence and other non-compensable
factors. The cost of right of way acquired by eminent domain
for fiscal years 1992-96 averaged $79.8 million annually. Based
on Westgate-type percentage increases, the department estimates
an increase in right of way costs $9.98 million annually.
In
addition, the TxDOT estimates it would need to obtain appraisals
on each parcel within a project prior to the first offer being
made. The department stated that the average cost of an appraisal
for fiscal year 1995 was $2,200, and estimated that approximately
1,000 parcels were acquired in fiscal year 1995. The TxDOT
also assumes additional updated appraisals would be needed for
the parcels being condemned. The total cost for additional
appraisals, as well as updated appraisals (about 20 percent
of the total at $600 per update) is estimated to be approximately
$2.44 million per year.
TxDOT estimates the total increase
in right-of-way expenditures for each fiscal year following
enactment of the bill to be $12.42 million.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from State
Highway Fund
0006
1998 ($12,420,000)
1998 (12,420,000)
2000 (12,420,000)
2001 (12,420,000)
2002 (12,420,000)
Net Impact on General Revenue Related Funds:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 0
2001 0
2002 0
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
The implications of the bill would apply to local governments
and would have a similar direct fiscal impact on local governments.
Source: Agencies: 601 Department of Transportation
LBB Staff: JK ,BB