LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                            February 13, 2001
  
  
          TO:  Honorable Gary Walker, Chair, House Committee on Land &
               Resource Management
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB377  by Turner, Bob (Relating to certain circumstances
               where the fair market value of natural resources may be
               included in the assessment of damage to a property owner
               in a condemnation proceeding.), As Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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Local Government Impact
  
If a political subdivision has filed a petition under Chapter 21 of the
Property Code for the condemnation of property and intends to use the
natural resources on or under the property, the bill would require that
the local market value of the natural resources be considered along with
the local market value of the land when assessing damages to the property
owner. The Act would take effect September 1, 2001, but would not affect
litigation pending prior to that date.

The provisions of the bill would result in an increased cost to the
political subdivision in property condemnation cases in which natural
resources are intended to be used by the subdivision. The local
government entity would incur the costs of conducting land surveys to
determine the value of the natural resources and would have to pay
higher damages to the property owner than under current statute.  The
land surveys are estimated to cost $750 each. It is anticipated that
most natural resources on condemned property would not have an
exceptionally high market value; however, the additional costs of paying
the property owner for natural resources could be significant if the
land contains substantial and high-valued natural resources. For
example, a natural gas asset could be valued starting at approximately
$330,000.
  
  
Source Agencies:   302   Office of the Attorney General, 601   Texas
                   Department of Transportation, 305   General Land
                   Office, 455   Railroad Commission of Texas
LBB Staff:         JK, CL, DB, MW