LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                            February 12, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB438  by Madla (Relating to permitting the value of
               natural resources to be included in the assessment of
               damages in a condemnation proceeding in certain
               circumstances.), 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:   592   State Soil & Water Conservation Board, 580
                   Texas Water Development Board, 582   Texas Natural
                   Resource Conservation Commission, 455   Railroad
                   Commission of Texas
LBB Staff:         JK, DB, MW