LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION

Revision 2

May 3, 2007

TO:	Honorable Anna Mowery, Chair, House Committee on Land & Resource Management
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	HB2006 by Woolley (Relating to the use of eminent domain authority.), Committee Report 1st House, Substituted

The amount of additional costs and overall negative fiscal impact to a condemnor under the provisions of the bill would vary by condemnor and by case, and therefore the fiscal impact to the state cannot be estimated.

The bill would amend the Government Code, the Local Government Code, and the Property Code relating to procedures for the state or a political subdivision of the state to exercise the power of eminent domain. Included in those procedures would be the requirement for a governmental entity to authorize the initiation of the condemnation proceedings at a public meeting by a record vote. In addition, an entity with eminent domain authority that wants to acquire real property for a public use would be required to make a good faith effort to acquire the property by voluntary purchase or lease. If a court hearing a suit related to eminent domain proceedings finds that the condemning entity did not make a good faith effort, the court would be allowed to order the condemning entity to pay all costs and any reasonable attorney's fees incurred by the property owner.

In addition to other requirements for exercising eminent domain authority, a common carrier, as defined by Section 111.002, Natural Resources Code, would be required to serve the owner of the property to be acquired with advance notice by regular mail and certified mail, return receipt requested, that the carrier intends to initiate condemnation proceedings.

The bill would require special commissioners in an eminent domain proceeding to consider any evidence that a property owner would consider in a negotiated transaction for the property subject to the proceeding when assessing damages from a condemnation.

Under provisions of the bill, the repurchase price of property acquired under eminent domain would be the price paid to the owner by the governmental entity at the time the property was acquired, whereas under current statute, the repurchase price is the fair market value of the property at the time the public use is canceled.

The bill would add to district court fees and costs, court costs for each special commissioner in an eminent domain proceeding as taxed by the court, $10 or more, and would add to district court and to statutory county court fees and costs, court costs and attorney's fees as taxed by the court and as reasonable.

The bill would take effect on September 1, 2007, except for those sections of the bill that relate to the amount of the repurchase price of property previously taken by eminent domain but for which the public use has expired. Those sections would take effect on the date on which the constitutional amendment proposed by the Eightieth Legislature, Regular Session, 2007, takes effect. If that amendment is not approved by the voters, those sections of the bill would have no effect.

Based on the analysis of TxDOT, it is assumed the provisions of the bill would result in increased costs for the acquisition of highway right of way through condemnation. Because the factors considered in evaluating the value of the property to be condemned and estimating damages to a property owner would vary by case, any additional costs or negative fiscal implications to the state cannot be determined.

Local Government Impact

As with the state impact, the negative fiscal impact to units of locl government would vary depending on the number of situations in which the entity would seek to exercise its eminent domain authority, costs associated with and imposed by court proceedings, and the number of parcels of
land involved in initial condemnation or in repurchase by the previous owner or their heirs. Actual amounts are not known, but as an example, Harris County reports having condemned 460 parcels at an aggregate market value of $108 million between calendar years 2002 and 2006.

Source Agencies:

601 Department of Transportation

LBB Staff:

JOB, SD, WK, MW, TG, DB