81R15987 AJA-D

By: Coleman H.B. No. 3709

Substitute the following for H.B. No. 3709:

By: Orr C.S.H.B. No. 3709

A BILL TO BE ENTITLED

AN ACT

relating to the exercise of eminent domain power by certain charitable corporations.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 178 (S.B. 289), Acts of the 56th Legislature, Regular Session, 1959 (Article 3183b-1, Vernon's Texas Civil Statutes), is amended by adding Section 7 to read as follows:

Sec. 7. (a) In this section:

(1) "Associated low-density multifamily residential housing" means housing that is located in a residential neighborhood or is shown to be an adjunct, section, or other integral part of a residential neighborhood, including townhouses, patio homes, triplexes, quadruplexes, or other low-rise housing of no more than four stories.

(2) "Blockbusting activity" means an avoidable act or omission by a medical center condemning entity or the entity's members that is intended to cause, or foreseeably will cause, a substantial reduction of residential-use property values in a residential area, whether in anticipation of sale to the entity or the entity's members or otherwise, including an act or omission:

(A) having the effect of increasing traffic, noise, or light intrusion;

(B) involving demolition of improvements or property; or

(C) allowing improved property to become blighted.

(3) "Deed-restricted residential subdivision" means a subdivision, including all of its sections, annexes, extensions, or other additional associated parcels or tracts, that is governed by deed restrictions that restrict the property to residential use and consists of lots for single-family dwellings and associated low-density multifamily residential housing within the subdivision.

(4) "Medical center condemning entity" means:

(A) a charitable corporation having the power of eminent domain under Section 1 of this Act; or

(B) an entity that has the authority to purchase, lease, or otherwise use or occupy property acquired by a charitable corporation having the power of eminent domain under Section 1 of this Act.

(5) "Predominately single-family residential subdivision or generally recognized residential area" means an area consisting predominately of single-family dwellings and associated low-density multifamily residential housing, without regard to whether the subdivision or area is governed by deed restrictions.

(6) "Property owners' association" means a property owners' association as defined by Section 202.001, Property Code, or described by Section 204.004, Property Code.

(7) "Residential litigant" means:

(A) a property owners' association representing a residential neighborhood affected by acts or omissions regulated under this section or a residential neighborhood bordering an affected residential neighborhood;

(B) a special district in which more than 50 percent of the landowners reside in single-family dwellings in the district; or

(C) any affected residential landowner.

(8) "Residential neighborhood" means:

(A) a deed-restricted residential subdivision;

(B) a predominately single-family residential subdivision or generally recognized residential area; or

(C) a combination of those subdivisions or areas.

(9) "Single-family dwelling" means:

(A) a lot containing one building designed for and containing not more than two separate units with facilities for living, sleeping, cooking, and eating;

(B) a lot on which is located a freestanding building containing one dwelling unit and a detached secondary dwelling unit of not more than 900 square feet; or

(C) a building that contains one dwelling unit on one lot that is connected by a party wall to another building containing one dwelling unit on an adjacent lot.

(b) A charitable corporation subject to this Act may not:

(1) exercise the power of eminent domain and condemnation to acquire property in any residential neighborhood;

(2) otherwise acquire property in a residential neighborhood, directly or through an agent or trustee, for future use; or

(3) acquire residential property if the value of the property has been materially diminished by blockbusting activity.

(c) Within a reasonable time on or before September 1, 2010, a medical center condemning entity that, on September 1, 2009, holds any property acquired in a residential neighborhood for future use shall sell the property. Property sold under this subsection must be made subject to a deed restriction requiring the property to be restored to the property's former status as a bona fide single-family dwelling or, if applicable, reintegrated into its original deed-restricted residential subdivision.

(d) For the purposes of Subsections (b)(2) and (c), property is acquired for future use if the charitable corporation or a member of the corporation does not have a plan for the specific, immediate use of the property. For property acquired on or after September 1, 2009, if substantial construction of permanent medical facilities designed to deliver health care for the use and benefit of the public, excluding surface parking not related to the medical facilities, has not commenced on the property before the second anniversary of the property's acquisition, the property is considered to be property acquired for future use. For property acquired before September 1, 2009, if substantial construction of permanent medical facilities designed to deliver health care for the use and benefit of the public, excluding surface parking not related to the medical facilities, has not commenced on the property before September 1, 2010, the property is considered to be property acquired for future use.

(e) A medical center condemning entity or the entity's members may not purchase property, by private contract or otherwise, in a residential neighborhood if the property values in the neighborhood have been substantially diminished by blockbusting activity.

(f) A medical center condemning entity shall remediate the effects of parking facilities constructed on property owned by the entity that was acquired in a residential neighborhood after January 1, 2004, and that is located within a residential neighborhood or directly adjacent to a residential neighborhood. Remediation required by this subsection includes:

(1) the installation of louvers, screens, panels, or other permanent fixtures that reduce the level of light emitted from the parking garages to the same level of light emitted from the windows of offices or hospital facilities of the entity or its members that were constructed after January 1, 2004;

(2) landscaping with large evergreen trees and evergreen plants to mitigate, to the maximum practical extent, the adverse property value impact of the parking facilities on the adjoining residential neighborhood; and

(3) sound reduction measures to mitigate, to the maximum practical extent, the noise emitted from the parking facilities, as well as the noise generated by mechanical systems erected in conjunction with the parking facilities, on formerly residential property.

(g) A medical center condemning entity may not challenge the validity of a deed restriction in a condemnation proceeding or in contemplation of condemnation.

(h) This section does not limit any right expressly granted in a residential deed restriction that authorizes an express waiver, amendment, or variance with respect to the restrictions, as determined by the relevant property owners' association.

(i) In an action under this section, a court shall:

(1) award litigation costs, including reasonable attorney's fees, witness fees, court costs, and other reasonable related expenses, to a residential litigant who:

(A) prevails in a suit seeking relief under this section, including money damages or equitable, declaratory, or other relief;

(B) brings an action under this section that causes or contributes to, directly or indirectly, a beneficial result to a residential neighborhood or to the public interest, notwithstanding which party may have prevailed on the merits; or

(C) is required to defend against claims arising out of actions or communications related to the provisions or purposes of this section; and

(2) periodically during the pendency of the litigation, on a showing of hardship, award interim costs of litigation to residential litigants who are claimants in the action.

(j) An award of interim litigation costs under Subsection (i)(2) is final and not subject to repayment.

(k) A court may not award litigation costs against a residential litigant who asserts a claim relating to or arising under this section or engages in actions or communications related to a right created by this section.

(l) Except as provided by Subsection (m), in addition to any other defense or immunity conferred by law, a residential litigant is not liable for money damages or subject to injunctive or declaratory relief based on:

(1) a decision by the residential litigant as an agent or representative of a property owners' association or a special district; or

(2) a communication by the residential litigant to a governmental agency, a public official, or the public information media relating to a matter reasonably of concern to a governmental agency or public official, any other person, or the public.

(m) Subsection (l) does not apply if the claimant establishes by clear and convincing evidence that the decision or communication of the residential litigant was not made in good faith.

(n) This section shall be liberally construed to effect its purposes, which are to:

(1) prevent the abuse of the power of eminent domain by a charitable corporation subject to this Act;

(2) protect single-family residential neighborhoods;

(3) shield advocates of neighborhood integrity from economic coercion; and

(4) correct and remediate the effects of the abuse of condemnation authority used by a charitable corporation under this Act on or after January 1, 2004.

SECTION 2. This Act takes effect September 1, 2009.