By: Coleman H.B. No. 3709

A BILL TO BE ENTITLED

AN ACT

Relating to certain charitable corporations granted eminent domain power by Section 6(b), Chapter 178 (S.B. 289), Acts of the 56th Legislature, Regular Session, 1959 (Article 3183b-1, Vernon's Texas Civil Statutes), repealing the power of eminent domain and condemnation of residential property adjacent or contiguous to such medical center, for the purpose of constructing, maintaining, and operating health care, educational and support entities as a part of the medical center or related facilities; and amending Article 3183b-1 to provide for legal remedies and measures to rectify past condemnation practices within residential neighborhoods.

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

SECTION 1. Title 51, Art. 3183b-1, Section 2, Texas Revised Civil Statutes, is amended to read as follows:

"Sec. 2.

(a) EMINENT DOMAIN POWER. Any charitable corporation as defined in Section 1 of this Act shall have the power of eminent domain and condemnation for the purpose of acquiring lands adjacent or contiguous (whether or not separated by public thoroughfares) to such medical center upon which are to be constructed, maintained, and operated as a part of the medical center, facilities dedicated to medical care, teaching, and research for the public welfare, including ancillary or service activities generally and customarily recognized as essential to such facilities in a medical center.

(b) RESIDENTIAL PROPERTY LIMITATIONS.

(1) Definitions.

(A) "Deed restricted residential property" shall mean property governed by existing deed restrictions which restrict the property to residential use within a subdivision, or within a section of a subdivision. Residential use shall include townhouses, condominiums, and multifamily residential housing included as a section or component of a residential subdivision.

(B) "Single family residential property" shall have the meaning defined by the generally-applicable municipal land-use ordinance, and which is located in a predominately single-family residential subdivision or established residential area, without regard to whether deed restrictions are in force. "Single family residential property" shall include townhouses, condominiums, and multifamily residential housing generally considered to be part of the predominately single-family residential subdivision or the established residential area. A single family residential property owners association in a non-deed restricted area may be formed pursuant to the procedures prescribed in Article, which shall entitle it to exercise all of the rights of a property owners' association under the Property Code notwithstanding the lack of deed restrictions. A management district more than fifty (50) percent of whose voters are bona fide resident landowners may also qualify as a property owners association. In any election required or permitted by the Property Code, legal or beneficial owners of more than one lot in a property owners association election shall have the right to cast no more than one vote.

(C) "Residential area" shall mean a deed restricted residential property subdivision, or a single family residential property area, or a combination of such areas.

(D) "Blockbusting activity" shall mean avoidable actions or omissions to act by a Medical Center Condemnation Entity or its members, including without limitation actions having the effect of increasing traffic, noise or light intrusion, or similar actions or omissions by investors, including actions involving demolition of or allowing improved property to become blighted, whether in anticipation of sale to a Medical Center Condemnation Entity or its members or otherwise, and which are intended, or which will foreseeably cause, a substantial reduction of residential-use property values in a residential area.

(E) "Medical Center Condemning Entity" shall mean any entity having the power of eminent domain under Section 1, or any entity which has the authority to purchase, lease, or otherwise use or occupy, property acquired by a Medical Center Condemnation Entity.

(F) "Future use" shall mean property acquired in a residential area through private contract or by formal condemnation proceedings by a Medical Center Condemnation Entity or its members, for which the Medical Center Condemnation Entity member has no plan for specific, immediate use. 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 such property within two years of its acquisition, the property shall be deemed to be property acquired for future use.

(G) "Condemnation" shall mean a taking through formal court proceedings, or any acquisition by a Medical Center Condemning Entity which could have, at the time of the acquisition, initiated court proceedings for condemnation. It shall be irrelevant whether the Medical Center Condemning Entity shall have overtly threatened condemnation or not.

(2) NO CONDEMNATION OF RESIDENTIAL PROPERTY. The power of eminent domain and condemnation shall not apply to any residential area, nor may a corporation defined in Section 1 of this Act otherwise acquire residential area property, directly or through an agent or trustee, for future use, nor may it acquire residential property whose value has been materially diminished by blockbusting activity. Nothing herein shall limit any rights that may be expressly granted in current residential deed restrictions that authorize express waiver, amendment, or variances with respect to the restrictions, or as may be determined by the "Property owners' association" as defined in Section 202.001 of the Property Code pursuant to applicable provisions of the Property Code or to a residential property owners association formed in a non-deed restricted area. A Medical Center Condemnation Entity may not challenge the validity of the deed restrictions in a condemnation proceeding, or in contemplation of condemnation.

(3) BLOCKBUSTING PROHIBITED. No Medical Center Condemnation Entity or its members may purchase property, by private contract or otherwise, in a residential area whose property values have been substantially diminished by blockbusting activity. Residential area property held for future use shall, within a reasonable time not to exceed one year, be sold by the Medical Center Condemnation Entity to a purchaser who shall covenant that the property will be restored to its former status as a bona fide single family residential property, or, if applicable, reintegrated into its original deed restricted residential property subdivision.

(4) REMEDIATION REQUIRED IN CERTAIN CASES. Parking facilities constructed on land owned by a Medical Center Condemning Entity that was acquired after January 1, 2004 within a residential area, or which is located directly adjacent to a residential area, shall be required to remediate the effects of such acquisition. Such remediation shall include:

(A) the installation of louvers, screens, panels, or other permanent fixtures that reduce the emission of light from parking garages to the same level of light emission from the windows of office or hospital facilities of the Medical Center Condemnation Entity or its members that were constructed after January 1, 2004;

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

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

(c) COSTS OF LITIGATION. A property owners association, individual landowners who are actually in residence in a single family residence who prevails in any suit seeking damages or equitable relief arising under this Subsection 2(b) shall recover its costs of litigation, including reasonable attorneys fees, witness and other litigation expenses, and costs of court.

(1) Any property owners association from the affected residential area, or bordering on the residential area, and any management district more than percent of whose voters are bona fide landowner residents, shall be a proper party to any proceeding under this Act.

(2) The Court may, in its discretion,

(A) award, periodically during the pendency of the litigation, interim costs of litigation to the qualified landowners or property owners associations, which award shall be final and not subject to repayment; and

(B) award costs of litigation to landowners or property owners association in any case in which the litigation brought about, directly or indirectly, a beneficial result to the deed restricted residential area, adjoining residential areas, or to the public interest, notwithstanding which party may have technically prevailed on the merits.

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