89R10393 DRS-D

By: Parker S.B. No. 2489

A BILL TO BE ENTITLED

AN ACT

relating to property owner claims for compensation from certain municipalities that fail to enforce certain laws.

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

SECTION 1. Subchapter Z, Chapter 229, Local Government Code, is amended by adding Section 229.902 to read as follows:

Sec. 229.902. COMPENSATION FOR FAILURE OF MUNICIPALITY TO ENFORCE CERTAIN LAWS OR ABATE PUBLIC NUISANCE. (a) In this section:

(1) "Fair market value" means the price real property will bring when offered for sale by one who desires to sell, but is not obliged to sell, and is bought by one who desires to buy, but is under no necessity of buying.

(2) "Nuisance violation" means a violation of a state law or a municipal ordinance or regulation prohibiting public camping, obstructing a public thoroughfare, loitering, panhandling, public urination or defecation, public consumption of an alcoholic beverage, possession or use of a controlled substance, or retail theft.

(3) "Property owner" means a person:

(A) holding fee simple title in real property; or

(B) leasing real property for which the person is required under the terms of the lease to pay all or part of the property taxes on the property or the cost of maintenance or insurance for the property.

(b) This section applies only to a municipality with a population of 900,000 or more.

(c) Notwithstanding any other law and except as provided by Subsection (d), a property owner may submit a claim to a municipality for compensation from the municipality with respect to property located in the municipality if the municipality:

(1) adopts and follows a policy, pattern, or practice of refusing to enforce a state law or a municipal ordinance or regulation prohibiting a nuisance violation; or

(2) maintains a public nuisance.

(d) This section does not apply to:

(1) a decision by a municipality to exercise prosecutorial discretion not to prosecute a nuisance violation if:

(A) the exercise of discretion is based on the circumstances of an individual case; and

(B) the municipality publishes a public notice of the justification for the exercise of prosecutorial discretion described by Paragraph (A); or

(2) a municipal action required by state or federal law.

(e) Except as provided by Subsection (f), a property owner shall elect the amount of compensation paid to the property owner under this section as determined by:

(1) the reasonably necessary documented expenses incurred by the property owner to mitigate the effect of the nuisance violation on the property that is the subject of the claim; or

(2) the diminution in the fair market value of the property owner's real property that is the subject of the claim.

(f) The amount of compensation paid to a property owner under this section may not exceed the amount of property taxes assessed by the municipality on the property that is the subject of the claim and paid by the property owner for the tax year in which the property owner submits the claim for compensation.

(g) Not later than the 30th day after the date a municipality receives a written claim for compensation under this section, the municipality shall accept or reject the claim and notify the property owner.

(h) If a municipality accepts a claim for compensation under this section, the municipality shall pay the claim in the amount determined under Subsection (e).

(i) If a municipality rejects a claim for compensation under this section or does not respond to a claim within the time period prescribed by Subsection (g), the property owner who submitted the claim may file an action in a court of competent jurisdiction in the county in which the property that is the subject of the claim is located.

(j) In an action filed under Subsection (i):

(1) the court shall determine whether:

(A) the property owner is entitled to the compensation claimed; and

(B) the amount of compensation claimed is reasonable; and

(2) the municipality has the burden of establishing that:

(A) the municipal response to the nuisance violation that is the basis for the claim for compensation is lawful; or

(B) the amount of compensation claimed is unreasonable.

(k) In an action filed under Subsection (i):

(1) a municipality may not recover attorney's fees or court costs; and

(2) a successful claimant may recover reasonable attorney's fees and court costs from the municipality.

(l) A property owner may not submit more than one claim for compensation in the same tax year under this section relating to a property affected by a nuisance violation. A property owner may submit another claim pertaining to that property in the following tax year if:

(1) the municipality has not:

(A) stopped the policy, pattern, or practice or abated the public nuisance that is the basis for the claim; or

(B) entered into an agreement with the property owner to settle the claim; or

(2) the property owner submitted a claim for compensation under this section in the preceding tax year in an amount that exceeded the amount described by Subsection (f) for that tax year.

(m) A property owner is not required to exhaust any other remedies that may be available under other law before submitting a claim for compensation under this section.

(n) A claim for compensation under this section is not exclusive and does not preclude a property owner from seeking any other remedy that may be available under other law.

SECTION 2. Section 229.902, Local Government Code, as added by this Act, applies only to a claim for compensation from a municipality based on expenses incurred by a property owner on or after the effective date of this Act.

SECTION 3. This Act takes effect September 1, 2025.