HBA-NLM H.B. 1414 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1414 By: Uher Land & Resource Management 3/24/1999 Introduced BACKGROUND AND PURPOSE In 1936, in State V. Carpenter, the Texas Supreme Court stated the proper procedure for determining severance damages in a condemnation case. The statement provided that "the proper rule for ascertaining the measure of damage to the remainder of a tract of land where a part only has been taken for public use is ... the difference between the market value of the remainder of the tract immediately before the taking and the market value of the remainder of the tract immediately after the appropriation..." This language establishes market value as the focal point of adequate compensation to property owners. Section 21.042 (Assessment of Damages), Property Code, also requires adequate compensation for the property condemned as well as severance damages to the property owner. The purpose of this bill is to ensure that property owners receive fair compensation for remainder property holdings involved in takings. H.B. 1414 establishes that if all or a portion of a tract or parcel of real property is condemned, the amount of the award is determined as of the date the tract or parcel is condemned. This bill specifies that the amount of the award is equal to the market value of the tract or parcel condemned, and any personal property damaged or destroyed as a result of the condemnation, rather than the local market value of property at the time of the special commissioners' hearing. H.B. 1414 requires the special commissioners to admit evidence on the market value of the property being condemned, including evidence regarding the effect of any construction or operation of the condemnor's project on the remaining property, and evidence regarding lost visibility and access. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 21.041, Property Code, to require the special commissioners to admit evidence on the market value of the property being condemned and the use of the property for the purpose of the condemnation, including any injury or benefit that the construction or operation of the condemnor's project has on the market value of the property owner's remaining property, and any change in the relative location of the remaining property caused by the condemnor's project that affects the remaining property's market value, including visibility to and from the remaining property and access to and from the remaining property. Makes a nonsubstantive change. SECTION 2. Amends Section 21.042, Property Code, by amending Subsections (b), (c), and (d) and by adding Subsection (f), as follows: (b) Establishes that unless otherwise provided by this chapter, if all or a portion of, rather than an entire, tract or parcel of real property is condemned, the amount of the award is determined as of the date the tract or parcel is condemned and is equal to the market value of: _the tract or parcel condemned; and _any personal property damaged or destroyed as a result of the condemnation, rather than the local market value of the property at the time of the special commissioners' hearing. Makes a nonsubstantive change. (c) Provides that if a portion of a tract or parcel of real property is condemned and the property owner seeks an award for damages caused by the condemnation to the remaining property, the amount of the award for damage to the remaining property is based on the difference in the market value of the remaining property immediately before the condemnation and the market value of the remaining property immediately after the condemnation, considering any injury or benefit that the construction or operation of the condemnor's project has on the remaining property. Deletes the provision that requires the special commissioners to determine the damage to the property owner. (d) Requires the special commissioner to consider all factors considered in the marketplace that may affect the property's market value in determining the market value of the property condemned and any remaining property if a portion of a tract or parcel or real property is condemned. Deletes the requirement for the special commissioner, in estimating injury or benefit under Subsection (c), to consider an injury or benefit that is peculiar to the property owner and that relates to the property owner's ownership, use, or enjoyment of the particular parcel of real property. (f) Prohibits the damage award from being less than the financial cost of replacing the property if, nothwithstanding any other provision of this section, the property condemned is owned by a public entity or by a person organized and operated on a nonprofit basis and the property is devoted to and needed by the property owner in good faith to perform a public function or to provide nonprofit educational, charitable, or eleemosynary services. Makes a nonsubstantive change. SECTION 3. Makes application of this Act prospective. SECTION 4. Emergency clause. Effective date: upon passage.