HBA-LJP C.S.H.B. 377 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 377
By: Turner, Bob
Land & Resource Management
3/2/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current law requires special commissioners, appointed by the court for a
condemnation proceeding, to assess actual damages to a property owner based
on the fair market value of the property. The courts' interpretation of the
law rejects the right of a property owner to submit evidence or be
compensated for the local market value of the natural resource in addition
to the local market value of the real property, even when the condemner's
intended use of the property is to develop and use the natural resource.
C.S.H.B. 377 authorizes the special commissioners to consider and award
actual damages to a property owner for the local market value of a real
property's natural resources in certain condemnation proceedings. 

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. 

ANALYSIS

C.S.H.B. 377 amends the Property Code to require special commissioners
appointed by the court for a condemnation proceeding to admit evidence of
the local market value of real property's natural resources in addition to
the real property's local market value when a political subdivision files a
condemnation petition that states that the intended purpose for acquiring
the property is to use or develop the natural resources on or under the
real property. If the special commissioners admit this evidence, then they
are authorized to assess the damages to the property owner for the local
market value of the real property, excluding the lease value of the natural
resources on or under the real property and the local market value of the
natural resources on or under the real property. 

The bill does not authorize the natural resources located on or under the
real property to be appraised separately from the real property for tax
appraisal purposes.  The bill does not subject real property under these
provisions to an additional tax. 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute bill modifies the original bill by providing that the lease
value of the natural resources on or under the condemned real property be
excluded from the assessment of damages when the special commissioners are
assessing damages to the property owner.  C.S.H.B 377 also clarifies the
original bill by providing that the bill does not subject the condemned
real property and the natural resources on or under the real property to
additional taxes.