Bill Text: TX HB138 | 2011-2012 | 82nd Legislature | Comm Sub

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Bill Title: Relating to the acquisition of and compensation for real property, including blighted property, for public purposes through condemnation or certain other means.

Sponsorship: Partisan Bill (Republican 3)

Status: (Introduced - Dead) 2011-04-26 - Committee report sent to Calendars [HB138 Detail]

Download: Texas-2011-HB138-Comm_Sub.html

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82R16824 TJS-F
By: Callegari H.B. No. 138
Substitute the following for H.B. No. 138:
By: Oliveira C.S.H.B. No. 138

A BILL TO BE ENTITLED
AN ACT
relating to the acquisition of and compensation for real property,
including blighted property, for public purposes through
condemnation or certain other means.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 373.002(b), Local Government Code, is
amended to read as follows:
(b) Activities conducted under this chapter are directed
toward the following purposes:
(1) elimination of [slums and] areas affected by
blight;
(2) prevention of blighting influences and of the
deterioration of property and neighborhood and community
facilities important to the welfare of the community;
(3) elimination of conditions detrimental to the
public health, safety, and welfare;
(4) expansion and improvement of the quantity and
quality of community services essential for the development of
viable urban communities;
(5) more rational use of land and other natural
resources;
(6) improved arrangement of residential, commercial,
industrial, recreational, and other necessary activity centers;
(7) restoration and preservation of properties of
special value for historic, architectural, or aesthetic reasons;
(8) reduction of the isolation of income groups in
communities and geographical areas, promotion of increased
diversity and vitality of neighborhoods through spatial
deconcentration of housing opportunities for persons of low and
moderate income, and revitalization of deteriorating or
deteriorated neighborhoods to attract persons of higher income; and
(9) alleviation of physical and economic distress
through the stimulation of private investment and community
revitalization in [slum or] blighted areas.
SECTION 2. Section 373.004, Local Government Code, is
amended to read as follows:
Sec. 373.004. GOALS OF PROGRAM. Through a community
development program, a municipality may conduct work or activities
designed to:
(1) improve the living and economic conditions of
persons of low and moderate income;
(2) benefit low or moderate income neighborhoods;
(3) aid in the prevention or elimination of [slums
and] blighted areas;
(4) aid a federally assisted new community; or
(5) meet other urgent community development needs,
including an activity or function specified for a community
development program that incorporates a federally assisted new
community.
SECTION 3. Section 373.006, Local Government Code, is
amended to read as follows:
Sec. 373.006. REQUIRED PROCEDURES BEFORE ADOPTION OF
COMMUNITY DEVELOPMENT PROGRAM. Before exercising powers under
Section 373.005, the governing body of the municipality must:
(1) identify areas of the municipality in which
predominantly low and moderate income persons reside and each unit
of real property in the municipality[,] that has the
characteristics of blight [are blighted or slum areas] or that is a
[are] federally assisted new community in the municipality
[communities];
(2) establish community development program areas in
which community development activities, building rehabilitation,
or the acquisition of privately owned buildings or land is
proposed;
(3) adopt, by resolution or ordinance, a plan under
which citizens may publicly comment on the proposed community
development program;
(4) conduct public hearings on the proposed program
before the 15th day before the date of its final adoption by the
governing body; and
(5) adopt the community development program by
resolution or ordinance.
SECTION 4. Sections 374.002(a) and (b), Local Government
Code, are amended to read as follows:
(a) The legislature finds that [slum and] blighted areas
exist in municipalities in this state and that those areas:
(1) are a serious and growing menace that is injurious
and inimical to the public health, safety, morals, and welfare of
the residents of this state;
(2) contribute substantially and increasingly to the
spread of disease and crime, requiring excessive and
disproportionate expenditures of public funds for the preservation
of the public health and safety, and for crime prevention,
correctional facilities, prosecution and punishment, treatment of
juvenile delinquency, and the maintenance of adequate police, fire,
and accident protection and other public services and facilities;
and
(3) constitute an economic and social liability,
substantially impair the sound growth of affected municipalities,
and retard the provision of housing accommodations.
(b) For these reasons, prevention and elimination of [slum
and] blighted areas are matters of state policy and concern that may
be best addressed by the combined action of private enterprise,
municipal regulation, and other public action through approved
urban renewal plans. The legislature further finds that the repair
and rehabilitation of buildings and other improvements in affected
areas, public acquisition of real property, demolition of buildings
and other improvements as necessary to eliminate [slum or] blight
conditions or to prevent the spread of those conditions, the
disposition of property acquired in affected areas and incidental
to the purposes stated by this subsection, and other public
assistance to eliminate those conditions are public purposes for
which public money may be spent and the power of eminent domain
exercised.
SECTION 5. Sections 374.003(3), (18), (25), (26), and (28),
Local Government Code, are amended to read as follows:
(3) "Blighted area" means a tract or unit of real
property [an area] that presents four or more of the following
conditions for at least one year after the date on which notice of
the conditions is provided to the property owner as required by
Section 374.018(a)(1) or (b):
(A) the property contains uninhabitable, unsafe,
or abandoned structures;
(B) the property has inadequate provisions for
sanitation;
(C) there exists on the property an imminent harm
to life or other property caused by fire, flood, hurricane,
tornado, earthquake, storm, or other natural catastrophe declared
to have brought about a state of disaster under Section 418.014,
Government Code, or that brought about a disaster for which a
request for federal assistance is made under Section 418.021,
Government Code;
(D) the property has been identified by the
United States Environmental Protection Agency as a superfund site
under the federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et
seq.) or as environmentally contaminated to an extent that the
property requires remedial investigation or a feasibility study;
(E) the property has been the location of
substantiated and repeated illegal activity of which the property
owner knew or should have known;
(F) the maintenance of the property is below
county or municipal standards;
(G) the property is abandoned and contains a
structure that is not fit for its intended use because the
utilities, sewerage, plumbing, or heating or a similar service or
facility of the structure has been disconnected, destroyed,
removed, or rendered ineffective; or
(H) the property presents an economic liability
to the immediate area because of deteriorating structures or
hazardous conditions [is not a slum area, but that, because of
deteriorating buildings, structures, or other improvements;
defective or inadequate streets, street layout, or accessibility;
unsanitary conditions; or other hazardous conditions, adversely
affects the public health, safety, morals, or welfare of the
municipality and its residents, substantially retards the
provision of a sound and healthful housing environment, or results
in an economic or social liability to the municipality. The term
includes an area certified as a disaster area as provided by Section
374.903].
(18) "Rehabilitation" means the restoration of
buildings or other structures to prevent deterioration of an area
that is tending to become a blighted area [or a slum area].
(25) "Urban renewal activities" includes [slum
clearance,] redevelopment, rehabilitation, and conservation
activities to prevent further deterioration of an area that is
tending to become a blighted [or slum] area. The term includes:
(A) the acquisition of all or part of a [slum area
or] blighted area or the acquisition of land that is predominantly
open and that, because of obsolete platting, diversity of
ownership, deterioration of structures or site improvements, or for
other reasons, substantially impairs or arrests the sound growth of
the community;
(B) the demolition and removal of buildings and
improvements;
(C) the installation, construction, or
reconstruction of streets, utilities, parks, playgrounds, and
other improvements necessary to fulfill urban renewal objectives in
accordance with an urban renewal plan;
(D) the disposition by the municipality of
property acquired in an urban renewal area for use in accordance
with an urban renewal plan, including the sale or initial lease of
the property at its fair value or the retention of the property;
(E) the implementation of plans for a program of
voluntary repair and rehabilitation of buildings or improvements in
accordance with an urban renewal plan; and
(F) the acquisition of real property in an urban
renewal area as necessary to remove or prevent the spread of blight
or deterioration or to provide land for needed public facilities.
(26) "Urban renewal area" means a [slum area,]
blighted area[, or a combination of those areas] that the governing
body of a municipality designates as appropriate for an urban
renewal project.
(28) "Urban renewal project" includes any of the
following activities undertaken in accordance with an urban renewal
plan:
(A) municipal activities in an urban renewal area
that are designed to eliminate or to prevent the development or
spread of [slums and] blighted areas;
(B) [slum clearance and redevelopment in an urban
renewal area;
[(C)] rehabilitation or conservation in an urban
renewal area;
(C) [(D)] development of open land that, because
of location or situation, is necessary for sound community growth
and that is to be developed, by replatting and planning, for
predominantly residential uses; or
(D) [(E)] any combination or part of the
activities described by Paragraphs (A)-(C) [(A)-(D)].
SECTION 6. Section 374.011, Local Government Code, is
amended by amending Subsection (a) and adding Subsection (d) to
read as follows:
(a) Except as provided by Section 374.012, a municipality
may not exercise a power granted under this chapter unless:
(1) the governing body of the municipality adopts a
resolution that finds that a [slum area or] blighted area exists in
the municipality and that the rehabilitation, the conservation, or
the [slum clearance and] redevelopment of the area is necessary for
the public health, safety, morals, or welfare of the residents of
the municipality; and
(2) a majority of the municipality's voters voting in
an election held as provided by Subsection (b) favor adoption of the
resolution.
(d) The governing body of the municipality must determine
that each unit of real property included in a resolution under
Subsection (a) has the characteristics of blight.
SECTION 7. Section 374.012(c), Local Government Code, is
amended to read as follows:
(c) The resolution ordering the election and the notice of
the election must contain:
(1) a complete legal description of each unit of real
property [the area] included in the proposed project;
(2) a statement of the nature of the proposed project;
[and]
(3) a statement of the total amount of local funds to
be spent on the proposed project; and
(4) a statement that each unit of real property has the
characteristics of blight.
SECTION 8. Section 374.013(a), Local Government Code, is
amended to read as follows:
(a) To further the urban renewal objectives of this chapter,
a municipality may formulate a workable program to use appropriate
private and public resources, including the resources specified by
Subsection (b), to encourage urban rehabilitation, to provide for
the redevelopment of [slum and] blighted areas, or to undertake
those activities or other feasible municipal activities as may be
suitably employed to achieve the objective of the program. The
program must specifically include provisions relating to:
(1) prevention, through diligent enforcement of
housing and occupancy controls and standards, of the expansion of
blight into areas of the municipality that are free from blight; and
(2) rehabilitation or conservation of [slum and]
blighted areas as far as practicable to areas that are free from
blight through replanning, removing congestion, providing parks,
playgrounds, and other public improvements, encouraging voluntary
rehabilitation and requiring the repair and rehabilitation of
deteriorated or deteriorating structures[, and the clearance and
redevelopment of slum areas].
SECTION 9. Section 374.014(a), Local Government Code, is
amended to read as follows:
(a) A municipality may not prepare an urban renewal plan for
an area unless the governing body of the municipality has, by
resolution, declared the area to be a [slum area, a] blighted area[,
or both,] and has designated the area as appropriate for an urban
renewal project. The governing body may not approve an urban
renewal plan until a general plan has been prepared for the
municipality. A municipality may not acquire real property for an
urban renewal project until the governing body has approved the
urban renewal plan as provided by Subsection (d).
SECTION 10. Sections 374.015(a) and (d), Local Government
Code, are amended to read as follows:
(a) A municipality may exercise all powers necessary or
convenient to carry out the purposes of this chapter, including the
power to:
(1) conduct preliminary surveys to determine if
undertaking an urban renewal project is feasible;
(2) conduct urban renewal projects within its area of
operation;
(3) execute contracts and other instruments necessary
or convenient to the exercise of its powers under this chapter;
(4) provide, arrange, or contract for the furnishing
or repair by any person of services, privileges, works, streets,
roads, public utilities, or other facilities in connection with an
urban renewal project, including installation, construction, and
reconstruction of streets, utilities, parks, playgrounds, and
other public improvements necessary to carry out an urban renewal
project;
(5) acquire any real property, including
improvements, and any personal property necessary for
administrative purposes, that is necessary or incidental to an
urban renewal project, hold, improve, clear, or prepare the
property for redevelopment, mortgage or otherwise encumber or
dispose of the real property, insure or provide for the insurance of
real or personal property or municipal operations against any risk
or hazard and to pay premiums on that insurance, and enter any
necessary contracts;
(6) invest urban renewal project funds held in
reserves or sinking funds, or not required for immediate
disbursement, in property or securities in which banks may legally
invest funds subject to their control, redeem bonds issued under
Section 374.026 at the redemption price established in the bond, or
purchase those bonds at less than the redemption price, and cancel
the bonds redeemed or purchased;
(7) borrow money and apply for and accept advances,
loans, grants, contributions, and other forms of financial
assistance from the federal, state, or county government, other
public body, or other public or private sources for the purposes of
this chapter, give any required security, and make and carry out any
contracts in connection with the financial assistance;
(8) make plans necessary to carry out this chapter in
its area of operation, contract with any person in making and
carrying out the plans, and adopt, approve, modify or amend the
plans;
(9) develop, test, and report methods and techniques
for the prevention of [slums and] urban blight, conduct
demonstrations and other activities in connection with those
methods and techniques, and apply for, accept, and use federal
grants made for those purposes;
(10) prepare plans and provide reasonable assistance
for the relocation of persons displaced from an urban renewal
project area, including families, business concerns, and others, as
necessary to acquire possession and to clear the area in order to
conduct the urban renewal project;
(11) appropriate funds and make expenditures as
necessary to implement this chapter and, subject to Subsection (c),
levy taxes and assessments for that purpose;
(12) close, vacate, plan, or replan streets, roads,
sidewalks, ways, or other places, plan, replan, zone, or rezone any
part of the municipality and make exceptions from building
regulations, and enter agreements with an urban renewal agency
vested with urban renewal powers under Subchapter C, which may
extend over any period, restricting action to be taken by the
municipality under any of the powers granted under this chapter;
(13) organize, coordinate, and direct the
administration of this chapter within the area of operation as
those provisions apply to the municipality to most effectively
promote and achieve the purposes of this chapter and establish new
municipal offices or reorganize existing offices as necessary to
most effectively implement those purposes; and
(14) issue tax increment bonds.
(d) A [Except as provided by Section 374.016, a]
municipality may acquire by condemnation any interest in real
property, including a fee simple interest, that the municipality
considers necessary for or in connection with an urban renewal
project. Property dedicated to a public use may be acquired in that
manner, except that property belonging to the state or to a
political subdivision of the state may not be acquired without the
consent of the state or political subdivision.
SECTION 11. Section 374.017(d), Local Government Code, is
amended to read as follows:
(d) Real property or an interest in real property subject to
this section may only be sold, leased, or otherwise transferred or
retained at not less than the fair value of the property for uses in
accordance with the urban renewal plan. In determining the fair
value, the municipality shall consider:
(1) the uses provided in the urban renewal plan;
(2) any restrictions on and any covenants, conditions,
and obligations assumed by the purchaser, lessee, or municipality
in retaining the property;
(3) the objectives of the plan for the prevention of
the recurrence of [slums or] blighted areas; and
(4) any other matters that the municipality specifies
as appropriate.
SECTION 12. Subchapter B, Chapter 374, Local Government
Code, is amended by adding Sections 374.018 and 374.019 to read as
follows:
Sec. 374.018. LIMITATIONS ON CHARACTERIZATIONS OF BLIGHT.
(a) Notwithstanding any other law, an area may not be considered a
blighted area on the basis of a condition described by Section
374.003 unless:
(1) the municipality has given notice in writing to
the property owner by first class mail regarding the condition to
the:
(A) last known address of the property owner; and
(B) physical address of the property; and
(2) the property owner fails to take reasonable
measures to remedy the condition.
(b) If a mailing address for the property owner cannot be
determined, the municipality shall post notice in writing regarding
the condition in a conspicuous place on the property.
(c) An area may not be considered a blighted area solely for
an aesthetic reason.
(d) A determination by a municipality that a unit of real
property has the characteristics of blight is valid for two years.
(e) After the two-year period prescribed by Subsection (d),
a municipality may make a new determination that the unit of real
property has the characteristics of blight and redesignate the unit
of real property as a blighted area for another two-year period.
(f) A municipality shall remove a determination of blight
under this chapter if the municipality finds that the property
owner has remedied the condition that was the basis for the
determination.
Sec. 374.019. COMMON OWNER PROPERTY. For the purposes of
this chapter and Chapter 21, Property Code, if a municipality
determines that two or more contiguous units of real property that
are owned by the same person have the characteristics of blight, the
municipality may treat those units of real property as one unit of
real property.
SECTION 13. Section 374.021(b), Local Government Code, is
amended to read as follows:
(b) In this section, "urban renewal project powers"
includes the rights, powers, functions, and duties of a
municipality under this chapter. The term does not include the
power to:
(1) determine an area as a [slum area,] blighted
area[, or both] and to designate that area as appropriate for an
urban renewal project;
(2) approve and amend urban renewal plans and hold
public hearings relating to those plans;
(3) establish a general plan for the locality as a
whole;
(4) establish a workable program under Section
374.013;
(5) make determinations and findings under Section
374.011(a), 374.013(b), or 374.014(d);
(6) issue general obligation bonds; and
(7) appropriate funds, levy taxes and assessments, and
exercise other functions under Subdivisions (11) and (12) of
Section 374.015(a).
SECTION 14. Section 2206.001(b), Government Code, is
amended to read as follows:
(b) A governmental or private entity may not take private
property through the use of eminent domain if the taking:
(1) confers a private benefit on a particular private
party through the use of the property;
(2) is for a public use that is merely a pretext to
confer a private benefit on a particular private party; or
(3) is for economic development purposes, unless the
economic development results [is a secondary purpose resulting]
from municipal community development or municipal urban renewal
activities to eliminate an existing affirmative harm on society
from [slum or] blighted areas under:
(A) Chapter 373 or 374, Local Government Code,
other than an activity described by Section 373.002(b)(5), Local
Government Code; or
(B) Section 311.005(a)(1)(I), Tax Code.
SECTION 15. Sections 21.046(a) and (b), Property Code, are
amended to read as follows:
(a) A department, agency, instrumentality, or political
subdivision of this state shall [may] provide a relocation advisory
service for an individual, a family, a business concern, a farming
or ranching operation, or a nonprofit organization that [if the
service] is compatible with the Federal Uniform Relocation
Assistance Advisory Program, 42 U.S.C. Section 4601 [23 U.S.C.A.
501,] et seq.
(b) This state or a political subdivision of this state
shall [may], as a cost of acquiring real property, pay moving
expenses and rental supplements, make relocation payments, provide
financial assistance to acquire replacement housing, and
compensate for expenses incidental to the transfer of the property
if an individual, a family, the personal property of a business, a
farming or ranching operation, or a nonprofit organization is
displaced in connection with the acquisition.
SECTION 16. Section 311.002, Tax Code, is amended by
amending Subdivision (1) and adding Subdivision (1-a) to read as
follows:
(1) "Blighted area" has the meaning assigned by
Section 374.003, Local Government Code.
(1-a) "Project costs" means the expenditures made or
estimated to be made and monetary obligations incurred or estimated
to be incurred by the municipality or county establishing a
reinvestment zone that are listed in the project plan as costs of
public works or public improvements in the zone, plus other costs
incidental to those expenditures and obligations. "Project costs"
include:
(A) capital costs, including the actual costs of
the acquisition and construction of public works, public
improvements, new buildings, structures, and fixtures; the actual
costs of the acquisition, demolition, alteration, remodeling,
repair, or reconstruction of existing buildings, structures, and
fixtures; and the actual costs of the acquisition of land and
equipment and the clearing and grading of land;
(B) financing costs, including all interest paid
to holders of evidences of indebtedness or other obligations issued
to pay for project costs and any premium paid over the principal
amount of the obligations because of the redemption of the
obligations before maturity;
(C) real property assembly costs;
(D) professional service costs, including those
incurred for architectural, planning, engineering, and legal
advice and services;
(E) imputed administrative costs, including
reasonable charges for the time spent by employees of the
municipality or county in connection with the implementation of a
project plan;
(F) relocation costs;
(G) organizational costs, including the costs of
conducting environmental impact studies or other studies, the cost
of publicizing the creation of the zone, and the cost of
implementing the project plan for the zone;
(H) interest before and during construction and
for one year after completion of construction, whether or not
capitalized;
(I) the cost of operating the reinvestment zone
and project facilities;
(J) the amount of any contributions made by the
municipality or county from general revenue for the implementation
of the project plan; and
(K) payments made at the discretion of the
governing body of the municipality or county that the governing
body finds necessary or convenient to the creation of the zone or to
the implementation of the project plans for the zone.
SECTION 17. Sections 311.008(b) and (e), Tax Code, are
amended to read as follows:
(b) A municipality or county may exercise any power
necessary and convenient to carry out this chapter, including the
power to:
(1) cause project plans to be prepared, approve and
implement the plans, and otherwise achieve the purposes of the
plan;
(2) acquire real property by purchase[, condemnation,
or other means] to implement project plans and sell that property on
the terms and conditions and in the manner it considers advisable;
(3) enter into agreements, including agreements with
bondholders, determined by the governing body of the municipality
or county to be necessary or convenient to implement project plans
and achieve their purposes, which agreements may include
conditions, restrictions, or covenants that run with the land or
that by other means regulate or restrict the use of land; and
(4) consistent with the project plan for the zone:
(A) acquire [blighted, deteriorated,
deteriorating, undeveloped, or inappropriately developed] real
property or other property in a blighted area, in an undeveloped
area, or in a federally assisted new community in the zone for the
preservation or restoration of historic sites, beautification or
conservation, the provision of public works or public facilities,
or other public purposes;
(B) acquire, construct, reconstruct, or install
public works, facilities, or sites or other public improvements,
including utilities, streets, street lights, water and sewer
facilities, pedestrian malls and walkways, parks, flood and
drainage facilities, or parking facilities, but not including
educational facilities; [or]
(C) in a reinvestment zone created on or before
September 1, 1999, acquire, construct, or reconstruct educational
facilities in the municipality; or
(D) acquire by condemnation any interest,
including a fee simple interest, in real property that is a blighted
area and necessary for the reinvestment zone.
(e) A municipality or county may acquire by condemnation an
interest in real property only if the taking is in accordance with
Chapter 2206, Government Code. [The implementation of a project
plan to alleviate a condition described by Section 311.005(a)(1),
(2), or (3) and to promote development or redevelopment of a
reinvestment zone in accordance with this chapter serves a public
purpose.]
SECTION 18. (a) The following provisions of the Local
Government Code are repealed:
(1) Section 374.003(19); and
(2) Section 374.016.
(b) Section 311.008(c), Tax Code, is repealed.
SECTION 19. The change in law made by this Act applies only
to a condemnation proceeding in which the condemnation petition is
filed on or after the effective date of this Act. A condemnation
proceeding pending on the effective date of this Act is governed by
the law in effect immediately before the effective date of this Act,
and that law is continued in effect for that purpose.
SECTION 20. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2011.