Texas House Passes Takings Compensation Bill

Texas House Passes Takings Compensation Bill
July 1, 2005

Citizens in Texas may soon be entitled to compensation when local governments enforce land use restrictions that substantially devalue their property.

House Bill 2833 would require a local government to compensate citizens when it imposes land-use limits on more than 55 percent of a property's surface area resulting in a greater than 25 percent reduction in property value.



Broad, Bipartisan Support

The bill, sponsored by State Rep. Rob Cook (R-Eagle Lake), received broad, bipartisan support in the Texas House, which approved the bill on May 10 by a vote of 117-24. The bill appears to have similar support in the Senate, but it faces vehement opposition from a small number of legislators.

Delaying tactics in both the House and Senate prevented the Senate from voting on the bill before going into recess at the end of May. The bill's supporters vow to revive the bill and send it to Gov. Rick Perry (R) in the next legislative session.

"It's heartening that some state legislatures continue to consider legislation to protect property rights from excessive land use regulation," said Case Western Reserve University law professor Jonathan H. Adler.

"Many jurisdictions in our state are rightly protecting our natural resources through water quality measures and more," said Texas Agriculture Commissioner Susan Combs at an April 5 news conference. "However, the issue of excessive land use regulations and the impact on landowners who invested in Texas has to be considered."



Legislative Action Necessary

Land use and environmental restrictions that have reduced property values by as much as 90 percent have been upheld by the Texas Supreme Court (Quick v. City of Austin (1999)). Proponents of HB 2833 believe legislative action is the best way to correct what they see as injustices perpetrated by the courts.

"We have to be sensitive to the property owners in this state while we establish regulations that impact their property values," State Sen. Todd Staples (R-Palestine) said at the April 5 news conference. "This bill allows environmental regulations to continue while protecting property owners with the right of just compensation."

Strong support for HB 2833 has come from the Texas Landowners Conservancy (TLC), a nonprofit organization dedicated to the preservation of the state's natural resources and the protection of private property rights. According to an April 5 TLC news release, "TLC members support legitimate environmental protection measures but do not agree their land alone should be sacrificed to pay for the protections of an entire community, nor should their private lands be opened up for public access."



Sierra Club Claims Conspiracy

While HB 2833 has broad legislative support, some strongly oppose the bill. The Sierra Club, for example, contends the bill would hinder "impervious cover" regulations that limit the percentage of property that can be covered by driveways, rooftops, or other materials impervious to water. The Sierra Club claims impervious cover limits are necessary to protect underground water quality.

According to a Sierra Club news release, "The MAJOR problem with the legislation, however, is that basically it is intended to STOP cities and other local governments from requiring impervious cover limitations and similar regulations to protect water quality. By making the potential price tag so high for local governments to try to establish these requirements in developing areas, the hidden motive here is NOT to 'compensate' landowners but rather to persuade local governments to abandon this approach to water quality protection" (emphasis in original).



Legislator Fires Back

Cook took issue with the organization's assertions. He told the San Antonio Express-News on May 18, "The agenda of a 10 percent impervious cover limitation (or buildable area) on a tract of land, as proposed by SOS (Save Our Springs) and others, is being disguised as a water quality measure when it is really intended to stop development altogether.

"HB 2833 would not interfere with cities' ability to protect water quality. Environmental experts have provided testimony that the highest levels of water quality and environmental protection specified in federal and state law can be achieved within the regulatory parameters of this bill.

"Moreover," Cook added, "there are numerous ways for cities to protect water quality through modern engineering solutions and purchasing land, conservation easements and development rights. Reliance on onerous impervious cover limitations for protecting water quality is an antiquated and lazy system. Strict impervious cover limits not only severely damage private property values, but also grossly reduce a portion of a municipal tax base."



Further Refinements Needed

"Government should not be able to restrict a person's use of his property on the mere off-chance that it might cause some harm," Sterling Burnett, a senior fellow at the National Center for Policy Analysis, said. "The onus in cases like this should never be upon the person whose property is at issue. It should be upon the government to show that regulation actually serves a legitimate public purpose, and then the property owner should be paid for that taking."

State Sen. Jim Jackson (R-Dallas) agreed. Stated Jackson in a May 18 news release, "HB 2833 does not limit the sovereign's ability to make regulations that are for the benefit of all; it merely seeks to provide for just compensation for the private property owners who suffer an undue burden because of such legislation."

"The problem with some of these bills, however, is that they often focus on land values rather than the real issue, which is property rights," noted Adler. "All sorts of government actions can affect property values. The question should be whether a government action effectively limited a landowner's preexisting property rights.

"If a government prevents a landowner from using his land in a way that doesn't interfere with his neighbors' ability to exercise the same right, then there should be consideration of compensation," said Adler. "Focusing on land values creates the risk that some people will be compensated who haven't suffered regulatory takings, and some that have suffered regulatory takings will be out of luck."


James Hoare (jhoare@mcgivneyandkluger.com) is managing attorney at the Syracuse, New York office of McGivney, Kluger & Gannon.