Special
Alert: 2003 Legislative Tracking Center for Real Estate
And so without
further adieu, here’s a brief legislative review by topic. Keep
in mind as you read through these, that this year the budget deficit,
projected at nearly $10 billion, is the tail wagging the legislative
dog, and any bill that will affect the budget will be scrutinized
carefully. Bills that will cost the state money are avoided like
the plague, while bills that are revenue-neutral don’t have that
strike against them. You’d think bills that increase revenue would
be all the rage, but since Republicans control the House and Senate
for the first time nearly since Santa Anna’s defeat, they don’t
want to be known for new taxes and such, so these bills are very
touchy. The focus is on cutting what’s already there, not generating
more revenue, necessarily, although all bets are off when it comes
to the Texas franchise tax (see the legislative review for business
owners on our Business Owner’s Resource Center for more on this).
Land
Use:
County
Land Use Regulation. There are many bills seeking to give counties
the power to regulate land use the way cities do via their zoning
codes. Some of these bills give specific powers (HB 223, for example,
authorizing noise regulations), some are very broad (HB 2035, basically
broad powers to regulate all aspects of land use). Counties want
to regulate land use to stop urban sprawl that precedes either annexation
into a city, or incorporation of a new city. Once a use has been
established prior to annexation or incorporation, it is very difficult
and expensive to force a change in that use. It will be interesting
to see which road this legislature chooses. Since these types of
bills do not affect the state budget too much, there is no “fiscal
responsibility” holding them back.
Annexation.
There are several bills that relate to annexation as well, from
giving persons in areas proposed to be annexed the right to vote
in the city elections of the city doing the annexation, to changing
the annexation process (which just changed as of December, 2002),
to prohibiting annexation without landowner consent, to just about
everything in between. Watch for our updates as the session progresses
to get a better idea where this legislature will take our annexation
process, or whether they will just leave it alone.
Transportation.
Remember a while back when TxDOT came out and said “no more frontage
roads”? Well, that ticked off more than a few, and so we now have
a heavily lobbied bill, SB 361 which would prohibit the Texas Transportation
Commission from adopting or enforcing rules which are inconsistent
with the plans of home-rule municipalities. Real estate councils
in Austin, San Antone, Dallas and Houston are all involved in this
one. Protecting future frontage roads is a key part of this bill,
all in the name of “economic development.”
Billboards.
You’d think billboards were the worst blight in the state, given
the many bills aimed at restricting and/or banning them outright.
If you have a billboard, whether it’s on your own property and advertises
your business, or whether it’s off premises, watch these closely
to see which ones, if any, pass.
Appearance
Regs. HB 1207 merits particular mention. At the moment, it has
been voted favorably out of the House Urban Affairs Committee. It
specifically allows cities to regulate the "appearance"
of buildings, yards, and landscaping. Can you say “Big Brother”?
This is but one example of the extremely broad powers being considered
given to cities to regulate land use. Ponder for a moment the potential
cost of complying with detailed regulations imposed by a city on
how your building, yard, and landscape LOOKS!
Construction:
Here are a few
particularly noteworthy construction-related bills:
Mechanics
Liens. HB 208 would allow those who demolish structures to claim
a mechanics lien. HB 3018 includes substantive changes to contract
retainage rights and liens of both general contractors and subcontractors,
and adds a new section restricting lien waivers, releases and impairments.
Contingency
Payments. HB 541 is a huge bill. It deals with contracts which
call for contingent payments from owners to general contractors.
Apparently these clauses have caused lots of problems in the past,
so much so that representatives of general contractors and subcontractors
got together in a mediation to try to hammer out a mutually agreeable
solution. This bill is that solution. And it’s already being discussed
for amendment.
Indemnification.
HB 3076 would prohibit indemnification clauses in contracts against
loss or liability for damage from the sole or concurrent negligence
of the indemnitee, its agent or employee, or an independent contractor,
other than the indemnitor, directly responsible to the indemnitee.
Residential
Construction. It is hard if not impossible to overstate the
effect HB 730 would have if passed. It sets up the “Texas Residential
Construction Commission” for dispute resolution of residential construction
issues, and limits exposure of builders for alleged defects. This
is a very important, very controversial, and heavily lobbied bill.
If you are in residential construction, you need to read this bill
and contact your legislators to support this bill.
Landlord/Tenant:
Mitigation.
There are two bills, HB 299 and HB 537, which try to define and
either advance or limit a landlord’s duty to mitigate damages under
a lease. HB 299 modifies the duty to mitigate to a duty to "make
reasonable efforts" to mitigate, and that applies only to leases
of 5 years or less. HB 537 is the pro-tenant yang to HB 299's ying.
Hunting:
Recreational
Liability. HB 408 expands the number of landowners who could
use the recreational liability limitations statute, by allowing
those who charge up to 20 times the amount of ad valorem taxes imposed
the previous year to come under its limited liability protections
(up from a mere 2 times).
Those
are the real estate highlights. Click over to the Special
Alert: 2003 Legislative Tracking Center for Business Owners
for additional legislative news, including an update on the franchise
tax debate. Our website is updated throughout the week; we keep
it as real-time current as possible, so click over to www.mctexlaw.com/2003legislation.asp,
book mark that page and check back often for those updates.