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.

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