TSCRA Legislative Update JUNE 2005
SPECIAL
REPORT: 79th Texas Legislature, Regular Session
Letter
from TSCRA President Dick Sherron
School
finance
Trans-Texas
Corridor
Workers’
compensation
Water
Purchase
of development rights
Hunting
on submerged land
Obesity
lawsuits
Field
inspector authority
Annexation
of agricultural property
Hunting
on annexed agricultural land
Oil-
and gas-related activities
June
1, 2005
Dear Friends and Colleagues,
Your
association has worked hard during the 79th Texas Legislative session to
represent and protect your interests.
I am pleased
to report that TSCRA was instrumental in influencing the outcome of several
important legislative issues, as reported in this Special Edition of TSCRA
News Update.
Special
editions will be sent periodically on timely topics for our members. By the end
of the year, we will begin sending the newsletter and member alerts by e-mail.
You will get
important information much faster, and TSCRA will
save the expense of printing and mailing. Please make sure we have your
current e-mail address on file. Send it to khawkins@texascattleraisers org .
Sincerely,
Dick Sherron, President
SPECIAL
REPORT: 79th Texas Legislature, Regular Session
The Texas Legislature convened on Jan. 11, 2005, with hopes of revising
the school finance system, providing property tax relief and reforming the
workers’ compensation insurance system, among other things.
They
succeeded on some issues, but failed on some of the major ones.
School
finance
On Oct. 1, 2005, a state district judge ruled that because the cost of
meeting state education requirements exceeds available revenue, the school
finance system fails to provide an adequate education as required under Article
VII of the Texas Constitution.
Coupled with
a public outcry over increasingly burdensome property taxes, the Legislature set
out to reform the system.
As part of a
plan to lower school property taxes while maintaining or increasing current
levels of education spending, legislators had to consider revisions to the
current tax system. Options considered included:
·
Expanding the franchise tax to encompass a greater number of businesses
that currently do not pay, such as partnerships and sole proprietorships,
·
Closing the so-called “Delaware sub” loophole that allows
corporations/partnerships to avoid the tax,
·
A gross receipts tax,
·
A payroll tax, and
·
Increases in various other taxes such as alcohol and tobacco taxes and
the sales tax.
The
education reform parts of the package were contained in HB 2 and the
revenue-swap provisions were in HB 3. Despite the efforts of both the House and
the Senate, they were never able to reach a compromise on the language contained
in these bills.
It is
unlikely that the governor will call a special session of the Legislature until
after a ruling from the Texas Supreme Court on the constitutionality of the
current education system, if at all.
As with any
tax session, we worked hard to ensure that agriculture valuations for property
and other agriculture related tax exemptions were protected. While the danger of
losing these exemptions wasn’t significant this session, it will always be an
issue that requires vigilant attention when the Legislature is at work.
Trans-Texas
Corridor
The Trans-Texas Corridor is Gov. Perry’s vision for future
transportation in the State of Texas. Originally passed in the 2003 legislative
session, fears began to rise among Texans when the Department of Transportation
began holding public meetings to discuss the Corridor concept.
As a result,
TSCRA, the Farm Bureau and other agriculture groups formed a committee to study
the issue and make recommendations on reforming the Corridor concept to make it
less burdensome on Texas landowners.
After
extensive negotiations with the House and Senate sponsors of the bill, HB 2702
was passed containing various reforms that benefit agriculture interests across
the state. The problems and our solutions to those problems are outlined below:
1)
Condemnation of property to be used for ancillary facilities. Current law
allows the state to purchase or condemn property to be leased to private
interests for the construction of ancillary facilities―gas stations,
hotels, restaurants and other commercial uses. HB 2702 provides the following:
·
Prohibits the purchase or condemnation of land for hotels, restaurants
and other commercial uses,
·
Puts a two-year moratorium on the acquisition of property for, or
construction of, any ancillary facilities,
· Requires the county commissioners to
approve any ancillary facility proposed in that county,
·
Allows the landowner to retain development rights over land taken for
ancillary facilities, and
·
Prohibits the state from condemning land outside the Corridor for the
construction of ancillary facilities.
2) Loss
of access. Most everyone was concerned about the Corridor severing their
property and limiting their ability to reach the severed parcel or accessing the
highway itself.
The bill
requires the state to provide access to and across the Corridor at the
intersections of all state and interstate highways, and to make every reasonable
effort to provide access to significant farm-to-market and ranch-to-market
roads, taking into consideration advice solicited from local officials.
3)
Utility. The bill also requires the state to restore the utility of any road
severed by the Corridor.
4)
Damages for diminished access. Of major significance, is the requirement
that the state compensate a landowner for the loss of reasonable access to
property that is appraised as agricultural or open space land and that is
outside the city limits or extraterritorial jurisdiction of a city with a
population of 5,000 or more.
Under
current law, the State is not required to compensate for impairment of access,
although it can have a dramatic impact on your property value and ability to
conduct business.
5)
“Quick-take” of property without due process. Under current law, the
State can file a declaration of taking and confiscate your property for
Trans-Texas Corridor purposes before you have a hearing with the special
commissioners in the condemnation case.
HB 2702
requires the State to provide the landowner 90 days to vacate the property once
the declaration of taking is filed. Typically, this will be well after the
hearing before the special commissioners.
6)
Groundwater pumping. Many raised the prospect that the state could drill
water wells within the Corridor and use the utility facilities in the Corridor
to transport water across the state without adequate protections for area
property owners.
This bill
prohibits the State from drilling a well and pumping water for purposes other
than to provide water for the construction of the Corridor. If the State does
drill a well for such a purpose, it must abide by the rules of the local
groundwater conservation district.
7)
Approval of toll rates. The Trans-Texas Corridor statute allows the State to
contract with a private company for the construction and operation of the
Corridor. The private entity would also be allowed to set toll rates and raise
toll rates without any oversight from the state. HB 2702 requires the State to
approve all rates and rate increases proposed on the Corridor.
8)
Conservation easements. Under federal law, the State is required to mitigate
potential damage to wildlife habitat resulting from road construction. The
mitigation is accomplished by acquiring, through purchase or condemnation, other
parcels of land to be used for wildlife habitat. Provisions were added to
encourage the use of conservation easements for mitigation, leaving property in
private owners’ hands.
9)
Expiration of option to purchase. Places an expiration date on the
options-to-purchase bought by the State along potential Corridor routes.
10)
Confidentiality. Ensures the confidentiality of information collected on the
toll roads.
11) Other
reforms. The bill requires the State, if forced to mitigate, to offer the
landowner the option of executing a conservation easement rather than selling or
having his property condemned,
·
Prevents the State from prohibiting the construction of roads around the
Corridor by local governments, and
·
Requires the Department of Transportation to provide area legislators
with a report justifying the need for a Corridor project in a certain area.
We
understand that as the population of Texas grows we will need to build
additional facilities to transport people and goods across the state; however,
this must be done in a way that is respectful of the rights of ranchers, farmers
and other affected landowners.
HB 2702
contains significant reforms to accomplish that goal and we view it as a big
step in the right direction. We owe special thanks to Sen. Todd Staples
(R-Palestine) and Reps. Glenn Hegar (R-Katy), Lois Kolkhorst (R-Brenham) and
Robby Cook (D-Eagle Lake) for their hard work on this issue during the 79th
Session.
Workers’
compensation
The Legislature succeeded in reforming the workers’ compensation system
this session, and it was badly needed:
·
From 1999 to 2001, the average medical cost for each claim processed by
the Texas Workers’ Compensation Commission (TWCC) increased 21 percent,
·
Texas currently has the second worst return-to-work rate in the country,
·
Roughly 40 percent of Texas businesses have opted out of the system,
forgoing lawsuit protections, and
·
The Texas Sunset Commission reported that the TWCC was suffering from
major mismanagement.
HB 7,
authored and sponsored by Rep. Burt Solomons (R-Carrollton) and Sen. Todd
Staples, respectively, abolishes the TWCC and transfers its functions to a newly
created Division on Workers’ Compensation at the Texas Department of
Insurance. Reforms include:
·
Provides a network of doctors, including chiropractors and physical
therapists, but allows the networks themselves to determine which physicians can
serve as treating doctors. This measure is intended to bring quality doctors
back into the system while controlling runaway costs,
·
Allows patients to continue treatment with a non-network doctor if they
already have a doctor/patient relationship that predates the injury,
·
Creates an Office of Injured Employee Counsel to assist workers with
claims and other problems,
·
Establishes mandatory rate hearings and gives the Department of Insurance
the authority to determine when rates are excessive and roll them back when
deemed necessary,
·
Includes a prompt pay provision (set at 45 days) for health care
providers, an
·
Makes improvements to the indemnity dispute resolution process by
limiting repetitive hearings.
It is hoped
that these reforms will help lower the costs of participation in the workers’
compensation system for employers, increase participation and provide workers
with the care they need to help them get back to work as soon as possible.
Water
Sen. Ken
Armbrister (D-Victoria) filed SB 3, an omnibus water bill intended to build upon
the progressive changes in Texas’ water law and water policy initiated by SB
1, 75th Legislature, and SB 2, 77th Legislature.
SB 3
advanced water management in the state by moving forward from the past 10 years
of extensive regional and state water planning, to actual implementation of
water management strategies, including strategies to ensure adequate
environmental flows and water infrastructure financing.
SB 3
addressed major water-related challenges currently facing Texas, including the
need to ensure the viability of our rivers, streams, bays, estuaries; promoting
land stewardship policy and strategies; water conservation; district permitting;
and water financing.
The bill
would have set up groundwater management area councils (GMACs) made up of local
interests including groundwater conservation districts to ensure joint
management of groundwater in each aquifer.
The bill
also would have set consistent requirements for future historic use permitting
by groundwater districts. Additionally, it would have allowed the creation of a
statewide groundwater district over state-owned lands that are not within a
local groundwater district.
Unfortunately,
the bill met with stiff opposition from local groundwater districts who feared
losing local control and from municipalities and industrial water users who were
opposed to the fee structure proposed in the bill. It almost goes without saying
that the Legislature will again attempt to address these issues during the next
legislative session.
Purchase
of development rights
SB 1273,
filed and passed by Sen. Mike Jackson (R-Pasadena) and Rep. Charlie Geren
(R-Fort Worth), creates a Purchase of Development Rights (PDR) program to assist
in the preservation of agriculture property.
Through PDR
programs, a cash payment is made to a landowner for the value of the development
rights associated with a parcel of land.
The owner
continues to own the land, and is compensated for relinquishing the right to
develop it commercially. Agriculture
and other use of the land continue.
In Texas,
2.3 million acres of productive farmland was lost to development between 1982
and 1997. Farmers and ranchers in Texas today are faced with escalating land
costs, extreme weather such as drought and flooding, shrinking commodity costs
and encroaching developments.
Many
landowners are finding that their property is worth much more to developers for
residential or commercial use.
SB 1273
establishes the structure of the PDR program but does not provide a funding
mechanism.
It does,
however, establish a PDR account with the comptroller so that private funds may
be deposited and future funds may be leveraged, including federal sources such
as the Forest Legacy Program, the North American Wetland Conservation Program
and the USDA Farmland Protection Program. It also provides some checks and
balances to ensure property rights for the landowner.
Hunting
on submerged land
HB 506 by Rep. Harvey Hilderbran (R-Kerrville) solves a problem faced by
some landowners along the Gulf coast. The bill prohibits hunting any wild animal
or wild bird on or over privately owned land that is submerged under public
fresh water due to seasonal or occasional inundation, or public salt water on or
above land located above the mean high tide line of the Gulf of Mexico and its
bays and estuaries if there are signs providing notification that it is private
property and that hunting is prohibited.
Obesity
lawsuits
H.B. 107, by Rep. Corbin Van Arsdale (R-Houston), prohibits lawsuits in
Texas for obesity caused by the long-term consumption of food.
While this may seem unnecessary, lawsuits have actually been filed in
other states against restaurants for allegedly making people overweight. This
bill provides common-sense protections for everyone in the “food chain”
including:
· Agricultural
products grown in the soil,
· Meat
on the hoof, be it a cow, sheep, goat or chicken,
· The
manufacturing process,
· The
distribution process,
· The
retail sale, and
· The
restaurant or other eating establishment;
While
attention has been given to the lawsuit against McDonalds, most of these
lawsuits include as defendants other producers mentioned above. While none of
these suits have succeeded in placing liability on the producers and food
retailers, thousands of dollars are spent on legal fees and other expenses.
This bill
remedies that situation and protects all of the links in the chain. It also
requires individuals to take responsibility for what they voluntarily put in
their mouths rather than blaming others
Field
inspector authority
Another important issue was making sure that TSCRA field inspectors have
the necessary authority to carry out their duties. In 1893, TSCRA field
inspectors became “special rangers” commissioned by the Department of Public
Safety.
Special
rangers are governed by Section 411.023, Government Code, which states that a
these officers “may not enforce a law except one designed to protect life and
property.”
This statute
has subsequently been refined by Department rule to prohibit these officers from
enforcing any law except when necessary to protect the personal property of a
special ranger.
Legislation
passed this session by Sen. Kel Seliger (R-Amarillo) and Rep. Glenn Hegar
(R-Katy) creates a special statute that reaffirms the authority of TSCRA field
inspectors to conduct investigations into the theft of cattle and other ranch
related property or livestock as requested by members, other law enforcement
agencies or the public.
If you are a
constituent of either Rep. Hegar or Sen. Seliger, we encourage you to thank them
for their hard work.
Annexation
of agricultural property
During 2004, TSCRA attorney Ed Small worked with numerous landowners and
farmers near New Braunfels, Texas, who were the subject of annexation attempts
by the City of New Braunfels. Ultimately, Small convinced the City to enter into
a development agreement with landowners that would allow them to continue their
agriculture operations and not be annexed.
These
efforts translated into legislation filed by Rep. Carter Casteel (R-New
Braunfels) that would require a city to offer a landowner whose land is
appraised for agricultural or open space use an opportunity to enter into a
development agreement that would prevent annexation and taxation while
subjecting the landowner to some regulations.
Despite
opposition from the Texas Municipal League, the legislation ultimately passed as
part of HB 1772 by Rep. Sid Miller (R-Stephenville).
Hunting
on annexed agricultural land
Another noteworthy piece of legislation passed this session was SB 734 by
Sen. Tommy Williams (R-The Woodlands) and sponsored in the House by Rep. Anna
Mowery (R-Fort Worth). This legislation resulted from a situation near Fort
Worth, where TSCRA member John Merrill had been prevented from hunting on parts
of his ranch that had recently been annexed by the City of Fort Worth.
SB 734
states that wildlife management (including hunting) is an agricultural operation
protected by the Agriculture Protection Act. The bill places significant
limitations on a city’s ability to prevent the discharge of firearms on
agriculture or open space land annexed after 1981.
Oil-
and gas-related activities
Several bills were filed concerning the property rights and remedies of
surface owners when faced with mineral exploration or operations on their land.
The landowners sought better notices of mineral operations while the operators
tried to force time-consuming and expensive procedures on the landowners.
Neither side
prevailed, but the testimony by TSCRA clearly swayed the legislative committee
to seek some solutions in the next session and to include landowners as
stakeholders in the outcome.
Despite the
Legislature’s inability to reform the school finance system and provide
property tax relief, it was a good session for agriculture and a good session
for TSCRA.
We greatly
appreciate all of you who support the TSCRA PAC and thank you for your continued
support. It is essential to making sure that good people get elected to office,
stay elected, and that we have good relationships with all members of the
Legislature and the Executive Branch.