Relating to the designation of a property as a historic landmark and the inclusion of a property in a historic district or similar preservation district by certain municipalities.

89(R) SB 2639 - Engrossed version - Bill Text

By: Bettencourt, Kolkhorst

S.B. No. 2639

A BILL TO BE ENTITLED

AN ACT

relating to the designation of a property as a historic landmark and

the inclusion of a property in a historic district or similar

preservation district by certain municipalities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 211.0165(a) and (d), Local Government

Code, are amended to read as follows:

(a) Except as provided by Subsection (b)
and subject to

Section 211.01651
, a municipality that has established a process

for designating places or areas of historical, cultural, or

architectural importance and significance through the adoption of

zoning regulations or zoning district boundaries may not designate

a property as a local historic landmark or include a property within

the boundaries of a local historic district unless:

(1) the owner of the property consents to the

designation or inclusion; or

(2) if the owner does not consent, the designation or

inclusion of the owner's property is approved by a three-fourths

vote of:

(A) the governing body of the municipality; and

(B) the zoning, planning, or historical

commission of the municipality, if any.

(d) The historic designation impact statement must include

[
lists of the
]:

(1)
the
regulations that may be applied to any

structure on the property after the designation;

(2)
the
procedures for the designation;

(3)
the
tax benefits that may be applied to the

property after the designation; [
and
]

(4)
the
rehabilitation or repair programs that the

municipality offers for a property designated as historic
;

(5)

the code violations that would need to be resolved

to bring the property into compliance if the property was

designated as historic or included in a local historic district;

(6)

an estimate prepared by an independent appraiser,

adjuster, or construction expert of the cost to repair or restore

the property if designated as historic; and

(7)

an appraisal prepared by an independent appraiser

of the value of the property:

(A)

if the proposed historic designation or

inclusion in a local historic district is not applied to the

property; and

(B)

if the property is designated as a local

historic landmark or included in a local historic district
.

SECTION 2. Subchapter A, Chapter 211, Local Government

Code, is amended by adding Section 211.01651 to read as follows:

Sec.

211.01651.

DESIGNATION OF HISTORIC LANDMARK OR

DISTRICT IN CERTAIN MUNICIPALITIES. (a)

This section applies only

to a property located in a municipality with a population of 950,000

or more.

(b)

A municipality may not designate a property as a local

historic landmark or include a property within the boundaries of a

local historic district without the consent of the owner of the

property unless the municipality complies with:

(1) Section 211.0165; and

(2)

the procedures in this section for assessing

damages and determining compensation to the property owner.

(c)

If the governing body of a municipality approves the

designation of a property as a local historic landmark or inclusion

of the property within the boundaries of a local historic district

as provided by Section 211.0165(a) and the owner of the property

does not consent, the municipality must make a bona fide offer to

compensate the property owner for damages attributable to the

designation or inclusion.

A municipality has made a bona fide offer

if the municipality:

(1) provides to the property owner in writing:

(A)

an initial offer of compensation for damages;

and

(B)

a final offer of compensation for damages, on

or after the 30th day after the date the municipality makes a

written initial offer to the property owner; and

(2)

provides the property owner with at least 14 days

to respond to the final offer and the property owner does not agree

to the terms of the final offer within that period.

(c-1)

An initial or final offer of compensation for damages

provided by a municipality under Subsection (c)(1) may not be less

than the greater of:

(1)

the estimated cost to repair or restore the

property as determined under Section 211.0165(d)(6); or

(2)

the appraised value of the property determined

under Section 211.0165(d)(7)(A) minus the appraised value of the

property determined under Section 211.0165(d)(7)(B).

(d)

If a municipality is unable to agree with a property

owner on the amount of damages under Subsection (c), the

municipality may bring an action to authorize the municipality to

designate a property as a local historic landmark or include a

property within the boundaries of a local historic district without

the consent of the property owner by filing in the proper court a

petition that includes:

(1) a description of the property;

(2)

the name of the property owner if the owner is

known; and

(3) a statement:

(A)

specifying the designation or inclusion that

the municipality seeks to authorize;

(B)

that the municipality and the property owner

are unable to agree on the damages; and

(C)

that the municipality made a bona fide offer

to compensate the property owner for damages as provided by

Subsection (c).

(e)

A municipality that files a petition under Subsection

(d) shall provide a copy of the petition to the property owner by

certified mail, return receipt requested, and first class mail.

If

the municipality has received written notice that the property

owner is represented by counsel, the municipality shall provide a

copy of the petition to the property owner's attorney by first class

mail, commercial delivery service, or e-mail.

(f)

The court in which a petition is filed under this

section not later than the 30th day after the date the petition is

filed shall appoint three special commissioners, as provided by

Section 21.014, Property Code, to assess the damages of the owner of

the property that the municipality seeks to designate as a local

historic landmark or include within the boundaries of a local

historic district.

(g)

The special commissioners appointed under Subsection

(f) shall:

(1)

as soon as practicable but not later than the 20th

day after the date the special commissioners are appointed hold a

hearing to assess damages; and

(2)

provide written notice of the hearing to the

municipality and the property owner as provided by Section 21.016,

Property Code.

(h) A municipality or property owner may:

(1)

appeal the findings from the special commissioners

as provided by Section 21.018, Property Code; or

(2)

move to dismiss the proceedings in an action filed

under Subsection (d), as provided by Section 21.019, Property Code.

(i)

As the basis for assessing actual damages to a property

owner from a designation of a property as a local historic landmark

or inclusion of a property within the boundaries of a local historic

district, the special commissioners shall admit evidence on:

(1) the value of the property;

(2) the injury to the property owner;

(3) the benefit to the property owner's property;

(4)

the use of the property for the purpose of the

designation or inclusion;

(5) the cost to repair the property; and

(6)

any diminution in the value of the property due to

the designation or inclusion, including from restrictions on the

property owner's ability to demolish or develop the property.

(j)

The special commissioners shall assess damages in a

proceeding under this section according to the evidence presented

at the hearing and as provided by Section 21.042, Property Code, as

applicable.

(k)

The special commissioners in a proceeding under this

section shall adjudge the costs of the proceeding against a party as

follows:

(1)

if the commissioners award greater damages than

the municipality offered to pay or a court on appeal awards greater

damages than the commissioners awarded, the municipality shall pay

all costs, including attorney's fees, other professional fees, and

court costs; or

(2)

if the commissioners' award or the court's

determination of the damages is less than or equal to the amount the

municipality offered before proceedings began, the property owner

shall pay court costs.

(l)

A municipality shall pay the initial cost of serving a

property owner with notice of a condemnation proceeding. If the

property owner is ordered to pay court costs, the municipality may

recover the expense of notice from the property owner.

(m)

If a court hearing a suit under this section determines

that a municipality did not make a bona fide offer to compensate the

property owner for damages as required by Subsection (c), the court

shall abate the suit, order the municipality to make a bona fide

offer, and order the municipality to pay:

(1) all costs as provided by Subsection (k); and

(2)

any reasonable attorney's fees and other

professional fees incurred by the property owner that are directly

related to the violation.

(n)

The special commissioners in a proceeding under this

section shall file with the court a written statement of damages and

costs as provided by Section 21.048, Property Code.

(o) The court in a proceeding under this section shall:

(1)

send notice of a decision by the special

commissioners to the parties as provided by Section 21.049,

Property Code; and

(2)

if no party files timely objections to the

findings of the special commissioners, adopt the commissioners'

findings as the judgment of the court, record the judgment in the

minutes of the court, and issue the process necessary to:

(A)

enforce any judgment of damages awarded to

the property owner; and

(B)

authorize the municipality to designate the

property owner's property as a local historic landmark or include

the property within the boundaries of a local historic district

under Section 211.0165.

SECTION 3. (a) Except as provided by Subsection (b) of

this section, the changes in law made by this Act apply only to a

designation of a property as a local historic landmark or inclusion

of a property within the boundaries of a local historic district

that is approved by the governing body of a municipality on or after

the effective date of this Act. A designation or inclusion approved

before the effective date of this Act is governed by the law as it

existed immediately before the effective date of this Act, and that

law is continued in effect for that purpose.

(b) If a property owner filed an action to challenge the

designation of the property owner's property as a local historic

landmark or the inclusion of the property within the boundaries of a

local historic district before the effective date of this Act and

the action is pending on the effective date of this Act, the

property owner may elect to dismiss the action and seek relief as

provided by Section 211.01651, Local Government Code, as added by

this Act.

SECTION 4. 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, 2025.