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Private Real Property Rights Preservation Act Guidelines

=A71.0 GENERAL DESCRIPTION OF THE LEGISLATION; DEFINITION OF = "TAKING."

=A71.1. PURPOSE OF GUIDELINES.

=A71.11. The Private Real Property Rights Preservation Act (Act or = PRPRPA)=20 represents a basic charter for the protection of private real property = rights in=20 Texas.^=20
(1) The Act represents the Texas legislature's acknowledgment = of the=20 importance of protecting private real property interests.^{2 =}PRPRPA's=20 purpose is to ensure that certain governmental entitiestake a "hard = look" at=20 their actions on private real property rights, and that those entities = act=20 according to the letter and spirit of the Act.^=20
(2) PRPRPA is, in short, another instrument to ensure open and = responsible government.

=A71.12.Section 2007.041 requires the attorney general to:

(a) prepare guidelines to assist governmental entities in = identifying and=20 evaluating those governmental actions described in = =A72007.003(a)(1)-(3) [of the=20 Act] that may result in a taking; .

(b) file the guidelines with the secretary of state for publication = in the=20 Texas Register in the manner prescribed by Chapter 2002 of the = Government=20 Code; and

(c) review the guidelines at least annually and revise the = guidelines as=20 necessary to ensure consistency with the actions of the legislature = and the=20 decisions of the United States Supreme Court and the supreme court of = this=20 state.

=A71.13. Governmental actions undertaken pursuant to these Guidelines = that=20 compel the need to promulgate "Takings Impact Assessments" (TIAs) must = ensure=20 that information regarding the private real property implications of=20 governmental actions are considered before decisions are made and = actions=20 taken.⁴This information and analysis must be accurate, = concise, and=20 of high quality. TIAs must concentrate on the truly significant real = property=20 issues. No need exists to amass needless detail and meaningless data. = The public=20 is entitled to governmental conformance with legislative will, not a = mass of=20 unnecessary paperwork. Nevertheless, the public is entitled to more than = mere=20 pro forma analyses by the governmental entities covered by the Act. TIAs = shall=20 serve as the means of assessing the impact on private real property, = rather than=20 justifying decisions already made.

=A71.14. The failure of a governmental entity to promulgate a TIA = when one is=20 required will subject the governmental entity to a lawsuit to invalidate = the=20 governmental action.⁵

=A71.15. CAVEAT. These Guidelines do not represent a formal Attorney = General's=20 opinion and should not be construed as an opinion of the Attorney = General as to=20 whether a specific governmental action constitutes a "taking." The Act = raises=20 complex and difficult issues in emerging areas of law, public policy, = and=20 government. These Guidelines are intended to provide guidance as = governmental=20 entities seek to conform their activities to the Act's requirements.

=A71.2 DEFINITION OF "TAKING."

=A71.21. The Act is directed at ensuring that governmental entities = undertaking=20 governmental actions covered by the Act do not do so without expressly=20 considering or assessing whether "takings" of private real property may = result.=20 The duty to promulgate a TIA represents a critical mechanism in ensuring = that=20 requisite attention is paid to the impact of a covered governmental = action on=20 real property interests. Governmental entities need to be fully aware of = three=20 sets of criteria set forth in the Act defining the scope of what actions = may=20 constitute a "taking."

=A71.22. The Act, =A72007.002(5), defines "taking" as follows:

(a) a governmental action that affects private real property, in = whole or=20 in part or temporarily or permanently, in a manner that requires the=20 governmental entity to compensate the private real property owner as = provided=20 by the Fifth and Fourteenth Amendments to the United States = Constitution or=20 Section 17 or 19, Article I, Texas Constitution; or

(b) a governmental action that:

(1) affects an owner's private real property that is the subject = of the=20 governmental action, in whole or in part or temporarily or = permanently, in a=20 manner that restricts or limits the owner's right to the property = that would=20 otherwise exist in the absence of the governmental action; and

(2) is the producing cause⁶of a reduction of at least = 25% in=20 the market value of the affected private real property, determined = by=20 comparing the market value of the property as if the governmental = action is=20 not in effect and the market value of the property determined as if = the=20 governmental action is in effect.

=A71.23 The Act, =A72007.002, thus sets forth a = definition of=20 "taking" that (I) incorporates current jurisprudence on "takings" under = the=20 United States and Texas Constitutions, and (ii) sets forth a new = statutory=20 definition of "taking."

(a) The Fifth Amendment to the United States Constitution (the = "Takings=20 Clause") provides: "[N]or shall private property be taken for public = use,=20 without just compensation." The Takings Clause applies to the states = by virtue=20 of the Fourteenth Amendment.^{=20
(3)}

(b) Article I, =A717 of the Texas State Constitution provides as = follows:=20

No person's property shall be taken, damaged or destroyed without = adequate compensation being made, unless by the consent of such = person; and,=20 when taken, except for the use of the State, such compensation shall = be=20 first made, or secured by a deposit of money . . .

(c) The Act, =A72007.002(5)(B), sets forth a new = statutory=20 definition of "taking." Essentially, if a governmental entity takes = some=20 "action" covered by the Act and that action results in a devaluation = of a=20 person's private real property of 25% or more, then the affected party = may=20 seek appropriate relief under the Act. Such an action for relief would = be=20 predicated on the assumption that the affected real property was the = subject=20 of the governmental action.

=A71.3. "REGULATORY TAKINGS" OR "INVERSE CONDEMNATION": GENERAL = PRINCIPLES.=20

=A71.31. While there is usually little question that there is a = "taking" when=20 the government physically seizes or occupies private real property, = there may be=20 uncertainty as to whether a "taking" occurs when the government = regulates=20 private real property or activities occurring on private real property, = or when=20 the government undertakes some physically non-intrusive action which may = have an=20 impact on real property rights. These Guidelines pertain, for the most = part, to=20 the non-physical invasion and non-occupancy situations.^=20
(4)

=A71.32. The Takings Clause "does not bar government from interfering = with=20 property rights, but rather requires compensation in the event of = otherwise=20 proper interference amounting to a taking.^=20
(5) A physically non-intrusive governmental regulation or = action that=20 affects the value, use, or transfer of real property may constitute a = "taking"=20 if it "goes too far."^{^=20
(6)}Regulatory or governmental actions are sometimes = difficult=20 to evaluate for "takings" because government may properly regulate or = limit the=20 use of private real property, relying on its "police power" authority = and=20 responsibility to protect the public health, safety, and welfare of its=20 citizens. Accordingly, government may abate public nuisances, terminate = illegal=20 activities, and establish building codes, safety standards, or sanitary=20 requirements generally without creating a compensatory "taking." = Government may=20 also limit the use of real property through land use planning, zoning=20 ordinances, setback requirements, and environmental regulations.

=A71.33. Governmental actions taken specifically for the purposes of = protecting=20 public health and safety may be given broader latitude by courts before = they are=20 found to be "takings." However, the mere assertion of a public health = and safety=20 purpose should be viewed as insufficient to avoid a taking = determination.¹¹⁼²⁰Actions which are asserted to be for the protection of public = health and=20 safety should be undertaken only in response to real and substantial = threats to=20 public health and safety, be designed to advance significantly the = health and=20 safety purpose, and should impose no greater burden than is necessary to = achieve=20 the health and safety purpose. Otherwise, the exemptions or exceptions = for these=20 actions¹²may swallow the rule set forth by the Act to = protect=20 private real property.

=A71.34. If a governmental action diminishes or destroys a = fundamental real=20 property right-such as the right to possess, exclude others from, or = dispose of=20 real property-it could constitute a "taking."^=20
(7) Similarly, if a governmental action imposes substantial = and=20 significant limitations on real property use, there could be a = "taking."^=20
(8)

=A71.4. CONSTITUTIONAL REGULATORY "TAKINGS" ANALYSES.

=A71.41. A governmental action may result in the "taking" of private = real=20 property requiring the payment of compensation if it denies an owner=20 economically viable use of his land." Deprivation of economic viability = may=20 occur through the denial of development permits, as well as through the=20 application of ordinances or state laws.^=20
(9) A plaintiff seeking to challenge a government regulation = as an=20 uncompensated taking of private property may proceed . . . by alleging a = "physical" taking," a Lucas-type "total regulatory taking," a = Penn=20 Central taking, or a land-use exaction violating the standards set = forth in=20 Nollan and Dolan.^=20
(10)

Prior to 2005, the perception existed that a regulation that did not=20 "substantially advance legitimate state interests" could result in a = taking.=20 In Lingle, however, the Supreme Court rejected that argument = and=20 concluded that the "substantially advances" test no longer has a place = in=20 takings jurisprudence, and observed that "an inquiry of this nature has = some=20 logic in the context of a due process challenge, for a regulation that = fails to=20 serve any legitimate governmental objective may be so arbitrary or = irrational=20 that it runs afoul of the Due Process Clause."^=20
(11)

Governmental actions requiring exactions of property must meet the = "rough=20 proportionality test." This test requires a governmental entity to make = "some=20 sort of individualized determination that the required dedication is = related=20 both in nature and extent to the project's anticipated impact, though a = precise=20 mathematical calculation is not required."^=20
(12)

=A71.42. Federal Law

(a) A proper regulatory taking analysis considers the economic = impact of=20 the regulation, in particular whether the proposed governmental action = interferes with a real property owner's reasonable investment-backed=20 development expectations.¹⁸For instance, in determining = whether a=20 "taking" has occurred, a court, among other things, might weigh the=20 governmental action's impact on vested development rights against the=20 government's interest in taking the action. Defining reasonable=20 investment-backed expectations is a complex, fact-intensive = undertaking. In=20 Reahard v. Lee County,¹⁹the Eleventh Circuit of = the=20 United States Court of Appeals set forth the following set of eight=20 essentially factual issues to be considered in determining whether a = private=20 real property owner's "investment-backed development expectations" = have been=20 negatively impacted and thus a regulatory taking effected:

1. History of the property. (when purchased? how much land = purchased?=20 where was the land located? nature of title? composition of the = land? how=20 was the land initially used?);

2. History of the development. (what was built on the land? by = whom? how=20 subdivided? to whom sold? what plats filed? what roads dedicated?); =

3. History of zoning and regulation. (how and when was the land=20 classified? how was use proscribed? changes in zoning = classification?);

4. How did development change when title passed;

5. Present nature and extent of the property;

6. Owner's reasonable expectations under state common law;

7. Neighboring landowners' reasonable expectations under state = common=20 law; and

8. Diminution of owner's investment-backed expectations, if any, = after=20 passage of the regulation or the undertaking of a governmental = action.=20

(b) If a governmental action prohibits all economically = viable or=20 beneficial uses of real property, a "taking" occurs, unless the = governmental=20 entity can demonstrate that laws of nuisance or other pre-existing = limitations=20 on the use of the real property prohibit the proposed uses, or unless = the=20 governmental entity can show that there is no interest at stake = protected or=20 defined by common law. The United States Supreme Court has = acknowledged that=20 it has never clarified the "property interest against which the loss = of value=20 is to be measured, but has suggested that a real property owner's=20 "investment-backed development expectations" as shaped by state = property law=20 may provide the answer.^{=20
(13)}

(c) In 2002, the United States Supreme Court held that temporary=20 development moratoria are not per se takings of property = under the=20 Takings Clause. The Court reasoned that "the answer to the abstract = question=20 whether a temporary moratorium effects a taking is neither 'yes, = always' nor=20 'no, never'; the answer depends upon the particular circumstances of = the=20 case."²¹

=A71.43 State Law

(a) The governmental entity must consider whether there is a taking = under=20 state constitutional law (commonly referred to as inverse = condemnation). In=20 the non-physical intrusion cases, Texas courts, on a case-by-case = basis, have=20 employed several general tests to determine whether a compensable = governmental=20 taking has occurred under the provisions of the Texas Constitution, = such as:=20

(1) whether the governmental entity has imposed a burden on = private real=20 property which creates a disproportionate diminution in economic = value or=20 renders the property wholly useless,

(2) whether the governmental action against the owner's real = property=20 interest is for its own advantage,²²or

(3) whether the governmental action constitutes an unreasonable = and=20 direct physical or legal restriction or interference with the = owner's right=20 to use and enjoy the property.²³

(b) In City of College Station v. Turtle Rock Corporation, = the=20 Texas Supreme Court held that there must be a reasonable connection = between an=20 exaction and the need for the property by the government. The court = recognized=20 that in order to be a compensable taking, the ordinance must render = the entire=20 property "wholly useless" or otherwise cause "total destruction" of = the entire=20 tract's economic value. Furthermore, the landowner must show that the=20 ordinance is unreasonable or arbitrary in that particular = application.^{=20
(14)}

=A71.5. REGULATORY TAKINGS ANALYSIS: NEW STATUTORY FORMULATION.

=A71.51. PRPRPA creates a new definition of taking, in addition to=20 judicially-determined takings. The Act, =A72007.002(5), provides that a = "taking"=20 occurs when a governmental action covered by the Act is a producing = cause of a=20 25% or more reduction in the value of private real property affected by = the=20 governmental action. Section 2007.02(5)(B), however, limits the = application of=20 the new definition.^=20
(15)

=A72.0. APPLICABILITY OF THE ACT.

=A72.1. GOVERNMENTAL ACTIONS COVERED.

=A72.11

(1) the adoption or issuance of an ordinance, rule, regulatory=20 requirement, resolution, policy, guideline, or similar measure;

(2) an action that imposes a physical invasion or requires a = dedication=20 or exaction of private real property;

(3) an action by a municipality that has effect in the = extraterritorial=20 jurisdiction of the municipality,²⁶excluding annexation, = and=20 that enacts or enforces an ordinance, rule, regulation, or plan that = does=20 not impose identical requirements or restrictions in the entire=20 extraterritorial jurisdiction of the municipality; and

(4) enforcement of a governmental action listed in Subdivisions = (1)-(3),=20 whether the enforcement of the governmental action is accomplished = through=20 the use of permitting, citations, orders, judicial or quasi-judicial = proceedings, or other similar means.

(b) The requirement to do a TIA only applies to=20 =A72007.003(a)(1)-(3)²⁷

=A72.12. The following actions, furthermore, are exempted from = coverage of the=20 Act under =A72007.003(b):

(a) an action by a municipality except as provided by subsection = (a)(3);=20

(b) a lawful forfeiture or seizure of contraband as defined by = Article 59.=20 01, Code of Criminal Procedure;

(d) an action, including an action of a political subdivision, that = is=20 reasonably taken to fulfill an obligation mandated by federal law or = an action=20 of a political subdivision that is reasonably taken to fulfill an = obligation=20 mandated by state law;

(e) the discontinuance or modification of a program or regulation = that=20 provides a unilateral expectation that does not rise to the level of a = recognized interest in private real property;

(f) an action taken to prohibit or restrict a condition or use of = private=20 real property if the governmental entity proves that the condition or = use=20 constitutes a public or private nuisance as defined by background = principles=20 of nuisance and property law of this state;

(g) an action taken out of a reasonable good faith belief that the = action=20 is necessary to prevent a grave and immediate threat to life or = property;

(h) a formal exercise of the power of eminent domain;

(I) an action taken under a state mandate to prevent waste of oil = and gas,=20 protect correlative rights of owners of interests in oil or gas, or = prevent=20 pollution related to oil and gas activities;

(j) a rule or proclamation adopted for the purpose of regulating = water=20 safety, hunting, fishing, or control of nonindigenous or exotic = aquatic=20 resources;

(k) an action taken by a political subdivision:

(1) to regulate construction in an area designated under law as a = floodplain;

(2) to regulate on-site sewage facilities;

(3) under the political subdivision's statutory authority to = prevent=20 waste or protect rights of owners of interest in groundwater; or =

(4) to prevent subsidence;

(l) the appraisal of property for purposes of ad valorem taxation; =

(m) an action that:

(1) is taken in response to a real and substantial threat to = public=20 health and safety ;

(2) is designed to significantly advance the health and safety = purpose;=20 and

(3) does not impose a greater burden than is necessary to achieve = the=20 health and safety purpose; or

(n) an action or rulemaking undertaken by the Public Utility = Commission of=20 Texas to order or require the location or placement of = telecommunications=20 equipment owned by another party on the premises of a certificated = local=20 exchange company.

=A72.13. According to =A72007.003(c) of the Act, =A72007.021 ("Suit = Against=20 Political Subdivision") and =A72007.022 ("Administrative Proceeding = Against State=20 Agency") (collectively, "Action To Determine Taking") do not apply to = the=20 enforcement or implementation of a statute, ordinance, order, rule, = regulation,=20 requirement, resolution, policy, guideline, or similar measure that was = in=20 effect September 1, 1995, and that prevents the pollution of a reservoir = or an=20 aquifer designated as a sole source aquifer under the federal Safe = Drinking=20 Water Act (42 United States Code, =A7300h-3(e)).

=A72.14. Nor does the Act apply to the enforcement or implementation = of the=20 Open Beaches Act, Subchapter B, Chapter 61, Natural Resources Code, as = it=20 existed on September 1, 1995, or to the enforcement or implementation of = any=20 rule or similar measure that was adopted under that subchapter and was = in=20 existence on September 1, 1995.²⁸

=A72.15. In order to effectuate the will of the legislature and to = ensure that=20 the Act is not read either too broadly or too narrowly, each = governmental entity=20 covered by the Act should promulgate a set of procedures ("Governmental=20 Entity-Specific TIA Procedures") specific to the governmental entity = that=20 defines which of its activities, programs, or policy, rule, or = regulation=20 promulgation activities trigger the need for a TIA.²⁹Such=20 promulgation of the Governmental Entity-Specific TIA Procedures should = be=20 completed as soon as possible after the publication of these Guidelines. = However, the promulgation of these TIA procedures must not delay = conformance=20 with the Act or these Guidelines.

=A72.16. In promulgating the Governmental Entity-Specific TIA = Procedures, the=20 governmental entity should establish (1) "Categorical Determination" = categories=20 that indicate that there are no private real property rights affected by = certain=20 types of proposed governmental actions, as well as (2) a quick, = efficient, and=20 effective mechanism or approach to making "No Private Real Property = Impacts=20 Determinations" ("NoPRPI Determinations") associated with the proposed=20 governmental action.

=A72.17. Categorical Determinations that no private real property = interests are=20 affected by the proposed governmental action would obviate the need for = any=20 further compliance with the Act. Without limitations the following are = examples=20 of the types of activities that might fall into such a Categorical = Determination=20 category: (I) student policies established by state institutions of = higher=20 education and (ii) professional qualification requirements for licensed = or=20 permitted professionals.

=A72.18. NoPRPI Determinations would also obviate the need for any = further=20 compliance with the Act once it is determined that there are no private = real=20 property interests impacted by a specific governmental action. In such a = case,=20 there would be no established Categorical Determination category in = which the=20 proposed governmental action fits, but after consideration and = preliminary=20 analysis of a specific proposed governmental action, the governmental = entity is=20 satisfied that there would be no impacts on private real property = interests.=20

=A72.19. Until and unless a covered governmental entity develops = Governmental=20 Entity-Specific TIA Procedures, it will have to determine on an ad hoc = basis=20 whether any private real property interests are impacted (including to = what=20 extent) by its proposed actions. Furthermore, because the TIA = necessarily=20 depends on the type of governmental action being proposed and the = specific=20 nature of the impacts on specific private real property, the = governmental entity=20 promulgating a TIA has discretion (within the parameters of the Act,=20 =A72007.043(b)) to determine the precise extent and form of the = assessment, on a=20 case-by-case basis.

=A73.0. GUIDE TO PROMULGATING TIAS.

=A73.1. Requirements for Promulgating TIAs.

The Act, =A72007.043(b) requires that the TIA:

(a) describe the specific purpose of the proposed action and = identify:

(1) whether and how the proposed action substantially advances = its stated=20 purpose; and

(2) the burdens imposed on private real property and the benefits = to=20 society resulting from the proposed use of private real property; =

(b) determine whether engaging in the proposed governmental action = will=20 constitute a taking; and

(c) describe reasonable alternative actions that could accomplish = the=20 specified purpose and compare, evaluate, and explain:

(1) how an alternative action would further the specified = purpose; and=20

(2) whether an alternative action would constitute a taking. =

(d) A takings impact assessment prepared under this section is = public=20 information.

=A73.2. Guide for Evaluating Proposed Governmental Actions.

Governmental entities covered by the Act should use the following = guide in=20 reviewing the potential impact of a proposed governmental action covered = by the=20 Act. While this guide may provide a framework for evaluating the impact = on=20 private real property a proposed governmental action may have generally, = "takings" questions normally arise in the context of specific affected = real=20 property. This guide for evaluating governmental actions covered by the = Act is=20 another tool that a governmental entity should aggressively use to = safeguard=20 private real property owners.

(a) Question 1: Is the Governmental Entity undertaking the proposed = action=20 a Governmental Entity covered by the Act, i.e., is it a "Covered = Governmental=20 Entity"? See the Act, =A72007.002(1).

(1) If the answer to Question 1 is "No": No further compliance = with the=20 Act is necessary.

(2) If the answer to Question 1 is "Yes": Go to Question 2. =

(b) Question 2. Is the proposed action to be undertaken by the = Covered=20 Governmental Entity an action covered by the Act, i.e., a "Covered=20 Governmental Action"? See =A72 of these Guidelines; and Governmental=20 Entity-Specific TIA Procedures for "Categorical Determinations" as = developed=20 by the respective Covered Governmental Entities.³⁰

(1) If the answer to Question 2 is "No": No further compliance = with the=20 Act is necessary.

(2) If the answer to Question 2 is "Yes": Go to Question 3. =

(c) Question 3. Does the Covered Governmental Action result in a = burden on=20 "Private Real Property" as that term is defined in the Act?

(1) If the answer to Question 3 is "No": A "No Private Real = Property=20 Impact" or NoPRPI Determination should be made. No further = compliance with=20 the Act is necessary if a NoPRPI Determinations is made. Logically, = the=20 initial critical issue regarding any proposed governmental action is = whether=20 there is any burden on private real property. If a governmental = entity has=20 not resolved this issue by reference to its preexisting list of = Categorical=20 Determinations, it can do so by quickly and concisely making a = NoPRPI=20 Determinations.

(2) If the answer to Question 3 is "Yes": A TIA is required and = the=20 governmental entity must undertake evaluation of the proposed = governmental=20 action on private real property rights.

=A73.3 Elements of the TIA As set forth in =A73.11 supra, the Act = sets forth=20 explicit elements that must be evaluated by the governmental entity = proposing to=20 undertake a governmental action covered by the Act.

(a) Question 4. What is the Specific Purpose of the Proposed = Covered=20 Governmental Action? The TIA must clearly show how the proposed = governmental=20 action furthers its stated purpose. Thus, it is important that a = governmental=20 entity clearly state the purpose of its proposed action in the first = place,=20 and whether and how the proposed action substantially advances its = stated=20 purpose.

(b) Question 5. How Does the Proposed Covered Governmental Action = Burden=20 Private Real Property?³¹

(d) Question 7. Does the Proposed Covered Governmental Action = result in a=20 "taking"?

Whether a Proposed Covered Governmental Action "burdens," in the = first=20 analysis, and ultimately results in a "taking" must be measured = against all=20 three prongs of the "takings" analysis outlined in secs.1.2-1.5 of = these=20 Guidelines. The Covered Governmental Entity proposing to engage in a = Covered=20 Governmental Action should consider the following subquestions:

(1) Does the Proposed Covered Governmental Action Result = Indirectly or=20 Directly in a Permanent or Temporary Physical Occupation of Private = Real=20 Property?

Regulation or action resulting in a permanent or temporary = physical=20 occupation of all or a portion of private real property will = generally=20 constitute a "taking." For example, a regulation that required = landlords to=20 allow the installation of cable television boxes in their apartments = was=20 found to constitute a "taking."³²

(2) Does the Proposed Covered Governmental Action Require a = Property=20 Owner to Dedicate a Portion of Private Real Property or to Grant an=20 Easement?

Carefully review all governmental actions requiring the = dedication of=20 property or grant of an easement. The dedication of real property = must be=20 reasonably and specifically designed to prevent or compensate for = adverse=20 impacts of the proposed development. Likewise, the magnitude of the = burden=20 placed on the proposed development should be reasonably related to = the=20 adverse impacts created by the development. A court will also = consider=20 whether the action in question substantially advances a legitimate = state=20 interest.

For example, the United States Supreme Court determined in = Nollan=20 that compelling an owner of waterfront property to grant a = public=20 easement across his property that does not substantially advance the = public's interest in beach access, constitutes a = "taking."³³=20 Likewise, the Court held that compelling a property owner to leave a = public=20 green way, as opposed to a private one, did not substantially = advance=20 protection of a floodplain, and was a "taking."³⁴

(3) Does the Proposed Covered Governmental Action Deprive the = Owner of=20 all Economically Viable Uses of the Property?

If a governmental action prohibits or somehow denies all = economically=20 viable or beneficial uses of the land, it will likely constitute a = "taking."=20 In this situation, however, the governmental entity should consider = whether=20 it can demonstrate that the proposed uses are prohibited by the laws = of=20 nuisance or other preexisting limitations on the use of the=20 property.³⁵

It may be important to analyze the action's impact on the = property as a=20 whole, and not just the impact on a portion of the property. It is = also=20 important to assess whether there is any profitable use of the = remaining=20 property available.³⁶The remaining use does not = necessarily have=20 to be the owner's planned use, a prior use, or the highest and best = use of=20 the property. One factor in this assessment is the degree to which = the=20 governmental action interferes with a property owner's reasonable=20 investment-backed development expectations.

Carefully review governmental actions requiring that all of a = particular=20 parcel of land be left substantially in its natural state. A = prohibition of=20 all economically viable uses of the property is vulnerable to a = "takings"=20 challenge. In some situations, however, there may be pre-existing=20 limitations on the use of property that could insulate the = government from=20 takings liability.

(4) Does the Proposed Covered Governmental Action have a = Significant=20 Impact on the Landowner's Economic Interest?

Carefully review governmental actions that have a significant = impact on=20 the owner's economic interest. Courts will often compare the value = of=20 property before and after the impact of the challenged action. = Although a=20 reduction in property value alone may not be a "taking," a severe = reduction=20 in property value often indicates a reduction or elimination of = reasonably=20 profitable uses. Another economic factor courts will consider is the = degree=20 to which the challenged action impacts any development rights of the = owner.=20

(5) Does the Covered Governmental Action Decrease the Market = Value of the=20 Affected Private Real Property by 25% or More? Is the Affected = Private Real=20 Property the subject of the Covered Governmental Action? See the = Act,=20 =A72007.002(5)(B).

(6) Does the Proposed Covered Governmental Action Deny a = Fundamental=20 Attribute of Ownership?

Governmental actions that deny the landowner a fundamental = attribute of=20 ownership-including the right to possess, exclude others and dispose = of all=20 or a portion of the property-are potential takings.

The United States Supreme Court has held that requiring a public = easement=20 for recreational purposes where the harm to be prevented was to the = flood=20 plain was a "taking." In finding this to be a "taking," the Court = stated:=20

The city never demonstrated why a public green way, as opposed to = a=20 private one, was required in the interest of flood control. The = difference=20 to the petitioner, of course, is the loss of her ability to exclude = others.=20 . . [T] his right to=20 exclude others is "one of the most essential sticks in the = bundle of=20 rights that are commonly characterized as property.³⁷

The United States Supreme Court has also held that barring the=20 inheritance (an essential attribute of ownership) of certain = interests in=20 land held by individual members of an Indian tribe constituted a=20 "taking."³⁸

(e) Question 8. What are the Alternatives to the Proposed Covered=20 Governmental Action?

Lastly, the governmental entity must describe reasonable = alternative=20 actions to the proposed governmental action that could accomplish the=20 specified purpose and compare and evaluate the alternatives. The = governmental=20 agency must also evaluate the "takings" implication of each reasonable = alternative to the proposed action pursuant to the applicable = provisions of=20 these Guidelines.

ENDNOTES:

1. Private real property is defined in the Act,=20 =A72007.002(4), to mean an interest in property recognized by common = law:

"Private real property" means an interest in real property = recognized by=20 common law, including a groundwater or surface water right of any = kind, that=20 is not owned by the federal government, this state, or a political = subdivision=20 of this state.

2. Furthermore, the Act may reflect a developing, = broader=20 appreciation of the importance of private property rights. See Dolan = v. City=20 of Tigard, 512 U.S. 374 (1994):

We see no reason why the Takings Clause of the Fifth Amendment, as = much a=20 part of the Bill of Rights as the First Amendment or Fourth Amendment, = should=20 be relegated to the status of a poor relation in these comparable=20 circumstances.

3. The Act, =A72007.002 (1) defines "governmental = entity" as:=20

(A) a board, commission, council, department, or other agency in = the=20 executive branch of state government that is created by constitution = or=20 statute, including an institution of higher education as defined by = Education=20 Code, =A761.003; or

(B) a political subdivision of this state.=20

4. The Act, 2007.043(a) provides:

A governmental entity shall prepare a written takings impact = assessment of a=20 proposed governmental action described in =A72007.003(a)(1)-(3) that = complies with=20 the evaluation guidelines developed by the attorney general under = =A72007.041=20 before the governmental entity provides the public notice required under = =A72007.042.

Section 2007.042 provides:

(a) A political subdivision that proposes to engage in a = governmental=20 action described in =A72007.003(a)(1)-(3) that may result in a taking = shall=20 provide at least 30 days' notice of its intent to engage in the = proposed=20 action by providing a reasonably specific description of the proposed = action=20 in a notice published in a newspaper of general circulation published = in the=20 county in which affected private real property is located. If a = newspaper of=20 general circulation is not published in that county, the political = subdivision=20 shall publish a notice in a newspaper of general circulation located = in a=20 county adjacent to the county in which affected private real property = is=20 located. The political subdivision shall, at a minimum, include in the = notice=20 a reasonably specific summary of the takings impact assessment that = was=20 prepared as required by this subchapter and the name of the official = of the=20 political subdivision from whom a copy of the full assessment may be = obtained.=20

(b) A state agency that proposes to engage in a governmental action = described in =A72007.003(a)(1) or (2) that may result in a taking = shall:

(1) provide notice in the manner prescribed by =A72001.023; and =

(2) file with the secretary of state for publication in the Texas = Register in the manner prescribed by Chapter 2002 a reasonably = specific=20 summary of the takings impact assessment that was prepared by the = agency as=20 required by this subchapter.

5. The Act, =A72007.044 provides:

(a) A governmental action requiring a takings impact assessment is = void if=20 an assessment is not prepared. A private real property owner affected = by a=20 governmental action taken without the preparation of a takings impact=20 assessment as required by this subchapter may bring suit for a = declaration of=20 the invalidity of the governmental action.

(b) A suit under this section must be filed in a district court in = the=20 county in which the private real property owner's affected property is = located. If the affected property is located in more than one county, = the=20 private real property owner may file suit in any county in which the = affected=20 property is located.

(c) The court shall award a private real property owner who = prevails in a=20 suit under this section reasonable and necessary attorney's fees and = court=20 costs.

6. A "producing cause" is an "efficient, exciting, = or=20 contributing cause, which in the natural sequence, produced injuries of = damages=20 complained of, if any." Union Pump Company v. Allbriton , 898 = S.W.2d=20 773, 775 (Texas 1995) (citing Haynes and Boone v. Bowser Bouldin, = Ltd.,=20 896 S.W.2d 179, 182 (Texas 1995)). An element of "producing cause" is = causation=20 in fact. Id. Causation-in-fact requires that the defendant's = conduct be=20 a substantial factor in bringing about the plaintiff's injuries, and = that the=20 injuries would not have occurred without defendant's conduct. = Id.=20 (citations omitted); C. J. Doe v. Boys Club of Greater Dallas , = 907=20 S.W.2d 472, 481 (Texas 1995). A "producing cause" need not be = foreseeable.

7. See Chicago, B & Q. R. Co. v City of = Chicago, 166=20 U.S. 226 (1897).

8. The most easily recognized type of "taking" = occurs when=20 government physically occupies private property. Clearly, when the = government=20 seeks to use private property for a public building, a highway, a = utility=20 easement, or some other public purpose, it must compensate the property = owner.=20

Physical invasions of property, as distinguished from physical = occupancies,=20 may also give rise to a "taking" where the invasions are of a recurring = or=20 substantial nature. Examples of physical invasions include, among = others,=20 flooding and water related intrusions and overflight or aviation = easement=20 intrusions.

9. Lingle v. Chevron, 544 U.S. ___, 125 = S.Ct. 2074,=20 2084 (2005), quoting First English Evangelical Lutheran Church v. = County of=20 Los Angeles, 482 U.S. 304, 315 (1987) (emphasis in original). The = Court=20 went on to note that "if a government action is found to be = impermissible-for=20 instance because it fails to meet the 'public use requirement or is so = arbitrary=20 as to violate due process--that is the end of the inquiry." = Id.

10. "The general rule at least is that while = property may=20 be regulated to a certain extent, if regulation goes too far it will be=20 recognized as a taking." Pennsylvania Coal Company v. Mahon, = 260 U.S.=20 393, 415 (1922).

11. Lucas v. South Carolina Coastal = Council, 503=20 U. S. 1003, 1025 n.12 (1992).

12. See exemptions (6), (7), and (13) of = =A72007.003(b) of the Act (set forth infra in =A72.12 of these = Guidelines).=20

13. Dolan, 512 U. S. at 391.

14. Lucas, 503 U. S. at 1019, 512 U.S. = at 385 n.=20 6.

15. Lingle, 125 S.Ct. at 2087.

16. Lingle, 125 S.Ct. at 2082-2083.

17. Dolan, 512 U. S. at 391. The=20 rough-proportionality test, however, has not been extended beyond the = special=20 context of exactions. City of Monterey v. Del Monte Dunes at = Monterey,=20 Ltd., 526 U.S. 687, 702 (1999).

18. Penn Central Trans. Co. v. City of New = York,=20 438 U. S. 104, 124 (1978).

19. 968 F.2d 1131 (11th Cir.), vacated, 978 F.2d = 1212 (11th=20 Cir.), rev'd., 30 F.3d 1412 (1992).

20. Lucas, 505 U. S.1003 (1992) at 1016, = n.7.

21. Tahoe-Sierra Preservation Council, Inc. = v. Tahoe=20 Regional Planning Agency, 535 U.S. 302, 321 (2002). The Court went = on to=20 analyze the circumstances in Tahoe-Sierra within the Penn=20 Central framework. Id.; see Penn Central, 438 = U.S. at 124=20 (regulatory takings jurisprudence characterized by "essentially ad hoc, = factual=20 inquiries.")

22. City of Austin v. Teague , 570 = S.W.2d 389, 393=20 (Texas 1978).

23. The Texas Supreme Court has held that in = order for=20 there to be an inverse condemnation there must be a "direct restriction" = on the=20 landowner's use of his property. As used, "direct restriction" is the = "actual=20 physical or legal restriction on the property's use such as blocking of = access=20 or denial of a permit for development." Westgate Ltd. v. State, = 843=20 S.W.2d 448 (1992). Since the court found that the condemnor's = unreasonable delay=20 of condemnation proceedings did not rise to the level of a "direct = restriction"=20 on the landowner's use of his property, the landowner therefore could = not=20 recover damages in a suit for inverse condemnation. 843 S.W.2d at 452. =

The court supported its findings with the decisions of two Texas = appellate=20 courts. A landowner may not recover in a suit for inverse condemnation = even if=20 there is the construction of improvements which would have the ultimate = effect=20 of increasing the property's chances of flooding and thus reducing the=20 property's value. 843 S.W.2d at 452 (citing, Allen v. City of Texas=20 City, 775 S.W.2d 863, 865 (Tex. App.-Houston [1st. Dist.] 1989, = writ=20 denied); Hubler v.City of Corpus Christi, 564 S.W.2d 816 (Tex. = Civ.=20 App--Corpus Christi 1978, writ ref'd n.r.e.). Moreover, the = Westgate=20 court reserved the question of whether a cause of action might exist = where there=20 is bad faith on the part of the condemnor. 843 S.W.2d at 454.

24. 680 S. W. 2d 802, 806 (Tex. 1984). The = Turtle=20 Rock holding was cited by the United States Supreme Court in=20 Nollan,107 S.Ct. 3141, 3150, and is consistent with the holding = of that=20 opinion.

25. There are limitations to the Act's converage = included=20 in the definition of "taking" in =A72007.002(5)(B):

a. private real property must be affected;

b. the private real property must be the subject of the = governmental=20 action; and

c. the governmental action must restrict or limit the owner's right = to the=20 property that would otherwise exist in the absence of the governmental = action.=20

26. "Extraterritorial jurisdiction" means the=20 unincorporated area, not part of any other city, that is contiguous to = the=20 corporate limits of a city. 52 Tex. Jur. 3d Municipalities =A785 (1989). = The=20 extent of an extraterritorial jurisdiction depends on the population of = the=20 city. See id.; see also Texas Local Government Code, = =A742.021.=20

27. The Act, Section 2007.041(a).

28. See 31 TAC =A7=A715.1-15.10.

29. Governmental entities are reminded that = Section=20 2007.003 provides that the Act applies to the following governmental = actions:=20

(1) the adoption or issuance of an ordinance, rule, regulatory = requirement,=20 resolution, policy, guideline, or similar measure.

30. In 2002, the Texas Supreme Court decided its = first case=20 under the Private Real Property Rights Preservation Act. In Bragg v. = Edwards=20 Aquifer Authority , 71 S.W. 3d 729, 730-731 (2002) the court = concluded that=20 the adoption of well permitting rules by an aquifer authority is = excepted from=20 the Act as an action "taken under a political subdivision's statutory = authority=20 to prevent waste or protect rights of owners of interest in = groundwater." The=20 Court also concluded that "the Authority's proposed actions on the = Braggs'=20 permit applications constitute 'enforcement of a governmental action,' = to which=20 the TIA requirement does not apply."

31. See discussion of relevant issues = under=20 =A73.3(d), infra.

32. See Loretto v. Teleprompter Manhattan = CATV=20 Corp., 458 U.S. 419 (1982).

33. Nollan v. California Coastal Comm'n, = 483 U.S.=20 825 (1987).

34. Dolan, 512 U.S. at 394-396.

35. Lucas, 505 U. S. at 1029-1032.

36. Florida Rock Industries, Inc. v. United=20 States, 18 F.3d 1560 (Fed. Cir. 1994).

37. Dolan, 512 U.S. at 393.

38. Hodel v. Irving , 481 U.S. 704 = (1987).=20

Revised: February 29 2008