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Below is the HillCo client report from the June 30 House Land & Resource Management Committee hearing.

The committee met to hear an agency update from the General Land Office and to address the following interim charge:
 
Study current regulatory authority available to municipalities in their extraterritorial jurisdiction. Examine how citizens are involved in the zoning process, and make necessary recommendations to ensure a proper balance between development activities, municipal regulations, and the effect zoning decisions have on Texas citizens.
 
Larry Laine, Deputy Land Commissioner, Texas General Land Office (GLO)

  • The Texas City oil spill cleanup ended up being hugely successful; all cleanup deployments were made very rapidly; Kirby paid for the entire cost of cleanup which was around $500,000
  • GLO manages the Permanent School Fund which is at around $3.3 billion currently
    • Highest earning public managed fund in Texas in 2013
  • Discussed the Oil Spill Cleanup fund which has a floor of $10 million and a ceiling of $20 million; as the fund is depleted, a per barrel tax is assessed on oil production; the tax is hedged back as the fund reaches the ceiling
  • Discussed renovations being made at the Alamo Plaza including a $15 million exhibit donated by artist Phil Collins
  • Chairman Joe Deshotel asked about hurricane recovery; has the agency been working to streamline procedures for housing issues; there was a lot of delay in getting new housing and repairs done after Hurricane Ike
    • Lessons learned from the wildfire and Hurricane Ike will translate to improved processes going forward
  • Rep. Armando Walle asked how many homes are still waiting to be rebuilt
    • Will get an estimate of that number
  • Rep. Drew Springer asked for an update on the Bureau of Land Management Red River issue
    • A BLM staff person made a mistake with a number which gave a lot of people the wrong idea about what is going on; GLO position is that BLM is wrong and to prove that it would take a $10 million survey that Congress is not likely to fund
  • Springer asked about the possibility of moving some positions within the GLO to other parts of the state; could there be cost savings, could we move some high-pay jobs to other parts of the state that have a lower median income level

 
Anita Dunn, Self

  • Owns property in Sunset Valley Extraterritorial Jurisdiction (ETJ)
  • Attempted to get a variance from Sunset Valley council to install a pervious pavement on the property before it was purchased
  • The council gave the indication that the variance would be given but now, after the property was purchased, the council has now zoned the property for single family residential
  • Have a lawsuit pending against Sunset Valley
  • Workman asked if the property was purchased with the understanding that the zoning would go in their favor
    • Yes; wanted to make sure council understood what was needed to make the project happen
  • Workman asked why council changed their mind
    • Do not know; the master plan seemed to take over and they just didn’t want any commercial activity on that plot; it is a commercial street though, not residential

 
Scott Houston, General Counsel, Texas Municipal League

  • More than 86% of Texans live in urban areas currently
  • Unsure of the facts in the Sunset Valley case; their case seems to be a textbook example of a regulatory taking
  • Springer asked if we have reached the point where in order for a city to annex a territory, it should take the vote of the community being annexed
    • The reason cities have annexation authority in Texas has to do with the way services are funded; other states take state-generated revenue and give it to cities to provide services such as transportation; Texas cities get virtually no money from the state so the state has allowed cities broad authority to raise revenue and given the ability to annex; developments outside of cities benefit from services cities provide and it makes sense sometimes for cities to share in the burden; if a vote was required, in many cases, the ETJ residents would not vote to increase their taxes
  • The reason central Texas cities have problems that come before the committee is because of the aquifer – because cities are trying to prevent unwanted pollution into the aquifer

 
Jeff Musgrove, Self

  • Part of a partnership that purchased property in Leander in 2007 to develop for resale
  • Prior to purchase the City of Leander created a special zoning district, then described as an opportunity to create higher values
  • The city did not say the developers would be required to build infrastructure at their own expense and would not be allowed to develop any commercially viable properties within the area
  • The code requires discretionary approval by city officials for any development
  • Buyers are avoiding the area because of the cumbersome code
  • Would like the legislature to take discretionary regulations in these types of codes away from city councils

 
Anne Seaman, Self

  • Inherited 27 acres in Cedar Park
  • The city wants commercial use on the land but no commercial entities want to buy the land because it sits on a hill behind a 13 foot retaining wall and it can’t be easily accessed
  • Cities should be using common sense when zoning areas

 
Jeff Howard, Land Use Lawyer, McClaine & Howard

  • Cities have broad authority in ETJs but they have very little accountability
  • Cities can annex a property and zone it however they like including “development reserve” which means almost nothing can be done on the property

 
Jess Fields, Texas Public Policy Foundation

  • Strict zoning keeps some property values artificially low and some artificially high
  • Most cities now plan for growth well outside of current city limits with annexation planned years in the future
  • By not allowing for redevelopment cities contain low value development as islands; high traffic commercial and industrial zones for example
  • The committee should consider that expansion of zoning authorities to counties and ETJs may exacerbate zoning issues as they currently are

 
 
Gregory Guernsey, Director of Planning and Development, City of Austin

  • Austin does not extend zoning into ETJs
  • When property is brought in, it is usually zoned as interim single-family, or interim rural residential
  • Some preferential treatment is given to incentivize affordable housing
  • In ETJs it is a delicate balance; there is an anticipation that properties will be annexed at some point
  • The city issues around 11,000 building permits each year; mistakes are made
  • Workman asked if a mistake is discovered down the road, are homeowners required to fund what it costs to bring a home into compliance
    • The homeowner can apply for a variance or make a change to the property to come into compliance; they also may find some resolution with the architect or the surveyor
  • Springer noted it may be good to require a city to be responsible for bringing a home into compliance if a mistake is made on the permit by the city
  • Springer asked why residents of an ETJ should not have the ability to vote on an annexation
    • They are utilizing city services and the benefits of living near a city without paying the taxes other residents pay
  • Springer noted they could be paying hospital taxes, sales taxes in the city, property taxes for their business in the city; some residents could vote for annexation if they feel they would benefit from it

 
Bill Foley, Self

  • When planning for development, cities are looking for as much retail sales tax and office ad-valorem taxes as they can get; cities are not using market studies to help make these decisions
  • Many times homeowners have very little viable recourse when dealing with cities

 
Ned Munoz, Texas Association of Builders

  • The idea that in an ETJ a landowner can do whatever they want with the land is not true
  • Several cities are trying to extend their building codes into ETJs; in order to do this they must do limited purpose annexation otherwise it is against statute
  • Cities get their power from the state; when cities abuse their power the state should do something about it
  • For ETJ residents, they cannot vote for city council members nor do they have other similar recourse
  • ETJ residents provide a lot to cities; city residents use businesses in the ETJ, they use roads in the ETJ, etc.

 
Pamela Madere, Attorney

  • Homeowners’ only recourse is to sue in many situations which is not financially feasible to most homeowners
  • Something needs to be done to look at accountability of municipalities

 
Harry Savino, Homebuilders Association of Greater Austin

  • It is very difficult to comply with city building regulations in Austin
  • Many times homeowners are left in situations where there is no recourse against the city