Top 10: New Laws for Business Owners
Top 10: New Laws for Real Estate
Top 10: Interesting For All the Wrong Reasons

Legislative Update ? Significant Bills of the 78th Legislature Affecting Real Estate, Lending, and Other Commercial Matters
(available in 3 downloadable formats below)

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NOTE: the selection of bills for inclusion on this page is subjectively determined by Mark McPherson. There are additional bills passed relating to each of these topics. All bills passed may be reviewed at

Land Use:

Bill Topic Effective
JMM Comments
HB 156 Relating to the grant of the power of eminent domain to a regional mobility authority. 6 - 20, 2003 Self explanatory
HB 157 Relating to the authority of a regional mobility authority to issue turnpike revenue bonds. 6 - 20, 2003 Self explanatory
HB 164 Relating to the rates at which the municipal sales and use tax for street maintenance may be imposed. 6 - 20, 2003 Technical changes; added flexibility
HB 212 Relating to the regulation of political signs by a municipality. 9 - 1, 2003 Political signs on private property
HB 645 Relating to prohibiting the creation or enforcement of certain restrictive covenants that undermine water conservation. 9 - 1, 2003 Limits property owners associations
HB 722 Relating to the powers of the commissioners court in a county that has no incorporated municipality. 9 - 1, 2003 Gives commissioner's court in these counties all the powers of the governing body of a Type A general-law municipality
HB 803 Relating to the assessment of damages in a condemnation proceeding based on the market value of groundwater rights as property apart from the land. 9 - 1, 2003 In certain instances the market value of groundwater rights may be considered and valued as property apart from the land to be condemned, in addition to the local market value of the real property
HB 919 Relating to the review and approval of a subdivision of land by certain special districts. 6 - 20, 2003 District may require that a property developer who proposes to subdivide land located in the district submit for district approval a drainage report for the subdivision
HB 1117 Relating to the clarification by a county of the existence of a public interest in certain roads. 9 - 1, 2003 Allows a county to clarify the existence of a public interest in a road
HB 1129 Relating to the types of restrictions that may be enforced by certain municipalities. 9 - 1, 2003 Greatly expands definition of land use "restriction"
HB 1197 Relating to authorization for a development agreement between a municipality and an owner of land in the municipality's extraterritorial jurisdiction. 6 - 20, 2003 New section, gives substantial increased flexibility for owners and cities to operate with each other by agreement
HB 1204 Relating to the authority of municipalities and counties to regulate subdivisions in a municipality's extraterritorial jurisdiction. 6 - 20, 2003 Substantial change in power to regulate subdivisions in ETJs
HB 1207
SB 991
Relating to the enactment of certain municipal zoning regulations. 9 - 1, 2003 Increases ability of cities to regulate the "appearance" of buildings, yards, landscaping
HB 1208 Relating to the mitigation of traffic congestion on highways; providing penalties. 6 - 20, 2003 Pro-HOV lanes and such
HB 1387 Relating to the regulation of on-premise signs in certain counties. 9 - 1, 2003 Allows counties to charge fees for permits for on-premises signs. Yes, you would have to pay to use your own property in certain ways
HB 1454 Relating to powers of a property owners' association relating to restrictive covenants in certain subdivisions. 9 - 1, 2003 Expands chapter of Property Code to smaller cities (good example of the "slippery slope" principle)
HB 2212 Relating to the continuation of legal land use in newly incorporated areas. 9 - 1, 2003 Limits newly incorporated cities from imposing certain land use regulations in the newly incorporated areas. Preserves rights of owners to continue existing land use in most instances.
SB 361 Relating to the precedence of certain municipal highway access rules and ordinances over highway access management orders of the Transportation Commission. 6 - 20, 2003 Preserves the Texas tradition of building access or "frontage" roads for controlled access roads, at the option of cities.
SB 487 Relating to the relocation of utilities required for the improvement of the state highway system. 6 - 20, 2003 Slam dunk for the state over utility companies; this result is expected since the state is writing the rules
SB 656 Relating to the removal of certain on-premise signs in a municipality. 9 - 1, 2003 Allows cities to remove signs that identifies a business, person, or activity that has ceased to operate

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Construction Legislation

Bill Topic Effective
JMM Comments
HB 208 Relating to persons who may obtain a mechanic's lien on real property. 9 - 1, 2003 Allows those who demolish structures to obtain a mechanics and materialmen's lien
HB 730
SB 383
Relating to residential construction, including certain warranties, building standards, and dispute resolution. 9 - 1, 2003 Creates the Texas Residential Construction Commission for dispute resolution of residential construction issues, a very important, very controversial, and heavily lobbied bill
HB 867 Relating to air conditioning systems in certain facilities. 9 - 1, 2003 A/C requirements for assisted living facilities

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Bill Topic Effective
JMM Comments
HB 3190 Relating to air conditioning systems in certain facilities. 9 - 1, 2003 Clarifies a prior confusion. At the termination of a commercial lease, the landlord has 60 days to return, or use and explain how, a security deposit. Failure to do so is "bad faith."

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Bill Topic Effective
JMM Comments
HB 284 Relating to the applicability of the offense of unlawfully carrying a weapon to certain persons carrying a weapon in a recreational vehicle. 9 - 1, 2003 Allows persons to carry handguns, otherwise illegal knives and clubs in RV's (defined as a travel trailer, camping trailer, truck camper, motor home, or horse trailer with living quarters), without committing a crime. Gives new meaning to the slogan "Go RV-ing".
HB 408 Relating to the liability of landowners for certain uses of their land. 9 - 1, 2003 Hunting and recreational liability statute
HB 1529 Relating to the inspection of wildlife resources and devices used to catch or hunt wildlife resources. 9 - 1, 2003 With or without cause, allows game wardens to inspect any person apparently engaged in hunting or fishing, to specifically look for and inspect any devices used to hunt or fish, any game in the person's possession, and "the contents of any container or receptacle that is commonly used to store or conceal a wildlife resource." How do they know what that is? Game wardens may also inspect any game that which is in plain view of the game warden. Prohibits game wardens from searching a person's residence or temporary residence, or searching persons on certain public roads.
HB 2159 Relating to the creation of a Kickapoo deer hunting license. Vetoed 6 - 20, 2003 ***
HB 3477 Relating to the issuance of concealed handgun licenses to residents of certain other states and to reciprocity agreements with other state concerning concealed handgun licenses. 9 - 1, 2003 Reciprocity statute for concealed weapons licenses of other states. Clarifies an ambiguity created by the Legislature in 1997.
SB 236 Relating to exempting landowners from the requirements of obtaining a hunting license to hunt feral hogs on the landowner's property. 6 - 20, 2003 "The commission may not require a landowner to have a hunting license to hunt a feral hog on the landowner's property." I'm serious?that's what it says.
SB 1582 Relating to authorizing political subdivisions to trap, transport, and transplant certain white-tailed deer. 9 - 1, 2003 Facilitates the ability of communities to more effectively control deer populations because, apparently unbeknownst to animal activists, there is currently an over-population of white-tail deer in urban areas in Texas, causing a public safety and public health problem. This bill allows for the trapping and transporting of surplus white-tailed deer by affected communities and property owners associations.
SB 1635 Relating to the use of all-terrain vehicles. 9 - 1, 2003 Carrying passengers on an ATV used to be strictly prohibited. Now, a person may carry a passenger on an all-terrain vehicle operated on public property if the all-terrain vehicle is designed by the manufacturer to transport a passenger.
HCR 256 Directing the White-tailed Deer Advisory Committee to study current deer management permits. 9 - 1, 2003 Establishes "White-tailed Deer Advisory Committee" to address how habitat relates to the ecological diversity of the state and to study the role of the wildlife biologist in the development of management plans and in the utilization of suitable management practices, including population goals and control, yearly census data, supplemental feeding and food plots, and genetic management; also to determine how to provide flexibility and economic incentives for private landowners in preserving wildlife habitat.

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Bill Topic Effective
JMM Comments
HB 4 Relating to reform of certain procedures and remedies in civil actions. 9 - 1, 2003 Except SEC. 17, Effective - 6 - 11, 2003 One of the most important bills of the entire session. Tort reform. Class action limits. Proportionate responsibility. Products liability. Post judgment interest.
HB 705 Relating to liability of in-home service companies and residential delivery companies for negligent hiring. 9 - 1, 2003 New regulations of, and protections for, the "in-home service company".
HB 1156 Relating to adoption of the Business Organizations Code. 1 - 1, 2006 Huge bill. "The purpose of this code is to make the law encompassed by this code more accessible and understandable by: (1) rearranging the statutes into a more logical order; (2) employing a format and numbering system designed to facilitate citation of the law and to accommodate future expansion of the law; (3) eliminating repealed, duplicative, expired, executed, and other ineffective provisions; and (4) restating the law in modern American English to the greatest extent possible." If it only accomlishes half of that, it will be a good thing.
HB 1165 Relating to business corporations. 9 - 1, 2003 Large piece of legislation. Includes provisions on communication and documentation of action via Emails, records kept on computers, allows an entity to eliminate the duties imposed by the corporate opportunity doctrine, indemnification of officers and directors, acquisition of stock, stock options, may allow for increased asset protection of corporate stock, preemptive rights, cumulative voting, mergers, certificate of authority.
HB 1282 Relating to commercial electronic mail. 9 - 1, 2003 New regulation of certain unsolicited commercial electronic mail messages, commonly known as "spam."
HB 1394
SB 994
Relating to a revision of the general provisions of the Uniform Commercial Code. 9 - 1, 2003 Large piece of legislation. Elevates priority of UCC; may not be so easily superceded by agreement; many other technical and substantive changes throughout the entire UCC.
HB 1637 Relating to the formation, organization, management, and records of certain business organizations. 9 - 1, 2003 Series of technical changes to LLC Act and Limited Partnership Act, they appear to provide added flexibility
HB 2415 Relating to the postjudgment interest rate. 6 - 20, 2003 Changes the minimum and maximum caps on post-judgment interest rates. Minimum goes from 10% to 5%; maximum goes from 20% to 15%.
HB 3213 Relating to the authority of veterinarians to form a professional association. 6 - 20, 2003 Specifically allows veterinarians to be Professional Associations, and thus not subject to the Texas Franchise Tax.
HB 164 Relating to the recording of jury deliberations in civil and criminal proceedings. 6 - 20, 2003 Prohibits the broadcast or recording of jury deliberations.

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Bill Topic Effective
JMM Comments
HB 276 Relating to the award of attorney's fees and costs in an action against a fraudulent transfer. 9 - 1, 2003 Allows court to award attorneys fees to any party in a fraudulent transfer case.
HB 2930 Relating to the confidentiality of certain personal information in real property records filed with the county clerk. 9 - 1, 2003 Requires all deeds executed on or after 1-1-04 to include the following specific notice relating to privacy concerns: NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
SB 14 Relating to automobile and residential property insurance regulation. 6 - 11, 2003 Huge bill, covers lots of territory. Regulates rates for residential property insurance, policy forms, credit scoring, residential rate reduction, methods for an insurer to withdraw from the Texas market, and mandatory Dept. review of insurers' business practices, insurer performance and operations. Oh-and periodic financial review too. Sounds like the insurance industry's worst nightmare.
SB 310 Relating to rate information to be filed by certain insurers of residential property. 2 -25, 2003 Requires, on a one-time basis, a summary report on insurance rates and supporting data, from which the 78th Legislature is supposed to be able to determine whether the rates are "just, adequate, and reasonable and not excessive or unfairly discriminatory"; and to point the way to the most "effective and efficient regulatory system for residential property insurance in Texas." Mighty ambitious, don't you think?
SB 1017 Relating to the ability of a county to sue and be sued. 9 - 1, 2003 Allows for the limited ability of a county to sue and be sued. Provides procedure that must be followed in order to proceed with any such suit. But sovereign immunity still is the rule, not the exception, in Texas.

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HB 148 Relating to the prohibition of the manufacture, sale, or possession of a counterfeit disabled parking placer. 9 - 1, 2003 The manufacture, sale, or possession of a placard that is deceptively similar to a disabled parking placard is now a Class A misdemeanor. Displaying an inauthentic handicapped parking permit while parking your car in a handicapped space, is now a Class C misdemeanor.
HB 151 Relating to offenses involving dogs that are a danger to livestock and other animals. 9 - 1, 2003 Here is a most interesting domestic relations policy. If you own a dog or coyote that you know is accustomed to run, worry, or kill livestock, domestic animals, or fowls, you cannot permit the dog or coyote to run at large. If it does, and it harms livestock the owner is liable for damages, and if the dog or coyote is shot by someone witnessing it misbehave, the owner can't get any damages for its death.
HB 653 Relating to a shampoo apprentice permit. 9 - 1, 2003 Establishes a new "shampoo apprentice" permit allowing the holder to shampoo and condition hair. Must be at least 16 years old and submit a certificate of health. Permit only good for one year; non-renewable. No fee for the permit. No educational prerequisites.
HB 831 Relating to regulation of the use of laser pointers. 9 - 1, 2003 You will commit a Class C misdemeanor if you knowingly direct a light from a laser pointer at a uniformed safety officer, including a peace officer, security guard, firefighter, emergency medical service worker, or other uniformed municipal, state, or federal officer. Why do some people have to be told this sort of stuff?
HB 1949 Relating to the finality of a grade issued by a public school teacher. 6 - 2, 2003 An examination or course grade issued by a classroom teacher is final and may not be changed unless the grade is arbitrary, erroneous, or not consistent with the school district grading policy applicable to the grade, as determined by the board of trustees of the school district in which the teacher is employed. A determination by a school district board of trustees is not subject to appeal.
SB 132 Relating to the replacement and repair of existing cattle guards on county roads. May 28, 2003 The commissioners court may replace or repair a cattle guard on a county road of any class and may pay for its replacement or repair from the county road and bridge fund if the court finds that the replacement or repair of the cattle guard is in the best interest of the residents of the county. Makes you wonder how many states have this sort of law. Texas: it's like a whole other country.
SB 378 Relating to the listing of a business location of certain businesses in a telephone directory or database. 9 - 1, 2003 Apparently some florist shops are way out of control and in the process of saying "I'm sorry" people ordering flowers forget to ask some very critical questions when placing their order, like "where are you located?" Now, a business that derives 50% or more of its gross income from the sale or arrangement for sale of flowers or floral arrangements may not misrepresent the geographical location of that business in the listing of the business in a telephone directory or other directory assistance database. If they do, it's a dreaded DTPA violation.
SB 693 Relating to flame effects and pyrotechnics before an assembly. 9 - 1, 2003 Implements standards for the use of flame effects or pyrotechnics. Apparently Texas' response to the Rhode Island nightclub fire disaster.
SB 895 Relating to the conducting of a driver education course by certain family members of the student. 9 - 1, 2003 Interesting legislative history. The bill as originally introduced was supposed to only provide authority to use electronic transmission (i.e. E-mail), but by the end of the process it ended up changing the restriction on who can give such a course, from the simple "be a licensed driver" to "possess a valid license for the preceding three years and the license has not been suspended, revoked, or forfeited in the past three years for traffic related violations". Bet the original proponents didn't see that one coming.
HCR 16 Designating the tortilla chips and salsa as the official State Snack of Texas. 9 - 1, 2003 Get a load of this? "WHEREAS, Like the square dance, the guitar, and the rodeo, tortilla chips and salsa are deeply rooted in Texas tradition [how much research did that take?]......
"WHEREAS, The primary ingredients of chips and salsa have nourished the people of this land for centuries; corn, peppers, and tomatoes all originated in the Western Hemisphere and were being cultivated by Native Americans along the Rio Grande when the Spaniards, who introduced onions to the New World, arrived in Texas; tortillas, developed in prehistoric times by the Indians of Latin America, have likewise long been a staple in parts of the state;
"WHEREAS, In addition to their traditional importance as a foodstuff, peppers, onions, and tomatoes have played a significant role in Texas folk medicine, and their value in fighting illness is being increasingly recognized by modern science [did you know Texas has folk medicine??I'm not making this up!]; "WHEREAS, The importance of these crops in Texas is reflected by such celebrations as the annual Corn Festival in Holland, Hot Pepper Festival in Palestine, and Tomato Festival in Jacksonville, as well as onion festivals in Noonday, Presidio, and Weslaco; salsa itself enjoys a starring role at the Three Rivers Salsa Festival and at other hotly contested competitions [pun intended? what imagination!] in Houston and Austin;
"......joining the state's oldest and largest salsa manufacturer, which began production in San Antonio in 1947 [Pace Picante? Wasn't it sold to Campbell Foods, which is based in Noo Yahk City?], smaller new salsa firms continue to spring up, often inspired by a cherished family recipe and encouraged by Texans' insatiable demand for this zesty concoction [are you at least smiling yet?]....."

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