A.R. "Babe" Schwartz Interview, 20 January 2006, Part 1 of 3

  • JS: Well I have some questions for you that are kind of general and then get more specific. And then I have a few questions David Todd asked me to ask. And then at the end, I'll just ask if there's anything else on this that you want to cover.
  • 00:00:30 - 2387
  • BS: Okay, sure.
  • JS: So, first, could you just describe to me what exactly is the Open Beaches Act and like as a bundle of legislation, instead of just one particular (inaudible).
  • 00:00:45 - 2387 BS: Well, that's exactly what it is. It's a bundle of legislation. Most people believe the Open Beaches Act is that specific act which guarantees Texas citizens or all citizens for that matter, the unrestricted right of ingress and egress to and from the beaches. And the-the exact language of the statute is, that is-that it is the free, unrestricted access to the beaches. And that means that you can get to the state owned property, you
  • 00:01:25 - 2387 can go across private property, although sometimes that's limited in many ways but the state owns all of the land in fee title, from the mean low tide to the mean high tide. The case law since 1840 has set us up in Texas so that the average of the two mean high tides daily is that mean high tide which divides the state-owned property from the private property. And the Open Beaches Act is nothing but a statutory definition of what became common law, from 1840 to 1950 (break in recording) the Open Beaches Law was passed. Bob Eckhardt actually passed the Open Beaches Law and-and is-and is the rightful
  • 00:02:24 - 2387 owner of that credit. What I did over the years, was worked with Bob when I was in the House in '55 and in '57. Then I ran for the Senate in '58 and lost that race so that I was not there in the '59 session. Bob was in the House and I would've been in the Senate. As it turns out, Bob Baker passed the bill in the Senate and when I came back then in-as a senator, as I got elected in a special election in 1960, I was there then in '61. And from that time on, I began to work on the additions to that bundle of law that became the Open Beaches Law. It actually became the-the Natural Resource Code provisions from which the Coastal Management Program was developed.
  • JS: So what are some of the-what's the scope of it now, with all these additional provisions?
  • 00:03:29 - 2387
  • BS: Well now-now they Open Beaches Law governs not only your right of ingress and egress and the word free is there too, it's a free right of ingress and egress. The free is qualified because you're charged for parking. Free means, in the law today, that you cannot be denied a free access to the beach if you can get there. There are so many places like Galveston that have restricted the immediate access for parking. And so, but the Land Office is authorized to regulate the distances from which and within which you can park and access the beach. Uh, basically the Land Office is protecting people's right to park within a quarter of a mile of any place on the public beach. So that gives them a right-the ability to walk to that place, but always free. (misc.)
  • JS: Well now let me ask you, could you describe-what is the situation when on barrier islands, with housing-with hard structures, what is it that eventually happens to the front row?
  • 00:05:25 - 2387 BS: Yeah. Well, the-the beaches of Texas are in a constant, irreversible, eroding condition because of, the geologists say, a paucity of sand with which to replenish the beaches naturally. The delta of the Mississippi River has basically changed the flow of sand to the Texas coast. And the Corps of Engineers, of course, is responsible for some of that for all their work on the Mississippi. Nature really has provided the method by which the delta grows and presents a problem both to Louisiana wetland situations and to the sand supply on the Texas coast.
  • The big problem is that the-the sand supply that
  • 00:06:16 - 2387 used to come to the Texas coast in the littoral currents or littoral currents, that flow from Louisiana down to Texas has been denied because that flow now goes straight to the deepest part of the Gulf. And we are denied a sufficient sand supply to replenish the natural erosion, plus that-plus the fact that in Louisiana now, off the coast of southern Louisiana, between the delta and Texas, there's a hypo-hypoxic zone in which there's nothing but a body of dead water and that is because of the runoff. The pesticides and chemical runoff of the Louisiana coast has killed every living thing in that area. And
  • 00:07:10 - 2387 that hypoxic zone of dead water, plus the ch-change in the channel of the Mississippi River because of the delta prevents us from receiving any sand supply. Now, without that sand supply, we have a minimum of two feet per year erosion on the upper Texas coast and on the lower Texas coast as well.
  • The only stabilized area of the Texas coast according to the geologists and Dr. [Jim] Gibeaut at the Bureau of Economic Geology will attest to the fact that, that stabilized area in the mid-coast at Corpus Christi, is about fifty miles, maybe fifty to a hundred miles or so, from North Padre Island. And that is a non-eroding
  • 00:08:02 - 2387 beach and may even be an accreting beach. All the other beaches are eroding, both to the south and the north. Uh, the littoral current comes from the Mississippi to the Texas coast, which means it comes from north to south, to North Padre. The current on the lower coast comes from the Rio Grande in Mexico up to North Padre and the confluence of those currents is there at North Padre Island. So, that's the-that's the natural exchange, which causes the erosion. Under ordinary circumstances, the Mississippi
  • 00:08:45 - 2387 pro-would provide sand to the Texas coast. That's how the barrier islands were built in the first place, from the sand supply that was in the current.
  • On the lower coast, that sand supply came from the Rio Grande. We don't even get any of Rio-any water from the Rio Grande anymore. I mean, it's-it over the last eight or ten years, the Rio Grande was dry when it reached the Gulf. And now, the Rio Grande is flowing again and our water supply is restored to the Laguna Madre and to a-a part of south Texas that needs it so
  • 00:09:23 - 2387 badly for all the natural consequences in the wildlife propagation, but it has certainly not replaced the sand supply.
  • And there's been no provision in the construction of dams all over these rivers of Texas, whether it's the Rio Grande a-or whether it's the Brazos or the Colorado for a sediment bypass. The geologists talk about it in the sense that they say, you-you can provide for a sediment bypass and let that sand reach the Gulf of Mexico and if indeed, that were done or had been done, why, we would not have this paucity of replenishment sand.
  • So now, if you want to restore a beach or replenish it,
  • 00:10:16 - 2387 you've got to find yourself a deposit of beach quality sand in the Gulf of Mexico and you have to mine it. You actually have to set up a dredge system so that you can take that sand and put it on the beach. And that's good for about a year or two and then it's gone. Uh, it either winds up going back to the Gulf itself or it goes down the coast, so you replenish a beach in Galveston and maybe luckily somebody might get the sand in Brazoria County.
  • JS: Well, for some of these smaller communities further up the coast, like a Surfside or Quintana, is it worth it for them to do beach re-nourishment?
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  • BS: I don't think so. I think the greatest waste of money that we're indulging in is replenishing beaches that will indisputably erode in a very short time. Some of these beaches are not good for a year. Some of them may be good for two years. There's not a beach out there in Texas that lasts more than two years that I have seen, where's there's been restoration or replenishment. The federal government, FEMA, has just approved a million, four hundred and thirty thousand dollars for beach re-nourishment of the Bolivar Peninsula. The Bolivar Peninsula is eroding at a rate up to fifteen feet per year. Now,
  • 00:11:44 - 2387 you know, they have gone over there and built millions of dollars worth of sand socks, or these artificial tubes which contain sand and then they put sand on top of that and that's supposed to be a dune and then they've all failed. First storm comes along, well they failed. Then you go spend another million dollars and you restore the tubes and then you put sand on top of it and then you put sand on the beach, and then next year a tropical storm comes along, takes it all away. So I-you know, I wonder who we're paying that money to please. (misc.)
  • JS: Even for, like, tourism purposes, is, you don't think...
  • 00:12:33 - 2387 BS: Well, it's a great tourist attraction to have a beach and they equate this tourist attraction with dollars. And so they say, well, you know, a-a tourist is worth a bale of cotton and he's twice as easy to pick. And so-so whatever-whatever numbers they want to put on it, the economists put numbers on tourism, a thousand tourists, worth a million dollars. Well nobody's ever analyzed that in my opinion, sufficiently to say that they can guarantee it, a thousand tourists on Galveston Island are worth a thousand dollars. The old saying in Galveston is, they come to Galveston with a dirty shirt and a
  • 00:13:17 - 2387 ten dollar bill and don't change either one. And that's not necessarily true. But so, we built our economy on tourism, so I can't really fault the theory. But they've been coming to Galveston for bad beaches and they don't come any greater-in any greater numbers for the better beaches. Well, I'm for that. I-you know, if we want to put sand on the beach in front of the seawall in Galveston and that attracts more tourists and that's a good thing and I-and I bless it.
  • Uh, but if you want to put sand on the beach in front of
  • 00:13:53 - 2387 somebody's subdivision, then those people need to realize that the restoration of the land which has been lost to erosion at public expense is still a restoration of public land because any sand that goes between mean high-mean low tide and the average of the two daily high tides is being placed on state-owned land. Now these homeowners think that when their house suddenly is in the surf and in the mean high tide line, they think
  • 00:14:29 - 2387 that they can get it restored while they've restored their property and that's their property right and it's your money and my money. And there is no way that under-under the Texas constitution, a political entity cannot be authorized by the legislature to make a gift of money or anything of value to any individual or association. That's exactly what Article one, Section 52 says. And so these folks who think that restoring their beach gives them a property right or-are in the hole and are un-first of all, they're uninformed. Most of the time they're misinformed.
  • JS: Okay. Um, well, could you just describe to me what is the-the current situation with hard structures on the beach, like in Surfside or-or Treasure Island or...(misc.)
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  • BS: The distinction between certain hard structures on the beach can only be made as to where they are, with regard to the mean high tide line. When a piece of property finds its footing, its footprint, within the mean high tide line on a beach, that part of the footing or that part of the house or all of it, or the structure, which is in the mean high tide line is on state property. It is subject to removal and all the case law, all the common law, all the cases since 1840, dictate that the Attorney General has a right to file a lawsuit to seek the removal of any structure from state-owned property. You can't go out and build a house in the park, nor can you re-maintain any structure in the park on state-owned land. The
  • 00:16:44 - 2387 same people who think they can live on a beach in the-in the high tide line, you know, understand full well that they couldn't go build that house in the state park because it's state-owned land. They don't understand that the land can transfer in its title simply by the forces of nature when it's on a barrier island or on a beach. It is not necessarily true on the bay shoreline as it is on the beach, but it's clear and unequivocal on the beach. Now the Open Beaches Act, which guarantees that right of access, that part was-was passed in 1959 does not apply to the bay shore properties. The Open Beaches Act only
  • 00:17:34 - 2387 applies to beachfront property. Now, when the Attorney General files a lawsuit to remove a structure that's in the mean high tide line, the Attorney General is preserving the right of the public to its land and the state to its ownership.
  • And people whose houses are partially in the mean high tide line have not been sued yet because even though a hundred and seven houses have been certified as being on the public beach, which means they're in the mean high tide line, the Attorney General's only filed suit about, oh, over eight or ten of them. The worst are in Treasure Isle, where three of those
  • 00:18:19 - 2387 houses are actually in the Gulf of Mexico. They have provided bulkheads and they've built all kinds of structures to maintain the little island in the Gulf or a little peninsula in the Gulf. Well, first of all, they never had a right to do that. The state let them do that, the Attorney General was lax in protecting the state rights and-and essentially, gave away state property for the term that these people have had those houses that were subject to removal. If the Attorney General had done his job back when the houses first went into the Gulf, they wouldn't be there and the state property would've been protected.
  • JS: Well, how is it that, well, someone was trying to explain to me, that because, technically, they still own the property, the-the public-there's just a public easement, so even wi-if it is actually submerged?
  • 00:19:21 - 2387 BS: Well, somebody's told you wrong. If it's submerged, it's state-owned land. If it is even in the mean high tide, as I've explained, and the mean high tide doesn't have to be there everyday. If the mean high tide line covers the property in and out over the year and it's determined that that is under the flow of the water and it is effectively submerged land some of the time of the year because of tidal influences, then that is no longer private property. Now they may have a deed to it and they may proclaim they own it and there may be part of it that's not subject to the mean high tide and that is still absolutely their private property and they can go sit on it and enjoy it. And if there was enough left,
  • 00:20:18 - 2387 they could build another structure until it becomes a part of the mean high tide.
  • But, the law has been the same since the second century. There was a-the Annals of Gaius or the Annals of a Roman named Gaius back in the second century. That law became the Justinian Code. And in the Justinian Code, the sovereign owned that soil, that submerged land and the mean high tide began to evolve as the distinction between sovereign soil and private ownership. It became English common law; it became Spanish civil law, in the thirteenth century. It became the law of Mexico as Spanish civil law and it would've
  • 00:21:11 - 2387 been the law of Texas. And Texas became a s-republic and it became the common law of the Republic of Texas. So, the homeowner that you're going to interview is going to damn the Open Beaches Act and he's going to damn Bob Eckhardt, he's going to damn Babe Schwartz. The truth is he's got to damn Gaius, who recorded in his Annals that there was a distinction between sovereign soil and private property.
  • JS: That was actually my next question on the history of the common laws that the OBA was based on. But let me ask you, in 2006, why would-why is that common law still relevant? Why is it-why should it still apply to the public?
  • 00:22:03 - 2387 BS: Okay, common law is based on the law as set forth in cases. Statutory law is passed by the legislature. So case law becomes a basis and a predicate, year in and year out, for every case in the future. That's called the stare decisis. For those people who watch the confirmation of Supreme Court Judges, each Supreme Court Judge candidate has made it clear that a court is bound by stare decisis. And stare decisis simply means the precedent is there-I don't know that that's the translation, but it means that all the case law prior to this case, leads me to the conclusion that the law of this state or the law of the land is such and such. And a judge doesn't have a right to deny what the precedent of law has given us over decades and centuries of courts and laws. So when Judge Alito seeks confirmation to the Supreme Court, he works diligently to convince the members of the United States Senate that he understands stare decisis. They also say that it is not
  • 00:23:23 - 2387 an inexorable command that cannot be altered. You can bend and twist and expand and contract principles and still stay within the principle of stare decisis, but that's the bottom line. So the fellow out there on the beach that says well, that's 1840 law and it doesn't mean anything in two thousand and six, you know, has forgotten that it's second century law. It's Justinian Code law, it's English common law and it's Mexican Spanish law and it's Texas common law. And until the legislature changes it, that's what the law is and that's what it'll be. And he bought his house understanding that principle and
  • 00:24:13 - 2387 even if he didn't sign that document in 1986, he had a lawyer and the lawyer told him. And if the lawyer didn't tell him, the lawyer committed malpractice because there's never been a question about it and it's got nothing to do with the Open Beaches Law. The Open Beaches Law didn't change a thing. It codified common law.
  • JS: Okay, so-so what does that mean if all these houses have been on the open beach since 1998 and are still there?
  • 00:24:50 - 2387 BW: Well, it just means that Attorney Generals by and large are politicians and they're kind of playing to the idea that they're going to let these people have their folly until they really are all in the water. And I guess, you know, I've been mad about it for fifty years, but the truth is that-and I did get to legislature fifty years ago, so I've been mad about it for fifty years.
  • But the truth is, I don't know that there's any damage done except in
  • 00:25:21 - 2387 those areas like Surfside, where you-it's so obnoxious and so insulting to the general public who want to use public beaches, to go down there and find structures on the beach, glass and nails and lumber. Uh, the last time somebody tore down a house on Surfside, they just burned it and all that trash-if you talk to Ellis Pickett, he's got baskets of glass and nails and screws and-and the damaging articles to people who might want to use that beach and-and who would be hurt doing it. Matter of fact, somebody was hurt last year I think on Surfside, trying to use a public beach that had been destroyed for effective purposes for at least natural use purposes by the rubble that came from houses and structures.
  • JS: Well, since-I mean, you say-you've been in this-you've been involved in government for fifty years, how has Texans' attitude towards conservation changed in that period?
  • 00:26:30 - 2387 BS: I think that the-that the public attitude is better today than it was fifty years ago. But fifty years ago, we had a pristine condition on the beaches, as far as barrier islands and peninsulas. The developers it-with their avarice and with their complete disregard for public rights, heading...(misc.)
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  • BS: The-fifty years ago, as I have indicated, the-the beaches were really pristine by nature across the United States except on the east and the west coast, where the population growth had already overcome the ability of the states to manage their-their laws. And we began working on the projects that would preserve that state of the beaches and give us an opportunity for the public to have free access and complete use. It was, as I said, it was 1959 before Bob Eckhardt got to the specific beach law that began the Open Beach Law concept and began the addition of this Natural Resource Code that became Open Beach Law or-or became the Coastal Management Law. So, all of
  • 00:28:07 - 2387 that transition brought about an awareness in the public that they had this ownership and they had this right and if anybody was going to protect that right, then it had to be done in the legislature. Believe it or not, the legislature will protect the public rights in that regard if they are aware of what they're doing.
  • The problem is that all these inland members don't really understand this concept either. And you have to tell them, and we have to tell them repeatedly, every legislative session, guess what, this is public land. Would you give them the Big Bend, you know, would you give them-would you give
  • 00:28:50 - 2387 them the river and its banks in your home town? Would you give them the state park and let them call it private property? All of these things have to be explained to every new member of the legislature who's not from the coast. Somebody's got to tell them, those folks don't own that property at the mean high tide line, that's your property. And then twenty-one, twenty-two million people in Texas have a right to use it. And when you give it away to Joe Blow, because he had enough money to buy a beach house, you know, you're violating the constitution in the first place. And in the second place, you know, he's not entitled to the gift.
  • JS: So would you say the Open Beaches Act is still under attack and if so, like from whom and why?
  • 00:29:48 - 2387 BS: The Open Beaches Act is under attack every day from every developer, every beachfront homeowner who thinks they bought an exclusive piece of property from which they can prevent any other human being from using and enjoying. And it's the most ridiculous thing in the world for a person to believe I'm rich, I bought a beach house; I don't want anybody eating fried chicken and watermelon on my beach. And if you look them in the eye and tell them, when the hell did it become your beach or when did you decide that because you're rich, that you can prevent...(misc.)
  • 00:30:43 - 2387
  • BS: What-what has to be made clear is that nobody has the right to-because they're rich, to buy and own public property, unless the public property is for sale because the state decides to do so. There's a doctrine called the Public Trust Doctrine, which places a trust upon government to protect public rights to its property, real and a-it's real
  • 00:31:13 - 2387 property and the air rights of that property as well and the water rights for that property. And it's very, very restrictive, again, through common law, in itself, from the beginning of time, that the state has no right to deny its citizens the use of public property except under rare circumstances. And has no right to sell that public property to somebody who will deny those rights to citizens. So, it's basically an idea that if you're a human being and you're alive and you live in a state, then the state's got to protect your rights. And the developers don't understand that. The developers are born with a lump of avarice in
  • 00:32:01 - 2387 their heart and nothing can persuade them that they don't have a right to buy everything and own it and make it exclusive, because they can't make as much money off of something that might be utilized by the public and the private sector. If they make it exclusive, the-then they can sell it to people just like them. And that's going on in Corpus Christi today.
  • JS: Well, what kind of development do you think would be appropriate for coastal areas? Like setbacks or...
  • 00:32:40 - 2387 BS: Well, I think that setbacks have their value, but they're limited in time. Ellis Pickett would like to have a two hundred and fifty foot setback on new construction. Well, you'd have to do that in areas that are not yet developed because you can't put a setback line in a subdivision, can't impose it on a subdivision where everybody else is on a dune
  • 00:33:02 - 2387 line. And that would be a denial of due process and would fall to a lawsuit. You can create a setback line on all new developments and I think that would be an excellent thing to do because it gives us an opportunity to-to protect the forefront and the foredune in these areas that have not yet been developed. We needed a setback line fifty years ago. All these folks have built on a dune line now and now the dune line's behind their house in Galveston. Many of these subdivisions are just-they are in the mean high tide line and the Attorney General's not doing anything about it.
  • The Attorney General's attitude,
  • 00:33:47 - 2387 I think, is that if it does de-not-if it does not deny public access to the state-owned land and if it is not a health hazard constituting a nuisance-defined as a nuisance, then the Attorney General does not sue to remove the structure, unfortunately. But those are the conditions that have been imposed on the Attorney General's office, that is, the staff who might want to remove eight or ten more structures and the General Land Office in the same conditions. The General Land Office takes the view that if it is not an impediment to the access and it's not a public nuisance, then they simply are not asking that those structures be removed.
  • JS: So, when this moratorium expires in June, what will happen next?
  • 00:34:45 - 2387 BS: Well, Jerry Patterson, the [General Land Office] commissioner, has a duty to enforce the law. And he has a duty, in my opinion, to ask the Attorney General for the removal of more houses than are being sued to re-be removed now. The three at s-Treasure Isle are under a lawsuit today, several in Galveston are under lawsuits today. I think that Jerry's just going to have to look at the hundred and seven that were previously certified as being on the beach, have the Bureau of Econo-Geology-Economic Geology do that survey again, make a determination of the worst offenders and ask the Attorney General to file a lawsuit against those people for removal. Now, the commissioner's idea is that he would
  • 00:35:39 - 2387 like to provide an economic incentive for those people to remove their own homes and therefore avoid the costs of these lawsuits. He's made a good case and I agree in part, that the cost of these lawsuits is almost prohibitive. You take on ten lawsuits to remove ten structures; you're liable to spend a million or two million dollars trying the lawsuits. So, you may want to give that money or half of it as an incentive for those people to move their own structures.
  • And I agree with that in part, as long as that's not public money. Now how do you raise money that's not public money? I don't know, I
  • 00:36:26 - 2387 think maybe if we put a tax on a-put a tax on the real estate ventures that take place on these barrier islands and peninsulas and created a fund for those purposes, then the very people who get that money back when they have to remove their structure could apply to that fund for that money. But we've got to create something better than taxing people who buy clothes and-and who buy things at the store and who pay sales taxes in this state out of minimum salaries that they earn in order to support some millionaire to pay for the removal of his house. You know, basically, I say that there's not an equation
  • 00:37:13 - 2387 there. You can't tax a guy who's buying clothes for his kids and use that money to give some rich guy who knew in the first place that his house would be removed, and give it to him a-for removal of his house. We're already subsidizing his insurance. We're already subsidizing his flood insurance and his windstorm insurance. We're already replenishing the beach in front of his house. We're already doing all these things that are gifts to him, which I think violate the constitution anyhow. But most of what we do, we do because it's good politics for the commissioner. It's good politics for the Attorney General but it's bad for the public at large. (misc.)
  • JS: It-what-well, I mean, I'd like-talk to me about should-because then these homeowners want compensation. So, I mean you talked a little bit about setting up a fund, right, and I never considered that before, but an-let's-we'll talk about that again, but tell me more about how you respond to these homeowners who want to be compensated for having to take down their house.
  • 00:38:49 - 2387 BS: Well, I co-I'm-I respond to them, who would you like to pay you for your leisure. I mean, you have public leisure-you have private leisure at public expense. What you're asking for is a gift from people who are barely living and are paying sales taxes all over the State of Texas, to put in your rich bank account so that you can enjoy
  • 00:39:14 - 2387 your leisure at their expense. If you look at it that way, I mean, let's take-let's take the ghetto and let's take the barrios and let's take the poorest sections of any community and figure out how much in taxes they pay to the State of Texas and then take these folks living on the beach and let them make a case for taking that public money for their private leisure. I want them to sit there in-in a television camera view and I want them to say, well I did sign the document when I bought my home and I did read it, they always say they didn't read it, and they didn't sign it and their signature's right there. And I-and I believe that even though the law of this state since 1840 has been that a
  • 00:40:08 - 2387 structure within the mean high tide line is subject to removal by a suit by the Attorney General, and that's what that piece of paper said. I would still like Joe to contribute his money, which he earns at the rate of minimum wage per hour and give me his money so that I won't have to pay to remove the structure, which I placed there knowing that it would be removed. And I want that person to do that with a straight face and tell me-I'll walk them through the poorest sections of town and say, you want all these people to subsidize your leisure. And if they say yes, then I just want everybody in the general
  • 00:40:58 - 2387 public to be able to see that. I think every one of them ought to go on television before they ask for money; we ought to have a camera view of them, a picture. We're going to show that picture to the leg-to the legislature. And even let them pick out who they want to subsidize their leisure. And I think their embarrassment at being proven to be the most avaricious of the avaricious would-would make some-would make some weight with members of the legislature. Jerry wants to do it because it's good politics. He also wants to do it because it's the cheapest way to remove those houses.
  • But being cheap ain't always the answer. First place, it ought not to be expensive to begin with because these people are all violating the law and they all know it, they all know they going to lose their lawsuit. And the more of them we try and the more we win, the less money they'll be willing to spend to defend, quote unquote, their rights, which don't exist.
  • JS: So, why don't you tell me again that suggestion about establishing a fund based on development tax.
  • 00:42:09 - 2387 BS: Well, I have no objection to the people who are going claim the funds at some time, creating that fund. If they want to pay the tax to provide a fund and that would mean that you could have a transaction tax on all properties that are sold on a barrier island-bought or sold on a barrier island or a peninsula. Or you could take it only the-only the first two thousand feet of those barrier island real estate transactions. You could create a pretty good fund from a transaction fee. And that fund could be maintained by the General Land Office and when a house was caused to be removed, an application could
  • 00:43:00 - 2387 be made by the owner. The owner could set the conditions which they believe entitle them to a part of that fund and then an allocation would be made after a hearing by the General Land Office. And you could go through due process and decide-we'll give them two hundred thousand dollars. And if they take the two hundred thousand dollars, they remove the house. They don't take the two hundred thousand dollars; we sue them and remove the house. They get nothing. That's the kind of attitude that has got to come about sooner or later to deal with these people. I've dealt with them for all these years and some of them are really good friends over a period of time, but they-they hate me and they don't mind telling me because of my attitude. And I'm trying to impose those same attitudes on a generation of new people who will be the folks that fight them at the bulwarks and bomb them-bomb them in the war.
  • JS: Well what would you tell someone who was thinking about buying a house somewhere along the coast?
  • 00:44:12 - 2387 BS: I give people advice on that all the time. They call me and say what should I do. And I say, well, go down there, pick the house that you like, ask how much it'd cost to rent it for three months, pay the price every year, give it back to them at the end of the hurricane season and move on. And in the long term, number one, you'll never have to worry about the hurricane that wipes it out. You'll never have to worry about the beach that goes away. You'll never have to worry about the maintenance that comes about through salt water in the air-salt water and salt-salt air. You won't have your boat stolen and you won't have-you wouldn't-you-you won't have all the stuff that goes on down there twenty-four hours a day, three hundred and sixty-five days a year. And it'll only cost you that three months' rent. And they say, well, I could buy a house at the same time and I say yeah, if you buy a house and you pay the same amount of money that
  • 00:45:20 - 2387 you pay for rent on your mortgage, well then you're going to maintain the house, you're going to protect the house, you're going to repair it when it's destroyed, you're going to take care of-going to replace the furniture when it's stolen. Wh-I mean, the-the biggest gag in the world used to be that everybody that had those beach houses down there fifty years ago had to replace their furniture, buy a new boat, buy new lawn furniture, you know, everything that you leave at one of those places in the winter when you're gone, belongs to everybody that lives down there. We used to call them the
  • 00:45:55 - 2387
  • nesters. And they-there's just no-I mean, no-no immorality about it to the people who were doing it. You know, if you're dumb enough to leave all that stuff down there all winter long, we know it ain't going to be any good next summer anyhow. So we might as well take it and sell it. There was a lot of that that used to happen. When I was in the District Attorney's office and we spent half our time chasing down people stealing boats, we knew who were stealing them, but if they're up under one of those houses, it's gone, you know. So I-that-that's a part of what they need to learn and so in a-in a
  • 00:46:31 - 2387 word, rent what you want, pay the price, enjoy it and leave it to the owner who's got it there simply for that purpose. Most of those people own those houses to rent them and they occupy them, you know, couple months a year.
  • JS: Well, I-I mean, why do you think people are still buying up land, developers, especially down around Corpus when-when these forecasters say the storms are just going to get worse and more frequent?
  • 00:47:06 - 2387
  • BS: Well, because they know that the insurance is subsidized, that the cost of insurance goes into the cost of doing business. If they get the property insured against a loss, they risk nothing. The cost of the insurance goes into the cost of doing business and the people who enjoy the leisure pay the price. What aggravates me is they're not-they're-they're not satisfied to have all the subsidies and to have all the rights and to-and to have the property which they occupy at any given time. But then they want to deny the public a right that the public has always had and they will tell you that well, we've got to deny the public that right because otherwise my rich folks won't be able to
  • 00:48:02 - 2387 enjoy their leisure. And I repeat, you know, private leisure at public expense has never been a doctrine of this country as a-as a rule, but it's rapidly becoming a doctrine of this country where beachfront areas are bought and developed and where these developers can stand up before city councils and county commissioners' courts and say oh, you're going to collect a million dollars worth of taxes on this property. It's a beautiful development, it's wonderful. And I would echo, it is beautiful, it is wonderful, but it ain't got any right to be private. You know, you're going to-you're going to rent to the public, you're going to charge the public for the use of your facilities. Those people are no different than the people that want to use the beach in front of that facility. They belong to the public too. You got no right to charge them because you own private property. You got no right to charge them or limit their use of the public property, so, get
  • 00:49:14 - 2387 over it, you know. But, you-you can't say that to developers. Developers, as I said, are born with this lump of avarice in their heart. They-they don't care about anybody. The only people in society worse than developers are homebuilders. If they can cheat you, they'll cheat you. You know, if they can deny you some right that you might otherwise have to a sound structure that's livable, why, they'll do something to make it less livable, but they'll charge the hell out of you for having it. And I-I realize that I've got a ver-kind of a radical attitude about this, but I've also been practicing law for fifty-three years. And I've seen the very people I'm talking about in their worst posture.
  • JS: Well, you touched on insurance there. Would you tell me a little bit about what you did when you were a senator to make insurance available to coastal areas?
  • 00:50:21 - 2387 BS: Well, it may have been the worst mistake I ever made, but it was probably the best piece of legislation that I ever passed. It took me three legislative sessions after Carla to pass a bill which we called a Windstorm Catastrophe Insurance Association. And the-the genius of that idea that came from my insurance agents in Galveston and which they educated me about, was that we would create an association of all the insurance companies in Texas. It would be mandatory. Every company that wrote windstorm insurance in Texas had to take a percentage of their windstorm insurance risk on the Gulf Coast. Now, in order to explain that, they had quit writing it voluntarily after Carla because of the losses in Carla. So if you owned a home, you couldn't buy windstorm,
  • 00:51:22 - 2387
  • particularly in Galveston County, mostly the-the penalties were to us in Galveston because of Carla. Corpus had not yet had Camille, I think it was, or one of them down there in-in the sixties and Beulah had not hit the valley yet. So I didn't have any valley members or any Corpus members supporting me until we had two hurricanes after Carla and then I was able to pass this bill. We provided that these companies all had to take a percentage of their risks off of the coastal counties and it worked well. Galveston County though wound up with fifty percent of that pool. So in se-in a sense, I'd
  • 00:52:09 - 2387 created a Windstorm Pool that wrote fifty percent of the windstorm insurance in Galveston County and accepted the rest of it from the rest of the coast. And-and it was good. It worked well and it's working to this very day. That Windstorm Bill is being considered for change and we went through it this last legislative session and we've gone through it in three or four previous sessions. And I've lobbied for the Galveston area group to maintain an adequate but-but livable rate for that insurance. In a sense, there's a tremendous risk out there that we're not charging a great enough rate to take care of the
  • 00:52:55 - 2387 kind of losses that we might face today. If we had a five billion dollar loss or a twenty billion dollar loss as Florida has experienced, we'd be in deep trouble. Our rate is actuarially sound for the time the-the pool has been in business, since 1971 and the rate is one and a quarter times the manual rate. The manual rate is that rate set by the insurance commission for windstorm insurance on the entire coast. And we're only in the pool a quarter of a s-quarter of a per-percentage over that and that's taking care of
  • 00:53:39 - 2387 the losses.
  • However, I passed another bad bill which I was persuaded was necessary to keep insurance companies from going broke in case of a catastrophic loss. And that bill provides that if there is a catastrophic loss, the insurance company, for that percentage of their catastrophic loss, and when we started, it was over a hundred million dollars, they could deduct and not pay the premium tax, which the state levied on policies for a period of time so that they could recoup their loss. Well the first time a hurricane triggered that premium tax withholding to the company, it cost the state twenty-seven million dollars in
  • 00:54:32 - 2387 general revenue. And I mean, Bob Bullock called me and called me every name that he could think of and some that hadn't been invented because that's a pretty good tap on the budget. And it's, you know, for who? For the residents of Galveston County. So, given that scenario, why there's been a-an attempt ever since then to find an alternative method to fund the Windstorm Pool against catastrophic losses.
  • And last session we dealt with the possibility that we could fund a fund against a catastrophic loss. There's six-no, there's three hundred and sixty million, I think, in the Windstorm Pool reserve
  • 00:55:21 - 2387
  • now that's been accumulated from various sources. It was proposed that we'd have an assessment for every policy written on the Gulf Coast and that assessment would presi-would provide a-what we call a pre-event assessment. That means you'd have an assessment before the hurricanes, you'd start right now with an assessment. You'd have it every year. Then you would have a post-event assessment. After the hurricane, you might double that assessment. But then we added to that the fact that the assessment
  • 00:56:00 - 2387
  • would be statewide and that drove them nuts. You know, the folks in Wichita Falls who have hailstorms that we pay for in the rate, went bananas. And the folks in Waco, who had a tornado once that wiped them out, went bananas. And the folks in El Paso said, you know, what the hell are you doing to me, I mean, why should I pay an assessment for Coastal Windstorm Insurance? It didn't pass and so now we're stuck with my law, which is inadequate on a rate basis to take care of a major catastrophe. And we're stuck with an
  • 00:56:41 - 2387 Assessment-not an assessment, but-but a credit that the companies can take against their premium tax, which might cost the state a hundred million dollars in general revenue. And it's scary. You know, I don't like to be blamed-I mean, I don't like to know that I'm the culprit.