LEGISLATIVE UPDATES
EMINENT DOMAIN
Landowner, government and industry groups were unable to reach a satisfactory compromise during the 85th session and will attempt to do so in the 86th. Political jockeying and preliminary meetings among the stakeholders are underway.
SB 740 Authored by Sen. Lois Kolkhorst
Status: Referred to Senate State Affairs Committee
SB 740 addresses five important issues that property owners recognize as necessary. The bill includes the following provisions:- Equal disclosure of appraisals:
Some condemning entities take advantage of a loophole by providing a new or updated appraisal at the special commissioners hearing, giving the property owner no time to assess the new information. The bill would require those entities to provide the appraisal reports no later than three business days prior to a hearing, as is currently required of property owners. - Property rights protections in bona fide offer:
There are few protections in place that require condemning entities to act in good faith when negotiating with landowners. This provision would require certain information to be contained in the “bona fide” offer to allow property owners to better understand the impact of the project. - Reimbursement of property owner’s expenses when sued on a low-ball offer:
This section of the bill would require the condemning entity to pay reasonable landowner expenses if final damages awarded to the property owner in eminent domain proceedings meet or exceed 20% in excess of the condemner’s final offer. - Bond requirement:
In some cases, private condemners have declared bankruptcy and failed to pay property owners even though they are in possession of the condemned property. SB 740 would require nongovernmental condemners to post a bond in the amount of the property owners award, pay the award or deposit the award with the court prior to appealing a court judgement. - No property taxes:
Condemning entities often take possession of property to begin work prior to the exchange or title or final compensation. In this situation, the condemner has possession, but the original property owner must still pay taxes on the land. Sen. Kolkhorst’s bill would require the ending property owner to pay those taxes.
SB 741 Authored by Sen. Lois Kolkhorst
Status: Referred to Senate State Affairs Committee
SB 741 includes provisions that address two issues:- Royalty payments:
This bill would allow, but not require, a bona fide offer to include compensation to the landowner by means of a royalty or percentage of the net profits generated by the project. - Valuation of easements:
SB 741 would require the court to admit evidence on the price paid for privately negotiated transaction made in the absence of condemnation authority. By allowing the special commissioners to admit evidence on the freely negotiated right-of-way prices and comparable easement sales, property owners are more likely to receive fair “market value” for their property.
SB 742 Authored by Sen. Lois Kolkhorst
Status: Referred to Senate State Affairs Committee
SB 742 is a stand-alone bill addressing the Property Rights Protection in Bona Fide Offer issue similar to, but with more requirements than SB 740. It provides several additional requirements pertaining to information about the project and property owner protections.
HB 2684 Authored by Rep. DeWayne Burns
Status: Filed
HB 2684 addresses seven major areas of reform to the current eminent domain process.- Equal disclosure of appraisals:
Some condemning entities take advantage of a loophole by providing a new or updated appraisal at the special commissioners hearing, giving the property owner no time to assess the new information. The bill would require those entities to provide the appraisal reports no later than three business days prior to a hearing, as is currently required of property owners. - Property rights protections in bona fide offer:
There are few protections in place that require condemning entities to act in good faith when negotiating with landowners. This provision would require certain information to be contained in the “bona fide” offer to allow property owners to better understand the impact of the project. - Valuation of easements:
HB 2684 would require the court to admit evidence on the price paid for privately negotiated transaction made in the absence of condemnation authority. By allowing the special commissioners to admit evidence on the freely negotiated right-of-way prices and comparable easement sales, property owners are more likely to receive fair “market value” for their property. - Reimbursement of property owner’s expenses when sued on a low-ball offer:
This section of the bill would require the condemning entity to pay reasonable landowner expenses if final damages awarded to the property owner in eminent domain proceedings meet or exceed 20% in excess of the condemner’s final offer. - Bond requirement:
In some cases, private condemners have declared bankruptcy and failed to pay property owners even though they are in possession of the condemned property. HB 2684 would require nongovernmental condemners to post a bond in the amount of the property owners award, pay the award or deposit the award with the court prior to appealing a court judgement. - Waiver of Sovereign Immunity:
In instances where a landowner enters into an agreement with a governmental entity with eminent domain authority, entry into the agreement waives the entities sovereign or governmental immunity from suit and liability as necessary to enforce the agreement. - No property taxes:
Condemning entities often take possession of property to begin work prior to the exchange or title or final compensation. In this situation, the condemner has possession, but the original property owner must still pay taxes on the land. Rep. Burns' bill would require the ending property owner to pay those taxes.
HB 2694 Authored by Rep. Kyle Kacel
Status: Filed
HB 2694 is a stand-alone bill addressing property rights protections included in a bona fide offer. This bill would require certain information to be contained in the “bona fide” offer to allow property owners to better understand the impact of the project.
SB 555 Authored by Sen. Lois Kolkhorst
Status: Referred to Senate State Affairs Committee
SB 555 creates a state jail felony offense if a person enters or tries to enter private property under the the false premise that they or the entity they represent has eminent domain authority.
SB 626 Authored by Sen. Charles Schwertner
Status: Referred to Senate State Affairs Committee
SB 626 requires a condemning entity that makes a "bona fide" offer using eminent domain authority to make a second, separate offer if the entity wants to acquire other property from the same landowner for a project not relating to public use or carrying eminent domain authority.
Occasionally, when negotiating to purchase property for public use under eminent domain, an entity will offer to purchase additional property from a property owner that may not be a part of the same project subject to condemnation. It is often not made clear to the property owner that the entity does not have condemnation authority to force the owner to sell the additional property.
SB 627 Authored by Sen. Charles Schwertner
Status: Referred to Senate State Affairs Committee
SB 627 provides a property owner, via the Landowner’s Bill of Rights and a Survey Permission Form, information of their rights relating to the survey of property by an entity with eminent domain authority.The bill requires the following provisions to be incorporated into the Landowner’s Bill of Rights:
- The condemning entity’s responsibility for any damages arising from a survey of the property;
- A property owner’s ability to negotiate terms of the survey; and
- The condemning entity’s right to sue for a court order authorizing the survey if the property owner refuses to grant permission.
It also provides similar requirements in a Survey Permission Form if an entity with eminent domain authority provides a form to property owner requesting their permission to enter the property to conduct a survey. The form must clearly state that:
- The property owner has a right to refuse permission to allow the condemning entity to enter the property to conduct the survey;
- The condemning entity has a right to sue the property owner for a court order authorizing the entity to enter the property to survey if the owner refuses permission;
- The property owner has a right to negotiate the terms of the survey; and
- The condemning entity has responsibility for any damages arising from the survey of the property.
SB 628 Authored by Sen. Charles Schwertner
Status: Referred to Senate State Affairs Committee
SB 628 amends current statute relating to the right to repurchase property from a condemning entity. The legislation increases the number of requirements that an entity must comply with in order to prove "actual progress" towards the stated public use of an eminent domain taking.
Currently, the Texas Property Code allows a person whose property was acquired through eminent domain the right to repurchase their property if the condemning entity fails to make “actual progress” toward the public use for which the property was taken within 10 years.
This bill requires a condemning entity to complete more actions to determine "actual progress" and narrows the list of development actions that define "actual progress."
HJR 40 Authored by Rep. Mike Schofield
Status: Filed
HJR 40 amends the Texas Constitution to require a governmental entity that has acquired a person’s property through eminent domain to offer the property back to the former owner for repurchase if certain conditions are not met.
Currently, the Texas Constitution permits a governmental entity that has acquired a person’s property through eminent domain to offer the property back to the former owner for repurchase at the same price if the public use for which it was acquired is canceled, no actual progress is made during a prescribed period of time or the property is unnecessary for the public use.
This resolution amends the Constitution by changing the language from "may sell" to "shall offer to sell," making it required instead of permissive.
HB 528 Authored by Rep. Mike Schofield
Status: Referred to House Business & Industry Committee
HB 528 amends current statute relating to the right to repurchase property from a condemning entity. The legislation increases the number of requirements that an entity must comply with in order to prove "actual progress" towards the stated public use of an eminent domain taking.
Currently, the Texas Property Code allows a person whose property was acquired through eminent domain the right to repurchase their property if the condemning entity fails to make “actual progress” toward the public use for which the property was taken within 10 years.
This bill requires a condemning entity to complete more actions to determine "actual progress" and narrows the list of development actions that define "actual progress."
HB 2556 Authored by Rep. Justin Holland
Status: Filed
HB 2556 specifies that an entity with eminent domain authority must make an initial written offer to a property owner, followed by a final offer, not less than 30 days from the time of the initial offer. Presumably, the 30 day period between the two offers would allow a landowner time for thorough review of the offer and opportunity for good faith negotiation between the landowner and entity. Once the final offer is made, it prescribes at least a 14 day period for the landowner to respond to the offer.
The bill also stipulates that the entity must provide a landowner with a written appraisal by a certified appraiser with the final offer. The appraisal must include the value of the property being acquired and any damages to the landowner’s remaining property. The final offer must also include a copy of the deed or easement and a landowner’s bill of rights document.
June, 2015
SB 474 by Kolkhorst (Did Not Pass)
Relating to the recovery of costs and fees in connection with certain eminent domain proceedings. This bill died in the House Committee.
SB 1812 by Senator Kolkhorst & Rep Geren Passed
Clarifies statutes that require certain entities with power of eminent domain to register with the Comptroller to include all entities with power of eminent domain.
November, 2013
STPRA supported the defeat of H.B. 2648, the common carrier pipeline legislation. If it had passed it would have undermined landowner protections of the previously passed SB 18; the landowner would no longer be certain that private lands would not have been taken to enrich other private interests.
August 1, 2011
S.B. 18 was passed after two previous tries in earlier sessions. STPRA joined with its allies to achieve the following outcomes: S.B. 18 requires a public vote to initiate eminent domain proceedings; it more clearly defines what kinds of entities may condemn property; each condemning entity must make a bona fide, good faith payment offer in writing. If it fails to do so, it must pay the landowners’ attorney’s fees and expenses; landowners must be compensated for limited access to his/her property and assisted with expenses if relocation is necessary; strengthens and supports the “public purpose” requirements passed in an earlier constitutional amendment; property owners have the right to buy back the property for the original payment price if the land is not used for the originally intended purpose within 10 years.
This legislation was necessary to strengthen the earlier constitutional amendment “Proposition 11” passed by Texas voters on November 3, 2009 due to the 2005 U.S. Supreme Court ruling, commonly known as the “Kelo” decision, which said that a public entity is justified in condemning private property for the sake of furthering economic development, even if the beneficiary is another private entity.
Governor Perry signed the bill May 19, 2011. It will go into effect September 1, 2011. S.B. 18 deals with all important protections of eminent domain and STPRA declares a major victory in assisting in the passage of this legislation.