Lozano Bill Adds Steps Before Pipelines Can Take Your Land

The text as introduced · 4,938 words

89R17627 SCR-F

By: Lozano
H.B. No. 5245

A BILL TO BE ENTITLED

AN ACT

relating to the acquisition of real property by a private entity

with eminent domain authority.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 21.0113, Property Code, is amended by

adding Subsections (c), (d), and (e) to read as follows:

(c) Notwithstanding Subsection (b), a private entity, as

defined by Section 21.0114, with eminent domain authority that

wants to acquire real property for a public use has made a bona fide

offer only if the entity:

(1) satisfies the requirements of Subsection (b);

(2) includes with the initial offer:

(A) an offer of compensation in an amount equal

to or greater than:

(i) the market value of the property rights

sought to be acquired, including an estimate of damages to the

property owner's remaining property, if any, based on an appraisal

of the property prepared by a third party who is a certified general

appraiser licensed under Chapter 1103, Occupations Code; or

(ii) the estimated price or market value of

the property rights sought to be acquired based on data for at least

three comparable arm's-length sales of a fee simple interest in

property, including an estimate of damages to the property owner's

remaining property, if any, based on data then available to the

appraiser, broker, or private entity, as applicable, and based on:

(a) a comparative market analysis

prepared by a third party who is a real estate broker licensed under

Chapter 1101, Occupations Code, or a certified general appraiser

licensed under Chapter 1103, Occupations Code;

(b) a broker price opinion prepared by

a third party who is a real estate broker licensed under Chapter

1101, Occupations Code; or

(c) a market study prepared by a third

party who is a real estate broker licensed under Chapter 1101,

Occupations Code, or a certified general appraiser licensed under

Chapter 1103, Occupations Code;

(B) the complete written report of the appraisal,

the comparative market analysis, the broker price opinion, the

market study, or a summary of the market study, as prepared by the

third party, that forms the basis for the amount of the offer of

compensation under Paragraph (A); and

(C) notice of the terms described by Section

21.0114(d) for which the property owner may negotiate to be

included in a deed, easement, agreement, or other instrument of

conveyance relating to the property; and

(3) provides notice of the proposed project to the

county judge as required by Section 21.0115.

(d) For purposes of Subsection (c)(2)(A)(ii), a real estate

broker licensed under Chapter 1101, Occupations Code, is authorized

to prepare an estimated price based on a comparative market

analysis, a broker price opinion, a market study, or a summary of

the market study.

(e) A private entity that provides to a property owner an

easement form that is generally consistent with the language or

provisions required by Section 21.0114(c) and the notice required

by Section 21.0114(d) is considered to have complied with Section

21.0114 for purposes of Subsection (b)(1)(C) of this section,

regardless of whether the private entity subsequently provides to

the property owner a different deed, easement, agreement, or other

instrument of conveyance as authorized under Sections 21.0114(e)

and (f).

SECTION 2. Section 21.0114(c), Property Code, is amended to

read as follows:

(c) Except as provided by Subsections (d), (e), and (f), a

deed, agreement, or other instrument of conveyance provided to a

property owner by a private entity with eminent domain authority to

acquire the property interest to be conveyed must address the

following general terms, as applicable:

(1) if the instrument conveys a pipeline right-of-way

easement or an easement related to pipeline appurtenances:

(A) the maximum number of pipelines that may be

installed under the instrument for a pipeline right-of-way;

(B) a description of the types of pipeline

appurtenances that are authorized to be installed under the

instrument for pipeline-related appurtenances, such as pipes,

valves, compressors, pumps, meters, pigging stations, dehydration

facilities, electric facilities, communication facilities, and any

other appurtenances that may be necessary [ or desirable ] in

connection with a pipeline;

(C) the maximum diameter, excluding any

protective coating or wrapping, of each pipeline to be [ initially ]

installed under the instrument for a pipeline right-of-way;

(D) the type or category of substances permitted

to be transported through each pipeline to be installed under the

instrument;

(E) a general description of any aboveground

equipment or facility the private entity intends to install,

maintain, or operate under the instrument for a pipeline easement

on the surface of the easement;

(F) a description or illustration of the location

of the easement, including a metes and bounds or centerline

description, plat, or aerial or other map-based depiction of the

location of the easement on the property;

(G) the maximum width of the easement under the

instrument;

(H) the minimum depth at which each pipeline to

be installed under the instrument for a pipeline right-of-way will

[ initially ] be installed;

(I) a provision identifying whether the private

entity intends to double-ditch areas of the pipeline easement that

are not installed by boring or horizontal directional drilling;

(J) a provision requiring the private entity to

provide written notice to the property owner at the last known

address of the person in whose name the property is listed on the

most recent tax roll of any taxing unit authorized to levy property

taxes against the property before assigning [ if and when the

private entity assigns ] the interest under the instrument to

another entity[ , provided that the provision does not require

notice by the private entity for assignment to an affiliate or to a

successor through merger, consolidation, or other sale or transfer

of all or substantially all of its assets and businesses ];

(K) a provision describing whether the easement

rights are exclusive , [ or ] nonexclusive , or otherwise limited ;

(L) a provision limiting the private entity's

right to grant to a third party access to the easement area for a

purpose that is not related to the construction, safety, repair,

maintenance, inspection, replacement, operation, or removal of

each pipeline to be installed under the instrument and of pipeline

appurtenances to be installed under the instrument;

(M) a provision regarding the property owner's

right to recover actual monetary damages arising from the

construction and installation of each pipeline to be installed

under the instrument, or a statement that the consideration for the

instrument includes any monetary damages arising from the

construction and installation of each pipeline to be installed

under the instrument;

(N) a provision regarding the property owner's

right after [ initial ] construction and installation of each

pipeline to be installed under the instrument to actual monetary

damages arising from the repair, maintenance, inspection,

replacement, operation, or removal of each pipeline to be installed

under the instrument, or a statement that consideration for the

instrument includes any monetary damages arising from the repair,

maintenance, inspection, replacement, operation, or removal of

each pipeline to be installed under the instrument;

(O) a provision:

(i) regarding the removal, cutting, use,

repair, and replacement of gates and fences that cross the easement

or that will be used by the private entity under the instrument; or

(ii) providing for the payment for any

damage caused by the private entity to gates and fences described by

Subparagraph (i), if any, to the extent that the gates or fences are

not restored or paid for as part of the consideration paid for the

instrument;

(P) a provision:

(i) regarding the private entity's

obligation to restore the pipeline easement area and the property

owner's remaining property, if any, used by the private entity to as

near to original condition as is reasonably practicable and to

maintain the easement in a manner not inconsistent [ consistent ]

with the purposes for which the easement will be used by the private

entity under the instrument; or

(ii) providing for the private entity to

reimburse the property owner for actual monetary damages incurred

by the property owner that arise from damage to the pipeline

easement area or the property owner's remaining property, if any,

to the extent caused by the private entity and not restored or paid

for as part of the consideration for the instrument; and

(Q) a provision describing the private entity's

rights of ingress, egress, entry, and access on, to, over, and

across the property owner's property under the instrument;

(2) if the instrument conveys an electric transmission

line right-of-way easement:

(A) a general description of the uses of the

surface of the property to be encumbered by the easement the entity

intends to acquire;

(B) a description or illustration of the location

of the easement, including a metes and bounds or centerline

description, plat, or aerial or other map-based depiction of the

location of the easement on the property;

(C) the maximum width of the easement under the

instrument;

(D) the manner in which the entity will access

the easement under the instrument;

(E) a provision limiting the private entity's

right to grant to a third party access to the easement area for a

purpose that is not related to the construction, safety, repair,

maintenance, inspection, replacement, operation, or removal of the

electric and appurtenant facilities installed under the

instrument;

(F) a provision regarding the property owner's

right to recover actual monetary damages arising from the

construction, operation, repair, maintenance, inspection,

replacement, and future removal of lines and support facilities

after initial construction in the easement, if any, or a statement

that the initial consideration for the easement instrument includes

such damages;

(G) a provision:

(i) regarding the removal, cutting, use,

repair, and replacement of gates and fences that cross the easement

or that will be used by the private entity under the instrument; or

(ii) providing for the payment for any

damage caused by the private entity to gates and fences described by

Subparagraph (i), if any, to the extent that the gates or fences are

not restored or paid for as part of the consideration for the

instrument;

(H) a provision regarding the private entity's

obligation to restore the easement area and the property owner's

remaining property to the easement area's and the remaining

property's original contours and grades, to the extent reasonably

practicable, unless the safety or operational needs of the private

entity and the electric facilities would be impaired, and:

(i) a provision regarding the entity's

obligation to restore the easement area and the property owner's

remaining property following any future damages directly

attributed to the use of the easement by the private entity, to the

extent reasonably practicable[ , unless the safety or operational

needs of the private entity and the electric facilities would be

impaired ]; or

(ii) a provision that the consideration for

the easement instrument includes damages as described by

Subparagraph (i) to the easement area and the property owner's

remaining property;

(I) a provision describing whether the easement

rights are exclusive, nonexclusive, or otherwise limited under the

terms of the instrument; and

(J) a prohibition against the assignment of the

entity's interest in the property to an assignee that will not

operate as a utility subject to the jurisdiction of the Public

Utility Commission of Texas or the Federal Energy Regulatory

Commission without written notice to the property owner at the last

known address of the person in whose name the property is listed on

the most recent tax roll of any taxing unit authorized to levy

property taxes against the property;

(3) a prohibition against any use by the private

entity of the property rights being conveyed by the instrument,

other than a use stated in the instrument, without the express

written consent of the property owner; [ and ]

(4) a provision that the terms of the instrument will

bind the successors and assigns of the property owner and private

entity ; and

(5) a provision setting forth the applicable insurance

or self-insurance to be provided by the private entity .

SECTION 3. Subchapter B, Chapter 21, Property Code, is

amended by adding Section 21.0115 to read as follows:

Sec. 21.0115. NOTICE OF INTENT. (a) A private entity as

defined by Section 21.0114 must send a written notice of intent to

the county judge of a county in which the private entity will seek

to acquire property for a project for public use before the first

time the private entity makes an initial offer to acquire real

property for the project in that county.

(b) A notice sent under Subsection (a) must:

(1) state the private entity's intent to acquire real

property for public use;

(2) specify the public use; and

(3) identify the proposed route, including the tracts

of real property, identified by the tract number assigned by the

county assessor-collector, that the private entity intends to

acquire.

SECTION 4. Section 21.012, Property Code, is amended by

adding Subsection (b-1) to read as follows:

(b-1) In addition to the contents prescribed by Subsection

(b), a petition filed by a private entity as defined by Section

21.0114 to acquire property for a public use must state the terms to

be included in the instrument of conveyance under Section

21.0114(c).

SECTION 5. Section 21.014(a), Property Code, is amended to

read as follows:

(a) The judge of a court in which a condemnation petition is

filed or to which an eminent domain case is assigned shall, not

later than the 30th calendar day after the property owner receives

notice that the petition is filed, appoint three disinterested real

property owners who reside in the county as special commissioners

to assess the damages of the owner of the property being condemned

and appoint two disinterested real property owners who reside in

the county as alternate special commissioners. The judge appointing

the special commissioners shall give preference to persons agreed

on by the parties, if any, before the court appoints the special

commissioners. The judge shall provide the names and contact

information of the special commissioners and alternate special

commissioners to the parties. Each party shall have until the later

of 15 [ 10 ] calendar days after the date of the order appointing the

special commissioners or 30 [ 20 ] days after the date the petition

was filed to strike one of the three special commissioners. Any

strike of a special commissioner must be filed electronically with

electronic service provided concurrently to any represented party

and first class mail service provided concurrently to any other

party. If a person fails to serve as a special commissioner or is

struck by a party to the suit in accordance with this subsection, an

alternate special commissioner shall serve as a replacement for the

special commissioner based on the order that the alternate special

commissioners are listed in the initial order of appointment. If a

party exercises a strike, the other party may, by the later of the

third day after the date of filing of the initial strike or the date

of the initial strike deadline, strike a special commissioner from

the resulting panel, provided the other party has not earlier

exercised a strike.

SECTION 6. Chapter 21, Property Code, is amended by adding

Subchapter B-1 to read as follows:

SUBCHAPTER B-1. ACQUISITION OF PROPERTY BY CERTAIN PRIVATE

ENTITIES

Sec. 21.031. DEFINITION. In this subchapter, "private

entity" has the meaning assigned by Section 21.0114.

Sec. 21.032. APPLICABILITY OF SUBCHAPTER. (a) Except as

expressly provided by Section 21.033(d), this subchapter applies

only to a private entity that seeks to acquire for the same pipeline

or electric transmission project 25 or more tracts of real

property, including easements within those tracts, that are owned

by at least 25 separate and unaffiliated property owners.

(b) Except as expressly provided by Section 21.0392, this

subchapter does not apply to a private entity that:

(1) operates or proposes to construct an electric

transmission line; and

(2) is subject to the jurisdiction of the Public

Utility Commission of Texas under Chapter 37, Utilities Code.

(c) This subchapter does not apply to the acquisition of a

tract of real property that is an industrial property, including a

tract that contains a refinery, processing facility, underground

storage facility, electric station, industrial facility, power

plant facility, or storage terminal.

Sec. 21.033. NOTICE OF PROPERTY OWNER INFORMATION MEETING.

(a) A private entity shall, before or at the same time that the

entity makes an initial offer as required under Section 21.0113,

provide a written notice advising the property owner of:

(1) the property owner's right to participate in a

meeting to discuss the proposed project, including:

(A) if the project is a pipeline, the substances,

products, materials, installations, and structures the private

entity intends to transport through, use for, or build as part of

the project; and

(B) any regulatory filings for the project; and

(2) the date, time, and location of the meeting.

(b) The private entity shall send the meeting notice to:

(1) the property owner listed for the property on the

most recent tax roll for a taxing unit with authority to levy an ad

valorem tax on the property; or

(2) the address for the property listed on the tax roll

described by Subdivision (1).

(c) The private entity shall also send the meeting notice

to:

(1) any other address that the private entity has for

the property owner; and

(2) each county judge of a county in which all or part

of the project section or segment for which the meeting is to be

held is located.

(d) If a pipeline involves fewer than 25 separate and

unaffiliated property owners, the private entity shall provide

notice to the property owners in the manner prescribed by this

section that a property owner may request a meeting with the private

entity to receive the information required to be presented by a

private entity under Section 21.037. If a property owner requests a

meeting, the private entity shall hold the meeting not later than

the 30th day after the date the private entity sent the notice to

the property owner.

Sec. 21.034. PROPERTY OWNER INFORMATION MEETING. (a) For

each contiguous linear section of a proposed project route that is

equal to or less than 100 miles in length, the private entity shall

hold a group property owner meeting. For a project that exceeds 100

miles in length, the private entity shall hold at least one separate

meeting for each 100-mile segment.

(b) The private entity shall hold a meeting required under

Subsection (a) in a centrally located public location:

(1) appropriate to the size and nature of the meeting;

and

(2) as convenient as possible to the majority of

property owners affected by the project or project segment for

which the meeting is required.

(c) The private entity shall hold the meeting in a location

the travel distance to which is 50 miles or less for the majority of

property owners who reside on property being acquired for the

project section or segment for which the meeting is to be held.

(d) A meeting required under Subsection (a) may not be

scheduled to begin earlier than 5:30 p.m.

(e) A meeting required under Subsection (a) may not be held

before the private entity sends at least 25 percent of the initial

offers required by Section 21.0113.

Sec. 21.035. PERSONS AUTHORIZED TO ATTEND PROPERTY OWNER

INFORMATION MEETING. (a) In addition to the property owner and the

private entity representatives, the following individuals may

attend a meeting held under Section 21.034:

(1) an invited relative of the property owner who is

related to the property owner within the third degree by

consanguinity or affinity, as determined under Chapter 573,

Government Code;

(2) an attorney or licensed appraiser representing the

property owner;

(3) an employee or a lessee of the property owner that

has direct knowledge of the property;

(4) an employee of an entity with whom the property

owner has contracted for services to manage the property; or

(5) a county judge of a county in which all or part of

the project section or segment for which the meeting is held is

located.

(b) A private entity may include in the notice required by

Section 21.033 a requirement that the property owner identify

persons described by Subsections (a)(1)-(4) who intend to attend

the meeting not later than two days before the date of the meeting.

(c) The number of attendees under Subsections (a)(1)-(4)

may not exceed five individuals for each separate tract of

property.

(d) The private entity may require attendees to provide

identification and complete a registration form that includes

contact information.

(e) The private entity may take reasonable steps to maintain

safety and decorum at the meeting, including expelling attendees

who do not meet the requirements of this subchapter.

(f) The private entity may not deny entry to a property

owner who provides proper identification.

Sec. 21.036. PARTICIPATION BY PRIVATE ENTITY REQUIRED. One

or more representatives designated by the private entity shall:

(1) attend each meeting required by Section 21.034;

and

(2) participate in those meetings in the manner

prescribed by Section 21.037.

Sec. 21.037. PROPERTY OWNER INFORMATION MEETING AGENDA.

(a) At a meeting held under Section 21.034:

(1) the private entity shall present:

(A) the information contained in the landowner's

bill of rights statement required to be provided to a property owner

under Section 21.0112;

(B) a description of the public use for which the

entity wants to acquire the real property;

(C) the terms required under Section 21.0114 to

be included in a deed, easement, agreement, or other instrument of

conveyance provided by the entity to the property owner;

(D) a description of the method and factors used

by the entity to determine the entity's initial offer, including:

(i) how damages to remaining property, if

any, were evaluated; or

(ii) the name of the person who prepared the

appraisal report, comparative market analysis, broker price

opinion, or market study required under Section 21.0113(c);

(E) a description of the private entity's

regulatory filings related to the project;

(F) the basis for the private entity's exercise

of eminent domain authority for the project; and

(G) the name and contact information, as known at

the time of the meeting, of any third-party contractor to be used by

the entity to acquire the land or undertake the project; and

(2) any person who is an authorized attendee of the

meeting must be given an opportunity at the meeting to ask questions

and make comments regarding:

(A) the rights of the property owners;

(B) the proposed public use for which the real

property is to be acquired; and

(C) any terms required under Section 21.0114 to

be included in a deed, easement, agreement, or other instrument of

conveyance provided by the private entity to a property owner.

(b) On request, a private entity shall provide, in written

or electronic form, the materials presented by the private entity

at the meeting to a property owner who could not attend the meeting.

Sec. 21.038. CONTACT AFTER PROPERTY OWNER INFORMATION

MEETING. A private entity that holds a meeting under Section 21.034

may not contact a property owner for three days following the date

of the meeting. Nothing in this section precludes:

(1) a property owner or an individual allowed to

attend a meeting held under Section 21.034 from contacting the

private entity at any time; or

(2) the private entity from engaging in discussions

with a person described by Subdivision (1) after that person

contacts the entity.

Sec. 21.039. PROCEDURES AFTER PROJECT RE-ROUTE. If any

part of the project is re-routed after any meeting is held under

Section 21.034, the private entity shall, with respect to that

re-route only, comply with the provisions of this subchapter with

respect to tracts along the re-route.

Sec. 21.0391. PRIVATE ENTITY NONCOMPLIANCE. (a) A private

entity subject to this subchapter may not proceed with a special

commissioners' hearing against a property owner unless the private

entity has held a meeting required under this subchapter.

(b) If a court hearing a suit under this chapter determines

that a private entity did not comply with the applicable provisions

of this subchapter, the court shall:

(1) abate any condemnation proceeding filed by the

private entity until the private entity has complied with this

subchapter;

(2) order the private entity to comply with the

applicable provisions of this subchapter; and

(3) order the private entity to pay:

(A) all costs of the proceeding; and

(B) any reasonable attorney's fees and other

professional fees incurred by the property owner that are directly

related to the entity's failure to comply with the applicable

provisions of this subchapter.

(c) A condemnation proceeding that is abated under this

section may proceed after a court finds that the private entity has

complied with the applicable provisions of this subchapter.

Sec. 21.0392. PROCEDURES FOR CERTAIN PRIVATE ENTITIES

SUBJECT TO JURISDICTION OF PUBLIC UTILITY COMMISSION. (a) This

section applies only to a private entity that proposes to exercise

the power of eminent domain to construct an electric transmission

line and is subject to the authority of the Public Utility

Commission of Texas under Chapter 37, Utilities Code.

(b) A private entity to which this section applies and that

is required by the Public Utility Commission of Texas to conduct a

public meeting in connection with the electric transmission line

project shall present at the meeting:

(1) the information contained in the landowner's bill

of rights required to be provided to a property owner under Section

21.0112;

(2) the terms required under Section 21.0114 to be

included in a deed, easement, agreement, or other instrument of

conveyance provided by the entity to the property owner;

(3) the name and contact information of any

third-party contractor or right-of-way agent that will contact a

property owner or seek access to the property owner's property in

connection with the project, to the extent available;

(4) the name and contact information, including direct

telephone number and e-mail address, for an agent or employee of the

entity with authority to answer questions about the electric

transmission line project;

(5) the method for calculating the value of the

property being acquired by the entity and the damages, if any, to

the property owner's remaining property, as part of the entity's

initial offer to a property owner; and

(6) a detailed summary of procedures for right-of-way

acquisition after the route for the electric transmission line has

been selected.

(c) The private entity must give property owners the

opportunity to ask the entity questions regarding eminent domain

and right-of-way acquisition at the meeting.

(d) After the Public Utility Commission of Texas adopts a

route for the electric transmission line, the entity shall provide

by letter to each property owner on the route:

(1) a copy of the entity's draft easement form

containing a statement of the terms required by Section 21.0114 to

be included in a deed, easement, agreement, or other instrument of

conveyance provided by the entity to the property owner;

(2) an explanation of the initial offer process and

the basis for calculating the value of the property being acquired

by the entity and the damages, if any, to the property owner's

remaining property as part of the initial offer required by Section

21.0113;

(3) a statement of the property owner's right under

Section 21.0113 to receive a copy of the written appraisal with the

final offer, if a copy of the written appraisal has not previously

been provided to the property owner by the entity;

(4) an explanation of the negotiation process,

including the name and contact information of any right-of-way

agent who will be participating in the process; and

(5) the name and contact information, including the

direct telephone number and e-mail address, for an agent or

employee of the entity with authority to answer questions about the

electric transmission line project.

(e) On request, a private entity shall provide, in written

or electronic form, the materials presented by the private entity

at the meeting to a property owner who could not attend the meeting.

SECTION 7. Section 21.042, Property Code, is amended by

adding Subsection (d-1) to read as follows:

(d-1) In estimating injury or benefit under Subsection (c)

in a condemnation proceeding relating to the acquisition of real

property by a private entity as defined by Section 21.0114 for a

pipeline or electric transmission project, the special

commissioners shall consider, in addition to the considerations

required under Subsection (d), an injury or benefit to the

remaining property as a result of:

(1) the characteristics, size, or visibility of any

infrastructure on the condemned property;

(2) any limitation of future expansion of the

remaining property; and

(3) terms of the easement acquired in connection with,

or the alignment of an easement in connection with, the

condemnation.

SECTION 8. (a) Except as provided by Subsection (b) of this

section, the changes in law made by this Act to Chapter 21, Property

Code, apply only to the acquisition of real property in connection

with an initial offer made under Chapter 21, Property Code, on or

after the effective date of this Act. An acquisition of real

property in connection with an initial offer made under Chapter 21,

Property Code, before the effective date of this Act is governed by

the law applicable to the acquisition immediately before the

effective date of this Act, and that law is continued in effect for

that purpose.

(b) Section 21.0392, Property Code, as added by this Act,

applies only to a public meeting required under Chapter 37,

Utilities Code, held on or after the effective date of this Act.

SECTION 9. This Act takes effect September 1, 2025.