By: Kolkhorst, et al. S.B. No. 421
(Craddick, Burns, Burrows, Phelan, et al.)
Substitute the following for S.B. No. 421: No.
A BILL TO BE ENTITLED
AN ACT
relating to the acquisition of real property by an 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), (e), and (f) to read as follows:
(c) Notwithstanding Subsection (b), a private entity, as
defined by Section 21.031, with eminent domain authority that wants
to acquire real property for a public use through the exercise of
the power of eminent domain 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;
(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 property 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; or
(iii) 140 percent of the per acre value for
each acre or part of an acre sought to be acquired by the private
entity from the property owner, based on the total land value and
improvements, if any, for the affected property as reflected in the
most recent tax rolls of the central appraisal district in which the
property is located;
(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, or, if applicable, a description of the method
described by Paragraph (A)(iii) and the related information from
the central appraisal district, that forms the basis for the amount
of the offer of compensation under Paragraph (A);
(C) a deed, easement, agreement, or other
instrument of conveyance for the property rights sought that
complies with Section 21.0114(a) unless previously provided to the
property owner; and
(D) the landowner's bill of rights statement
prescribed by Section 21.0112, unless previously provided to the
property owner; and
(3) provides notice of the proposed project to the
constitutional county judge of each county that the project is
proposed to traverse not later than the time that an initial offer
is made to acquire property in the county in connection with the
project.
(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(a) is considered to have
complied with Section 21.0114(a) for purposes of Subsection
(c)(2)(C), 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
Section 21.0114.
(f) Notwithstanding any other law, a private entity, as
defined by Section 21.031, with eminent domain authority that wants
to acquire real property for a public use may not, directly or
indirectly, offer or pay to an agent or employee of the private
entity a financial incentive that would tend to encourage the agent
or employee to make an initial offer that the agent or employee
knows or should know is lower than the lowest initial offer required
under Subsection (c)(2)(A).
SECTION 2. Subchapter B, Chapter 21, Property Code, is
amended by adding Sections 21.0114 and 21.0115 to read as follows:
Sec. 21.0114. REQUIRED TERMS FOR INSTRUMENTS OF CONVEYANCE
BY CERTAIN PRIVATE ENTITIES. (a) Except as provided by Subsection
(b), a deed, easement, agreement, or other instrument of conveyance
provided to a property owner by a private entity, as defined by
Section 21.031, with eminent domain authority to acquire the
property interest to be conveyed for a public use and that seeks to
acquire the property interest through the exercise of the power of
eminent domain must include the following terms, as applicable:
(1) if the instrument conveys a pipeline right-of-way
easement, the following terms with respect to the easement rights
granted under the instrument:
(A) the maximum number of pipelines that may be
installed in the easement;
(B) the maximum diameter, excluding any
protective coating or wrapping, of each pipeline to be initially
installed in the easement;
(C) the type or category of substances permitted
to be transported through each pipeline to be initially installed
in the easement;
(D) a general description or illustration of the
location of the easement on the property in the form of a plat map,
aerial sketch, or other type of description or illustration;
(E) the maximum width of the easement; and
(F) the minimum depth at which each pipeline to
be installed in the easement will initially be installed; and
(2) if the instrument conveys an electric transmission
right-of-way easement:
(A) a general description of any use of the
surface of the easement the entity intends to acquire;
(B) a general description or illustration of the
location of the easement on the property in the form of a plat map,
aerial sketch, or other type of description or illustration; and
(C) the maximum width of the easement.
(b) Except as provided by this subsection, this section does
not prohibit a private entity or the property owner from proposing
or agreeing to add to, change, or omit any term required by
Subsection (a) at any time after the private entity first provides a
deed, easement, agreement, or other instrument containing the term
to the property owner, whether provided before or at the same time
as the entity's initial offer to the property owner. A private
entity that adds to, changes, or omits any term required by
Subsection (a) must provide a copy of the amended deed, easement,
agreement, or other instrument of conveyance to the property owner
before the date the private entity files a condemnation petition
relating to the property.
(c) A private entity that changes a deed, easement,
agreement, or other instrument of conveyance to which this section
applies after the initial offer or final offer is not required to
satisfy again any requirement of Section 21.0113 that the private
entity has previously satisfied.
Sec. 21.0115. MUTUAL AGREEMENT. Notwithstanding any other
provision of this chapter and regardless of whether an acquisition
is for a public use, a property owner and a private entity, as
defined by Section 21.031, are not prohibited from agreeing to
acquisition by the private entity of an interest in the property
owner's property without complying with the provisions of Section
21.0113(c) or 21.0114 at any time after the private entity provides
the landowner's bill of rights statement to the property owner in
accordance with Section 21.0112.
SECTION 3. 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 15th calendar day after the date 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 two disinterested real
property owners who reside in the county as alternate special
commissioners. The judge appointing the special commissioners
shall give preference to any persons agreed on by the parties before
the court appoints the special commissioners. Each party shall
have seven calendar days after the date of the appointment of the
special commissioners [The judge shall provide each party a
reasonable period] to strike one of the three special commissioners
[appointed by the judge]. 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 [, the judge shall appoint a replacement].
SECTION 4. Section 21.015(a), Property Code, is amended to
read as follows:
(a) Unless otherwise agreed by the parties, the [The]
special commissioners in an eminent domain proceeding shall
[promptly] schedule a hearing to occur not earlier than [for the
parties at the earliest practical time but may not schedule a
hearing to assess damages before] the 20th day or later than the
45th day after the date the special commissioners were appointed.
The special commissioners shall schedule a hearing for the parties
at a place that is as near as practical to the property being
condemned or at the county seat of the county in which the
proceeding is being held.
SECTION 5. Section 21.016(d), Property Code, is amended to
read as follows:
(d) Notice may be served[:
[(1)] by delivering a copy of the notice to the party
or to the party's agent or attorney or in another manner provided by
the Texas Rules of Civil Procedure for service of citation[;
[(2) if the property being condemned belongs to a
deceased's estate or to a minor or other legally disabled person and
the person or estate has a legal representative, by delivering a
copy of the notice to the legal representative; or
[(3) if the property being condemned belongs to a
nonresident of this state and there has been no personal service on
the owner, if the identity or the residence of the property owner is
unknown, or if the property owner avoids service of notice by
hiding, by publication in the same manner as service of citation by
publication in other civil cases in the district courts or county
courts at law].
SECTION 6. Subchapter B, Chapter 21, Property Code, is
amended by adding Section 21.0161 to read as follows:
Sec. 21.0161. FILING OF COMMISSIONERS' FINDINGS. The
special commissioners shall file their findings with the court not
later than the third calendar day after the date of the special
commissioners' hearing.
SECTION 7. 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":
(1) means:
(A) a for-profit entity, as defined by Section
1.002, Business Organizations Code, however organized, including
an affiliate or subsidiary, authorized to exercise the power of
eminent domain to acquire private property for public use or a group
or combination of two or more such entities; or
(B) a corporation organized under Chapter 67,
Water Code, that has a for-profit entity, however organized, as the
sole or majority member; and
(2) does not include:
(A) a railroad operating in this state; or
(B) an interstate pipeline governed by the
Natural Gas Act (15 U.S.C. Section 717 et seq.) that does not seek
to acquire property under this chapter.
Sec. 21.032. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies only to a private entity that seeks to acquire
for a project for public use 25 or more tracts of real property that
are:
(1) classified as residential, agricultural, or
commercial property by the taxing authority that assesses ad
valorem taxes on the tracts; and
(2) owned by at least 25 separate and unaffiliated
property owners.
(b) Except as expressly provided by Section 21.038, 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.
Sec. 21.033. NOTICE OF RIGHT TO REQUEST MEETING. (a) Not
later than the time that a private entity makes an initial offer to
a property owner under Section 21.0113, the private entity shall
provide to the property owner a written notice of the property
owner's right to request a meeting, subject to Section 21.0331, to
discuss the proposed project, including:
(1) 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
(2) any regulatory filings for the project existing at
that time, if any, as to the regulatory classification of the
project.
(b) The private entity shall send the 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 at the address for the property owner
listed on the tax roll; or
(2) the address for the property listed on the tax roll
described by Subdivision (1).
Sec. 21.0331. PREREQUISITE FOR PROPERTY OWNER MEETING. (a)
A private entity is required to hold a property owner information
meeting under Section 21.034 for a segment or section of a proposed
project route, as described by Section 21.034(a), only if at least
25 percent of property owners of property in the segment or section
who are entitled to notice under Section 21.033 submit a request for
the meeting as provided by Subsection (b).
(b) A property owner request for a meeting under Section
21.034 must be:
(1) in writing; and
(2) received by the private entity not later than the
14th day after the date of the notice provided to the property owner
under Section 21.033.
Sec. 21.0332. NOTICE OF PROPERTY OWNER INFORMATION MEETING.
A private entity required under Section 21.0331 to hold a property
owner information meeting for a segment or section of a proposed
project route, as described by Section 21.034(a), shall send notice
to each property owner of property in the segment or section of the
date, time, and location of the meeting.
Sec. 21.034. PROPERTY OWNER INFORMATION MEETING. (a) If
required under Section 21.0331(a), a private entity shall hold:
(1) for a proposed project that is equal to or less
than 100 miles in length, at least one meeting for each contiguous
linear section of the project, as designated by the private entity;
and
(2) for a proposed project that is more than 100 miles
in length, at least one meeting for each segment of the project, as
designated by the private entity and not to exceed 100 miles in
length.
(b) The private entity shall hold a meeting under Subsection
(a) in a centrally located public location:
(1) appropriate to the size and nature of the meeting;
and
(2) as convenient as practicable to the majority of
the tracts of real property affected by the project section or
segment for which the meeting is held.
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; or
(4) an employee of an entity with whom the property
owner has contracted for services to manage the property.
(b) A private entity may include in the notice required by
Section 21.0332 a requirement that the property owner, not later
than five days before the date of the meeting:
(1) notify the private entity that the property owner
intends to attend the meeting; and
(2) identify persons described by Subsections
(a)(1)-(4) who intend to attend 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:
(1) require attendees to:
(A) provide one form of government-issued photo
identification; and
(B) complete a registration form that includes
contact information; and
(2) exclude from the meeting:
(A) any person who does not provide at least one
form of government-issued photo identification or complete a
registration form, if required by the private entity as provided
under Subdivision (1); and
(B) any person described by Subsections
(a)(1)-(4) who is not timely identified to the private entity, if
required by the private entity as provided under Subsection (b).
(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 or who disrupt
the meeting.
(f) Notwithstanding Subsection (b)(1), the private entity
may not deny entry to a property owner who provides proper
identification and completes a registration form, if required by
the private entity as provided under Subsection (d)(1).
Sec. 21.036. PARTICIPATION BY PRIVATE ENTITY REQUIRED. One
or more representatives designated by the private entity shall:
(1) attend each meeting held under Section 21.034; and
(2) participate in those meetings as described by
Section 21.037.
Sec. 21.037. PROPERTY OWNER INFORMATION MEETING AGENDA. At
a meeting held under Section 21.034:
(1) the private entity shall present an agenda; and
(2) attendees of the meeting may ask questions of and
make comments to a representative of the private entity 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.
Sec. 21.038. 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) At a meeting required by the Public Utility Commission
of Texas to be conducted by a private entity to which this section
applies in connection with an electric transmission line project:
(1) the private entity shall present an agenda; and
(2) attendees of the meeting may ask questions of and
make comments to a representative of the private entity 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.
Sec. 21.039. PRIVATE ENTITY NONCOMPLIANCE. A condemnation
proceeding may not be abated, dismissed, or delayed because a
private entity does not comply with Section 21.0331, 21.0332,
21.034, 21.035, 21.036, 21.037, or 21.038.
SECTION 8. Section 21.047, Property Code, is amended by
adding Subsection (e) to read as follows:
(e) An abatement under Subsection (d) continues only until
the condemnor makes a bona fide offer under Section 21.0113.
SECTION 9. Chapter 21, Property Code, is amended by adding
Subchapters F and G to read as follows:
SUBCHAPTER F. EFFECTS OF CERTAIN CHANGES TO PROPERTY USE
Sec. 21.151. CHANGE OF USE. The temporary removal of land
from timber, agriculture, or open space usage due to construction
in a right of way or easement under threat of eminent domain is not a
change of use as that term is used for purposes of property
taxation.
SUBCHAPTER G. MORATORIUM ON CERTAIN LEGISLATIVE ACTS
Sec. 21.201. MORATORIUM. (a) Except as provided by
Subsection (b), the legislature will not add a provision to or amend
or repeal a provision of this chapter during the period beginning
January 1, 2020, and ending December 31, 2030, or enact, amend, or
repeal other laws during that period concerning procedures for,
prerequisites to, or damages available in connection with the
acquisition of property for a public use by an entity with eminent
domain authority.
(b) Subsection (a) does not apply to:
(1) a provision regarding high-speed rail, as defined
by Section 112.201, Transportation Code;
(2) an amendment stakeholders agree is necessary to
give effect to or correct an existing provision;
(3) an amendment in response to a final and
unappealable judgment or order of a state or federal court; or
(4) a nonsubstantive addition to, revision of, or
correction in an enacted code or other law.
Sec. 21.202. EXPIRATION OF SUBCHAPTER. This subchapter
expires December 31, 2030.
SECTION 10. If any provision of this Act or its application
to any person or circumstance is finally held to be
unconstitutional, the entire Act is invalid, and to this end the
provisions of this Act are declared to be nonseverable.
SECTION 11. (a) Notwithstanding Subsections (b), (c), and
(d) of this section, Sections 21.014(a), 21.015(a), and 21.016(d),
Property Code, as amended by this Act, and Section 21.0161,
Property Code, as added by this Act, apply to a condemnation
proceeding commenced on or after the effective date of this Act. A
condemnation proceeding commenced before the effective date of this
Act is governed by the law applicable to the condemnation
proceeding immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
(b) Except as provided by Subsections (a) and (c) of this
section, with respect to the acquisition of real property under
Chapter 21, Property Code, for a pipeline project:
(1) the changes in law made by this Act apply to a
pipeline for which an application for a permit to operate the
pipeline is filed with the Railroad Commission of Texas or a
successor agency on or after the effective date of this Act; and
(2) a pipeline for which an application for a permit to
operate the pipeline is filed with the Railroad Commission of Texas
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.
(c) Notwithstanding Subsection (b) of this section, the
changes in law made by this Act apply to a pipeline project for
which an application for a permit to operate the pipeline is filed
with the Railroad Commission of Texas on or after September 1, 2019,
and before the effective date of this Act, unless a written survey
request is provided to a property owner on the proposed route of the
project not later than the 90th day after the date the application
is filed.
(d) Except as provided by Subsection (a) of this section,
with respect to the acquisition of real property under Chapter 21,
Property Code, for an electric transmission project:
(1) the changes in law made by this Act apply to an
electric transmission project for which an initial offer is made on
or after the effective date of this Act; and
(2) an electric transmission project for which an
initial offer is made 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.
SECTION 12. This Act takes effect January 1, 2020.