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.