Rep. Tryon Lewis

Rep. Tryon Lewis

HB 2748 by Rep. Tryon Lewis (R-Odessa) will be debated on the House floor this Friday, May 3. A response to the Texas Supreme Court’s decision in the Texas Rice Land Partners v. Denbury, HB 2748 establishes an administrative permitting process at the Railroad Commission for common carrier pipelines. Opponents of the bill argue that this process deprives property owners of due process. They also argue that class action litigation is a better and more efficient way to determine common carrier status than a standard permitting process subject to the Texas Administrative Procedures Act, with a right of appeal to district court. To assist Chairman Lewis and supporters of HB 2748 in explaining the true effect of the bill, TCJL has prepared a side-by-side comparison of HB 2748 and the opposition arguments:

Opponents Say:
What HB 2748 Does:
HB 2748 creates a “special process” for pipeline owners. HB 2748 prescribes the same administrative procedure for permitting common carrier pipelines as exists for other regulatory permits.
HB 2748 takes away a property owner’s right to “due process.” HB 2748 requires public notice and an evidentiary hearing for property owners and the applicant pursuant to the Texas Administrative Procedures Act—just as for any other permitting process.
HB 2748 deprives property owners of “discovery” that would be available in an action in district court. HB 2748 applies the same rules of discovery for a contested hearing as for a trial in district court. (§2001.081, Government Code)
HB 2748 takes away a property owner’s right to challenge a pipeline’s common carrier status if conditions change. HB 2748 requires a pipeline to obtain a permit to operate as a common carrier. If the carrier later violates the permit, regulatory remedies apply—just as in any other permitting process.
HB 2748 takes away a property owner’s right under existing law to challenge a pipeline’s common carrier status through class action litigation in a local court. HB 2748 preserves a property owner’s right to appeal the Railroad Commission’s determination to district court. Nothing in HB 2748 prevents a property owner or group of property owners from litigating valuation and compensation issues.
HB 2748 changes the constitutional standard. HB 2748 retains the constitutional standard for the Railroad Commission to use subject to confirmation by the courts.
HB 2748 favors the operator because administrative hearings limit the evidence that may be introduced. HB 2748 actually works in favor of the landowner because the burden of proof is on the operator to prove a “reasonable probability of third party use.”  If the operator does not meet its burden in the administrative proceeding, then it will be unable to supplement evidence on appeal. These types of evidentiary limitations are generally viewed to be more favorable to the party that does not have the burden of proof.

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