Following a long day and night of drama on the last day the Senate could consider bills on second or third reading, eminent domain reform (HB 2730) passed the Senate at around 4 a.m. on May 27. The bill now goes to the Governor. HB 2730 marks the culmination of six years of hard negotiations between TCJL, the Coalition for Critical Infrastructure (CCI), and landowner organizations to reach consensus on reforms that provide more transparency and accountability without creating litigation traps that would delay projects and increase costs for everybody. The passage of the legislation also follows a successful strategy commenced two years ago (after the failure of negotiations to produce a bill in 2019) of offering a proactive CCI reform proposal to work from. This strategy resulted in House Land & Resource Management Chair Joe Deshotel (D-Beaumont) and House Agriculture Chair Dewayne Burns (R-Cleburne) coming together as co-authors of HB 2730 and securing a consensus between TCJL, CCI, Texas Farm Bureau, and many other organizations representing landowners. The consensus bill passed the House without amendments by a 143-1 majority, and then cleared the Senate by a 31-0 majority. Sen. Lois Kolkhorst (R-Brenham), the author of eminent domain legislation that passed the Senate in each of the last three sessions, got the bill over the finish line as the clock expired earlier this morning. This effort could never have succeeded without the leadership of these three legislators, nor without the concerted effort of the TCJL, CCI Steering Committee members, TXOGA, the Texas Pipeline Association, and Texas Farm Bureau.
There are many, many plaudits to give out on this bill, which we will do more fully in the coming days and weeks, but the biggest has to go to TCJL General Counsel Lisa Kaufman, who represented TCJL and CCI in very tough and extended negotiations on HB 2730 with Rep. Deshotel, Rep. Burns, and all the interested parties. Lisa kept the train on the tracks despite numerous moments when a derailment looked imminent, including all day and most the early morning hours today (up to and including drafting an amendment to another bill just in case the Senate didn’t reach HB 2730 in time). We all owe Lisa an enormous debt for her work on this issue over the past six years. Without it, we could never have hoped for such a positive result.
So, what is actually in HB 2730? A lot of good things for property owners seeking the best terms and compensation from the condemning entity without the necessity of litigation. Here’s what the bill does:
- Amends §402.031, Government Code, to add to the LOBOR notice of the property owner’s right to file a written complaint with TREC regarding misconduct by easement or right-of-way agents;
- Requires the LOBOR to include an addendum of required terms for the instrument of conveyance of a pipeline or electric utility easement;
- Requires the OAG to conduct a biennial review of the LOBOR with public input;
- Amends Chapter 1101, Occupations Code, to require easement or ROW agents to complete required courses to obtain or renew a certificate of registration (16 hours every two years);
- Prohibits an easement or ROW agent from receiving a financial incentive to make an offer the agent knows or should know is lower than adequate compensation;
- Amends §21.0113, Property Code, to require the written initial offer to include a copy of the LOBOR, an addendum of easement terms, and a prominent notice of whether the offer includes damages to the remainder, if any, or a written appraisal that includes damages to the remainder, if any, prepared by a certified appraiser;
- Requires the initial offer to include an instrument of conveyance with the required terms under §21.0114 unless the entity has previously provided it, the property owner desires a different form, or the property owner provided a form to the entity before the initial offer;
- Requires the offer to include the name and phone number of an entity employee or legal representative;
- Adds §21.0114, Property Code, to establish required easement terms for certain for-profit pipeline and electric transmission entities;
- Requires the entity to notify the property owner of the owner’s right to negotiate: (1) to recover damages (or a notice that the consideration for the easement includes damages) for damage to vegetation or income loss from agricultural production or other leases; (2) to require the entity to maintain commercial liability insurance or self-insurance against the entity’s negligence;
- Permits the entity and the property owner to agree to different easement terms, including terms different than or not included in the condemnation petition;
- Permits the entity and the property owner to negotiate subsequent amendments to the easement, which must be provided to the property owner 7 days before the date the entity files a condemnation petition (unless otherwise agreed);
- Amends §21.012(c), Property Code, to require the entity to provide the condemnation petition to the property owner’s counsel on receipt of written notice that the owner is represented by counsel;
- Amends §21.014, Property Code, to require the trial court to appoint special commissioners not later than the 30th calendar day after the petition is filed;
- Requires the court to appoint two alternative commissioners and limits the time period in which the entity or property owner may strike a special commissioner to 10 calendar days after the date of the order appointing commissioners or 20 days after the date the petition was filed;
- Permits a party to exercise a strike after the other party has stricken a commissioner, if the party has not already exercised a strike;
- Requires the entity to provide a copy of the court’s order appointing special commissioners to the property owner and the owner’s counsel, if applicable.
Please join TCJL and CCI in urging Governor Abbott to sign this historic legislation, ensuring what we hope are many years of legal certainty as Texas builds the massive infrastructure projects necessary to keep our growing economy on the move.