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House Land & Resource Management met on March 30 to take up a number of bills. This report covers HB 3633 (Leman et al.) and HB 3312 (Harris) , HB 2041 (Leman), HB 2044 (Leman), HB 3385 (Rogers), HB 2730 (Deshotel, Geren), and HB 901 (Burns et al.). Part one of the hearing can be found here and part two can be found here.

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

HB 3312 (Harris) – Relating to the disposition of real property acquired for high-speed rail projects

  • Harris – Provides protections to landowners ensures their property will not be taken under the threat of eminent domain by a high-speed rail company and later used for a different purpose
  • Requires an entity that presents themselves as a high-speed rail company must use that land for that expressed purpose
  • If the land will not be used for stated purpose, the original landowner must be given notice and first right of refusal to repurchase the property from the entity
  • Texas Central has a recorded history of making promises to landowners and the legislature and doing the complete opposite
  • Burrows – Can we just take away the power of eminent domain for this project altogether?
    • Will work with you on that
  • Deshotel – Under current statute, the railroad does have power of eminent domain?
    • I contend it does not, the company contends it is; is litigation to address this question
  • Biedermann – Do other eminent domain entities have the same protections if they do not build what is promised?
    • Very similar; one of the biggest between high-speed rail and pipeline is the ability for the landowner to contest
  • Biedermann – Isn’t it true that if they are not done with a project within a certain amount of time, they are able to buy the property back?
    • Not in how these contracts are drawn up
  • Biedermann – But they will
    • We will see if they get that power, but right now they are entering into contracts where the entity tells them they might as well sell because they will have eminent domain authority
  • Biedermann – These protections are already in place because of those time restraints
    • There are some protections such as the landowner’s bill of rights
  • Biedermann – Why do we need this since there are already protections
    • This is about the threat of condemnation and then nothing happens; such as option contracts from Texas Central threatening eminent domain
  • Deshotel – Your bill is saying the property reverts back to the original landowner if a project does not occur?
    • Yes, but not automatically; just gives the original landowner the option to buy it back
  • Leman – Under option contracts, during the time they were executed, there were four court decisions that prevented the high-speed rail companies from acquiring the property?
    • Yes
  • Leman – Isn’t that why this legislation is needed? Because acquisitions were occurring during these court cases?
    • Yes

 

Judge Trey Duhon, County Judge Waller County – For

  • Bill would protect Texans by ensuring fairness in a condemnation
  • Have seen instances where landowners lost property to a project that never materialized
  • Landowners should be able to re-acquire property after ten years if it was never used for its intended purpose
  • Will hold high speed rail accountable
  • Leman – These option contracts allow the terms to be renegotiated solely by Texas Central?
    • Yes, if they are executed, they would be able to use the property however
  • Leman – Asks again if there were pending court cases while contracts were executed?
    • Correct; many landowners felt like there was no other choice than to execute those option contracts
  • Leman – There is a difference between this and condemnation cases including the inability to find attorneys?
    • Would be very difficult for individuals to find an attorney on a contingency basis

 

Roy Johnson, Self – For

  • Have been involved in high speed rail discussions; people were signing contracts in 2016 believing projects would start in 2017
  • Projects that were presented as $10 billion have jumped to $30 billion
  • Need due diligence and protections for landowners like this bill
  • Leman – Thanks for their testimony

 

Carma Sullivan, Self – For

  • Must be willing to look at the reality when large projects fail; has doubts HSR will be for the greater good
  • Need insulation from the failure of large projects; notes they are a farmer, and their livelihood has been trivialized by HSR plans/projects

 

Patrick McShan, Self – For

  • Is an attorney that represents a number of landowners
  • Are laws in place that protect against failed projects with eminent domain authority
  • Issue is unrepresented landowners are offered an option contract for those who do not already have eminent domain authority
  • Proposed bills last session for similar laws; HSR entity testified they would not exercise on option contracts, but later did exactly that
  • Noted the property in these option contracts were held by a foreign bank; would not have happened if we passed a bill like this
  • Leman – You have a capacity on your pro-bono work for landowners?
    • Yes
  • Leman – Are you saying that a Texas Central testified they would not execute contracts without permits and funding? Is this on video?
    • Yes and yes; executed contracts in every county between Dallas and Houston

 

Becky Skasta, Self – For

  • Discussed the failed Super Glider eminent domain project in Ellis County; landowners were not given the first right of refusal
  • Have a farm in which high speed rail is planned to go through their property; asks this bill passes so landowners can repurchase back their land once HSR fails

 

Travis Kelly, Texas Central – Against

  • Agrees the process for property purchased for major infrastructure projects could be improved
  • The real purpose of this bill is not to improve processes, but to unfairly single out a company and a single project
  • This bill offers no new improvements, regulations, or anything to that purchasing process
  • Real target of this bill is voluntary purchases; will eliminate an important tool to accommodate landowners
    • Helps owners sell larger parcels
  • Concerning testimony from last session, it was the company’s understanding that funding and permits would be issued by the end of 2019
  • At the end of 2019, landowners were anxious to execute the option; allowed others to extend their option period
  • Burrows – This bill essentially provides for the first right of refusal for landowners right?
    • Yes
  • Burrows – The idea is that landowners would be able to repurchase after a project fails; how is that targeting TC?
    • Those protections exist for property that is in eminent domain
  • Burrows – So you are saying landowners can already repurchase if a project does not go forward?
    • If those parcels are purchased through eminent domain; this would be a restriction on two parties negotiating in good faith/voluntarily
  • Burrows – Those acquisitions are negotiated because they are adjacent to other eminent domain property?
    • Correct
  • Burrows – Then you have a little more leverage in these situations since there was a threat of eminent domain?
    • Would not be able to condemn adjacent properties; made it clear to the landowner we had that authority and we would pay a premium
  • Leman – Reads the quote from last session in which they stated they would not close on projects until they secured all funding/permits, is that your recollection of what was said?
    • Yes
  • Leman – Are you fully funded now? What percentage are you funded?
    • No; do not know the percent, but have spent $1.5 billion
  • Leman – Has already been said the project is worth about $30 billion, so less than 2%
  • Leman – Do you have all your federal permits? What state agency makes sure you meet your promises?
  • Do not, will have the last two in a couple months; not familiar with any state agency partnership
  • Leman – Is any of this land we are talking about acquired by condemnation?
    • It is not through eminent domain, no
  • Leman – So those protections you talked about do not apply to these?
    • These are voluntary contracts; landowners who could have extended their options
  • Leman – Does not answer my question; do those under option contracts have the same protections as condemnation?
    • There is no obligation for the option contracts
  • Leman – A yes or no?
    • Does not apply to option contracts
  • Biedermann – What happens to the property if the rail is not built?
    • Would likely be sold to adjacent landowners or previous landowner; does not know
  • Biedermann – Is very rare to buy small parcels that are/will be a part of a larger in eminent domain; who owns the land?
    • Texas Central, land held under option is still owned by the original owner
  • Biedermann – Were told that the land is owned by a foreign country?
    • The properties owned fee-simple were deeded over to the bank that is one of the backers of the project
  • Biedermann – So the condemned land the bank owns? So, it is a foreign entity?
    • There is no condemned land, have the fee-simple land
    • Is not a foreign country, but a foreign bank
  • Biedermann – There is no way for the original landowner to take back the land then?
    • No, but that was never promised in negotiations
  • Biedermann – But a part of the negotiations said that you would have taken the land anyway
  • Burrows – These are private contracts based on the threat of condemnation or a was a misrepresentation that it was/would be funded
    • Company does have eminent domain authority that has been held up by litigation
  • Burrows – This bill is saying the equitable solution is to place the landowner back at their original situation
  • Leman – Putting parameters around this project is the goal; is needed because we cannot trust your company to tell the truth
  • Leman – Didn’t you just say that it was not a foreign county, but a foreign entity that holds the deeds?
    • Yes; the entity that holds it is a bank
  • Leman – That is a state-owned bank?
    • Not familiar with the ownership
  • Leman – Well it is; the bank created an entity and loaned them $300 million which loaned that money to Texas Central; are misrepresenting the facts
    • That loan was made by a Japanese investment corporation that is owned jointly by the government and private industry
  • Leman – But it is owned by Japan?
    • There are two Japanese entities involved

 

Roy Johnson, Self – For

  • Clarifying the comment about how options would not be exercised until funding/permitting was secured; was done in 2019
  • Went back to look at the permitting table, in 2018 the ROD was due March 2020

 

Harris, in closing

  • Landowners have been subject to a “bait and switch” and we need to remedy that

 

HB 3312 left pending

 

HB 3633 (Leman et al.) – Relating to establishing a High-Speed Rail Legislative Review Committee; authorizing a fee

  • Leman – No state agency currently exists to regulate high speed rail projects as it relates to eminent domain in Texas
  • The Surface Transportation Board made it clear that the eminent domain authority is a matter of state law
  • Landowners have endured personal abuse by the threat of domain; state agencies are supposed to regulate to protect citizens
  • Current rail project issues:
    • Is not a U.S. or Texas project as originally claimed
    • Creates a permanent land burn that divides communities
    • Controls are out of cost; admitted project has gone from $10 billion to $30 billion
    • Assured no taxpayer monies would be used, but they are pursuing taxpayer money
    • They have admitted the lack of their financial stability
    • Construction delays continue; have been delayed for the last seven years
  • We do not want to be like California to move a project built on false pretenses blindly along; bill will ensure that will not happen
  • This project has circumvented all eminent domain laws and has gone unchecked relating to eminent domain
  • Formulates a joint committee with members from the House and the Senate; projects will be evaluated, and the public will be able to comment before a franchise is granted
  • Spiller – Bill does not prohibit eminent domain through high speed rail projects, but creates oversight?
    • Yes; establishes a process by which an entity can use eminent domain for a high speed rail project and be regulated

 

Judge Trey Duhon, County Judge Waller County – For

  • Have seen firsthand the impact of high speed rail projects on people
  • Have seen people signing option contacts under duress and the threat of condemnation; high speed rail contractors and surveyors have trespassed on private and county land
  • Needs to be a regulatory threshold before an entity can be granted eminent domain authority
  • Misconduct could be addressed and could protect citizens

 

Christi Parker, Self – For

  • Member of Harris County; Texas Central sued us in 2016 after we denied survey access and they lost this case
  • They dismissed the ruling and trespassed on our property and published evidence of this in their project’s EIS
  • Is no one landowners can turn to in situations like this or anyone to hold these entities accountable
  • The false testimony from Texas Central blocked bills that could have protected landowners
  • Leman – Mentioned a lack of state agency, when this happened, who did you turn to?
    • Was no state agency to turn to; reached out to federal agencies, state legislators, etc.
  • Leman – Are you aware of similar stories of trespassing by this company?
    • Yes, trespassed multiple times on my property after a court order and heard similar stories throughout the corridor

 

Gene Whiteside, Self – For

  • No state level advocate for me as a landowner
  • Could not produce evidence of eminent domain
  • Federal bodies told state bodies to stop communicating with local authorities
  • Trespassed to survey on my property

 

Don Sowell, Sheriff of Grimes County – For

  • Represents Sheriff coalition and constituents
  • The rail concerns first responder responses to accidents, how do we go around rails
  • Can’t get a straight answer
  • Elderly landowners being harassed by Texas Central Agents
  • Leman – Have you found someone to regulate eminent domain?
    • No
  • Leman – When you compare complaints of trespassing and bullying in this project with say power lines, is it out of proportion?
    • This is completely different and out of control

 

Donavon Meritick, Self – For

  • Veteran and landowner
  • Fought for over 5 years against this entity
  • Spent thousands of dollars to protect themselves
  • Was told to accept or they would take their land
  • Need authority to help in this fight, private entities do not have to disclose information
  • 8 out of ten counties created coalition
  • Fought against oppression and now faces oppression
  • Needs threshold of liability and protection of rights

 

Patrick McShane, On behalf of landowners he represents – For

  • All threatened with eminent domain in various ways
  • No laws that regulate eminent domain
  • State instituted financial milestones in the past and they ran out of money, wasn’t threatened in the past
  • Leman – Why does Texas regulate eminent domain separate from rail?
    • This is essentially a 20 foot tall land levy
  • Leman – The clearance height is about 40 feet?
    • Yes
  • Leman – This separates east from west?
    • It freezes county road networks
  • Leman – They just decided this themselves?
    • Yes
  • Leman – Can you do at grade crossings with this?
    • No
  • Leman – An approximately $40 million dollar bridge would need to be made by a rural local government?
    • Yes
  • Leman – Is it your understanding this is diesel powered?
    • Yes
  • Leman – Is it true that both the DEIS and FDIS plans to use the ERCOT reserve margin?
    • Correct
  • Leman – It would support this by 2029?
    • Correct
  • Leman – Does the federal government control ERCOT?
    • No
  • Leman – ERCOT said there was not a market to support additional generation?
    • Yes
  • Leman – Railroads allow any shipment as long as they pay the fee?
    • Yes
  • Leman – Isn’t that how pipelines are, what other trains can run on this facility?
    • None, it requires a closed system
  • Leman – This does not tie into any other track?
    • No
  • Leman – Can any other car run on this track?
    • No
  • Leman – Who has the control over the technology?
    • The Japan Railroad Company
  • Leman – Is this proprietary?
    • Yes
  • Leman – Is this effectively a monopoly?
    • Yes
  • Leman – Does this mean that they are equal with common carrier?
    • Not in any way
  • Leman – Is it your understanding that they wouldn’t sustain themselves in operations?
    • Possibly could fund operations but no debt servicing, no way for both
  • Leman – Is there a study for post-Covid ridership figures
    • No for pre or post
  • Spiller – How many landowners do you represent for this project?
    • Over 100 at least, we prevent them from having properties surveyed
  • Leman – To clarify, the high speed rail sued your landowners?
    • Yes, over 40 of the same lawsuit

 

Travis Kelly, Texas Central – Against

  • Would not result in additional regulation
  • Already exists for all freight and passenger railroad
  • Court of Appeals affirmed Texas Central status as a railroad, grants authority
  • Hosted dozens of meetings and public comments
  • Required to conduct thorough review of costs, projections, etc.
  • False to assume that law has agencies to enforce applications, other means of regulations
  • Judicial branch imposes penalties
  • Attempts to resurrect old tactic is not new after millions in investments
  • 100% of the options closed, the landowner wanted the money then
  • Leman – It has been about 7 years that your company will begin construction the next year?
    • I don’t think that is accurate, first time private entity has done a project like this
  • Leman – It has been at least five years
    • There is a lot of processes
  • Leman – Have you applied for the final application?
    • No, we haven’t submitted it
  • Leman – How long in between applications, a couple of years?
    • Possibly
  • Leman – Have you finalized safety regulations and lack of interoperability running next to Union Pacific?
    • Yes, and we have conducted two rounds of testing in Japan and other tests to resolve this
  • Leman – It hasn’t been tested on the technology here?
    • No, but there is a plan to do that
  • Leman – I understand there is a timeline, but you have a responsibility to ensure you are respecting private property rights as a priority, the big issue is the severance
    • We would go to a bridge structure
  • Leman – I haven’t seen any plans for that, How did you come up with that
    • There were many public meetings
  • Leman – The bulk of solutions didn’t incorporate this, who made the decision on the size?
    • Ultimately, the FRA approves the environmental documents
  • Leman – Who made the decision about the culverts?
    • There was not a state agency
  • Leman – You want to be recognized, but are subject to different treatment, why was this treated differently than before?
    • The state started a franchise to get into the business?
  • Leman – Was this a result of the franchise?
    • This was outside of the franchise due to eminent domain
  • Leman – You can’t award it twice
    • The business that came to Texas were train manufacturers
  • Leman – Can any other trains run on your project in the US?
    • No, there are no high speed trains
  • Leman – It doesn’t tie into any other rail system?
    • No, the FRA made this decision
  • Leman – The Japan Bank of International Cooperation signed an agreement to provide a loan for the development of the project, a public company owned by Japan, correct?
    • My understanding is they participated in lending money
  • Leman – They were the vehicle to do it
  • Thierry – What is the thought of a tiebreaker for the review committee?
    • Leman – Open to working on a solution on establishing what agencies are responsible for what, conference committees compromise
  • Thierry – Would they have the authority of all committees in the House?
    • Leman – Yes
  • Thierry – We would create this as a legislative body, but nothing regulates the occurrence of a tiebreaker?
    • Leman – Its powers are limited to what they can do
  • Thierry – Don’t we already have rules regarding this?
    • Leman – This is first step, a committee determines if it is appropriate, then makes recommendation to file a bill, can do in interim
  • Thierry – If this were established, we would still have to come back to pass another bill to do what they said, this is no different than all the bills we have on the same issue
    • Leman – Establishes a process for a high-speed rail
  • Thierry – Are you open to the findings required to be done in a timeline so we aren’t extending across sessions?
    • Leman – Yes
  • Thierry – How is this different from functioning as an agency?
    • Leman – They are determining if the project is funded for the whole project
  • Thierry – I am concerned about 6 members addressing this issue against 150
    • Leman – California didn’t implement any structure and is the reason for their struggles
  • Thierry – Wouldn’t we have a better chance to regulate that with the full House?
    • Leman – I will get back to you with more details
  • Thierry – Where would the public hearings be held?
    • Leman – We can certainly work with you on that, there can be multiple hearings and locations
  • Thierry – We have to ensure access
    • Leman – We could also do virtual testimony
  • Thierry – If they can call a public hearing at any time, it doesn’t say that other legislative committees have to do this?
    • Leman – They could abide by the same requirements
  • Thierry – Everything is subject to open meetings?
    • Those concerns are covered in the general law
  • Thierry – I think it would need a more precise definition
  • Spiller – Normally they get a certificate and approval, I’m assuming no entity awarded them this authority?
    • Leman – Correct, they are assuming that they are a railroad under current statute
  • Deshotel – What is the next step complicated?
    • Leman – The committee would write a recommendation that this project would move forward the following session in legislation
  • Deshotel – The railroad is saying this is a delay in starting their operation, what is the purpose of the review, why not just send it to TxDOT?
    • Leman – The purpose is to establish the appropriate process of oversight, they could file it under TxDOT, need an initial review to ensure money is there
  • Deshotel – Say they get the authority in 2 months, would have to wait 2 years to start?
    • Leman – We have authority when it comes to eminent domain, it has been the wild west
  • Rosenthal – Putting together a committee of legislators from both bodies appointed the Lt. Governor and Speaker of the House, one of their choice, one from urban, and one from rural. The committee could be set up one way or the other depending on the leadership. However, they aren’t acting as an agency?
    • Leman – Correct, they determine the agency that will
  • Rosenthal – We heard conflicting opinions on whether the company has eminent domain or not, does TxDOT regulate normal railroads?
    • Leman – State laws contemplate various types of rails due to the varying needs of regulation, this bill mirrors the process that an entity would have to go down.
  • Rosenthal – Who regulates regular passenger trains?
    • Leman – If it is interstate, it is the federal government, intra would be the state
  • Rosenthal – What agency regulates passenger trains in Texas?
    • Leman – General railroad doesn’t have an agency. TxDOT regulates crossings, but not for high-speed rail. Appeals are not a final decision, it is before the Supreme Court, they couldn’t act on this decision. No intrastate railroads regulated by Texas
  • Rosenthal – This isn’t singling out one entity?
    • Correct, there are growing amounts of this technology that needs to be addressed
  • Rosenthal – Infrastructure needs are growing, at some point, we are going to have to figure this out
    • Leman – I am not opposed to building this within existing agency
    • Leman – We need to ensure protections are in place, it is our responsibility

 

HB 3633 left pending

 

HB 2041 (Leman) – Relating to the disclosure of appraisal reports in connection with the use of eminent domain authority

  • Current law provides that when an entity exercises eminent domain, the property owner shall disclose any and current evaluations in order to determine the opinion of value in a timely manner
  • No such requirement exists with the eminent domain authority, uneven playing field
  • Bill requires the condemner to disclose to the property owner any reports related to the property prior to the hearing in the same timeline that is required of the landowner

 

Left Pending

 

HB 2044 (Leman) – Relating to establishing actual progress for the purposes of determining the right to repurchase real property from a condemning entity

  • Under current law, the property code allows a person whose property was acquired through eminent domain if there is no progress after ten years
  • Only 2 out of 7 elements have to be achieved to satisfy this, miniscule progress
  • Strengthens the definition of progress by requiring at least 3 of 5 property development actions currently in statute in the timeline
  • Gives port authorities and navigating districts flexibility to ensure urban and rural are treated equally

 

Lee Christie, Tarrant Regional Water District – Against

  • Concur with the intent, but sometimes water projects take decades to complete
  • Consider the unique nature of these water projects and add to the exceptions of the bill
  • Romero – How long has the pipeline has the Marvin Nichols plan been going on?
    • It has been going on for decades and the IPL is still under construction for about 12 years
  • Romero – Do you have a problem with the ten year date?
    • We would prefer water districts to be exempt like port and navigating authorities due to our unique nature
  • Leman – Under the current language of this bill, it would be difficult?
    • Correct
  • Leman – If we were to adjust this you would be able to achieve the 3 out of 5?
    • We were talking about exempting projects in the state water plan
  • Biedermann – Panther Island would fall under this, would this bill help speed this project up?
    • This is a flood control project in Fort Worth, they have started some construction, so we aren’t concerned
  • Spiller – Is there anything in Wise county that would fall under this?
    • I don’t believe so
  • Spiller – In regard to the surrounding area, is that a part of Tarrant Regionals?
    • We have not acquired any property

 

Left Pending

 

HB 3385 (Rogers) – Relating to a landowner’s bill of rights statement in connection with the acquisition of real property through eminent domain

  • In 2017, HB 1495 created the landowner’s bill of rights when approached by entity with eminent domain authority
  • Created a bonified offer, damages to the remaining property, and the location of the project
  • Comptroller’s office provides a form to reassess property value decreases
  • Only recently made aware of this form, several constituents protested appraisals for years, including myself
  • Own appraisal district unaware of this form
  • Bill enhances document to make landowner aware when approached by an entity

 

Left Pending

 

HB 2730 (Deshotel, Geren) (CS) – Relating to the acquisition of real property by an entity with eminent domain authority

  • A public or private entity that acquires property for public use must meet certain requirements
  • Process needs to be more transparent, accountable, and fair
  • Good faith offer requirements included
  • Provides a basis for compensation in initial offer
  • 150% of appraised value removed
  • Modernized requirements and a meeting required with the project
  • Landowners requested standardized easement terms to be included
  • Educational requirements on top certification requirements at Texas Real Estate Commission specific to eminent domain process
  • Prohibits financial incentives to low ball offers
  • User friendly and accessible
  • Adds timelines to special commissions processes
  • CS removed 150% provision, general notice provisions, puts current process in statute
  • Bill is a work in progress

 

Lisa Kaufman, Coalition of Critical Infrastructure – For

  • Group of companies and individuals on the condemner side of the docket
  • Three goals are to further transparency, accountability, and fairness
  • Added provisions for education and user friendly versions
  • Basically, 901 concepts that are workable in the industry, don’t want to impede critical infrastructure funding at the same time

 

Thomas Zabel, Texas Pipeline Association – For

  • Came very close to getting consensus last session
  • Condemnation needs to be crystal clear so there is no litigation over easement terms
  • Provisions for ethics exists
  • Have had negative comments about form given to landowners
  • Deshotel – Putting the Bill of Rights in statute is a good thing?
    • It is good for transparency, but the Attorney General’s office didn’t consult with us, wants dialogue first
  • Deshotel – Where does the special commission stand as substituted?
    • There was only one feature left, wants timeline for process instead of “reasonable” period and bookend

 

Todd Staples, President of the Texas Oil and Gas Association – For

  • Landowners need easement presented to them, clarity and information is provided

 

Steve Bresnen, North Harris County Regional Water Authority – For

  • Been part of coalition since the beginning
  • Used a lot of public right of way
  • Maintains distinction, but brings us into be responsible with landowner concerns

 

Tony Bennett, President of Texas Association of Manufacturers – For

  • 600 large and small companies, 908,000 Texans employed, over $87,000 on average
  • Attempts to overhaul eminent domain laws are concerning to keeping us functioning properly
  • Supply chain chaos has resulted in 64% of domestic manufacturers wanting to bring back production to North America
  • Texas must be ready to compete and have efficient infrastructure
  • Balance between landowner protections and move products around the state

 

Pat Avery, President and CEO of Port Arthur Chamber of Commerce – For

  • Had $54 billion of expanded industrial projects coming to area 15 months ago
  • Home of the largest methanol facility in the US and two strategic military ports
  • 22% of Texas commerce handled

 

Bill Allen, President and CEO of Beaumont Chamber of Commerce – For

  • Petroleum and chemical complex pivotal to growth
  • Fairness needs to be provided as well for landowners

 

Arthur Uhl, Rancher and VP of Texas and Southwestern Cattle Raisers Association – Against

  • Cattle raisers oppose blank easement forms that could need to be changed later
  • Assigning easements without conditions is a concern
  • Deshotel – They can be assigned to another pipeline or owner?
    • Correct
  • Deshotel – Selling ownership to another owner would still have same agreement in place, please explain?
    • There are notice provisions of who would acquire the ownership, oil and gas companies have this luxury
  • In person meetings can be had now, not a substitute for open meetings
  • Don’t want impression they are a substitute
  • Provisions don’t satisfy goals about transparency, accountability, and fairness
  • Deshotel – Explain to me the meetings you are talking about?
    • A concept of community meetings are exemplary of what we think about this bill, in person meetings doesn’t get there
  • Deshotel – What does?
    • Open public meetings to inform public at a local level, needs to be more open
  • Leman – Are they saying they won’t provide notice?
    • It is not in the bill, would like specific form
  • Leman – Is the other side refusing to put it in?
    • We haven’t discussed this with them yet
  • Leman – What other projects require the county judge to host meetings?
    • Would be more thorough presentation of the project
  • Leman – It was never the burden of the county to facilitate the discussion, why would you contemplate this form?
    • It should not be the obligation of the county, but rather, the condemning authority
  • Craddick – have you ever been affected by eminent domain?
    • Yes, LCRA sent us a notice that we were the prime route for a transmission line over 6 miles on our property
  • Craddick – Was relief negotiated?
    • No, we hired a lawyer and went to the PUC, so we didn’t get to that point
  • Craddick – Would this legislation have affected your settlement?
    • I’m not sure, because we never got to the compensation part of it
  • Craddick – How long have you worked on this bill and communications?
    • I haven’t been made aware of meetings, I think I would have heard of it
  • Craddick – What are the main five issues that aren’t in this bill?
    • If you are a condemning authority, you aren’t allowed to present other purchases for projects, a significant player in determining fair market value
  • Craddick – If this bill passes will you be back next session?
    • I don’t know
  • Craddick – You haven’t been working on it?
    • Industry representatives will tell you we have been working very hard
  • Craddick – I would like a list of exactly what you want in the bill
  • Deshotel – We need to know what the issues are, bill helps landowners if it passes right now
    • Want to address concerns with one bite of the apple

 

Russell Boening, Rancher and President of Texas Farm Bureau – Against

  • Does not honor agreements in 2019
  • Makes process worse for landowners, especially the pipeline forms
  • Advises landowners to not seek
  • Against codifying landowner bill of rights as it stands
  • Does not require damages to the remainder just like the final damages
  • Does not require document of conveyance to include easement terms, leverage against landowner to accept bad deal
  • Deshotel – What are your objections to the landowner bill of rights?
    • It says the landowner should not seek outside help
  • Deshotel – It advises you to educate yourself and you have the right to, so what are you saying it doesn’t do, do you have a proposed bill of rights you could provide?
    • I can
  • Leman – What percentage of the language is agreed to?
    • I’d say about 75%
  • Leman – What is the major component?
    • The ones I testified to are the major issues
  • Craddick – What was wrong with the 150%, how important is that?
    • We were never in favor of this
  • Craddick – How does the initial offer end up being the final offer?
    • I’m not sure
  • Craddick – Normally you try to sell high and buy low, why is the minimum offer in the statute?
    • A company that has this eminent power, the initial offer needs to be based off something substantive
  • Craddick – The percent was not a big issue?
    • We would have testified against that, appraisal districts are off a lot of the time
  • Deshotel – What do you want the offer to be based on?
    • An appraisal by a certified appraiser or broker
  • Deshotel – The bill says that, so I don’t know why you are against it?
    • The data part is a little arbitrary, property in the same area can be quite different in its value
  • Deshotel – Obviously rocks aren’t the same as cash crops if they are in the same area, need to look past last session
    • We appreciate the effort, but this doesn’t take us far enough
  • Leman – Is it your understanding that if there is a low ball offer, can’t the percentage of the overall value to attorneys be significant?
    • I haven’t had experience with that but I’ve heard that to be the case
  • Leman – Which figure do they go off of, the original offer or the reduced value taken to court?
    • I’m not sure about that
  • Leman – Is the original offer considered a valuation?
    • I’m not sure about that
  • Leman – What would be an adequate way to start?
    • Market analysis, broker, appraiser either or
  • Burrows – Have you had any push back on this?
    • It’s not in the bill, they get to choose what it is
  • Burrows – It sounds like 3 comparable properties could get us there?
    • We will get back to you

 

Jaren Taylor, Association of Electric Companies of Texas – Neutral

  • Not all electric companies have eminent domain authority, regulated by PUC
  • Regulatory process required for right of way
  • Concerns about easement of crossings
  • Smaller changes to address our industry in particular regarding grade changes
  • Evaluation method of 150% is used by several member entities, they want to continue to utilize this

 

Withdraws Committee Substitute and left pending

 

HB 901 (Burns et al.) (CS) – Relating to the acquisition of real property by an entity with eminent domain authority

  • Improves the position of landowners
  • Called upon church for help regarding eminent domain issue my family faced
  • Public meetings would have been helpful
  • Basis for original values would have been helpful
  • Burrows – I’ve supported you on your efforts, but what are the terms you don’t think are agreed to?
    • I received some edits from one industry and several had already been fixed
  • Ramon – Are we in the same place in evaluating the property?
    • We are extremely close, every word makes a difference, on par with concept but must consider damages to the remainder
  • Ramon – Could you elaborate if the damages need to be done in the initial offer or somewhere throughout the process?
    • Telling someone what their property is worth is an intimidating process for the landowner
  • Ramon – You are talking about the comparison of easement vs an easement free property in the market analysis?
    • A set of standards evaluate the remainder while a broker knows the real estate environment
  • Deshotel – I was under the impression it was physical damage, but it is the totality of its scope instead
    • It should be considered as well, the appraisal would consider that
  • Leman – Is it critical to go back to the original offer when talking about attorney fees?
    • Yes, we want to eliminate the low ball offer
  • Spiller – Your offer will be comprised of the amount they are taking and damage to the remainder, even if it is zero?
    • There may be cases where that is true, a bar needs to be set to cut out the low ball victimization
  • Rosenthal – I appreciate your work
  • Biedermann – Is there an initial offer by the good actors?
    • I think they know how to be good actors and fairness
  • Biedermann – What you got here is what the good actors do?
    • I believe they would do these things
  • Ramon – It would be nice if there was a simple equation, how close did you get at the end of session?
    • We were within hours or a day of agreement, couldn’t settle on public meetings
  • Ramon – Your family didn’t have the benefits of hiring the lawyers, does anything prevent landowners who can afford them taking advantage of this?
    • I’m not sure this helps them as much as it does those who don’t have the resources
  • Ramon – If these folks are sophisticated and slow down the process, doesn’t it hurt the small guys?
    • Our church community grew and benefitted from the favored nations clause we learned about
  • Thierry – Could you give us some dates on the process so far?
    • We have met for hours on end over the last two sessions on all sides of the issue, landowner groups felt confident at the time and we have tried to perfect the details to this day regarding critical infrastructure and landowner groups
  • Deshotel – This process has been very open and honest

 

Rita Beving, Texas Landowners for Eminent Domain Reform – For

  • Recent reports indicate that Texas has lost 2.2 million acres of land in the past 20 years
  • Last major reform was 2011, none since
  • Position align with eh Farm Bureau and Cattle Raisers
  • Market value is the most important aspect of the bill
  • Multiple examples of small offers turned down to later get millions of dollars for their land, happens often in pipeline cases
  • Landowners told they couldn’t drive over pipeline to tend their crops
  • Biedermann – What made such a huge change in awards?
    • It was most definitely the lawyers due to the contingency in the process, one landowner fought this for 7 years and earned $1 million more for his property than he would have received
  • Biedermann – Is this what we want?
    • It’s not about making money, but just having fair terms, a Paris landowner experienced unreasonable treatment of her property and was told to graze her cattle elsewhere when the pipeline was put in
  • Biedermann – Are we here for these extreme cases? What can we do to address the main issues that helps the most people?
    • I don’t think these are extreme cases, we need to establish fair market value and a process where companies can’t cherry pick appraisals
  • Biedermann – Doesn’t this bill have a fair market value to start with? Are you saying it is better to have lawyers get involved and get very high compensation for your land?
    • Appraisals from the past ten years should be brought forward so it is fair
  • Craddick – Are you against pipelines?
    • Most of my experience is in this area
  • Craddick – Is there anyone you know that had a positive experience with pipelines?
    • Yes
  • Craddick – Do you like the 150%
    • I would have to see the Committee Substitute
  • Craddick – So you haven’t read it?
    • I wasn’t made aware of the substitute until this morning
  • Craddick – So you are against pipelines basically?
    • I didn’t say that, I work on a variety of projects
  • Craddick – We need to address the transfer of above ground storage to help grow our energy industry in light of the recent storms, how do we transfer this without pipelines?
    • When it comes to what happened, I’m not familiar with the proposal put forward
  • Craddick – Where do you live?
    • Dallas
  • Craddick – Anti-pipeline Austin was bailed out through pipelines in the last winter storm, does this bill help any of your problems?
    • I haven’t seen the substitute
  • Craddick – How can you testify?
    • We didn’t have access, I can testify to the historical nature of this
  • Craddick – We have to look at the state as a whole, there are bad actors in every industry but the majority have been treated nicely, if you can get 75% of what you want I would consider that sufficient
    • I haven’t testified against the Deshotel bill, I’m here to be for Burns bill, I also worked for an Oil and Gas Company so I’m not anti-pipeline

 

Arthur Uhl, Rancher and VP of Texas and Southwestern Cattle Raisers Association – For

  • Texas landowners take on the burden of the lackluster eminent domain system
  • Required terms of conveyance and the bonified offer are the product of many hours of negotiations
  • Step in the right direction for transparency, accountability, and fairness
  • Craddick – If we pass this bill, will you come back asking for more?
    • I can’t speak to future circumstances, if these don’t work then we will be back
  • Craddick – How much did you get from last session percentage wise?
    • I can’t put a number on it
  • Craddick – Did you like any of the bills last session?
    • We wanted required terms of conveyance, the bonified offered, and public meetings
  • Craddick – Did you get what you wanted?
    • We didn’t get what we wanted on the meetings
  • Craddick – Did the pipeline go through your ranch?
    • No, it got moved
  • Burrows – Were you a part of the negotiations leading up to 901?
    • Historically yes, lately no
  • Burrows – I think most people support reform, but do you know where the divide still exists?
    • The bonified offer and required conveyance terms are good enough to meet our goals, we support this bill
  • Burrows – You don’t know why this isn’t agreed to unanimously?
    • I think there are objections to the 150% and some other things, but I’m probably not the right person to ask

 

Todd Staples, President of Texas Oil and Gas Association – Against

  • Not in opposition to finding a resolution
  • There needs to be clarity on what the words mean
  • Wanted to work with where we left off last session to make the bill applicable to real life
  • Nothing in statute that requires any basis for initial offer
  • Every landowner will get a certified appraisal if they don’t like the initial offer
  • The initial offer may require years of appraisals due to construction
  • The bill that is written represents progress, but certified appraiser’s do have the ability to assess damages to the remainder, brokers can already give price opinions, but requiring it is not good because a broker is not trained to do the necessary appraisal analysis regarding damages to the remainder
  • Needs to include easement terms, ancillary elements, clarity on descriptions available could result in suits being thrown out, and progress is disrupted throughout the bill
  • Craddick – We have had calls regarding open pipelines, could you attest to this?
    • No I can’t, they were covered
  • Craddick – Could you tell where the pipeline was?
    • I can’t event tell where the pipelines are sometimes
  • Craddick – I think east Texas has done a good job of covering their lines, but there has probably been some bad choices over the years, registering brokers and bad actors helped solve some of the problems?
    • Yes I would agree, if someone is not doing it right, they need to be held accountable
  • Burrows – I like both of the bill authors, where do you see the gaps in the debate?
    • There are two tiers, Tier 1 represents the easement terms that a landowner needs to know about
    • The basis for the initial offer also needs to be tweaked, 3 comparable sales is a method of estimating value
    • A broker cannot make a separate opinion because they aren’t trained to do that
    • Pumps, meters, valves, etc. aren’t specified so they might throw out the suit
  • Rosenthal – In regards to damages to the remainder, is it unreasonable to expect an estimate at the time of the original offer?
    • The time in the process might not be an efficient time to estimate this, good actors offer much more than what is estimated to cover the damages
  • Rosenthal – This bill is for bad actors not good actors, my understanding is that you want a qualified estimate?
    • A professional broker would violate their own rules by providing this estimate?
  • Rosenthal – Who should let the landowner know the value?
    • This bill would require licensed professionals to make estimates, subjects them to losing their license
  • Rosenthal – Who is the right person to make this estimate?
    • This bill requires something that the licensee doesn’t have the authority to delineate, market value or comparisons should be used
    • Constitutional requirement for fair compensation
    • The real estate commission can’t assess damages to the remainder like an appraiser can
  • Rosenthal – Is there a reason we can’t have an appraiser make an original estimate?
    • There are a finite number of appraisers, slows down process
  • Rosenthal – Was that one of sticking points for a public meeting?
    • It was, there is no requirement for a meeting today
  • Rosenthal – I do not want to impede the process of oil and gas growth in the state, I think there is a piece of common ground to be found
    • I hope we can too, many companies do meetings in a thoughtful way already
  • Burrows – So appraisers have the ability and licensing while brokers have the ability but not licensing?
    • Brokers don’t have the training to do a separate line item
  • Burrows – Is there a way to provide the training to do that?
    • A good broker has the knowledge of the market, but they don’t have the training in the process to pinpoint a number
  • Craddick – Have you looked at the broker incentives to hasten the process? Hurts many who sign these deals?
    • I believe a statute made it here last session, It would prevent decisions being made based on financial compensation
  • Biedermann – I feel like we are going in circles, Burns is put together by landowners while your bill is put in by people in the industry, why do you have to have the initial offer based on a CAD that probably isn’t the right offer? Why not just do it right up front?
    • Chairman Leman’ example is why, the company offered $77,000 and the end result was $12,000, many companies offer higher offers upfront to avoid litigation
    • TxDOT goes to special commissioners at a higher rate because they cannot give more than market value
    • 150% seems like a reasonable starting point
  • Biedermann – When was the last time you went to Rep. Burns to discuss changes?
    • We worked all interim and discussed 2730 with all stakeholders, haven’t seen a counterproposal until 901
  • Biedermann – Have you had a counterproposal to 901?
    • We will definitely be working on this and provide language in response

 

David Yeates, Texas Wildlife Association – For

  • Followed the will of legislature through process
  • In pursuit of a fair upfront offer
  • Great appetite to get this right, bill language has to be right
  • Biedermann – You want a fair offer upfront, but you get a better offer than the final offer, where is the disconnect?
    • People pluck examples to support their position, this bill establishes the language
  • Biedermann – But we are hearing that this isn’t a low ball, so what is the truth?
    • To introduce a licensed professional that focuses on valuing property into the initial offer is substantial, the state of Texas does this and I see no harm in using an appraiser
  • Biedermann – The difference is that the CAD includes damages?
    • The CAD isn’t in this bill, but it is fast for industry, based on my knowledge in the banking industry, CADs are not sufficient to analyze damages, I don’t care how convenient it is for them
  • Biedermann – We are getting two completely opposite answers
    • It is an improvement to the status quo
  • Burrows – Time kills bills around here, I see this happening right now
  • Romero – How often do different organizations use CAD and accept an offer of 150%?
    • I wouldn’t be qualified to answer that
  • Romero – Would it be negotiated anyway?
    • Landowners are eager to resolve the issue considering costs
  • Romero – How do you get to a good first offer if it’s not CAD or 150%?
    • We support the substitute as is
  • Romero – Why can’t this be about the math if the initial offer isn’t going to be accepted?
    • We can’t paint with a broad brush, the good actors may already offer too much, but we have to address bad actors too
  • Romero – Just because you have more money, means you can hire better lawyers to get a better offer, I’m not sure that is this bill’s intent?
    • That is right
  • Romero – I’m not sure how important the initial offer is?
    • I’m sure more people would accept the initial offer with these minimum requirements in place
  • Burrows – Let’s say there is a more sophisticated way to raise the bar for the minimum offer, is it fair to say that attorneys wouldn’t take cases because it is close to the actual value?
    • Correct
  • Burrows – The major goal is to close deals faster, which squeezes the attorneys out, gives more to landowners, and expedites the process, would this happen under this bill?
    • I can hear lawyers cringing right now, but yes there is less margin for an attorney

 

Calvin Tillman, Self – For

  • Voices support for prior discussions and sees momentum that he hasn’t seen in the past

 

Eric Opiela, South Texans Property Rights Association – For

  • Improves transparency, accountability, and fairness
  • No statutory wording of easement in this bill, a statute would eliminate adaptability to unique circumstances, allows for challenges
  • Encourages negotiation and empowers landowner
  • Committee substitute allows for appraisers, but it doesn’t say that brokers are required, only requires damages to be assessed in value
  • Using CAD values is not permissible as stated in 1867 Supreme Court Case, especially for production value
  • Craddick asked if pipelines have left lines open, I would be open to sending pictures of my neighbors

 

Pat McDowell, Texas Farm Bureau State Director – For

  • We farm in Wheeler and Collingsworth county in the east side of the panhandle
  • 58 years ago a transmission line easement was signed on a half sheet of paper, deals aren’t straight now a days and lawyers get involved
  • Value is diminished from pipelines and it needs to be considered in initial offer
  • Two neighbors in area had substantially different offers after getting lawyer involved
  • Bad actors have to be threatened with being sued to get a good offer

 

Russell Boening, President of the Texas Farm Bureau – For

  • Current law doesn’t give legitimacy upfront
  • Final offer has to include damages to the remainder, a copy of the written appraisal, equal to or greater than the appraisal, the easement agreement, and the bill of rights should be in the initial offer
  • 100% behind this bill, everything else has been said
  • Biedermann – You seem like this bill is a better deal for oil companies because you take initial appraisal upfront instead of the offer that might be more, is the first offer the low ball in most cases?
    • In some, but this addresses the bad actors

 

Kevin Wilkerson, Texas Farm Bureau – For

  • Voices support

 

Sam Snyder, Texas Farm Bureau – For

  • Voices support
  • Has to look at transmission line because litigation from a billionaire neighbor sent the proposed line around the south side of his property, no compensation
  • This bill protects the little guy
  • Leman – Are you aware of the percent contingency?
    • I think its 10%

 

Mark Daniel, Texas Farm Bureau – For

  • I think 901 accomplishes what we have asked for

 

Walt Hagood, Texas Farm Bureau – For

  • Fairness is what we are asking for

 

Bill Wright, Rancher – For

  • Condemned twice over terms, not money
  • Verbal agreements were made, but then taken back, helped gain some of his money back once exposed
  • Good actors won’t be bothered by revisions

 

Heath Frantzen

  • Protecting private property rights is priority number one
  • Landowners never realize the full value of the land’s best purpose, eminent domain takes away our dreams
  • 901 needs an amendment to state that land should be valued to its highest and best use, takes into consideration all uses
  • Needs an amendment to give landowners unrestricted access to special commission award deposit, expenses are unrecoverable
  • Goal is to break landowners down financially so they can get lower value
  • Legal ethics and bribery happened in my case when my land was taken

 

John Griffith, Texas Farm Bureau – For

  • Voices support

 

Marty Berry – Against

  • Seems like you are going to legislate intelligence into people so they don’t take a low ball offer
  • A good deal is when you agree to something, I negotiated my deal and this will send it to the attorneys
  • Bad deals are like accepting the sticker price on a car with no questions asked
  • A high minimum stops projects, I like making good deals and don’t need government intervention

 

Lisa Kaufmann, Coalition for Critical Infrastructure – Against

  • Substitute is a step in the right direction and we are ready to work on it
  • Bills aren’t that far apart from each other

 

Thomas Zabel, Texas Pipeline Association – Against

  • 901 substitute and 2730 substitute aren’t very far apart
  • Inconsistencies in IOLs and FOLs that need to be solved
  • My firm represents 80% of the pipelines in Texas
  • Low Balls came from the Barnet Shell in oil and gas pipelines that cut through subdivisions and caused more havoc
  • Just because a special commissioner awards more doesn’t mean the original offer was a low ball
  • Commissioner hearings are a free for all generally speaking
  • Offer 10 to 20 times the appraised value because time is valuable and it avoids litigation
  • Settle up to 90% of offers on their own
  • If we made initial offers based on appraised value, they would get less
  • Unrealistic standards don’t help differences in appraiser opinions
  • Ready to address issues
  • Biedermann – How come you are so familiar with the bill?
    • 901 is essentially where we left off last session
  • Biedermann – We keep running in circles, if your offers are so great, why would they not the original offer?
    • I know many who are happy with the current system
  • Biedermann – It seems like the pipeline companies will save a lot of money?
    • But more cases will be litigated due to lower evaluations
  • Biedermann – How do you know it is going to be low considering the Farm Bureau is for this bill?
    • They know the values of relative properties
  • Biedermann – Then why are they upset with the initial offer?
    • It makes no sense, happy to incorporate their necessities and it is in the current bill
  • Biedermann – Then do it if you stand to make more money
  • Romero – It doesn’t really matter what the original offer is?
    • Yes
  • Romero – You could prove the average rate of mile per pipeline?
    • The last two lines were 10 to 20 times the appraised value
  • Romero – Is this the norm across most pipelines or because it was controversial?
    • Most had followed a uniform route
  • Romero – Would the landowners feel differently if it was CAD times 500%?
    • The problem lies with TxDOT, they had heartburn at 150% due to taxpayers
  • Romero – In terms of the process, you say there aren’t enough appraisers, do you think giving say ten times the value expedites the process?
    • I don’t think so, the pipeline companies do a project study of various types of land to get a value, landowners don’t get any additional benefit with the initial offer and it hurts the litigation and time costs for us
  • Romero – If you were to take the per linear costs, how great would the range of offers be?
    • There is not a great variance, most discrepancy comes from very different appraiser opinions when taken to trial
  • Spiller – We want to get something done sooner rather than later and appreciate your effort

 

Jaren Taylor, Association of Electric Companies of Texas – On

  • Workable framework to accomplish reform
  • We are not going in circles with regards to the electrics

 

Rep. Burns, Self – For

  • Initial offer won’t reduce final value
  • Most legislation passed from this House addresses bad actors

 

Withdraws Committee Substitute and Left Pending