81R2148 UM-D

By: Orr H.B. No. 4

A BILL TO BE ENTITLED

AN ACT

relating to eminent domain, including certain limitations, procedures, and standards relating to the use of eminent domain.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 2206, Government Code, is amended to read as follows:

CHAPTER 2206. [LIMITATIONS ON USE OF] EMINENT DOMAIN

SUBCHAPTER A. LIMITATION ON PURPOSE AND USE OF PROPERTY ACQUIRED

THROUGH EMINENT DOMAIN

Sec. 2206.001. LIMITATION ON EMINENT DOMAIN FOR PRIVATE PARTIES OR ECONOMIC DEVELOPMENT PURPOSES. (a) This section applies to the use of eminent domain under the laws of this state, including a local or special law, by any governmental or private entity, including:

(1) a state agency, including an institution of higher education as defined by Section 61.003, Education Code;

(2) a political subdivision of this state; or

(3) a corporation created by a governmental entity to act on behalf of the entity.

(b) A governmental or private entity may not take private property through the use of eminent domain if the taking:

(1) confers a private benefit on a particular private party through the use of the property;

(2) is for a public use that is merely a pretext to confer a private benefit on a particular private party; or

(3) is for economic development purposes, unless the economic development is a secondary purpose resulting from municipal community development or municipal urban renewal activities to eliminate an existing affirmative harm on society from slum or blighted areas under:

(A) Chapter 373 or 374, Local Government Code, other than an activity described by Section 373.002(b)(5), Local Government Code; or

(B) Section 311.005(a)(1)(I), Tax Code.

(c) This section does not affect the authority of an entity authorized by law to take private property through the use of eminent domain for:

(1) transportation projects, including, but not limited to, railroads, airports, or public roads or highways;

(2) entities authorized under Section 59, Article XVI, Texas Constitution, including:

(A) port authorities;

(B) navigation districts; and

(C) any other conservation or reclamation districts that act as ports;

(3) water supply, wastewater, flood control, and drainage projects;

(4) public buildings, hospitals, and parks;

(5) the provision of utility services;

(6) a sports and community venue project approved by voters at an election held on or before December 1, 2005, under Chapter 334 or 335, Local Government Code;

(7) the operations of:

(A) a common carrier pipeline [subject to Chapter 111, Natural Resources Code, and Section B(3)(b), Article 2.01, Texas Business Corporation Act]; or

(B) an energy transporter, as that term is defined by Section 186.051, Utilities Code;

(8) a purpose authorized by Chapter 181, Utilities Code;

(9) underground storage operations subject to Chapter 91, Natural Resources Code;

(10) a waste disposal project; or

(11) a library, museum, or related facility and any infrastructure related to the facility.

(d) This section does not affect the authority of a governmental entity to condemn a leasehold estate on property owned by the governmental entity.

(e) The determination by the governmental or private entity proposing to take the property that the taking does not involve an act or circumstance prohibited by Subsection (b) does not create a presumption with respect to whether the taking involves that act or circumstance.

SUBCHAPTER B. AUTHORIZATION TO INITIATE EMINENT DOMAIN PROCEEDING

Sec. 2206.051. APPLICABILITY OF SUBCHAPTER. This subchapter applies only to the use of eminent domain under the laws of this state by a governmental entity.

Sec. 2206.052. VOTE ON USE OF EMINENT DOMAIN. (a) Before a governmental entity initiates a condemnation proceeding by filing a petition under Chapter 21, Property Code, the entity must authorize the initiation of the condemnation proceedings at an open public meeting by a record vote. Except as provided by Subsection (b), a separate record vote must be taken for each unit of property for which condemnation proceedings are to be initiated.

(b) For the purposes of Subsection (a), if two or more units of real property are owned by the same person, the governmental entity may treat those units of property as one unit of property.

(c) The motion to adopt an ordinance, resolution, or order authorizing the initiation of condemnation proceedings under Chapter 21, Property Code, must be made in a form substantially similar to the following: "I move that the (name of governmental entity) authorize the use of the power of eminent domain to acquire (describe the property) for (describe the public use)."

SUBCHAPTER C. EXPIRATION OF CERTAIN EMINENT DOMAIN AUTHORITY

Sec. 2206.101. REPORT OF EMINENT DOMAIN AUTHORITY; EXPIRATION OF AUTHORITY. (a) Not later than December 31, 2010, an entity, including a private entity, authorized by the state by a general or special law to exercise the power of eminent domain shall submit to the comptroller of public accounts a letter stating that the entity is authorized by the state to exercise the power of eminent domain and identifying the provision or provisions of law that grant the entity that authority. The entity must send the letter by certified mail, return receipt requested.

(b) The authority of an entity to exercise the power of eminent domain expires on September 1, 2011, unless the entity submits a letter in accordance with Subsection (a).

(c) Not later than March 1, 2011, the comptroller shall submit to the governor, the lieutenant governor, the speaker of the house of representatives, the appropriate standing committees of the senate and the house of representatives, and the Texas Legislative Council a report that contains:

(1) the name of each entity that submitted a letter in accordance with this section; and

(2) a corresponding list of the provisions granting eminent domain authority as identified by each entity that submitted a letter.

(d) The Texas Legislative Council shall prepare for consideration by the 83rd Legislature, Regular Session, a nonsubstantive revision of the statutes of this state as necessary to reflect the state of the law after the expiration of an entity's eminent domain authority effective under Subsection (b).

SECTION 2. Section 21.0111, Property Code, is amended to read as follows:

Sec. 21.0111. DISCLOSURE OF CERTAIN INFORMATION REQUIRED; INITIAL OFFER. (a) An [A governmental] entity with eminent domain authority that wants to acquire real property for a public use shall, by certified mail, return receipt requested, disclose to the property owner at the time an offer to purchase or lease the property is made any and all [existing] appraisal reports produced or acquired by the [governmental] entity relating specifically to the owner's property and used in determining the final valuation offer.

(b) A property owner shall disclose to the [acquiring governmental] entity seeking to acquire the property any and all current [existing] appraisal reports produced or acquired by the property owner relating specifically to the owner's property and used in determining the owner's opinion of value. Such disclosure shall take place not later than the earlier of:

(1) the 10th day after the date of [within 10 days of] receipt of an appraisal report; or

(2) the day before the date of a special commissioners hearing if an existing appraisal report is to be used at the hearing.

(c) The property owner's failure to obtain or disclose an appraisal report as required by Subsection (b) does not affect the authority of the special commissioners to admit other evidence relating specifically to the owner's property [reports but no later than 10 days prior to the special commissioner's hearing].

(d) The initial offer to purchase made by the entity must also include:

(1) a copy of this section and Section 21.0114;

(2) a written estimate of:

(A) the fair market value of the property the entity is offering to acquire; and

(B) the amount of damages to the property owner's remaining property, if any, that will result from the acquisition; and

(3) a statement that the property owner has a right to make a written request to the entity for:

(A) an appraisal of the property, at the entity's expense, in accordance with Section 21.0114; and

(B) certain information regarding transactions involving the entity for nearby property the entity intends to use for a similar purpose.

(e) A property owner may submit a written request to the entity for each appraisal report completed, offer to purchase made, and negotiated purchase price paid by the entity for property that is wanted for a purpose that relates to the purpose for which the entity seeks to acquire the property owner's property and:

(1) that is adjacent to the property owner's property;

(2) that is adjacent to property adjacent to the property owner's property; or

(3) any point on the boundary of which is located one mile or less from any point on the boundary of the property owner's property.

(f) If, at the time the request under Subsection (e) is made, a special commissioners hearing has been set regarding the condemnation of the property, the request must be made not later than the 15th day before the date set for the hearing.

(g) The entity shall make the disclosures required by Subsection (e) in writing by certified mail, return receipt requested, or by hand delivery to the property owner not later than the earlier of:

(1) the 10th day after the date of the receipt of the request; or

(2) the 10th day before the date of any scheduled special commissioners hearing.

(h) The condemning entity shall supplement a disclosure made under this section with any new information received by the condemning entity that is required to be disclosed under this section not later than the 10th day after the date the entity receives the information.

(i) A subsequent bona fide purchaser for value from the acquiring [governmental] entity may conclusively presume that the requirement of this section has been met. This section does not apply to acquisitions of real property for which an [a governmental] entity does not have eminent domain authority.

SECTION 3. Subchapter B, Chapter 21, Property Code, is amended by adding Sections 21.0113, 21.0114, and 21.0115 to read as follows:

Sec. 21.0113. FINAL OFFER. (a) An entity with eminent domain authority that wants to acquire real property for a public use shall provide to the property owner at least two written offers proposing a purchase or lease of the property, as the entity determines in good faith is appropriate in accordance with Section 21.0115. The last offer the entity intends to make to the property owner shall be in writing and be designated on its face as the entity's final offer.

(b) This section does not require the entity's initial offer and final offer to differ in substance.

Sec. 21.0114. APPRAISAL REQUEST. (a) Subject to Subsection (b), after a property owner receives an offer from an entity with eminent domain authority proposing to acquire the owner's property for a public use, but not later than the 20th day after the date the property owner receives an offer designated as a final offer under Section 21.0113, the property owner may, by certified mail, return receipt requested, request that the entity procure an appraisal report of the property produced and certified by an independent and certified appraiser chosen by the property owner. The entity shall pay the reasonable cost of the appraisal report and provide the report to the property owner not later than the 30th day after the date the entity receives a request under this subsection.

(b) An entity is not required to provide more than one appraisal report under this section.

Sec. 21.0115. GOOD FAITH NEGOTIATION REQUIRED. (a) Before an entity with eminent domain authority may file a condemnation petition under this chapter, the entity shall negotiate in good faith to acquire the property through a voluntary purchase or lease agreement.

(b) In determining whether an entity has negotiated in good faith to acquire a property through a voluntary purchase or lease agreement, the court shall consider:

(1) whether the entity has complied with applicable disclosure provisions and procedural requirements, including Sections 21.0111-21.0114;

(2) whether the entity has provided the property owner with a written initial offer and a written final offer to acquire the property; and

(3) whether an offer provided by the entity to the property owner is a good faith offer that is not arbitrary or capricious and is based on a reasonably thorough investigation and honest assessment of the fair and reasonable compensation for acquisition of the property.

(c) For purposes of this section, evidence that an entity with eminent domain authority failed to disclose or provide information required to be disclosed under Section 21.0111, 21.0112, or 21.0114 is prima facie evidence that the entity failed to negotiate in good faith to acquire the property through a voluntary purchase or lease agreement.

SECTION 4. Section 21.012, Property Code, is amended to read as follows:

Sec. 21.012. CONDEMNATION PETITION. (a) If an entity [the United States, this state, a political subdivision of this state, a corporation] with eminent domain authority[, or an irrigation, water improvement, or water power control district created by law] wants to acquire real property for public use but is unable to agree with the owner of the property on the amount of damages, the [condemning] entity may begin a condemnation proceeding by filing a petition in the proper court.

(b) The petition must:

(1) describe the property to be condemned;

(2) state with specificity the public purpose for which the entity intends to use the property;

(3) state the name of the owner of the property if the owner is known;

(4) state that the entity and the property owner are unable to agree on the damages after negotiating in good faith; and

(5) if applicable, state that the entity provided the property owner with the landowner's bill of rights statement in accordance with Section 21.0112.

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 appoint three disinterested real property owners [freeholders] who reside in the county as special commissioners to assess the damages of the owner of the property being condemned. The judge appointing the special commissioners shall give preference to persons agreed on by the parties. The judge shall provide each party a reasonable period to strike one of the three commissioners appointed by the judge. If a person fails to serve as a commissioner or is struck by a party to the suit, the judge shall [may] appoint a replacement.

SECTION 6. Section 21.015(a), Property Code, is amended to read as follows:

(a) The special commissioners in an eminent domain proceeding shall promptly schedule a hearing for the parties at the earliest practical time but may not schedule a hearing to assess damages before the 20th day after the date the special commissioners were appointed. The special commissioners shall schedule a hearing for the parties [and] at a place that is as near as practical to the property being condemned or at the county seat of the county in which the proceeding is being held.

SECTION 7. Section 21.016(b), Property Code, is amended to read as follows:

(b) Notice of the hearing must be served on a party not later than the 20th [11th] day before the day set for the hearing. A person competent to testify may serve the notice.

SECTION 8. Section 21.023, Property Code, is amended to read as follows:

Sec. 21.023. DISCLOSURE OF INFORMATION REQUIRED AT TIME OF ACQUISITION. An [A governmental] entity with eminent domain authority shall disclose in writing to the property owner, at the time of acquisition of the property through eminent domain, that:

(1) the owner or the owner's heirs, successors, or assigns may be [are] entitled to:

(A) repurchase the property under Subchapter E [if the public use for which the property was acquired through eminent domain is canceled before the 10th anniversary of the date of acquisition]; or

(B) request from the entity certain information relating to the use of the property and any actual progress made toward that use; and

(2) the repurchase price is the price paid to the owner by the entity at the time the entity acquired the property through eminent domain [fair market value of the property at the time the public use was canceled].

SECTION 9. The heading to Section 21.047, Property Code, is amended to read as follows:

Sec. 21.047. ASSESSMENT OF COSTS AND FEES.

SECTION 10. Section 21.047, Property Code, is amended by adding Subsection (d) to read as follows:

(d) If a court hearing a suit under this chapter finds that the condemnor did not negotiate in good faith to acquire the property in accordance with Section 21.0115, the court shall order the condemnor to pay:

(1) all costs as provided by Subsection (a); and

(2) all reasonable attorney's fees and other professional fees incurred by the owner.

SECTION 11. Subchapter E, Chapter 21, Property Code, is amended to read as follows:

SUBCHAPTER E. REPURCHASE OF REAL PROPERTY FROM CONDEMNING

[GOVERNMENTAL] ENTITY

Sec. 21.101. RIGHT OF REPURCHASE [APPLICABILITY]. (a) A person from whom [Except as provided in Subsection (b), this subchapter applies only to] a real property interest is acquired by an [a governmental] entity through eminent domain for a public use, or that person's heirs, successors, or assigns, is entitled to repurchase the property as provided by this subchapter if:

(1) the public use for which the property was acquired through eminent domain is [that was] canceled;

(2) no actual progress is made toward the public use for which the property was acquired between the date of acquisition and the 10th anniversary of that date; or

(3) the property becomes unnecessary for the public use for which the property was acquired [before the 10th anniversary of the date of acquisition].

(b) In this section, "actual progress" means the completion of two or more of the following actions:

(1) the performance of a significant amount of labor to develop the property or other property acquired for the same public use project for which the property owner's property was acquired;

(2) the furnishing of a significant amount of materials to develop the property or other property acquired for the same public use project for which the property owner's property was acquired;

(3) the hiring of and performance of a significant amount of work by an architect, engineer, or surveyor to prepare a plan or plat that includes the property or other property acquired for the same public use project for which the property owner's property was acquired;

(4) application for state or federal funds to develop the property or other property acquired for the same public use project for which the property owner's property was acquired; or

(5) the acquisition of a tract or parcel of real property adjacent to the property for the same public use project for which the owner's property was acquired [This subchapter does not apply to a right-of-way under the jurisdiction of:

[(1) a county;

[(2) a municipality; or

[(3) the Texas Department of Transportation].

(c) A district court may determine all issues in any suit regarding the repurchase of a real property interest acquired through eminent domain by the former property owner or the owner's heirs, successors, or assigns.

Sec. 21.102. NOTICE TO PREVIOUS PROPERTY OWNER REQUIRED [AT TIME OF CANCELLATION OF PUBLIC USE]. Not later than the 180th day after the date an entity that acquired a real property interest through eminent domain determines that the former property owner is entitled to repurchase the property under Section 21.101 [of the cancellation of the public use for which real property was acquired through eminent domain from a property owner under Subchapter B], the [governmental] entity shall send by certified mail, return receipt requested, to the property owner or the owner's heirs, successors, or assigns a notice containing:

(1) an identification, which is not required to be a legal description, of the property that was acquired;

(2) an identification of the public use for which the property had been acquired and a statement that:

(A) the public use has been canceled;

(B) no actual progress was made toward the public use; or

(C) the property has become unnecessary for the public use; and

(3) a description of the person's right under this subchapter to repurchase the property.

Sec. 21.1021. REQUESTS FOR INFORMATION REGARDING CONDEMNED PROPERTY. (a) On or after the 10th anniversary of the date on which real property was acquired by an entity through eminent domain, a property owner or the owner's heirs, successors, or assigns may request that the condemning entity make a determination and provide a statement and other relevant information regarding:

(1) whether the public use for which the property was acquired has been canceled;

(2) whether any actual progress was made toward the public use between the date of acquisition and the 10th anniversary of that date, including an itemized description of the progress made, if applicable; and

(3) whether the property has become unnecessary for the public use of the property.

(b) A request under this section must contain sufficient detail to allow the entity to identify the specific tract of land in relation to which the information is sought.

(c) Not later than the 90th day following the receipt of the request for information, the entity shall send a written response by certified mail, return receipt requested, to the requestor.

Sec. 21.103. RESALE OF PROPERTY; PRICE. (a) Not later than the 180th day after the date of the postmark on a [the] notice sent under Section 21.102 or a response to a request made under Section 21.1021 that indicates that the property owner or the owner's heirs, successors, or assigns is entitled to repurchase the property interest in accordance with Section 21.101, the property owner or the owner's heirs, successors, or assigns must notify the [governmental] entity of the person's intent to repurchase the property interest under this subchapter.

(b) As soon as practicable after receipt of a notice of intent to repurchase [the notification] under Subsection (a), the [governmental] entity shall offer to sell the property interest to the person for the price paid to the owner by the entity at the time the entity acquired the property through eminent domain [fair market value of the property at the time the public use was canceled]. The person's right to repurchase the property expires on the 90th day after the date on which the [governmental] entity makes the offer.

SECTION 12. The changes in law made by Chapter 2206, Government Code, and Chapter 21, Property Code, as amended by this Act, apply only to a condemnation proceeding in which the petition is filed on or after the effective date of this Act and to any property condemned through the proceeding. A condemnation proceeding in which the petition is filed before the effective date of this Act and any property condemned through the proceeding is governed by the law in effect immediately before that date, and that law is continued in effect for that purpose.

SECTION 13. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.