By: Deshotel, et al. (Senate Sponsor - Kolkhorst) H.B. No. 2730
         (In the Senate - Received from the House May 13, 2021;
  May 18, 2021, read first time and referred to Committee on
  Jurisprudence; May 21, 2021, reported favorably by the following
  vote:  Yeas 5, Nays 0; May 21, 2021, sent to printer.)
Click here to see the committee vote
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the acquisition of real property by an entity with
  eminent domain authority and the regulation of easement or
  right-of-way agents.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 402.031, Government Code, is amended by
  amending Subsection (b) and adding Subsections (c-1), (e), and (f)
  to read as follows:
         (b)  The landowner's bill of rights must notify each property
  owner that the property owner has the right to:
               (1)  notice of the proposed acquisition of the owner's
  property;
               (2)  a bona fide good faith effort to negotiate by the
  entity proposing to acquire the property;
               (3)  an assessment of damages to the owner that will
  result from the taking of the property;
               (4)  a hearing under Chapter 21, Property Code,
  including a hearing on the assessment of damages; [and]
               (5)  an appeal of a judgment in a condemnation
  proceeding, including an appeal of an assessment of damages; and
               (6)  file a written complaint with the Texas Real
  Estate Commission under Section 1101.205, Occupations Code,
  regarding alleged misconduct by a registered easement or
  right-of-way agent acting on behalf of the entity exercising
  eminent domain authority.
         (c-1)  The statement must also include an addendum of the
  terms required for an instrument of conveyance under Section
  21.0114(c), Property Code, and the terms a property owner may
  negotiate under Section 21.0114(d), Property Code.
         (e)  At least once every two years, the attorney general
  shall:
               (1)  evaluate the landowner's bill of rights statement,
  including the addendum required by Subsection (c-1), for compliance
  with the requirements of this section, including the requirement
  under Subsection (d) that the statement be written in plain
  language designed to be easily understood by the average property
  owner; and
               (2)  subject to Subsection (f), make any change to the
  landowner's bill of rights statement and addendum that the attorney
  general determines necessary to comply with the requirements of
  this section, including making a change to the writing style of the
  statement or addendum necessary to improve compliance with
  Subsection (d).
         (f)  Before making any changes to the landowner's bill of
  rights statement under Subsection (e), the office of the attorney
  general shall:
               (1)  publish the proposed changes in the Texas
  Register; and
               (2)  accept public comment regarding the proposed
  statement for a reasonable period after the date the proposed
  statement is published under Subdivision (1).
         SECTION 2.  Section 1101.502(a), Occupations Code, is
  amended to read as follows:
         (a)  To be eligible to receive a certificate of registration
  or a renewal certificate under this subchapter, a person must:
               (1)  be, at the time of application:
                     (A) [(1)]  at least 18 years of age; and
                     (B) [(2)]  a citizen of the United States or a
  lawfully admitted alien; and
               (2)  successfully complete the required courses of
  study prescribed by this subchapter, including qualifying or
  continuing education requirements.
         SECTION 3.  Subchapter K, Chapter 1101, Occupations Code, is
  amended by adding Sections 1101.508 and 1101.509 to read as
  follows:
         Sec. 1101.508.  PROBATIONARY CERTIFICATE. (a) The
  commission may issue a probationary certificate of registration
  under this subchapter.
         (b)  The commission by rule shall adopt reasonable
  requirements for the issuance of a probationary certificate.
         Sec. 1101.509.  QUALIFYING AND CONTINUING EDUCATION
  REQUIREMENTS. (a) The commission by rule shall approve coursework
  that an applicant must successfully complete to be eligible for the
  issuance or renewal of a certificate of registration under this
  subchapter.
         (b)  An applicant for the issuance of an original certificate
  of registration shall submit evidence satisfactory to the
  commission that the applicant has completed at least 16 classroom
  hours of coursework approved by the commission in:
               (1)  the law of eminent domain, including the rights of
  property owners;
               (2)  appropriate standards of professionalism in
  contacting and conducting negotiations with property owners; and
               (3)  ethical considerations in the performance of
  right-of-way acquisition services.
         (c)  An applicant for the renewal of a certificate of
  registration shall submit evidence satisfactory to the commission
  that the applicant has, during the renewal period, completed at
  least 16 classroom hours of coursework approved by the commission
  that provides current information regarding:
               (1)  the subjects specified in Subsection (b); and
               (2)  other relevant subjects as prescribed by
  commission rule.
         SECTION 4.  Section 1101.653, Occupations Code, is amended
  to read as follows:
         Sec. 1101.653.  GROUNDS FOR SUSPENSION OR REVOCATION OF
  CERTIFICATE. The commission may suspend or revoke a certificate of
  registration issued under this chapter if the certificate holder:
               (1)  engages in dishonest dealing, fraud, unlawful
  discrimination, or a deceptive act;
               (2)  makes a misrepresentation;
               (3)  acts in bad faith;
               (4)  demonstrates untrustworthiness;
               (5)  fails to honor, within a reasonable time, a check
  issued to the commission after the commission has mailed a request
  for payment to the certificate holder's last known address
  according to the commission's records;
               (6)  fails to provide to a party to a transaction a
  written notice prescribed by the commission that:
                     (A)  must be given before the party is obligated
  to sell, buy, lease, or transfer a right-of-way or easement; and
                     (B)  contains:
                           (i)  the name of the certificate holder;
                           (ii)  the certificate number;
                           (iii)  the name of the person the
  certificate holder represents;
                           (iv)  a statement advising the party that
  the party may seek representation from a lawyer or broker in the
  transaction; and
                           (v)  a statement generally advising the
  party that the right-of-way or easement may affect the value of the
  property; [or]
               (7)  directly or indirectly accepts a financial
  incentive to make an initial offer that the certificate holder
  knows or should know is lower than the adequate compensation
  required under the Texas Constitution; or
               (8)  disregards or violates this chapter or a
  commission rule relating to certificate holders.
         SECTION 5.  Subchapter B, Chapter 21, Property Code, is
  amended by adding Section 21.0101 to read as follows:
         Sec. 21.0101.  EFFECT OF CHAPTER ON SURVEY ACCESS RIGHTS.
  Nothing in this chapter prevents an entity from seeking survey
  access rights as provided by law.
         SECTION 6.  Section 21.0113(b), Property Code, is amended to
  read as follows:
         (b)  An entity with eminent domain authority has made a bona
  fide offer if:
               (1)  an initial offer is made in writing to a property
  owner that includes:
                     (A)  a copy of the landowner's bill of rights
  statement prescribed by Section 402.031, Government Code,
  including the addendum prescribed by Section 402.031(c-1),
  Government Code, if applicable;
                     (B)  a statement, in bold print and a larger font
  than the other portions of the offer, indicating whether the
  compensation being offered includes:
                           (i)  damages to the remainder, if any, of the
  property owner's remaining property; or
                           (ii)  an appraisal of the property,
  including damages to the remainder, if any, prepared by a certified
  appraiser certified to practice as a certified general appraiser
  under Chapter 1103, Occupations Code;
                     (C)  an instrument of conveyance, provided that if
  the entity is a private entity as defined by Section 21.0114(a), the
  instrument must comply with Section 21.0114, as applicable, unless:
                           (i)  the entity has previously provided an
  instrument complying with Section 21.0114;
                           (ii)  the property owner desires to use an
  instrument different than one complying with Section 21.0114 and
  consents in writing to use a different instrument; or
                           (iii)  the property owner provided the
  entity with the instrument prior to the issuance of the initial
  offer; and
                     (D)  the name and telephone number of a
  representative of the entity who is:
                           (i)  an employee of the entity;
                           (ii)  an employee of an affiliate providing
  services on behalf of the entity;
                           (iii)  a legal representative of the entity;
  or
                           (iv)  if the entity does not have employees,
  an individual designated to represent the day-to-day operations of
  the entity;
               (2)  a final offer is made in writing to the property
  owner;
               (3)  the final offer is made on or after the 30th day
  after the date on which the entity makes a written initial offer to
  the property owner;
               (4)  before making a final offer, the entity obtains a
  written appraisal from a certified appraiser of the value of the
  property being acquired and the damages, if any, to any of the
  property owner's remaining property;
               (5)  the final offer is equal to or greater than the
  amount of the written appraisal obtained by the entity;
               (6)  the following items are included with the final
  offer or have been previously provided to the owner by the entity:
                     (A)  a copy of the written appraisal;
                     (B)  a copy of the deed, easement, or other
  instrument conveying the property sought to be acquired; and
                     (C)  the landowner's bill of rights statement
  prescribed by Section 21.0112; and
               (7)  the entity provides the property owner with at
  least 14 days to respond to the final offer and the property owner
  does not agree to the terms of the final offer within that period.
         SECTION 7.  Subchapter B, Chapter 21, Property Code, is
  amended by adding Section 21.0114 to read as follows:
         Sec. 21.0114.  REQUIRED TERMS FOR INSTRUMENTS OF CONVEYANCE
  OF CERTAIN EASEMENTS. (a) In this section, "private entity":
               (1)  means:
                     (A)  a for-profit entity, as defined by Section
  1.002, Business Organizations Code, however organized, including
  an affiliate or subsidiary, authorized to exercise the power of
  eminent domain to acquire private property for public use; or
                     (B)  a corporation organized under Chapter 67,
  Water Code, that has a for-profit entity, however organized, as the
  sole or majority member; and
               (2)  does not include an entity governed by the Natural
  Gas Act (15 U.S.C. Section 717 et seq.), unless the entity seeks to
  acquire property under this chapter.
         (b)  This section:
               (1)  applies only to a deed, agreement, or other
  instrument of conveyance for a pipeline right-of-way easement or an
  electric transmission line right-of-way easement that is included
  with an offer made under this chapter to acquire a property interest
  for a public use; and
               (2)  does not apply in relation to:
                     (A)  a pipeline or appurtenance that is:
                           (i)  downstream of the point where natural
  gas is measured and custody is transferred from a transmission
  pipeline to a gas local distribution company for distribution to
  end-use customers; or
                           (ii)  at a location where a gas utility taps
  a transmission pipeline to a city gate, provided that the pipeline
  does not exceed 100 feet; or
                     (B)  an electric power line that operates below 60
  kilovolts.
         (c)  Except as provided by Subsections (d), (e), and (f), a
  deed, agreement, or other instrument of conveyance provided to a
  property owner by a private entity with eminent domain authority to
  acquire the property interest to be conveyed must address the
  following general terms, as applicable:
               (1)  if the instrument conveys a pipeline right-of-way
  easement or an easement related to pipeline appurtenances:
                     (A)  the maximum number of pipelines that may be
  installed under the instrument for a pipeline right-of-way;
                     (B)  a description of the types of pipeline
  appurtenances that are authorized to be installed under the
  instrument for pipeline-related appurtenances, such as pipes,
  valves, compressors, pumps, meters, pigging stations, dehydration
  facilities, electric facilities, communication facilities, and any
  other appurtenances that may be necessary or desirable in
  connection with a pipeline;
                     (C)  the maximum diameter, excluding any
  protective coating or wrapping, of each pipeline to be initially
  installed under the instrument for a pipeline right-of-way;
                     (D)  the type or category of substances permitted
  to be transported through each pipeline to be installed under the
  instrument;
                     (E)  a general description of any aboveground
  equipment or facility the private entity intends to install,
  maintain, or operate under the instrument for a pipeline easement
  on the surface of the easement;
                     (F)  a description or illustration of the location
  of the easement, including a metes and bounds or centerline
  description, plat, or aerial or other map-based depiction of the
  location of the easement on the property;
                     (G)  the maximum width of the easement under the
  instrument;
                     (H)  the minimum depth at which each pipeline to
  be installed under the instrument for a pipeline right-of-way will
  initially be installed;
                     (I)  a provision identifying whether the private
  entity intends to double-ditch areas of the pipeline easement that
  are not installed by boring or horizontal directional drilling;
                     (J)  a provision requiring the private entity to
  provide written notice to the property owner at the last known
  address of the person in whose name the property is listed on the
  most recent tax roll of any taxing unit authorized to levy property
  taxes against the property if and when the private entity assigns
  the interest under the instrument to another entity, provided that
  the provision does not require notice by the private entity for
  assignment to an affiliate or to a successor through merger,
  consolidation, or other sale or transfer of all or substantially
  all of its assets and businesses;
                     (K)  a provision describing whether the easement
  rights are exclusive or nonexclusive;
                     (L)  a provision limiting the private entity's
  right to grant to a third party access to the easement area for a
  purpose that is not related to the construction, safety, repair,
  maintenance, inspection, replacement, operation, or removal of
  each pipeline to be installed under the instrument and of pipeline
  appurtenances to be installed under the instrument;
                     (M)  a provision regarding the property owner's
  right to recover actual monetary damages arising from the
  construction and installation of each pipeline to be installed
  under the instrument, or a statement that the consideration for the
  instrument includes any monetary damages arising from the
  construction and installation of each pipeline to be installed
  under the instrument;
                     (N)  a provision regarding the property owner's
  right after initial construction and installation of each pipeline
  to be installed under the instrument to actual monetary damages
  arising from the repair, maintenance, inspection, replacement,
  operation, or removal of each pipeline to be installed under the
  instrument, or a statement that consideration for the instrument
  includes any monetary damages arising from the repair, maintenance,
  inspection, replacement, operation, or removal of each pipeline to
  be installed under the instrument;
                     (O)  a provision:
                           (i)  regarding the removal, cutting, use,
  repair, and replacement of gates and fences that cross the easement
  or that will be used by the private entity under the instrument; or
                           (ii)  providing for the payment for any
  damage caused by the private entity to gates and fences described by
  Subparagraph (i), if any, to the extent that the gates or fences are
  not restored or paid for as part of the consideration paid for the
  instrument;
                     (P)  a provision:
                           (i)  regarding the private entity's
  obligation to restore the pipeline easement area and the property
  owner's remaining property, if any, used by the private entity to as
  near to original condition as is reasonably practicable and to
  maintain the easement in a manner consistent with the purposes for
  which the easement will be used by the private entity under the
  instrument; or
                           (ii)  providing for the private entity to
  reimburse the property owner for actual monetary damages incurred
  by the property owner that arise from damage to the pipeline
  easement area or the property owner's remaining property, if any,
  to the extent caused by the private entity and not restored or paid
  for as part of the consideration for the instrument; and
                     (Q)  a provision describing the private entity's
  rights of ingress, egress, entry, and access on, to, over, and
  across the property owner's property under the instrument;
               (2)  if the instrument conveys an electric transmission
  line right-of-way easement:
                     (A)  a general description of the uses of the
  surface of the property to be encumbered by the easement the entity
  intends to acquire;
                     (B)  a description or illustration of the location
  of the easement, including a metes and bounds or centerline
  description, plat, or aerial or other map-based depiction of the
  location of the easement on the property;
                     (C)  the maximum width of the easement under the
  instrument;
                     (D)  the manner in which the entity will access
  the easement under the instrument;
                     (E)  a provision limiting the private entity's
  right to grant to a third party access to the easement area for a
  purpose that is not related to the construction, safety, repair,
  maintenance, inspection, replacement, operation, or removal of the
  electric and appurtenant facilities installed under the
  instrument;
                     (F)  a provision regarding the property owner's
  right to recover actual monetary damages arising from the
  construction, operation, repair, maintenance, inspection,
  replacement, and future removal of lines and support facilities
  after initial construction in the easement, if any, or a statement
  that the initial consideration for the easement instrument includes
  such damages;
                     (G)  a provision:
                           (i)  regarding the removal, cutting, use,
  repair, and replacement of gates and fences that cross the easement
  or that will be used by the private entity under the instrument; or
                           (ii)  providing for the payment for any
  damage caused by the private entity to gates and fences described by
  Subparagraph (i), if any, to the extent that the gates or fences are
  not restored or paid for as part of the consideration for the
  instrument;
                     (H)  a provision regarding the private entity's
  obligation to restore the easement area and the property owner's
  remaining property to the easement area's and the remaining
  property's original contours and grades, to the extent reasonably
  practicable, unless the safety or operational needs of the private
  entity and the electric facilities would be impaired, and:
                           (i)  a provision regarding the entity's
  obligation to restore the easement area and the property owner's
  remaining property following any future damages directly
  attributed to the use of the easement by the private entity, to the
  extent reasonably practicable, unless the safety or operational
  needs of the private entity and the electric facilities would be
  impaired; or
                           (ii)  a provision that the consideration for
  the easement instrument includes damages as described by
  Subparagraph (i) to the easement area and the property owner's
  remaining property;
                     (I)  a provision describing whether the easement
  rights are exclusive, nonexclusive, or otherwise limited under the
  terms of the instrument; and
                     (J)  a prohibition against the assignment of the
  entity's interest in the property to an assignee that will not
  operate as a utility subject to the jurisdiction of the Public
  Utility Commission of Texas or the Federal Energy Regulatory
  Commission without written notice to the property owner at the last
  known address of the person in whose name the property is listed on
  the most recent tax roll of any taxing unit authorized to levy
  property taxes against the property;
               (3)  a prohibition against any use by the private
  entity of the property rights being conveyed by the instrument,
  other than a use stated in the instrument, without the express
  written consent of the property owner; and
               (4)  a provision that the terms of the instrument will
  bind the successors and assigns of the property owner and private
  entity.
         (d)  A private entity shall notify the property owner that
  the property owner may negotiate for the following general terms to
  be included in a deed, agreement, or other instrument of conveyance
  described by Subsection (c):
               (1)  a provision regarding the property owner's right
  to negotiate to recover damages, or a statement that the
  consideration for the instrument includes damages, for:
                     (A)  damage to certain vegetation; and
                     (B)  the income loss from disruption of existing
  agricultural production or existing leases based on verifiable loss
  or lease payments; and
               (2)  a provision:
                     (A)  requiring the private entity to maintain at
  all times while the private entity uses the easement, including
  during construction and operations on the easement, commercial
  liability insurance or self-insurance:
                           (i)  issued by an insurer authorized to
  issue liability insurance in this state, if maintaining commercial
  liability insurance; and
                           (ii)  insuring the property owner against
  liability for personal injuries and property damage sustained by
  any person to the extent caused by the negligence of the private
  entity or the private entity's agents or contractors and to the
  extent allowed by law; or
                     (B)  if the private entity is subject to the
  electric transmission cost-of-service rate jurisdiction of the
  Public Utility Commission of Texas or has a net worth of at least
  $25 million, requiring the private entity to maintain
  self-insurance or commercial liability insurance at levels
  approved by the Public Utility Commission of Texas in the entity's
  most recent transmission cost-of-service base rate proceeding.
         (e)  A private entity or the property owner may, after the
  entity provides an instrument in compliance with Section
  21.0113(b)(1)(C):
               (1)  negotiate for and agree to terms and conditions
  not required by Subsection (c), including terms and conditions that
  differ from or are not included in a subsequent condemnation
  petition; and
               (2)  negotiate for and agree to a deed, agreement, or
  other instrument of conveyance that does not include or includes
  terms that differ from the terms required by Subsection (c).
         (f)  Except as provided by this subsection, this section does
  not prohibit a private entity or the property owner from
  negotiating for or agreeing to amend, alter, or omit the terms
  required by Subsection (c) at any time after the private entity
  first provides a deed, agreement, or other instrument containing
  the required general terms to the property owner, whether before or
  at the same time that the entity makes an initial offer to the
  property owner. A private entity that changes the terms required by
  Subsection (c) must provide a copy of the amended deed, agreement,
  or other instrument of conveyance to the property owner not later
  than the seventh day before the date the private entity files a
  condemnation petition relating to the property unless the parties
  agree in writing to waive the notice.
         (g)  A private entity that changes or amends a deed,
  agreement, or other instrument has satisfied the requirements of
  Section 21.0113 if the requirements were previously satisfied as
  part of the initial offer made in accordance with Section
  21.0113(b)(1)(C).
         SECTION 8.  Section 21.012(c), Property Code, is amended to
  read as follows:
         (c)  An entity that files a petition under this section must
  concurrently provide a copy of the petition to the property owner by
  certified mail, return receipt requested, and first class mail. If
  the entity has received written notice that the property owner is
  represented by counsel, the entity must also concurrently provide a
  copy of the petition to the property owner's attorney by first class
  mail, commercial delivery service, fax, or e-mail.
         SECTION 9.  Section 21.014, Property Code, is amended by
  amending Subsection (a) and adding Subsection (d) to read as
  follows:
         (a)  The judge of a court in which a condemnation petition is
  filed or to which an eminent domain case is assigned shall, not
  later than the 30th calendar day after the petition is filed,
  appoint three disinterested real property owners who reside in the
  county as special commissioners to assess the damages of the owner
  of the property being condemned and appoint two disinterested real
  property owners who reside in the county as alternate special
  commissioners. The judge appointing the special commissioners
  shall give preference to persons agreed on by the parties, if any,
  before the court appoints the special commissioners. The judge
  shall provide the names and contact information of the special
  commissioners and alternate special commissioners to the parties.
  Each [each] party shall have until the later of 10 calendar days
  after the date of the order appointing the special commissioners or
  20 days after the date the petition was filed [a reasonable period]
  to strike one of the three special commissioners [appointed by the
  judge]. Any strike of a special commissioner must be filed
  electronically with electronic service provided concurrently to
  any represented party and first class mail service provided
  concurrently to any other party. If a person fails to serve as a
  special commissioner or is struck by a party to the suit in
  accordance with this subsection, an alternate special commissioner
  shall serve as a replacement for the special commissioner based on
  the order that the alternate special commissioners are listed in
  the initial order of appointment. If a party exercises a strike,
  the other party may, by the later of the third day after the date of
  filing of the initial strike or the date of the initial strike
  deadline, strike a special commissioner from the resulting panel,
  provided the other party has not earlier exercised a strike[, the
  judge shall appoint a replacement].
         (d)  Each party in an eminent domain proceeding is entitled
  to a copy of the court's order appointing special commissioners
  under Subsection (a). The court must promptly provide the signed
  order to the party initiating the condemnation proceeding and that
  party must provide a copy of the signed order to the property owner
  and each other party by certified mail, return receipt requested.
  If the entity has received written notice that the property owner is
  represented by counsel, the party initiating the condemnation
  proceeding must concurrently provide a copy of the signed order to
  the property owner's attorney by first class mail, commercial
  delivery service, fax, or e-mail.
         SECTION 10.  Not later than September 1, 2022, the Texas Real
  Estate Commission shall adopt rules necessary to implement the
  changes in law made by this Act to Chapter 1101, Occupations Code.
         SECTION 11.  Notwithstanding Section 1101.502(a),
  Occupations Code, as amended by this Act, and Section 1101.509,
  Occupations Code, as added by this Act, a person who has submitted
  an application for the issuance or renewal of a certificate of
  registration as an easement or right-of-way agent before January 1,
  2023, is not subject to the education requirements of those
  provisions until the first renewal of the certificate after March
  1, 2023.
         SECTION 12.  (a) Except as provided by Subsection (b) of
  this section, the changes in law made by this Act to Chapter 21,
  Property Code, apply to the acquisition of real property in
  connection with an initial offer made under Chapter 21, Property
  Code, on or after the effective date of this Act.  An acquisition of
  real property in connection with an initial offer made under
  Chapter 21, Property Code, before the effective date of this Act is
  governed by the law applicable to the acquisition immediately
  before the effective date of this Act, and that law is continued in
  effect for that purpose.
         (b)  The changes in law made by this Act to Chapter 21,
  Property Code, do not apply to an electric transmission project for
  which the Public Utility Commission of Texas has issued a final and
  appealable order that amends a certificate of convenience and
  necessity before the effective date of this Act.
         SECTION 13.  This Act takes effect January 1, 2022.
 
  * * * * *