The Texas Legislature approved a bill early Thursday that will revise eminent domain negotiations between landowners and companies — such as railroads, pipeline and utility companies — that are seeking to condemn land, requiring that landowners be given the terms of the contract up front, as well as more information about the eminent domain process.
After six years of heated negotiations between groups that represent landowners and the groups that represent big pipeline, utility, railroad, and oil and gas companies, the Legislature passed a limited version of a bill that failed in 2019.
The House approved the legislation on May 13. The Senate approved the bill unanimously in the early hours of Thursday morning; it now goes to Gov. Greg Abbott for his consideration.
Companies would also be required under the bill to restore the surrounding area to as close to the original condition as possible and compensate the landowner for damages to the surrounding land that isn’t restored.
State law currently offers few protections for property owners after a company notifies state regulators of its intent to build; the company must compensate the owner for the land, but it isn’t required to make other concessions, such as altering the route.
Eminent domain — always a contentious issue in Texas — became a political flashpoint in recent years due to Kinder Morgan's 423-mile Permian Highway Pipeline that runs through the Texas Hill Country. Angered landowners sought to stop the project with lawsuits, but lost. Last August, singers Willie Nelson and Paul Simon, who both live in the Texas Hill Country, opposed the pipeline in a Houston Chronicle op-ed. The pipeline began service in January.
State Sen. Lois Kolkhorst, R-Brenham, who has worked on the issue since she joined the Senate six years ago, acknowledged that the legislation did not go as far as many landowners would have liked, but she described it as an effort to start giving landowners more leverage when companies want to seize private land to build oil or gas pipelines, railroads or power transmission lines that companies argue are in the public’s best interest.
“Giving the right to private companies to come in and take your land — that you do not want to sell — should be one of the highest privileges that we give in statute,” Kolkhorst said during a Senate Jurisprudence Committee hearing last Thursday.
She said House Bill 2730 is a first pass at creating more balance in negotiations. The final version of House Bill 2730 requires companies to show landowners the contract terms up front, allows landowners to file complaints against a right-of-way agent and requires the state to give landowners more information about the eminent domain process.
“What you have is six years of negotiation by industry on all sides, including landowners, energy and infrastructure,” said Thomas Zabel, an oil and gas lawyer who spoke on behalf of the Texas Pipeline Association. “There’s a little give and take on both sides.”
During the 2019 legislative session, a bill by Kolkhorst sought to prevent companies from making low-ball offers to property owners, require public meetings between property owners and the companies, and restore damaged land to as close to its original condition as possible.
But after the bill was watered down in a joint House-Senate conference committee — an effort led by Rep. Tom Craddick, R-Midland — it failed to make it to Abbott’s desk.
An initial version of this year’s bill, sponsored by state Rep. Joe Deshotel, D-Beaumont, angered landowners who felt it favored companies. The Texas Farm Bureau publicly opposed it. Billy Howe, the Farm Bureau’s associate director of government affairs, said that after “intense negotiations,” lawmakers came back with language that the powerful agricultural and rural community interest group would support, because it was closer to the 2019 bill.
Craddick was the only member to vote against the bill in the House.
“We feel [this bill] is going to improve the process for landowners, so we’re going to support it and see if it works,” Howe said. He said the bill includes provisions that should result in more fair compensation for land taken through eminent domain.
“It’s going to take a good step forward in improving that initial offer,” Howe said.
Deshotel told his colleagues on the House floor May 12 that his goal was to put landowners and property owners closer to even standing with pipeline, electric and railroad companies that use eminent domain, which he said were “starting to have an advantage over landowners.”
“We wanted to give [landowners] a real say and real involvement in the process that affects their property,” Deshotel said.
Jaren Taylor, a utility and eminent domain lawyer who spoke on behalf of the Association of Electric Companies of Texas during the Senate committee hearing, said if the bill passed, it would be a signal of compromise.
“I don’t disagree that not everyone is happy with it, but frankly that’s a sign of quality negotiation and compromise,” Taylor said.