Bill Text: TX SB740 | 2017-2018 | 85th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the acquisition of property by an entity with eminent domain authority.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Engrossed - Dead) 2017-05-09 - Referred to Land & Resource Management [SB740 Detail]

Download: Texas-2017-SB740-Comm_Sub.html

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By: Kolkhorst, et al. S.B. No. 740
(In the Senate - Filed February 3, 2017; February 21, 2017,
read first time and referred to Committee on State Affairs;
April 27, 2017, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 1; April 27, 2017,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 740 By: Hughes

A BILL TO BE ENTITLED
AN ACT
relating to the acquisition of property by an entity with eminent
domain authority.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 402.031(b), Government Code, is amended
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) receive notice of the proposed acquisition of the
owner's property;
(2) contact and speak directly with an employee of the
entity proposing to acquire the property who is qualified to
discuss the acquisition of the property;
(3) receive a bona fide offer from, make a
counteroffer to, and seek to negotiate terms and conditions with
[good faith effort to negotiate by] the entity proposing to acquire
the property;
(4) consult with a licensed real estate broker or
sales agent, an attorney, an appraiser, or any other person
regarding the proposed acquisition, offer of compensation, or other
related matters at any time;
(5) have [(3)] an assessment made of damages to the
owner that will result from the taking of the property;
(6) be provided [(4)] a hearing under Chapter 21,
Property Code, including a hearing on the assessment of damages;
[and]
(7) [(5) an] appeal [of] a judgment in a condemnation
proceeding, including to [an] appeal [of] an assessment of damages;
and
(8) contact the office of the attorney general for
more information regarding a property owner's rights with respect
to the condemnation process.
SECTION 2. Section 1101.501, Occupations Code, is amended
to read as follows:
Sec. 1101.501. CERTIFICATE REQUIRED. (a) Except as
provided by Subsection (b), a [A] person may not sell, buy, lease,
or transfer an easement or right-of-way [for another], for
compensation or with the expectation of receiving compensation, on
behalf of an entity with eminent domain authority [for use in
connection with telecommunication, utility, railroad, or pipeline
service] unless the person:
(1) holds a license issued under this chapter; and
[or]
(2) holds a certificate of registration issued under
this subchapter.
(b) Subsection (a) does not apply to:
(1) an entity with eminent domain authority or the
entity's employee; or
(2) an attorney licensed in this state.
SECTION 3. 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) hold a license issued under this chapter [be:
(1) at least 18 years of age]; and
(2) complete a right-of-way agent responsibility
course approved by the commission under Section 1101.5021 [a
citizen of the United States or a lawfully admitted alien].
SECTION 4. Subchapter K, Chapter 1101, Occupations Code, is
amended by adding Sections 1101.5021, 1101.5042, and 1101.5043 to
read as follows:
Sec. 1101.5021. RIGHT-OF-WAY AGENT RESPONSIBILITY COURSE.
(a) The commission by rule shall approve a right-of-way agent
responsibility course.
(b) A course approved by the commission under this section
must include at least 15 hours of classroom instruction related to:
(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
easement and right-of-way acquisition services.
Sec. 1101.5042. ELIGIBILITY REQUIREMENTS FOR RENEWAL
CERTIFICATE. To be eligible to receive a renewal certificate under
this subchapter, a person must:
(1) hold a license issued under this chapter; and
(2) satisfy the continuing education requirements
under Section 1101.5043.
Sec. 1101.5043. CONTINUING EDUCATION. (a) The commission
by rule shall approve a continuing education course for certificate
holders.
(b) A continuing education course approved under Subsection
(a) by the commission must include at least six hours of classroom
instruction related to the acquisition of easements and
rights-of-way under eminent domain authority.
SECTION 5. Section 21.0111, Property Code, is amended by
adding Subsections (a-1) and (a-2) to read as follows:
(a-1) After an offer to which Subsection (a) applies is
made, the entity or the property owner shall disclose to the other
party any new, amended, or updated appraisal report that is
produced or acquired by or on behalf of the entity or property owner
after the offer is made and that is used in determining the entity's
or the property owner's opinion of value. A disclosure required by
this subsection must be made not later than the earlier of:
(1) the 10th day after the date the entity or property
owner receives the appraisal report; or
(2) the third business day before the date of a special
commissioner's hearing if the appraisal report is to be used at the
hearing.
(a-2) A new, amended, or updated appraisal report that is
not disclosed as required by Subsection (a-1), and any testimony or
other evidence based on the report, may not be presented in a
hearing under Section 21.015.
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 monetary offer in an amount:
(i) equal to or greater than 150 percent of
the market value of the property sought to be acquired, as
determined on a per acre or per square foot proportionate valuation
of raw land as reflected in the appraisal of the county taxing
authority as of the date of the initial offer; or
(ii) if an appraisal of the property sought
to be acquired and any damages to any remaining property has been
completed by a certified appraiser, equal to or greater than the
amount provided by the appraisal report;
(B) a statement that the entity will not contact
the property owner sooner than the fourth business day after the
date of the first personal contact made by the entity after the
entity sends the initial offer, except to respond to an inquiry from
the property owner;
(C) the name and telephone number of an employee
of the entity that the property owner may contact with questions
regarding the initial offer; and
(D) a copy of the appraisal report on which the
offer is based, if applicable;
(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 an
[a written] appraisal report 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 provided by [of] the [written] appraisal report [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 report;
(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
(D) a notice, as appropriate, as described by
Section 21.0114; 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 Sections 21.0114 and 21.0115 to read as follows:
Sec. 21.0114. NOTICE REGARDING PIPELINE AND ELECTRIC
TRANSMISSION RIGHTS-OF-WAY. (a) Unless otherwise addressed by
the easement, the condemning entity shall provide a list of items
that the landowner may consider when reviewing the offer of the
condemning entity.
(b) If the property is to be acquired for purposes of a
pipeline right-of-way, the notice must include:
(1) the approximate number of pipelines that may be
installed in the right-of-way;
(2) the type or category of each product to be
transported through the pipelines to be installed in the
right-of-way;
(3) the depth of the pipeline and the amount of cover;
(4) a reasonable description of any use the entity
intends to make of the surface of the right-of-way;
(5) a metes and bounds or center line description of
the location of the right-of-way;
(6) the width of the right-of-way;
(7) whether the proposed easement is exclusive,
nonexclusive, or otherwise limited and the terms and conditions of
any proposed limitation on the property owner's right to use or
grant additional easements to other parties;
(8) the manner in which the entity will access the
right-of-way, other than in case of an emergency;
(9) a statement:
(A) regarding the property owner's right to
recover actual damages arising from the construction, maintenance,
repair, replacement, or future removal of a pipeline in the
right-of-way, including any actual damages to growing crops or
livestock; or
(B) if applicable, that the initial offer
includes damages described by Paragraph (A);
(10) a statement that the entity will agree to
coordinate with the property owner regarding the treatment of all
gates and fences; and
(11) a statement that the entity will agree to:
(A) restore to original or better condition any
areas outside the right-of-way that are used or damaged by the
entity, to the extent reasonably practicable; or
(B) pay actual damages for any of those areas the
entity does not restore.
(c) If the property is to be acquired for purposes of an
electric transmission right-of-way, the notice must include:
(1) a copy of any Public Utility Commission of Texas
order or other regulatory order relevant with respect to initial
construction;
(2) a reasonable description of any use the entity
intends to make of the surface of the right-of-way;
(3) a metes and bounds or center line description of
the location of the right-of-way;
(4) the width of the right-of-way;
(5) the type, spacing, and maximum number of poles,
towers, or other support apparatus that will be used to carry
electrical lines over the easement;
(6) whether the proposed easement is exclusive,
nonexclusive, or otherwise limited and the terms and conditions of
any proposed limitation on the property owner's right to use or
grant additional easements to other parties;
(7) the manner in which the entity will access the
right-of-way, other than in the case of emergency;
(8) a statement:
(A) regarding the property owner's right to
recover actual damages arising from the construction, maintenance,
repair, replacement, or future removal of lines and support
apparatus in the right-of-way, including any actual damages to
growing crops or livestock; or
(B) if applicable, that the initial offer
includes damages described by Paragraph (A);
(9) a statement that the entity will agree to
coordinate with the property owner regarding the treatment of all
gates and fences; and
(10) a statement that the entity will agree to:
(A) restore to original or better condition any
areas outside the right-of-way that are used or damaged by the
entity, to the extent reasonably practicable; or
(B) pay actual damages for any of those areas the
entity does not restore.
(d) A property owner and the entity may agree to terms other
than those required to be included in the notice required under this
section.
(e) If an entity does not have sufficient information to
include in a notice required under this section an item listed in
Subsection (c) or (d), as applicable, the entity shall:
(1) in the notice:
(A) indicate the item that is not included; and
(B) state that information regarding the item
will be provided to the property owner in an amended notice when
known; and
(2) as soon as practicable after the entity obtains
the information, provide the information to the property owner in
an amended notice.
Sec. 21.0115. LIMITATION OF PROPERTY OWNER LIABILITY. A
property owner is not liable to a condemning entity, the entity's
agents, employees, or contractors, including the contractor's
subcontractors of any tier, or a third party for personal injury,
death, or property damage:
(1) arising from the use by a person other than the
property owner of property, including for a right-of-way, acquired
from the property owner by condemnation; and
(2) not caused by the property owner's negligence or
intentional conduct.
SECTION 8. Section 21.041, Property Code, is amended to
read as follows:
Sec. 21.041. EVIDENCE. (a) As the basis for assessing
actual damages to a property owner from a condemnation, the special
commissioners shall admit evidence on:
(1) the value of the property being condemned;
(2) the injury to the property owner;
(3) the benefit to the property owner's remaining
property; and
(4) the use of the property for the purpose of the
condemnation.
(b) The special commissioners may admit evidence on the
price paid for pipeline or electrical line rights-of-way in
privately negotiated transactions made in the absence of a
potential, actual, or threatened condemnation.
SECTION 9. Section 21.063, Property Code, is amended by
adding Subsections (c) and (d) to read as follows:
(c) As a condition of appealing the final judgment of a
trial court in a condemnation proceeding, a nongovernmental
condemnor shall:
(1) deposit with the trial court the amount of the
final judgment, less the amount of any monetary deposit made and any
bonds posted by the condemnor under Sections 21.021(a)(2) and (3),
subject to the order of the court of appeals; or
(2) post a surety bond, issued by a surety company
authorized to engage in business in this state and conditioned to
secure the payment of the final judgment, in the amount of the final
judgment, less the amount of any monetary deposit made and any bonds
posted by the condemnor under Sections 21.021(a)(2) and (3).
(d) If the property owner moves to enforce Subsection (c)
and the nongovernmental condemnor fails to comply with that
subsection before the 30th day after the date the trial court grants
the motion:
(1) the court of appeals shall dismiss the appeal with
prejudice and order enforcement of the final judgment; and
(2) the property owner is entitled to all reasonable
and necessary fees for attorneys hired in relation to the
condemnation.
SECTION 10. Section 26.11(a), Tax Code, is amended to read
as follows:
(a) If the federal government, the state, or a political
subdivision of the state acquires the right to possession of
taxable property under a court order issued in condemnation
proceedings, assumes possession of taxable property under a
possession and use agreement, or a similar agreement, that is
entered into under threat of condemnation, or acquires title to
taxable property, the amount of the tax due on the property is
calculated by multiplying the amount of taxes imposed on the
property for the entire year as determined as provided by Section
26.09 of this code by a fraction, the denominator of which is 365
and the numerator of which is the number of days that elapsed prior
to the date of the conveyance, the effective date of the agreement,
or the date of the order granting the right of possession, as
applicable.
SECTION 11. The office of the attorney general shall make
the landowner's bill of rights statement required by Section
402.031, Government Code, as amended by this Act, available on the
attorney general's Internet website not later than January 1, 2018.
SECTION 12. Not later than January 1, 2018, the Texas Real
Estate Commission shall adopt rules to implement Subchapter K,
Chapter 1101, Occupations Code, as amended by this Act.
SECTION 13. (a) Sections 21.0111 and 21.0113, Property
Code, as amended by this Act, and Sections 21.0114 and 21.0115,
Property Code, as added by this Act, apply only to the acquisition
of real property in connection with an initial offer made under
Section 21.0113, Property Code, on or after the effective date of
this Act. An acquisition of real property in connection with an
initial offer made under Section 21.0113, 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) Section 21.041, Property Code, as amended by this Act,
applies only to an eminent domain proceeding commenced on or after
the effective date of this Act. An eminent domain proceeding
commenced before the effective date of this Act is governed by the
law applicable to the proceeding immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
(c) Section 21.063, Property Code, as amended by this Act,
applies only to an appeal commenced on or after the effective date
of this Act. An appeal commenced before the effective date of this
Act is governed by the law applicable to the appeal immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.
(d) Section 26.11, Tax Code, as amended by this Act, applies
only to an agreement entered into on or after the effective date of
this Act. An agreement entered into before the effective date of
this Act is governed by the law applicable to the agreement
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 14. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2017.
(b) Sections 1101.501 and 1101.502, Occupations Code, as
amended by this Act, and Section 1101.5042, Occupations Code, as
added by this Act, take effect March 1, 2018.
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