Eminent Domain Reform 2017 and Beyond - PowerPoint Presentation

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Eminent Domain Reform2017 and Beyond

South Texans’ Property Rights Association12th Annual MeetingOctober 19, 2017

Photo by Tave Doty

James D. Bradbury, PLLC

Eminent Domain Reforms

TEXANS FOR PROPERTY RIGHTS

Photo by Tave DotyJames D.

Bradbury, PLLC

2017 Eminent Domain Reform Efforts

Attorneys’ FeesMinimum Easement TermsValuation of EasementsThe Court may admit evidence on the price paid for pipeline or powerline rights of way from privately negotiated transactionsPrice per rod/foot valuation method may be presented if it is the basis of the condemning entities offerBond RequirementAs a condition of appealing a final judgment, a nongovernmental entity must pay the jury verdict or post a bond to support the jury verdict or lose their right to appeal

James D.

Bradbury, PLLC

2017 Eminent Domain Reform Efforts

Possession & Use Agreements: EnforceabilityWhat are Possession and Use Agreements?Any written agreement between the condemning authority and the property owner during condemnation or under the threat of condemnation should be enforceableNo Sovereign ImmunityPossession & Use Agreements: No Property TaxesGeneral rule: obligation to pay taxes ends when the government acquires title or possession by court order

Issue: Under a Possession & Use Agreement the taxing entities continue to tax the property owner, who no longer has possession of the land, even though no title changed hands and no court order is issued

James D.

Bradbury, PLLC

2017 Eminent Domain Reform Efforts

AppraisalsCondemning entities must produce the appraisal it seeks to use at the special commissioners’ hearing at least three (3) business days in advance of the hearingGoal: prevent trial by ambush by forcing entity to share the appraisal before special commissioners’ hearing

James D.

Bradbury, PLLC

James D.

Bradbury, PLLC

Eminent Domain and the 85th Texas Legislative Session

Photo by Ed Schipul

James D. Bradbury, PLLC

S.B. 740 and H.B. 2684

740 Authored by Senator Lois Kolkhorst

Co-authored by Senators Birdwell, Perry, and SchwertnerHouse Counterpart was H.B. 2684

Authored by Representative BurnsJoint Authors Representatives Ashby, Kacal, Holland

CoAuthors Representatives Anderson, Bailes, Bell, Burrows, Canales, Cook, Cosper, Cyrier, Dean, Faircloth, Frank, Gonzalez, Guerra, Guillen, King, Longoria, Miller, Munoz, Jr., Murr, Nevarez, Parker, Phelan, Phillips, Raney, Schubert, Sheffield, Shine, Smithee, Springer, Stephenson, VanDeaver, Wilson

James D.

Bradbury, PLLC

S.B. 740

S.B. 740 outlines increased transparency between the condemning entity and the landowner. There are two critical protections that the bill provides landowners facing eminent domain proceedings. First, S.B. 740 amends Section 21.0113 of the Property Code to require the deed, or easement contract presented to the landowner to contain certain project information and property rights protections.Second, S.B. 740 amends Section 21.047 of the Property Code to require condemnors to reimburse landowners for their attorney's and professional fees in eminent domain proceedings where either: the amount of damages awarded by the special commissioners is at least 20 percent greater than the amount of the condemnor's final offer; or

if the commissioners' award is appealed and a court awards damages in an amount that is at least 20 percent greater than the amount of the condemnor's final offer.

James D.

Bradbury, PLLC

S.B. 740 also proposed new requirements for pipeline right-of-way easements and electrical transmission line right-of-way easements.

Also added requirements for deeds or easement contracts addressing conveyance of property, indemnification of landowners, and liability insurance.

James D. Bradbury, PLLC

S.B. 740

What Happened?Bill was Radically Altered The Attorneys’ Fee provision was removedThird Party evidence was removedInitial offers based on county appraisals were addedLanguage was added that would prevent landowners from testifying on the value of their own propertyMinimum easement terms were changed to a non-binding “notice” to landowners

The provision that condemnors must insure landowners against liability during construction and operation was removedThe requirement that condemnors post a bond if they appeal an award was changed to say landowners only got their expenses paid for the appeal itself

James D. Bradbury, PLLC

James D.

Bradbury, PLLC

Changes to S.B. 740 and H.B. 2684

Equal Appraisal DisclosureSome condemning entities are taking advantage of a loophole on appraisals. Although they present appraisal at time of initial and final offer, they are allowed to present a new and updated appraisal immediately before a commissioners hearingHB 2687 maintained this provision. SB 740 maintained it but added language that could prevent landowners from testifying as to their opinion on their property’s valueMinimum Easement TermsRetained by Both Bills but became a “Notice” to landowners.

Insurance CoverageThis provision was replaced in both bills by “limitation of liability” language. Prevents landowner from being sued but must still retain and pay for legal defense, prove they were not negligent and are covered by the limitation of liability language.

James D. Bradbury, PLLC

Changes to S.B. 740 and H.B. 2684

Bond on AppealOriginal language required landowners be entitled to all reasonable fees in relation to condemnation. Revised language allowed only for fees on the appealLandman Certification and TrainingNegotiation with Landman, who can act in unscrupulous manner and low-ball landownersCertification and training provisions were included in SB 740 but not HB 268410% or an Appraisal Upfront

Negotiated as a replacement for landowner expensesIncluded only in HB 2684Provision provided that landowner with their initial offer will receive a check upfront in the amount of 10% of the initial offer (minimum of $1000 and maximum of $25000), allowing for flexibility to have the offer reviewed by real estate professionals.

10% was on top of final award as long as no appealIf no stipend upfront, must offer appraisal with initial offerRevision removed the floor of $1000 and then lowered the cap from $25000 to $10000

James D. Bradbury, PLLC

Changes to S.B. 740

Initial Value Based on CADOffered as replacement for landowner expensesOnly included in final version of SB 740CAD is notoriously unreliable

Photo by Tave Doty

James D. Bradbury, PLLC

James D.

Bradbury, PLLC

James D. Bradbury, PLLC

James D.

Bradbury, PLLC

Forest Oil Corp. v. El Rucio Land & Cattle Co.

McAllen Ranch leased mineral interests to Forest Oil Corporation for over 30 yearsRanch learned in 2004 that Forest Oil contaminated property with hazardous materials and sued in state court for damagesCase went to arbitration where Ranch was awarded over $22 million in damagesForest Oil appealed arbitration award with district courtDistrict Court denied Forest Oil’s appealCourt of Appeals affirmed

Texas Supreme Court granted reviewJames D.

Bradbury, PLLC

Forest Oil Corp. v. El Rucio Land & Cattle Co.

Question: Whether the Railroad Commission has exclusive or primary jurisdiction over contamination actions resulting from oil and gas production? Whether landowners can bring claims in court against oil and gas companies for property damages?Texas Supreme Court Held: Railroad Commission does not have exclusive or primary jurisdiction over claims for environmental contamination and landowners who have property damages arising from oil and gas operations can bring claims in court against oil and gas companies

Amicus Briefs filed by South Texans’ Property Rights Association, Texas and Southwestern Cattle Raisers Association, Texas Forestry Association, Texas Land & Mineral Owners Association, The Landowner Coalition of Texas, and the Texas Agricultural Land Trust.

James D. Bradbury, PLLC

Photo by Marie D. DeJes, Houston Chronicle

James D. Bradbury, PLLC

www.bradburycounsel.com