Bill Text: TX HB2730 | 2021-2022 | 87th Legislature | Enrolled

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Bill Title: Relating to the acquisition of real property by an entity with eminent domain authority and the regulation of easement or right-of-way agents.

Spectrum: Moderate Partisan Bill (Republican 17-3)

Status: (Passed) 2021-06-16 - Effective on 1/1/22 [HB2730 Detail]

Download: Texas-2021-HB2730-Enrolled.html

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H.B. No. 2730

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.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2730 was passed by the House on May
13, 2021, by the following vote: Yeas 143, Nays 1, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2730 was passed by the Senate on May
27, 2021, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor