Texas Land Trust Conference March 6, 2015

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1 Texas Land Trust Conference March 6, 2015 James D. Bradbury James D. Bradbury, PLLC Austin Fort Worth

2 An Overview

3 Unique area of law where the government can take private property Protected by the US Constitution Law has evolved to allow condemnation by private corporations Modern era has enabled the taking of property for a wide array of purposes The needs of growth and development have expanded the scope of private property takings

4 The federal government State of Texas City County Texas Department of Transportation Utilities School District Railroads Pipeline companies Hospitals Many others, no defined list yet

5 Taking must be for a public purpose. Highway Utility right of way (electricity, water, gas, cable) School Library Railroad track Oil and gas pipeline Sports Stadium Recreational and housing development? Groundwater for supply?

6 Rights are protected by the US Constitution and Texas Constitution These rights are addressed in statute; In essence, define how you will be paid. Also inverse condemnation, where there is a taking of your property by an act of government without a proceeding. Still entitled to value but you may have to file the suit The Taking is a forced deal between you and the government or condemnor; It s a sale to which you cannot say no. But you can say no to the price, value is your right. Landowner has little right to challenge the taking.

7 Photo by Keith Burgess-Jackson

8 All takings in Texas are governed by Chapter 21 of the Property Code Most transfers of property take place in a negotiation outside formal proceedings; But significant disadvantage to landowners Lawyers cost money, deceptive tactics, distraction, emotion and value is difficult Entity seeking to acquire property must negotiate in good faith for the value before filing any action If no result, may file an action in the county where the property is located No immediate notice to landowner Judge appoints three special commissioners (not lawyers) to set value

9 Prior to any formal proceedings, there exists a period of planning, initial contacts by condemnor, and negotiations. Involves visit from negotiation agent or landman to discuss scope of taking and payment. When negotiations start to become futile, landowner will receive a Last Offer letter. For highway condemnation, there will also be an appraisal. Appraisals are unlikely, however, for pipelines. Last Offer may actually be less than previous offers. If no response or agreement, condemnor will file an action in the county where the property is located.

10 After the condemnor files its action with the court, the judge will promptly appoint three commissioners to sit in a quick Special Commissioners Proceeding The Commissioners will select a time and place for a hearing on value (not on validity of taking) Then the landowner will get notice (usually 3-4 weeks) Have the right to object and replace a commissioner Entity seeking to acquire must provide appraisal with offer ahead of hearing Landowner has the same obligation in advance of hearing But landowner may testify to value without appraisal

11 Special Commissioners Hearing is short and reasonably informal Each side has the right to question any witness Commissioners will confer and make an award Either side may appeal to a jury trial on issue of value or possibly right to take (rare) Regardless of appeal, condemnor gets property Money is deposited with the court and may be withdrawn At the time money is deposited, property belongs to condemnor Costs can go either way-set by Commissioners By this point, landowner has lost the chance to avoid project, change route, or negotiate for additional provisions

12 Damages are: The value of the part taken (what you lose times value); and The value of the damage to the remainder (what you keep). You do not generally get your attorneys fees back Does the taking lower the value of the property you keep? Cannot be damages that are general to the public. If the case proceeds to a jury trial, these are the issues to be answered by the jury. If you withdraw the money, there is a true up after the verdict Judge can determine whether the entity had the legal right to take property.

13 Part Taken Remainder

14 The Wild West of Condemnation

15 In pipelines condemnations: No real role by any state agency No formal process of routing or involving stakeholders Once a line is drawn by an engineer, essentially permanent Purely private companies can condemn

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17 Common Carrier Pipelines Railroad Commission process to determine if a pipeline will be operated as a common carrier Common carriers have eminent domain power Maintain right of the landowner to challenge status in court

18 Proposed rule prescribes procedure by which a pipeline operator may identify itself as a common carrier, gas utility, or private line operator. Must state requested classification and purpose as a common carrier, gas utility or private line operator Must provide sworn statement providing factual basis for classification sought Must provide documentation to support classification if applicable or requested by RRC Commission s decision on issuance of a pipeline permit shall be completed within 45 days of determination that application is complete. Classification of pipeline as common carrier, a gas utility, or private pipeline based upon information and documentation submitted by applicant.

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23 Taking of Designated Public Land TxDoT may approve the use or taking of public land designated and used as a park, recreation area, scientific area, wildlife refuge, or historic site only: If there is no feasible alternative; and The project includes all reasonable planning to minimize harm to the land resulting from the use or taking, including mitigation measures. Taking of Protected Private Land TxDoT may approve the use or taking of private land encumbered by an agricultural conservation easement purchased under Nat. Res. Code, Ch. 183 only: If there is no feasible alternative; and The project includes all reasonable planning to minimize harm to the land resulting from the use or taking.

24 Photo by Phillip C. Marshall

25 Certain triggers determine whether coordination is required between TxDoT and TPWD If the project is within the range of a state threatened or endangered species If the project may adversely impact important remnant vegetation If the project includes in the right of way or conservation, construction or drainage easement, more than 200 ft of stream channel for each single and complete crossing or one or more of the following that is not already channelized or maintained: Channel realignment Stream bed or stream bank excavation, scraping, clearing or other permanent disturbance Isolated wetlands At least 0.10 acre of riparian vegetation Disturbs certain amount of habitat

26 For projects subject to review for archeological resources and cemeteries: TxDoT must evaluate for potential project effects to archeological historic properties and to determine whether the site contains cemeteries TxDoT must make reasonable efforts and act in good faith when complying with this requirement

27 Certain events trigger coordination between TxDoT and TCEQ: Air quality Water quality Projects that require Tier II Individual Clean Water Act Section 401 certification Projects located in a recharge, transition, or contributing zones of the Edwards Aquifer Projects located within five miles or an impaired assessment unit and within the watershed of an impaired assessment unit

28 TCEQ is designated agency for environmental review of transportation project TCEQ sets forth rules for environmental review that must include: Public comment on TxDoT s environmental reviews Including procedure for requesting a public hearing Evaluation of direct and indirect effects of projects Analysis of project alternatives Written report Specifies decision on project Shows mitigation measures on environmental harm Environmental review must be conducted before adoption of location or alignment of project TxDoT must coordinate with other agencies in preparing environmental review TCEQ has power of condemnation to acquire property to mitigate an adverse environmental impact that is a direct result of a state highway improvement project

29 TxDoT sought to condemn private property for project to expand a state highway. The proposed expansion would require that four out of ten year-old oak trees would be cut down to make way for the highway The landowners (who have owned the land for nearly 150 years) fought the planned expansion, requesting an alternative plan to save the trees TxDoT agreed to alter the design to avoid the trees

30 Photo by Marie D. DeJes, Houston Chronicle

31 Protections, Tips, and Key Strategies

32 Get involved as early as possible Once lines are drawn, increasingly hard to alter Come to the conversation with potential alternatives Along row, parallel to other utilities, boring for pipelines Opposition is natural and a necessity but must also keep the negotiations open for additional benefits to you and the land Retain experienced appraiser familiar with condemnation and conservation easements Retain experienced counsel

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34 Do not take the first offer, they will come back Make sure that you want to get into the fight Landowner s Bill of Rights explaining your rights is required Entities with the right of eminent domain have the right to enter and survey-but no destructive testing Careful opposing this Careful with landmen or agents You do not lose the right to contest value if you refuse offer

35 Pipelines Ask can it be bored vs. trenched double-ditch soil Re-seed and maintain grass cover for period of time Limited access Notice prior to access Lighter equipment No surface facilities Abandonment Do not use their easement form

36 Highways Publicity, letters, and political support may help More opportunities to get involved in early stages of planning than for pipeline TxDoT has changed route for certain reasons (e.g., ancient oaks near Somerville, TX) Money is always good, but often you can accomplish more through non-monetary concessions (e.g., narrow right-of-way, avoid trees, etc.)

37 Arrange a meeting with principals of condemnor (not negotiation agents) and your director and/or selected board members Explain your holdings, nature and permanency of conservation easement, structure of transaction. Don t assume your conservation easement is understood.

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