Pipeline operators and landowners called on Texas lawmakers Monday to clarify eminent domain laws following a recent court decision that has thrown that authority into question.
Representatives for pipeline companies complained that the Texas Supreme Court decision to give landowners the power to challenge a company’s right to condemn property to make way for a pipeline has injected uncertainty into the industry. Before the court ruling, the company only had to check a box on a permit application to the Texas Railroad Commission to prove it should have the authority to force people to sell their land.
“To go to a policy change that would make this a judicial review (instead of an administrative one) … could severely impede the development of pipelines in this state,” said Greg Schnacke, a representative for Plano-based Denbury Associates, which lost the Supreme Court case.
Julia Trigg Crawford, a landowner and farmer in Lamar County, said she was sued by TransCanada Corp. when she refused to turn over part of her land for a pipeline. She complained that no state agency is thoroughly vetting whether pipelines actually qualify under Texas law for eminent domain authority as a common carrier. A common carrier is a pipeline that transports substances to or for the public and are for hire by the public. The pipeline must not operate solely for the company that owns it to have eminent domain powers.
“The process lacks real oversight by any empowered and engaged state agency,” Crawford said. “Why is it my responsibility as a Texas landowner to make a foreign corporation prove critical elements that should be step one in the state permitting process?”
Lindale Fowler, general counsel of the Texas Railroad Commission, said the agency processes 4,400 pipeline permits a year and a little more than 200 are for new pipelines. Applicants check a box on the application form promising to be a common carrier, but the commission does not attempt to verify the claim, he said.
The permit “is not intended to confer the power of eminent domain to any pipeline,” Fowler told lawmakers. “The commission possesses no authority to determine property rights, nor whether any entity has the right to practice eminent domain.”
Clayton Henry, representing the Texas and Southwestern Cattle Raisers Association, told lawmakers his members want a process where they can argue against a pipeline company using eminent domain authority.
“To simply check a box on a one page form, submit a pipeline route, and post a $25,000 bond to receive condemnation authority appears to be a very low bar,” he said.
Pipeline operators said they would like the Legislature to give the Railroad Commission control of certifying a pipeline is in the public interest and for public use, rather than force companies to fight legal challenges in perhaps dozens of local courts if the pipeline crosses multiple counties.
“The issue is whether we do it once, or will we do it 100 times,” said James Mann of the Texas Pipeline Association.
State Rep. Rene Oliveira, D-Brownsville, called the House Land and Resource Management Committee on Monday to consider the impact of recent court decisions on the state’s eminent domain laws, including the Open Beaches Act.
“I think we have to strike the right balance so that property owners can be confident in the industry that is creating jobs and tax revenue and a major source for power and electricity is not overburdened,” he said.
David Land, an attorney for the General Land Office, said the state has appealed a case to the 5th Circuit Court of Appeals over the Texas Supreme Court’s ruling that took away the state’s ability to automatically condemn private property when a hurricane erodes the beach in front of it. The state owns the wet portion of the beach and assumes a public easement up to the vegetation line. When a property owner recently found that their home extended past the vegetation line, she fought the easement.
Land said if the state does not win the appeal it could be forced to spend millions to claim such property when the beach erodes suddenly.