Brazoria County – Epicenter of Eminent Domain in Texas

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Liquefaction Facility. Image Courtesy of Baton Rouge Business Report.

Brazoria County, Texas has recently experienced a rapid increase in its volume of eminent-domain cases. The County has long been considered a “hot spot” of the energy industry. Oil giants such as Conoco Phillips, Kinder Morgan, Gulf South, Enterprise, HSC Pipelines, as well as public utilities like the Brazosport Water Authority, maintain large-scale operations within the County. As energy production and transportation activities are often land intensive, the State government has established mechanisms by which private corporations can use the power of eminent domain to obtain private land.

Typically, natural gas is a by-product of the oil production process. In the past few years, global events in the oil market have resulted in a massive surplus of natural gas. Simultaneously, many of the new eminent-domain acquisitions in Brazoria County have been for the construction of new pipelines. One could speculate that this increase in activity within Brazoria County, especially the construction of pipelines, may be related to the abundance of natural gas.

In addition to pipelines, a new gas liquefaction plant is being developed in Brazoria County. Liquefaction is the process of converting gas that is in its vapor form, into a liquid. The liquid is denser per volume and easier to contain and transport than its gaseous counterpart, making it more profitable for companies. The liquefaction process requires extreme pressure and consumes large quantities of water. Also notable, the city of Freeport is a major export hub of the oil and gas industry within Brazoria County. It remains a mystery as to whom and where the liquid is transported and/or sold. It is only reasonable to attribute these rapid additions to the Brazoria County infrastructure to this new process.

Because this is a revolutionary concept, it is only a matter of time until this Brazoria County based process of gas liquefaction is spread out to the rest of the world. As with Brazoria County, these projects will likely produce an increase of eminent-domain actions against land owners wherever they are being built. Though the process of eminent-domain is never pleasant, landowners should remember that receiving just compensation for their land is a Constitutional right.

Written by James Nguyen.

Justin Hodge, Johns Marrs Ellis & Hodge Partner Featured in Houston Chronicle

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JMEH Partner Justin Hodge at the firm’s Houston Offices.

The Texas transportation and energy industries’ need for new infrastructure often brings them into conflict with landowners whose properties are required for these expansions. This tension has only increased in recent years, as economic and population growth have produced a need for ever greater quantities of energy, and the infrastructure necessary for its production and delivery. Transportation projects have been similarly affected by these growth conditions. Recent examples in both industries are the high speed rail project from Houston to Dallas and the pipelines being built from the Permian Basin to the Gulf Coast. Land requirements therefore have risen at a commensurate rate.

Naturally, landowners are generally not thrilled when an entity makes an offer for their land ahead of a planned construction project. They are even less happy when they realize the entity can often seize the land anyways via eminent domain if the offers are rejected. Making matters worse, these initial offers are often artificially low. Landowners who reject these low-ball offers and fight for compensation in the courts regularly receive settlement amounts several times greater than the offer they rejected. This however, leads to the additional problem of a lengthy legal process, as well as forcing the landowner to pay court costs, expert fees, and legal bills – the total cost of which can absorb large portions of the settlement.

There have been attempts to address this issue legislatively. In 2015, a bill would have allowed landowners to recover legal fees if their cases succeeded. It passed the Senate but not the House. This legislative session, a bill was proposed that would require a condemning entity to reimburse legal fees if a resolution for the landowner was greater than the entity’s final offer by 20% or more. The bill was revised to remove this language – and it passed the Senate. Since then, it has been referred to the House Land and Resource Management Committee.

There are two sides to this issue. On one hand, condemning authorities have argued this type of legislation would adversely affect the construction process – and stifle the economic benefits these projects produce. They assert such legislation would increase the propensity for landowners to take matters to court (currently, only 15% do) and the construction process would become more costly and lengthy as a result.

Property owners and their representatives disagree. They argue there’s little evidence to compel the notion such legislation would actually dampen industry growth. Florida, for example, robustly grows despite an eminent domain law that permits reimbursement of legal costs. They also suggest that without such a law, the legal costs associated with fighting a large corporate or government entity will continue to prevent landowners from being made whole.

These issues stir the passions of many because both property rights and oil and gas are embedded in the people and politics of the State of Texas.

To read the full article, click here.

‪Vote to support to end #eminentdomain ‬for private gain. YES on SB 740 @loiskolkhorst

‪Vote to support to end #eminentdomain ‬for private gain. YES on SB 740 @loiskolkhorst

Please watch the “‘TRANS PECOS’ | TEASER” on Vimeo.

 

The website for “TRANS PECOS” can be viewed here.

Luke Ellis interviewed on Fox News: Border wall faces legal battles over eminent domain in Texas

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The story can be viewed on our website.

$9 Billion Highway Funding Boost Includes $620 million for Austin Projects

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Congestion in Austin. Courtesy of the Austin Statesman.

$620 million of a $9 billion spending plan passed by the Texas Transportation Commission will fund four Austin city congestion relief projects. The plan is the latest development in Texas’ unified transportation plan, which, updated yearly, instructs the state’s highway, maritime, and aviation spending.

Loop 360, referred to as Capital of Texas Highway, will receive $204 million in State funding. This project will construct overpasses along the Loop beginning at Westlake Drive North. The overpasses will allow drivers to circumvent traffic lights.

Interstate 35 will receive $162 million and $133 million for two separate projects. The $162 million project will improve overpasses, ramps, and pavement conditions between Holly Street and Oltorf Street. The $133 million project will add flyover bridges near the I-35 and U.S. 183 interchange.

U.S. Highway 183 will receive $120 million. This project will add additional lanes to sections of the highway between MoPac Boulevard and Ranch-to-Market-Road (RM) 620. The funds will be combined with $46 million raised by the City of Austin.

Taken together, the investments will produce a noticeable increase of infrastructure-related construction activity. Landowners in affected areas should be mindful that such projects may require the use of eminent domain to obtain the land necessary to satisfy project needs.

Houston Receives $1.32 Billion Infusion of Highway Funding

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Traffic on I-45. Courtesy of Houston Chronicle.

Houston will receive $1.32 billion of the $9 billion spending plan passed by the Texas Transportation Commission for congestion relief. The Houston allocation, which is directed towards improving Interstate 45 and other highways, is among the largest distributions for a total of 230 statewide projects supported by this funding. The allotment will help reconstruct sections of I-45, and realign it with Interstate 69 (U.S. 59) through various individual projects.

The earliest of the scheduled developments will reconstruct I-69 between I-45 and Spur 527 before rebuilding I-45 at its I-69 interchange. This will be followed by a widening of I-45 in League City to four lanes in each direction. Finally, reconstruction work is scheduled for selected I-69/Loop 610 connections, near the Galleria area.

Congestion relief projects frequently involve expansion of one kind or another, as the principle method of relieving traffic is to increase the carrying capacity of targeted roadways. The completion of such projects may therefore require the acquisition of privately owned lands, which can in turn lead to eminent domain use for the condemnation of property.

U.S. Infrastructure Receives Near-Failing Grade

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Mayor Walsh Hopes To Reopen Long Island Bridge In Three Years

Rusted Long Island Bridge. Courtesy of Fortune.

In its most recent assessment, the American Society of Civil Engineers (ASCE) gave infrastructure in the United States a D+ grade overall. The grade is unchanged from the ASCE’s last assessment in 2013, which indicates that any improvement has been minimal. An average of total U.S. infrastructure, the report also included breakdowns of each of the sixteen individual categories. Seven areas showed improvement and three declined.

The lowest grade, a D-, was for transit, a decline from a D four years ago. Unsurprisingly, the current rebuilding schedule for rail and bus systems is roughly $90 billion behind. The drinking water system was also given a D grade, the same as the 2013. Much of the pipes were laid in the beginning or middle of the last century and are coming to the end of their lifespans. Each year, water main leaks cause over two trillion gallons of fresh water to be wasted.

Dams also received a D grade. The most famous recent case of dam failure was the Oroville Dam in California, the breaking of which displaced 200,000 people. But the 49-year-old dam was just one of many at a high risk for failure. The ASCE report noted that “The average age of the 90,580 dams in the country is 56 years,” and that “the number of deficient high-hazard potential dams has also climbed to an estimated 2,170 or more.”

Funding shortages appear to be the root of the problem. The ASCE estimates that the U.S. needs to invest $4.59 trillion by 2025 to bring its infrastructure to an acceptable B- grade. Current funding plans would fall short of this amount by about $2 trillion. The highest grade in the report was a B for rail, an improvement from the C+ given in 2013. The report attributed asserts that significant spending was a large factor, with $27.1 billion spent on rails in 2015 alone.

The report comes at a time when political momentum for infrastructure investment may be building. In an address to Congress, the President indicated the desire to pass legislation to increase infrastructure spending by $1 trillion. He has also discussed a tax credit to incentivize private sector investment. Though much needed, such infrastructure improvements could very well bring applications of eminent domain. Given the comprehensiveness of the need, it’s possible that use of the power could be equally wide ranging.

$1 Billion TxDOT Funding to Bring I-45 Construction

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Traffic on I-45. Courtesy of Houston Chronicle.

Approximately $1 billion of a Texas congestion relief package fund will be dedicated to addressing issues in the Houston area. Recently approved by the Texas Department of Transportation (TxDOT), the funding will be distributed across three projects that target high traffic zones. Over half of the funding will be used for the reconstruction of Interstate 45 at the interchange where it crosses Interstate 69. The project will also rebuild the main lanes of both freeways. Another project receiving funding will rebuild the ramps and freeways of Interstate 69 from Spur 527 to Interstate 45, and through its interchange with Texas 288. The remainder of the funds will support a project that rebuilds the main lanes and frontage roads of Loop 610, and creates a bridge for the Cambridge, Almeda, and Union Pacific Railroad tracks. Such projects often require property outside the existing right-of-way, a need which may lead to the use of eminent domain.

Texans for Property Rights Coalition Supports Eminent Domain Legislation

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Courtesy of the Texas Farm Bureau.

In a recent press release, the Texans for Property Rights Coalition voiced its support for State Representative DeWayne Burns’ (R-Cleburne) recently authored House Bill 2684. The Bill, which has been filed, seeks to improve the odds for landowners who face condemnation actions by powerful and wealthy corporations and government agencies. The eminent domain legislation will require condemning authorities to reimburse the expenses of landowners they sue if the landowners are awarded an amount significantly greater than the condemnor’s final offer. Also endorsed were proposed legislation by Representatives Trent Ashby (R-Lufkin), Kyle Kacal (R-Bryan), and Justin Holland (R-Rockwall).

The Texans for Property Rights Coalition is dedicated to advancing landowner rights in the State of Texas. The Coalition includes:

Texas Farm Bureau, Texas and Southwestern Cattle Raisers Association, Texas Wildlife Association, Texas Association of REALTORS®, South Texas’ Property Rights Association, Texas Forestry Association, Texas Sheep and Goat Raisers Association, Texas Poultry Federation, Independent Cattlemen’s Association of Texas, Texas Grain Sorghum Association, Plains Cotton Growers Inc., Texas Land and Mineral Owners Association, Texas Association of Dairymen, Texas Cattle Feeders Association, Corn Producers Association of Texas, Riverside and Landowners Protection Coalition, Texas Grain and Feed Association, Texas Citrus Mutual, Texas Hill Country Heritage Association, Texas Coalition for Conservation, Texas Wheat Producers Association, Texas Agricultural Land Trust, Ranchers and Landowners Association of Texas, Texas Nursery and Landscape Association and the Tax Exchange Institute.

Please view the press release here.

CPS Energy Power Line Collapses in San Antonio

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CPS Energy power line collapse. Courtesy of Texas Public Radio.

Heavy winds generated by thunder storms caused the collapse of a power line operated by CPS Energy this past weekend. The storms damaged approximately 100 structures of various kinds, and disrupted service to 40,000 CPS customers.

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CPS tower, opposite side. Courtesy of San Antonio Express.