Submitted by LIV Board Members, Calvin Tillman and Michele Gangnes
As we wrap up another round of the Texas Legislature, I can’t help but think of another lost opportunity. This session began with great optimism, as they always do, but in the end, the same old question arises; why did I bother? Why do I continue to let myself be optimistic, only to be disappointed session after session? Maybe the disappointment will wear off by the time the 86th Legislature rolls around, but right now, eminent domain reform seems hopeless.
“Independent thinking” is needed at the Legislature
Texans for Property Rights, a big property rights coalition made a huge push for real eminent domain reform, something that is long overdue in Texas. They held meetings throughout the state before the legislative session began. In other words, they did their homework during the interim session. The leading members were mostly large agricultural groups like the Farm Bureau, Texas and Southwest Cattle Raisers Association, and some wildlife and conservation groups as well. Sen. Lois Kolkhorst was one of the leading politicians working with the coalition on its most important legislation.
Legislation was introduced that would have gone a long way in leveling the playing field for property owners dealing with condemnation. This legislation, which was authored by Senator Lois Kolkhorst, would have put significant controls on the information pipeline companies must provide property owners and also require the condemning authority to pay the property owner’s legal fees if the property owner successfully resisted the condemnor’s low-ball offer. It initially appeared that this legislation was going to go somewhere. Then politics got involved.
The real teeth in this legislation was the requirement that the condemnor pay the legal fees of the victims if the final judgment was 20% higher than the initial offer. This was meant to discourage low initial offers, which happens most of the time.
A study was completed with the assistance of the League of Independent Voters of Texas on the most recent 23 condemnation cases from the Texas Department of Transportation. The cases are from around the entire state, from Houston to Lubbock to Fort Worth. What this study highlighted was that in instances where the victim disputed the initial offer, the average initial offer was 41% of the final offer and the final settlement was on average 126% higher than the initial offer. So clearly this type of legislation was needed to provide relief to Texas landowners facing eminent domain takings. The TxDOT study indicates that “fair” price may be in the eye of the beholder and that without incurring legal fees to effectively dispute the fairness of a condemnation offer, landowners may be deprived of their legal right to just compensation when property is taken for a public purpose.
The hearings for some of these bills went really well with passionate testimonies of property owners who had their lives turned upside down by having their land condemned. Of course, the same old critics of any kind of eminent domain reform were also present. These critics are the ones who benefit from the current way of doing business. They made baseless claims of how this would increase litigation and drive up the costs for public projects. These maneuvers really made it plain that landowners are being underpaid for their property through eminent domain. Sadly, in the end, the invalid arguments won and nothing was accomplished.
It was clear that not all of the legislators were attentive during the hours and hours of testimony. While a few asked questions and seemed genuinely interested, others either showed no interest or had no clue of what the witnesses were talking about. There was absolutely no empathy from the legislators for the victims of the horrific crime of taking someone’s property.
I wonder how long we will continue down the path to nowhere. The definition of insanity is doing the same thing over and over expecting different results. Maybe it is time that we consider voting for someone who is not burdened by a particular party, someone who can have an independent thought without the party giving it to them. This session showed me more than ever why we need a group like the League of Independent Voters of Texas. Without strong independent thinking, there is little incentive for legislators to care about whose property is being taken and by whom and for what purpose.
The League of Independent Voters will continue to pursue eminent domain reform.
The League of Independent Voters refuses to take no for an answer on eminent domain reform. Another case in point not addressed in the 2017 session was the proliferation of “eminent domain for private gain.” The League has long been focused on this issue, most recently in connection with the 142-mile water pipeline for the San Antonio/Vista Ridge Project.
Under both the federal and Texas constitutions all entities who condemn or “take” private property are required to pay just compensation and to take private property only for public purposes. Thousands of entities in Texas have been delegated eminent domain authority by the Legislature. The League is concerned that there are few standards and protections for landowners to assure that compensation and purpose requirements are met. Also, it is concerned that there be effective oversight, accountability and transparency in the process.
Public infrastructure needs of Texas are increasingly expected to be met with private, for-profit initiatives like Vista Ridge. So-called “public-private partnerships” or “P3’s” are being pushed by state and local governments as the way to get public projects constructed. A major reason P3’s are currently favored is that private companies assume project and construction risks and liabilities that the state or city would otherwise incur.
Among other consequences, shifting that risk typically involves allowing the private partner, or a captive entity of the private partner that has been granted eminent domain authority, to condemn private property needed/wanted to construct the highway, pipeline or power lines. The governmental partner neither exercises its own ability to condemn nor delegates its authority to the private side. Instead of being actively involved in building the project, the public side simply pays for whatever the project produces and has no direct interaction with landowners.
The looming problem is that typically the lower the price paid to take property, the higher the profits for the private partner. The public partner’s “hands off” approach may remove the incentives to pay a fair price to innocent landowners and contributes to lack of accountability and transparency on the private side. In our experience, private partners find it much easier to avoid public scrutiny than governmental condemnors.
This is a potential problem for landowners in every such project. However, there is a more fundamental policy problem involved when the private partner has the power to condemn private property. The legal requirement that condemnation may only be exercised for a public purpose may be abused. The private partner’s primary purpose is to enrich itself, and the ability to condemn facilitates this motive. To avoid unfair results, either the governmental partner itself should have to condemn the property or the private partner should be subject to public oversight and scrutiny every step of the way. Otherwise, the private partner should be denied the power to condemn and instead should have to acquire property from willing sellers in arm's length transactions.
So far, it appears that eminent domain will not be addressed in the 30-day special session to begin on July 18th, but The League of Independent Voters will focus on these and related critical issues in the coming interim period between sessions.