Report: Stop Bad Road Privatization

Property Rights Protection Act (PRPA)

Real Eminent Domain Reform
Released by: TexPIRG

Executive Summary

The Property Rights Protection Act (PRPA) is genuine eminent domain reform and provides property owners in Texas with much-needed protections from profit-driven eminent domain for private gain. PRPA guards landowners from wrongful takings and ensures property owners that they will be fairly compensated for their land. It provides the people of Texas with strong safeguards to defend themselves against unlawful condemnations. PRPA minimizes conflicts of interest, increases transparency and enhances remedies so that the condemnation process is one which favors the people of Texas rather than the condemning entities in the state, while providing clarity and certainty to condemning entities when uses are necessary and justified.

A “Necessary Public Use”

Constitutionally, a condemning entity must take only for a public use, after due process. But SB 18 effectively writes “public use” as a requirement, out of the US and Texas Constitution, by leaving the term open to almost any creative use a condemning entity can dream up. PRPA stops this, because public use must be a necessity that:

  • Provides a significant public benefit. (Subchapter A, Sec.2206a.001(1)(a))
  • Is stated clearly, ahead of time. (Subchapter A, Sec.2206a.001)
  • Does not allow condemning entities to arbitrarily change a use at whim, after a taking. (Subchapter A, Sec.2206a.001(3)(b); (Amended Subchapter E, Sec. 21.101(c), Property Code)
  • Does not allow shifting ownership of land after the taking: Taker must remain in control of the land and necessary use for which it was taken, until the use is cancelled, becomes unnecessary, is not realized or changes in character to any degree (Subchapter A, Sec.2206a.001(3)(b))
  • Must in whole or significant part be enabled through a Necessary Public Taking of property. (Subchapter A, Sec.2206a.001) (b))
  • Is clearly authorized in statute, and is not barred in statute. (Subchapter A, Sec.2206a.001); (Subchapter B, Sec.2206.001)

A “Necessary Public Taking”

Constitutionally, a taking must be for a public use; this implies the use is valid, and that it will not change. SB 18 presumes a taking is valid, if an administrator somewhere simply states that it is, with no definitions to evaluate the claim against. Under the PRPA, a taking must be:

  • A required element of a Necessary Public Use. (Subchapter A, Sec.2206a.001(1)(b))
  • Achieved only through due process of law. (Subchapter C, 2206.053); (Amended SECTION 4. Section 21.012, Property Code)
  • Permitted only if the Necessary Public Use cannot be achieved without that taking, and only if there is no reasonable and feasible alternative. (Subchapter A, Sec.2206a.001(2))
  • Proven with clear and convincing evidence on the part of condemning entity, to be in accordance with the Act. (Subchapter A, Sec.2206a.001(4)); ; (Subchapter C, 2206.053); (Amended SECTION 4. Section 21.012, Property Code)
  • On a parcel by parcel basis. (Subchapter A, Sec.2206a.001(4)(b)); (Subchapter A, Sec.2206a.001(3)); and not grouped with other properties, ((Subchapter C, 2206.053(b)) or  sequential “small” takings of parcel pieces in order to enable later, full parcel takings.
  • Accompanied by a bona fide offer, which is at least 125% of the market value of the property at its highest and best use, (Amended Section 3, Sec. 21.0113(5)(a), Property Code) among other things,  (Amended SECTION 3. Subchapter B, Chapter 21, Property Code).

Right of Repurchase

What if the necessary use for which a property was taken is cancelled? Or is no longer necessary, or isn’t achieved? Should the condemning entity be allowed to simply invent another use in order to keep it? We think not. SB 18 is no more than lip service; it’s repurchase rights language is so weak and so easily used in conjunction with other sections of SB 18, that any rights to repurchase are rendered meaningless. Property owners have virtually no chance of repurchasing their property if the condemning entity decides to keep it.

PRPA adds meaningful teeth value to rights of repurchase, and renders them enforceable through due process. Repurchase is:

  • Allowed immediately when necessary use is cancelled, becomes unnecessary or changes. (Amended Subchapter E, Sec. 21.101, Property Code)
  • Allowed after 5 years if the stated, Necessary Public Use is not realized (Amended Subchapter E, Sec. 21.101, Property Code)
  • At price originally paid at taking, or at present market value, whichever is less (Amended Subchapter E, Sec. 21.103(b), Property Code)
  • Does not include offset increases to pay for condemning entity costs of pursuing the Necessary Public Use. (Amended Subchapter E, Sec. 21.103(c), Property Code)
  • Able to be passed to others upon death, or assignable

Due Process

At best, SB 18 provides weak, procedural due process and nothing of substance. This allows courts to rubber stamp approval of a taking if condemning entities simply follow procedural rules. The effect is that, if the condemnor simply says the taking is for a public use, then it is, and the case is rubber-stamped to a compensation hearing. Any property rights mentioned can’t be realistically claimed. This has over the years led to expensive litigation that few landowners (and for that matter condemning entities) can afford.

PRPA offers stronger procedural due process and includes actual substance which will stop this practice and ultimately lead to fewer expensive lawsuits, and to more certain outcomes:

  • Burden of proof is on condemning entity, to prove assertions with clear and convincing evidence. (Subchapter A, Sec.2206a.001(4)); ; (Subchapter C, 2206.053); (Amended SECTION 4. Section 21.012, Property Code)
  • Adequate notice by condemning entity or court/commissioners, to all concerned, with reasonable timelines. (All notice provisions, including Amended SECTION 4. Section 21.012a, Property Code)
  • Hearing to determine lawfulness  of taking, prior to compensation hearing: A complete evidentiary hearing allows for documentary and testimonial evidence, in order to prove the lawfulness of a taking before the issue of compensation is decided. (Amended SECTION 4. Section 21.012, Property Code)
  • Damages/compensation to consider fair appraisals, and supportive, documentary and testimonial evidence. (Amended Section 3, Sec. 21.0113, Property Code)
  • Right to appeal condemnation petition outcomes to a 6 person jury comprised of landowners.
  • A use variance permit and review hearing if and when decision is made by condemning entity to change to any degree the Necessary Public Use. (Amended Subchapter E, Sec. 21.101(c), Property Code)
  • Attorney’s fees for prevailing condemnee at various stages in proceedings (Amended SECTION 5. SubSec. 21.014a, Property Code)

Transparency

SB 18 allows the happenings in an eminent domain taking to remain under the radar, difficult to review on a case by case basis, or to review en mass with other takings in order to evaluate, from a public overview and policy perspective, to know how and where to improve the practice of eminent domain.

PRPA shines a light on each and all, eminent domain transactions and proceedings. We as Texans must be able to ascertain the practice of eminent domain, so we can improve or correct it, in order to ensure that eminent domain best protects landowners while, with objective transparency, we ensure that it fully achieves the opportunity to achieve a significant public benefit intended by the framers of our State and US Constitutions.

  • All records of pre or post settlements/takings sent to comptroller, and made available in person to all parties to proceedings and to general public, per public records request and online (Subchapter D, Sec. 2206.102)

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