All public and private entities authorized to exercise the power of eminent domain in the State of Texas must comply with a December 31, 2012, deadline to submit a letter to the Comptroller of Public Accounts stating that the entity is authorized to exercise the power of eminent domain and identifying each provision of Texas law that grants the entity the power to condemn.

Background

In the summer of 2011, the 82nd Texas Legislature passed Senate Bill 18 (“SB 18”), which made significant revisions to several Texas codes, changed substantive eminent domain law, and created additional procedural requirements for the condemnation process. Act of May 19, 2011, 82d Leg., R.S., ch. 81, § 2. One of those changes created Texas Government Code Section 2206.101, entitled “Report of Eminent Domain Authority; Expiration of Authority.” Id.

Reporting Requirements for Entities with Power of Eminent Domain

Section 2206.101(b) requires that any entity Texas authorizes by “general or special law” to exercise the power of eminent domain “shall submit to the [C]omptroller a letter stating that the entity is authorized by the state to exercise the power of eminent domain and identifying each provision of law that grants the entity that authority.” The entity with the power of eminent domain must file the letter no later than December 31, 2012, and must send the letter by certified mail, return receipt requested. Susan Combs, Texas Comptroller of Public Accounts, has posted a dedicated webpage for SB 18 compliance, which you can see by clicking here. The website provides the Comptroller’s address and also provides this link to download the Comptroller’s form letter, entitled “Required Documentation of Eminent Domain Authority in Texas.”

The penalty for failure to comply with Section 2206.101(b) is the expiration of the entity’s authority to exercise the power of eminent domain on September 1, 2013. Tex. Gov’t Code § 2206.101(c).

SB 18 requires the Comptroller take the information provided and, no later than March 1, 2013, prepare and send a report to the Governor, the Lieutenant Governor, the Speaker of the House of Representatives, the presiding officers of the appropriate standing committees of the Senate and House of Representatives, and the Texas Legislative Council. Tex. Gov’t Code § 2206.101(d). The report will identify the name of each entity that submitted a letter to the Comptroller and provide a corresponding list of the provisions granting eminent domain authority as identified by each entity submitting a letter. Id. The bill goes on to require the Texas Legislative Council to use the Comptroller’s report to prepare non-substantive revisions of the statutes granting eminent domain authority “to reflect the state of law after the expiration of an entity’s eminent domain authority effective under subsection (c).” Tex. Gov’t Code § 2206.101(e).

Filing Considerations

Loss of the power of eminent domain is a significant non-compliance penalty; therefore, organizations need to make a detailed study of all of their affiliates, partnerships, and joint ventures and to send the Comptroller separate letters for each entity. Condemnors should also take special care and pay particular attention to enumerating all possible statutes that could provide an entity with the power of eminent domain. Large organizations with multiple affiliates possessing condemnation authority often rely upon several statutory provisions granting the right to take. Reporting entities must therefore avoid adopting a cookie-cutter approach when preparing their letters for submission to the Comptroller. A reporting entity should also double check recent determinations of necessity, permit applications, and other regulatory filings to ensure all references to any grants of eminent domain authority are consistent with the information provided to the Comptroller.