House Bill Tackles Pipeline Companies’ Eminent Domain Powers

In a state where property rights are considered to be on par with the right to breathe, pipeline companies can seize private land by invoking the power of eminent domain. In what state Rep. Rene Oliveira (D-Brownsville) deemed “a ridiculous process,” a company merely has to assert that it’s a “common carrier” to gain the power of eminent domain.

This common carrier status, which means the company is carrying competitors’ products as well as its own to serve the public good, grants companies the right to take land without getting landowners’ consent. Oliveira’s House Bill 3547 attempts to set up a process to ensure companies claiming the status are actually common carriers. The House Business and Industry Committee discussed the bill last night.

In Texas, there is currently no process to verify whether a company is actually carrying competitors’ products. All a company has to do is check a box on its permit application to the Texas Railroad Commission.

The commission doesn’t have the authority to ensure the company can claim the status. It does not ask for evidence or otherwise monitor the pipeline. This leaves the door open for companies that want the power of eminent domain free to do so without any oversight. The practice has resulted in a number of lawsuits across the state. Landowners who feel their land was taken unfairly (and sometimes without notice), have sued pipeline companies, and in at least one case the courts have determined that some pipeline companies “game the permitting process” to get eminent domain powers.

With House Bill 3547, Oliveira aims to change the process so that pipeline companies can’t abuse the common carrier designation. It would require the State Office of Administrative Hearings to review the common carrier application and conduct a hearing to determine if a company actually intends to be a common carrier. A company would have to prove a certain percentage of the pipeline’s capacity (the bill stipulates 10 percent, though Oliveira says the number is arbitrary and will likely be changed) was being used to carry a competitor’s fuel. The hearing should include “an aggressive and thorough investigation” before a company is granted the status, Oliveira said at the hearing.

Last night, the majority of witnesses testified in favor of the bill. Supporters included Julia Trigg Crawford, a farmer from Direct, Texas (near Paris) whose legal case against TransCanada, the company behind the Keystone XL pipeline, has gotten a lot of attention in the national media.

“It is gut-wrenchingly refreshing to hear this dialogue at this level with the openness you guys have,” Crawford told the committee. “Because landowners have been screaming at the top of our lungs to elected officials and judges and people at every agency we can find for years with everyone just holding their hands up.” … FULL STORY