Texas legislators already tackling property rights

AUSTIN — The Texas Legislature doesn't reconvene until 2013, but it's already facing a host of sticky legal issues that balance property rights against the ways private land can be taken.

The House Land and Resource Management Committee held the first of what likely will be several hearings on Monday, concentrating the discussion on three court cases. Two of the cases pit property owners against the oil and gas industry. The third has thrown into question the ability of the Texas Open Beaches Act to guarantee the public's right to access all parts of the coastline.

In a Beaumont-area case, Texas Rice Land Partners Ltd. and Mike Latta v. Denbury Green Pipeline-Texas LLC, a Texas Supreme Court opinion in August 2011 made clear that landowners can challenge in court whether a pipeline is a "common carrier" - one that also moves product for other companies - or is a private line, which wouldn't have eminent domain rights to take private property.

Uncertainty

The energy industry says the opinion creates uncertainty. With the state in the middle of a shale-drilling boom, thousands of miles of new pipeline are needed, and attorneys for industry groups worry they may have to fight - and refight - eminent domain battles along the entire length of a pipeline.

"The energy industry depends on a predictable regulatory environment," Phil Gamble, an attorney for the Gas Processors Association, told the House committee.

The case deals with the way pipeline companies get common carrier status. Basically they check a box on a Railroad Commission form.

The Texas Supreme Court said that having a company mark an "X" in a box isn't enough to entitle a company to take private property. The court's opinion notes that no permits ever have been denied.

State Rep. Rene Oliveira, D-Brownsville, chairman of the House Land and Resource Management Committee, called the developments in the Denbury case the "biggest in perhaps decades" for the pipeline industry.

Although the case deals with a pipeline, it could affect more than the oil and gas industry.

"The reasoning the court lays out is broadly applicable," said Josiah Neeley, an attorney and policy analyst with the Texas Public Policy Foundation, a conservative think tank.

A separate case pending before the Texas Supreme Court deals with whether a pipeline lowers the value of the whole property, or just the easement. If the court upholds the jury award in the LaSalle Pipeline LP v. Donnell Lands LP case in McMullen County, it could ensure that pipeline firms pay something for the diminished value of the so-called "remainder" property that isn't taken under an easement.

Open Beaches Act

Regan Beck, assistant general counsel for the Texas Farm Bureau, said that landowners should be able to testify about the reduced value to their land, as James Donnell Jr. did in district court.

"The landowner has one chance to get compensated," Beck said, noting that property owners do not receive royalties or rent payments from pipeline companies.

Monday's hearing also touched on the Open Beaches Act, which since the late 1950s has kept Texas beaches open to the public even after major erosion in the wake of hurricanes. But a controversial 6-2 decision, the Texas Supreme Court ruled in November 2010 that a beach can remain open if erosion is gradual and imperceptible, but public access ends if a storm suddenly pushes back the vegetation line.

"This may be a very big issue for the next session," Oliveira said.

jhiller@express-news.net