Understanding Eminent Domain in Texas

What eminent domain is

Eminent domain is the power to take private property for a public use, on payment of adequate compensation. In Texas the substantive limit sits in Article I Section 17 of the state constitution, and the procedure sits in Chapter 21 of the Property Code, beginning at section 21.001.

Who can use eminent domain in Texas

The power reaches further in Texas than in most states, because the Legislature has extended it beyond government.

• Governmental entities. The state, counties, cities, school districts, water districts and similar bodies.
• Public agencies. TxDOT for highway right of way, river authorities for water projects, and comparable agencies.
• Certain authorised private entities. Common carrier pipelines and electric utilities among them.

That last category is where Texas disputes concentrate. In Texas Rice Land Partners v Denbury Green Pipeline (2012) the Texas Supreme Court held that a pipeline does not become a common carrier merely by checking a box on a permit form. There must be a reasonable probability that the line will at some point serve the public by transporting product for one or more customers who will retain ownership of it.

The Landowner Bill of Rights

The Office of the Texas Attorney General prepares a Landowner Bill of Rights, and an entity must deliver it to the owner with the initial offer. It is short, it is written for landowners rather than lawyers, and it is the first document worth reading when contact is made.

What a bona fide offer requires

Section 21.0113 of the Property Code sets out what makes an offer bona fide. There must be an initial written offer. The final offer must come on or after the thirtieth day after that initial offer. It must be supported by a written appraisal from a certified appraiser, and it must equal or exceed that appraisal amount. The owner must be given at least fourteen days to respond.

House Bill 2730, passed in 2021, added further requirements, including plain language disclosure about damage to the remainder and minimum terms for easements.

How compensation is measured

For a whole taking, compensation is the market value of the property. For a partial taking, Texas uses the before and after method: the value of the entire tract before the taking, against the value of the remainder after it. The difference is the compensation, and it captures both the strip acquired and the damage done to what you keep.