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Can a Private Company Use Eminent Domain in Texas?

Both the United States Constitution and the Texas State Constitution grant the government the power of eminent domain. The government may also delegate the power of eminent domain to other entities to condemn private property for public use. Some private companies and individuals may be granted the ability to condemn private property to complete specific projects intended for the public benefit.

The government generally uses eminent domain to purchase private land to create room for new construction projects or to expand the existing infrastructure, including highways, public roads, airports, or public buildings. Often, a private company is authorized to use this power for energy transportation or common carrier pipelines, such as oil, water, or gas pipelines. Our Arlington, TX eminent domain litigation attorneys discuss.

Eminent Domain and Condemnation in Texas

Taking private property under the authority of eminent domain is known as condemnation. The Texas Constitution’s Bill of Rights, under Article I, Section 17, prohibits the taking, damaging, or destruction of private property for public use without paying proper compensation while the Texas Property Code prescribes three necessary elements for the legitimate use of eminent domain:

  • The condemning entity must be the government or a private company with government authorization.
  • The purpose for condemning the property must be public use or benefit.
  • The government or private company with government authorization must pay the landowner adequate compensation for the condemned property.

The Effect of Kelo v. New London on Texas Eminent Domain Cases

The U.S. Supreme Court expanded the government’s power of eminent domain in their ruling in Kelo v. New London. This controversial decision granted the government the authority to condemn private property for economic development. Condemnation has been allowed for large commercial projects, including sports stadiums and shopping centers. Due to the broad interpretation of economic development, private companies have sought to use the right for private projects.

In response to the advocacy of private property rights groups, the Texas Legislature has passed laws limiting the use of eminent domain for private commercial projects. The Landowner’s Bill of Rights is one of these legislative protections.

Texas’s Landowners’ Bill of Rights

The Texas Landowner Bill of Rights provides property owners several protections including:

  • Landowners are entitled to adequate compensation for any property seized.
  • Private property can only be seized for the public benefit.
  • Only the government or a private company with government authorization can seize private property.
  • Landowners are entitled to notice of condemnation.
  • Landowners are entitled to a written, certified appraisal.
  • Before condemnation procedures can commence, a good faith purchase offer must be presented to the landowner.

Eminent Domain Requires Condemnation for Public Use

The exercise of eminent domain and condemnation requires that the taken property must be for public use. Statutorily, public use is defined as the ownership, use, and enjoyment of the property by the State, a political subdivision of the state, or the public at large, or an entity granted the power of eminent domain under law, or the elimination of urban blight. Because this definition provides little practical guidance, courts examine the specific facts of a case to determine if the specified reasons constitute public use.

In Texas, the purpose cannot bestow a private benefit to a particular private entity or party. Additionally, public use does not occur if the primary purpose of condemnation of the private property is for economic development or improvement of tax revenues.

Condemnation Procedure

The condemnation procedure consists of three specific phases. Our experienced attorneys have the skill and depth of knowledge to assist you during each part of the process.

First is the negotiation process between the government agency or authorized entity and the property owner. An appropriate offer, in writing, must be made along with a certified appraisal of the property value.

If there is no agreement possible, then a Special Commissioner’s hearing is held to determine the property value and any potential damages. The court will appoint three local landowners as commissioners to hear evidence concerning the value of the condemned property. Once all of the evidence and arguments have been presented, the commissioners will determine the proper compensation.

If either party is dissatisfied with the commissioners’ determination, they can appeal the decision through a civil condemnation suit. It is crucial, if you have not already done so, to retain the services of our Texas eminent domain attorneys to represent you during the trial process.

When Can Private Companies Use Eminent Domain for Public Use?

Public use includes infrastructure construction projects like highways, bridges, and railroads, and public projects like schools, hospitals, or public parks. The most common type of eminent power exercised is for the construction or expansion of old gas pipelines. Often these projects are delegated to private companies.

The power to exercise eminent domain and condemnation must be conferred to a private company by the Texas legislature. Granting this power requires a two-thirds vote of both the Texas Senate and House of Representatives. The most common examples of private companies authorized to condemn private property include groundwater conservation districts, gas or electric corporations, and common carrier pipelines.

Eminent Domain and Private Property Attorney in Texas

The statutes, rules, regulations related to eminent domain and condemnation are complicated, requiring the services of an experienced eminent domain attorney. If you are facing the condemnation of your property, or have any questions regarding eminent domain, contact The Queenan Law Firm, P.C. to learn more about our services and how we can help you. Call (817) 774-9627 to schedule a free consultation.