Without Action, Texas Eminent Domain Powers will Expire for Water Utilities and other Entities

It is no secret that eminent domain powers have been a hot topic in Texas over the last few years. Governor Rick Perry, Sen. Kay Bailey Hutchison, and even George W. Bush made limiting eminent domain powers a key political issue following the U.S. Supreme Court's controversial decision in Kelo vs. City of New London.

While that case greatly expanded imminent domain power on a national level, Texas' Republicans quickly angled to limit government takings, especially for less than purely public purposes. These efforts culminated in the Texas Legislature's enactment of SB 18 during its 82nd Regular Session in 2011.  This legislation was billed as an "eminent domain reform bill," but its practical application extends far beyond "reform."

Of particular import to water utilities and other entities that have historically enjoyed eminent domain powers is a quasi-sunsetting provision that results in EXPIRATION of those powers in the event that they are not "registered" with the Texas Comptroller by December 31, 2012. The expiration date is September 1, 2013, unless timely, specific action is taken.

In order to avoid expiration, a public or private entity "authorized by the state by a general or special law to exercise the power of eminent domain" is required to submit to the Comptroller "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." These provisions of SB 18 are now codified in Section 2206.101 of the Texas Government Code.

Water Districts, Water Supply Corporations, Special Utility Districts, and municipal utilities in Texas generally enjoy eminent domain authority, and often use that power to condemn easements for pipelines, and land for lift stations, treatment plants and other facilities used in providing water and wastewater service.  In this regard, SB 18 implicates and threatens the ability of these utilities to conduct business as usual, in the event that management fails to timely register with the Comptroller.  This could present substantial problems and costs to these entities and their ratepayers.

To register as required by SB 18, entities with eminent domain powers should visit the Comptroller's SB 18 Compliance Page and follow the provided instructions.