Proposed bill could compensate some affected landowners

The battle last year in Flower Mound between homeowners’ access to their mineral rights and residents’ safety is beginning to have a trickling interest across the state.

State Rep. Bryan Hughes (R-Mineola) has authored a bill that would cause municipalities in Texas to compensate landowners who are unable to access their minerals because of unreasonable regulations.

House Bill 2110, which was submitted to the house committee on March 2 and discussed in a public hearing April 1, would make a city regulation that takes, damages, destroys, impairs, or prohibits development of a mineral interest subject to the Private Real Property Rights Preservation Act.

The bill would waive sovereign immunity to suit and liability for a regulatory taking; authorize a private real property owner to bring suit to determine whether the governmental action of a city results in a

taking; require a city to prepare a “takings impact assessment” prior to imposing certain regulations; and require a city to post 30-days notice of the adoption of most regulations prior to adoption.

Hughes said gas drilling ordinances would not disappear but that the bill’s intent is to make government entities be more cautious when establishing ordinances.

“Does this limit the government’s regulating power? Absolutely,” Hughes said. “But, it limits the test of reasonableness. A city, county or other governing body would have to make sure they’re being reasonable with their ordinances. There might be a city that is being unreasonable, and if they are, the courts would strike (the ordinance) down.”

Another facet of the bill would require municipalities to compensate a landowner who can’t obtain his or her mineral rights because of “unreasonable” regulations. Hughes said it would be a case-by-case scenario, adding that a landowner whose tract of land is large enough to obtain minerals without causing harm to the city or residents and is still prohibited could be entitled to compensation.

As of Tuesday, the bill was left pending in the house committee. To become law, the bill must get out of the house committee, be voted on by the house, get out of the senate committee, be voted on by the senate and approved by the governor.

Cities and towns across the state with ordinances that could be impacted have been contacted by the Texas Municipal League (TML), urging officials to oppose the bill.

Flower Mound hasn’t taken an official stand as of Tuesday.

“We’re actively monitoring this bill, but we have not yet taken an official position,” said Michael Ryan, town spokesperson for Flower Mound. “We’ll continue to track it as it makes its way through the legislative process and will take the necessary action at the appropriate time, should the town deem it necessary.”

Hughes, who represents District 5 in East Texas, said a potential boom in the Haynesville Shale in that area is one motivating factor for his efforts in authoring the bill.

“The Haynesville Shale is a huge gas play that some say will dwarf the Barnett Shale,” Hughes said. “I wanted to prepare ourselves, and seeing that coming was part of my motivation. I represent a part of the state that’s heavy in oil and gas. There is a lot of exploration in and around my district, and a lot of people are affected by this. People are coming to us concerned because they aren’t able to develop their minerals because of government actions.”

Flower Mound’s ordinance was at the center of debate last year when several variances were requested by Red Oak Gas to have gas well sites at the River Walk at Central Park, a 158-acre project that will be located north of FM 1171 and between FM 2499 and Morriss Road. The denial of the 15 variance requests by the town’s Oil and Gas Board of Appeals on June 18, 2008 resulted in a lawsuit by Red Oak Gas against the Oil and Gas Board of Appeals and the town.

The board denied various other requests from the River Walk team earlier that year.

Hughes said he is familiar with Flower Mound’s gas drilling restrictions and said Flower Mound’s situation is likely another reason people have approached him on the need for the bill.

Roy Morris is an attorney in Flower Mound who spoke at the public hearing in support of the bill. In the testimony, which can be seen on the Texas House Web site, Morris referenced the denial of the variance requests at the River Walk as an example of landowners who can’t obtain their minerals. Morris is part of a partnership that owns the River Walk.

“The concern is personal to me, but it also goes across the state,” Morris said. “Because, as an attorney, I represent landowners throughout the Metroplex, and I run into this issue almost weekly. People come in and say, ‘I have the right to drill, and I have the spacing requirements from the Railroad Commission, yet I’m being told not to.’”

Those who oppose the bill say it would eliminate a major role of local government.

“The bill would strip cities from doing what the residents have asked their government to do,” said Frank Sturzl, executive director of the TML, which opposes the bill. “Flower Mound has adopted an ordinance dealing with the use of land because residents came to town hall and asked for the ordinance. The council doesn’t just dream these up. We oppose any legislation that erodes a city’s authority to manage their affairs.

“People live in cities and want the government to have the authority to make ordinances to protect their land value,” Sturzl said. “A guy next door to you can’t have a pig farm in his front yard because of zoning ordinances. If he does, it devalues your property. Can anyone do whatever they want on their land if they think it’s the proper use? No. And this bill would undo that.

“Flower Mound and other cities have adopted ordinances to regulate gas drilling,” Sturzl said. “And, citizens have asked the government to do that because it protects the value of their land, and for health and safety reasons.”

The fear by some is that the bill’s passage would allow drilling pad sites to be much closer to a coveted location than currently allowed.

Morris said that wouldn’t happen because of current setbacks established by the Texas Railroad Commission.

“I can’t sit in my backyard in Flower Mound and drill. I wouldn’t comply with the Railroad Commission’s setback requirements,” Morris said. “That would never happen with the current law or the one that’s being proposed.”

Sturzl said with the bill’s passage, a city would have to jump through a lot of hoops to prevent drilling sites from inching closer to homes.

“This authorizes a property owner to bring about a lawsuit to see if the government action is a taking of the land,” Sturzl said. “Then, it’s off to court you go to see what the court decides.”

However, time could be against the bill’s side. The deadline for the committee to progress a house bill is May 11, though one state official said the deadline is much shorter because of the opposition it is likely to face.

Another option is for the bill to be amended and latched on to a similar bill that has progressed further, which Hughes said is a distinct possibility.

“In a session like this, there are a number of bills that this might be amended on to,” Hughes said.

Should the bill pass, it would go into effect Sept. 1 of this year.

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"Another facet of the bill would require municipalities to compensate a landowner who can’t obtain his or her mineral rights because of “unreasonable” regulations. Hughes said it would be a case-by-case scenario, adding that a landowner whose tract of land is large enough to obtain minerals without causing harm to the city or residents and is still prohibited could be entitled to compensation."


Very interesting concept.

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