2015-2016 Bill 4326: Procedures for Eminent Domain for Pipeline Companies - South Carolina

1 South Carolina General Assembly 2 121st Session, 2015-2016 3 4 H. 4326 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Reps. Hixon, Corley, Taylor, Clyburn, Wells and Gagnon 10 Document Path: l:\council\bills\bh\26317ab15.docx 11 Companion/Similar bill(s): 868 12 13 Introduced in the House on June 3, 2015 14 Currently residing in the House Committee on Judiciary 15 16 Summary: Procedures for eminent domain for pipeline companies 17 18 19 HISTORY OF LEGISLATIVE ACTIONS 20 21 Date Body Action Description with journal page number 22 6/3/2015 House Introduced and read first time ( House Journalpage 225) 23 6/3/2015 House Referred to Committee on Judiciary ( House Journalpage 225) 24 6/4/2015 House Member(s) request name added as sponsor: Gagnon 25 26 View the latest legislative information at the website 27 28 29 VERSIONS OF THIS BILL 30 31 6/3/2015 32 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 12 1976, BY ADDING ARTICLE 3 TO CHAPTER 7, TITLE 58 SO 13 AS TO PROVIDE PROCEDURES FOR THE EXERCISE OF 14 EMINENT DOMAIN BY PIPELINE COMPANIES, TO 15 PROVIDE NECESSARY DEFINITIONS, TO PROVIDE 16 CERTAIN RELATED CERTIFICATION OR PERMITTING 17 FUNCTIONS AT THE PUBLIC SERVICE COMMISSION AND 18 THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL 19 CONTROL, AND TO PROVIDE PROPERTY OWNER RIGHTS 20 AND A CAUSE OF ACTION FOR DAMAGES SUSTAINED 21 BY CERTAIN ADJACENT PROPERTY OF THE OWNER OF 22 PROPERTY CONDEMNED UNDER THE PROVISIONS OF 23 THIS ACT; AND TO DESIGNATE THE EXISTING 24 PROVISIONS IN THE CHAPTER AS ARTICLE 1 ENTITLED 25 “GAS AND WATER COMPANIES”. 26 27 Be it enacted by the General Assembly of the State of South 28 Carolina: 29 30 SECTION 1. Chapter 7, Title 58 of the 1976 Code is amended by 31 adding: 32 33 “Article 3 34 35 Pipeline Companies 36 37 Section 587310. The South Carolina General Assembly finds 38 and declares that pipelines, including petroleum pipelines, and 39 their related facilities are necessary for use in the transportation of 40 products, including petroleum and petroleum products, but their 41 potentially hazardous nature requires special procedures and

[4326] 2 1 restrictions governing the grant of the power of eminent domain to 2 pipeline companies, including petroleum pipeline companies. 3 4 Section 587320. As used in this article: 5 (1) ‘Certificate of public convenience and necessity’ or 6 ‘COPCN’ means authorization by the South Carolina Public 7 Service Commission or its designee as provided in Section 587340 8 as a prerequisite for a pipeline company to exercise the right to 9 eminent domain that is required before the company may exercise 10 the right. 11 (2) ‘Eminent domain permit’ or ‘EDP’ means authorization by 12 the Director of the Department of Health and Environmental 13 Control or his designee as provided in Section 587350, as a 14 prerequisite for a pipeline company to exercise the right to eminent 15 domain that is required before the company may exercise the right. 16 (3) ‘Necessary for a public purpose’ or ‘public necessity’ mean 17 for a use that is vital to the welfare of the people of this State 18 which will be achieved by the location of a pipeline within the 19 boundaries of this State after considering any environmental harm 20 that the pipeline might cause. 21 (4) ‘Pipeline’ means a pipeline constructed or to be constructed 22 as a common carrier in interstate or intrastate commerce for the 23 transportation of products, to include petroleum or petroleum 24 products, in or through this State. 25 (5) ‘Pipeline company’ means a corporation organized under 26 the laws of this State or which is organized under the laws of 27 another state, and also is authorized to do business in this State and 28 which is specifically authorized by its charter or articles of 29 incorporation to construct and operate pipelines, including those 30 pipelines for the transportation of petroleum and petroleum 31 products. 32 (6) ‘Pipeline facility’ or ‘pipeline facilities’ means a pipeline 33 and all equipment or facilities, including lateral lines, essential to 34 the operation of the pipeline but may not include a storage tank or 35 storage facility that is not being constructed as a part of the 36 operation of the pipeline. 37 38 Section 587330. (A)(1) Subject to the provisions and 39 restrictions of this article and Title 28, a pipeline company may 40 acquire an interest in property by eminent domain for the 41 construction, reconstruction, operation, and maintenance of 42 pipelines in this State; provided, however, that before instigating 43 or indicating an intention to instigate an eminent domain

[4326] 3 1 condemnation action, the pipeline company shall send through 2 certified mail to each landowner whose property may be 3 condemned written notice containing the following language in 4 boldface type: 5 ‘ ARTICLE 3, CHAPTER 7, TITLE 58 OF THE SOUTH 6 CAROLINA CODE OF LAWS, 1976, PROVIDES SPECIFIC 7 REQUIREMENTS THAT MUST BE FOLLOWED BY A 8 PIPELINE COMPANY BEFORE IT MAY CONDEMN YOUR 9 PROPERTY. THIS ARTICLE ALSO PROVIDES SPECIFIC 10 RIGHTS FOR YOUR PROTECTION. YOU SHOULD MAKE 11 YOURSELF FAMILIAR WITH THOSE REQUIREMENTS AND 12 YOUR RIGHTS BEFORE CONTINUING NEGOTIATIONS 13 CONCERNING THE SALE OF OR GRANTING AN 14 EASEMENT OVER YOUR PROPERTY TO A PIPELINE 15 COMPANY.’ 16 (2) The notice required in item (1) must be delivered to the 17 landowner at least fourteen days before the company may access 18 the property for any purpose and must be accompanied by: 19 (a) information regarding whether survey activities on the 20 landowner’s property are being requested, or may be requested, 21 before issuance of a COPCN; 22 (b) a copy of the COPCN; and 23 (c) to the extent that survey activities are sought on a 24 landowner’s property at any time, the following additional written 25 information also must be provided: 26 (i) notification that the pipeline company is not entitled 27 to perform any survey activities on the property of the landowner, 28 without his prior written consent, or otherwise enter upon his 29 property before issuance of a COPCN; 30 (ii) a description of the proposed survey activities; 31 (iii) a general schedule of the dates of the proposed 32 survey activities; 33 (iv) a map showing the approximate location of the 34 proposed survey activities; 35 (v) a description of any soil testing and water testing; 36 (vi) a description of proposed access to the landowner’s 37 property, including the proposed access to cropland, pasture, forest 38 land, orchards, and livestock enclosures; and 39 (vii) a description of proposed measures to prevent 40 property damage and a statement that the pipeline company shall 41 provide reasonable compensation to the landowner for damage to 42 the property incident to such survey activities.

[4326] 4 1 (B)(1) The restrictions and conditions imposed by this article on 2 the exercise of the power of eminent domain by pipeline 3 companies do not apply to relocations of pipelines necessitated by 4 the exercise of a legal right by a third party or to activities incident 5 to the maintenance of an existing pipeline or existing pipeline right 6 of way. 7 (2) A pipeline company is entitled to reasonable access to 8 property proposed as the site of a pipeline so the company may 9 conduct a survey of the surface of the property for use in 10 determining the suitability of the property for placement of a 11 pipeline, but this right to access is only available after: 12 (a) DHEC issues a certificate of public convenience and 13 necessity; or 14 (b) the pipeline company obtains the prior written consent 15 to this access from the landowner. 16 (C) After obtaining the COPCN and after complying with the 17 notice requirements set forth in subsection (A), a pipeline company 18 is entitled to reasonable access to any property proposed as the site 19 of a pipeline for the purpose of conducting additional surveying 20 which may be necessary in preparing its submission to the 21 Department of Health and Environmental Control as provided in 22 Section 587350. 23 (D) The owner of property or a property interest that is entered 24 by a pipeline company for the purpose of surveying the property, 25 as allowed in this section, or for access to or maintenance or 26 relocation of an existing pipeline has the right to be compensated 27 for damage to the property incident to the entry. A survey 28 conducted pursuant to this article must be conducted in a manner 29 to cause minimal damage to the property surveyed. 30 31 Section 587340. (A) A pipeline company shall obtain a 32 COPCN from the Public Service Commission that authorizes the 33 company to exercise the right to eminent domain before the 34 company may exercise the right. 35 (B) The commission shall promulgate regulations concerning 36 the requirements for obtaining a COPCN. These regulations must 37 include: 38 (1) a requirement that the application for such certificate 39 include a description of the proposed project including its route, a 40 description of the public convenience and necessity which supports 41 the proposed pipeline route, the width of the proposed pipeline 42 corridor up to a maximum width of no more than one hundred feet, 43 a showing that the use of the power of eminent domain may be

[4326] 5 1 necessary for construction of the pipeline, and a showing that the 2 public necessity for the pipeline justifies the use of the power of 3 eminent domain; 4 (2) a provision for reasonable public notice of the 5 application and the proposed route; 6 (3) a provision for at least three public hearings on the 7 application and the filing and hearing of any objections to such 8 application; and 9 (4) other reasonable requirements that the commission 10 considers necessary or desirable to a proper determination of the 11 application. 12 (C) The approval or denial of the COPCN is subject to review 13 by the Administrative Law Court pursuant to the Administrative 14 Procedures Act. 15 16 Section 587350. (A) In addition to obtaining a COPCN, a 17 pipeline company shall obtain an eminent domain permit from the 18 Director of the Department of Health and Environmental Control 19 as provided in this section before it may exercise the power of 20 eminent domain. 21 (B) The department shall promulgate regulations concerning 22 the requirements for obtaining an EDP from DHEC as required in 23 subsection (A), which must include: 24 (1) mandatory and reasonable public notice to an owner of 25 property who, after reasonable efforts, cannot personally be given 26 the notice in Section 587330(A); 27 (2) mandatory and reasonable public notice of the filing of 28 an application for a permit; 29 (3) provisions for public hearings on all applications for 30 such permits; and 31 (4) a requirement that DHEC may not grant a permit for the 32 construction of any portion of the pipeline project for which the 33 use of the power of eminent domain may be needed until: 34 (a) the pipeline company submits the proposed siting of 35 the portion of the pipeline project to DHEC and appropriate 36 notices to affected parties; and 37 (b) the Director of DHEC determines after a public 38 hearing that the location, construction, and maintenance of the 39 portion of the pipeline project in this State is consistent with and 40 not an undue hazard to the environment and natural resources of 41 this State consistent with the factors set forth in subsection (C). 42 (C) In making the decision required by subsection (B)(4), 43 DHEC shall determine whether:

[4326] 6 1 (1) the proposed route of the portion of the pipeline project 2 is an environmentally reasonable route; 3 (2) other corridors of public utilities already in existence 4 reasonably may be used for the siting of the portion of the pipeline 5 under consideration; 6 (3) ample opportunities have been afforded for public 7 comment, including the governing body of any municipality or 8 county within which the proposed project or any part of it is to be 9 located, as well as the general public; and 10 (4) reasonable conditions to the permit exist so to allow the 11 monitoring of the effect of the pipeline upon the property subjected 12 to eminent domain and the surrounding environment and natural 13 resources. 14 (D) A permit application must include an environmental effects 15 report to support the permit application, which must include: 16 (1) a description of the proposed project under consideration 17 for condemnation, including its route across the property 18 sufficiently adequate to permit the location of the subject parcel on 19 a United States Geological Survey 1:24,000 topographic 20 quadrangle map; 21 (2) a copy of the COPCN, which must include accurate route 22 maps and descriptions; 23 (3) the location of lands under consideration for 24 condemnation and the names of the owners of said lands; 25 (4) a specification of alternative routes, as well as 26 information on other corridors of public utilities; 27 (5) information on the existence of local zoning ordinances 28 and whether the plans of the pipeline company comply with 29 applicable local zoning ordinances; and 30 (6) a proposal, where appropriate, for monitoring the effects 31 of the pipeline on the surrounding environment and natural 32 resources including, but not limited to, wetland dewatering, 33 sinkhole inducement, impact on protected plants and animals, 34 pollutant pathways, and stream siltation. 35 (E) The complete application including the environmental 36 effects report must be made available to the public upon request. 37 38 Section 587360. All hearings and appeals on applications for 39 certificates and permits required under this article must be 40 conducted pursuant to the Administrative Procedures Act. 41 42 Section 587370. When a pipeline company that has obtained the 43 COPCN and EDP required in this article is unable to acquire the

[4326] 7 1 property or interest required for such certified or permitted project 2 after reasonable negotiation with the owner of such property or 3 interest, the company may acquire that property or interest by the 4 use of the condemnation procedures authorized by the Eminent 5 Domain Procedure Act found in Title 28. 6 7 Section 587380. If the portion of the pipeline route chosen and 8 approved pursuant to this article unreasonably impacts any other 9 property of the same owner that is not acquired by eminent domain 10 as a part of the project, the owner has a cause of action for 11 compensation available under the laws of eminent domain for the 12 fair market value of the damage of the parcel taken.” 13 14 SECTION 2. The existing sections of Chapter 7, Title 58 are 15 designated Article 1, “Gas and Water Companies”. 16 17 SECTION 3. This act takes effect upon approval by the 18 Governor. 19 XX 20

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