You asked for a description of eminent domain legislation passed in other states in the wake of the U. S. Supreme Court's decision in Kelo v. City of New London, 125 S. Ct. 2655 (2005). Information in this reported was primarily taken from webpages that the National Conference of State Legislatures (www. ncsl. org), the American Planning Association (www. planning. org), and the Institute for Justice (http: //www. ij. org/), have on this subject.

SUMMARY

Most (28) states have adopted legislation amending their eminent domain laws subsequent to the Kelo decision. (In most cases, the bill numbers cited in this report are hyperlinked to legislation or the legislature's homepage. ) As described in OLR report 2005-R-0662, Alabama, Delaware, and Texas adopted legislation in 2005. The remaining states adopted legislation in 2006.

Most of these laws restrict the purposes for which eminent domain can be used. In general, these laws (1) prohibit the use of eminent domain for economic development, (2) limit economic development takings to blighted areas, or (3) restrict what constitutes a “public purpose” or “public use” for which eminent domain can be used. The legislation in Arizona, Iowa, and New Mexico was vetoed.

Other legislation makes procedural changes, including requiring greater public notice or more public hearings or requiring approval of takings by elected officials. Another approach has been requirements for compensation greater than fair market value or giving the former the right of first refusal if the property is not used for the purpose for which it was taken. Ohio placed a moratorium on eminent domain for economic development.

Legislatures in six states (Florida, Georgia, Louisiana, Michigan, New Hampshire, and South Carolina) have passed constitutional amendments regarding eminent domain that will take effect if approved by the states' voters this fall.

RESTRICTIONS ON ALLOWABLE PURPOSES FOR EMINENT DOMAIN

Prohibition on Using Eminent Domain for Economic Development

Alaska. HB 318 prohibits the use of eminent domain to transfer private property to another private entity for economic development purposes, unless authorized by the legislature. It similarly bars taking residential property for recreational facilities or projects, unless the legislature authorizes it.

Arizona. H. B. 2675 (vetoed) would have prohibited the use of eminent domain for economic development purposes. It also would have limited the use of eminent domain in connection with blight removal to property that is maintained in a slum condition. The property's condition would have to have been determined on a property-by-property basis as opposed to an area-wide basis. The bill also would have required a two-thirds vote of the governing body to designate a slum area. It also would have specified that the determination that eminent domain is necessary to take property is a judicial question and not a legislative determination.

Florida. HB 1567 prohibits the transfer of private property acquired through eminent domain to another private entity with certain exceptions, such as use where the private use is incidental to a public project.   It prohibits the use of eminent domain to generate additional tax revenue.   It also prohibits using eminent domain to eliminate blight conditions, except under the Community Redevelopment Act when the taking is necessary to remove a threat to the public health or safety.

Georgia. HB 1313 prohibits the use of eminent domain for economic development purposes, including enhancement of the tax base or tax revenue, increased employment, or improvement in the general economic health by transferring the property to another private entity.  

Idaho. H. B. 555 prohibits the use of eminent domain for a public use that is merely a pretext for transferring the property to another private entity, or for promoting economic development.

Kentucky. H. B. 508 prohibits the transfer of private property to another private entity for economic development purposes, including enhancement of the tax base or tax revenue, increased employment, or promoting the general economic health of the community.

Minnesota. S. F. 2750 prohibits the use of eminent domain for economic development and requires that it be used only for a public use or public purpose. On the other hand, it allows for takings for blight mitigation under certain conditions

Nebraska. LB 924 prohibits the use of eminent domain primarily for economic development purposes, which it defines to mean use by a commercial entity or to increase tax revenue, the tax base, employment, or general economic conditions.

New Mexico. HB 746 (vetoed) would have prohibited the use of eminent domain to promote private or commercial development when title to the property is transferred to another private entity.

South Dakota. H. B. 1080 prohibits the use of eminent domain to transfer private property to another private entity or to be used primarily to generate additional tax revenue.

Vermont. S. B. 246 prohibits the use of eminent domain where the taking is primarily for economic development purposes.

Allowing Economic Development Takings Only in Blighted Areas

Alabama. SB 68A bars municipalities and counties from condemning property for (1) the purposes of private retail, office, commercial, industrial, or residential development; (2) primarily for enhancement of tax revenue; or (3) for transfer to a person, nongovernmental entity, public-private partnership, corporation, or other business entity. But, this restriction does not apply to the use of eminent domain by a municipality, housing authority, or other public entity based upon a finding of blight in an area covered by any redevelopment plan or urban renewal plan.

Illinois. S. B. 3086 prohibits the use of eminent domain for the benefit of a particular private party. It also prohibits the use of eminent domain for private development unless the area is blighted and (1) the proposed use is consistent with a regional plan adopted within the past five years or (2) the state or local government has entered into an agreement with a private entity to undertake the redevelopment project. The act specifies that the determination by the state or local government that a proposed taking is permissible does not create a presumption that this is the case. It places the burden of proof for demonstrating blight on the government.

The act does allow for condemnation for private development if this is a secondary purpose to urban renewal when necessary to protect public health and safety.

The act also prohibits seizing property used for production agriculture for private development.

Kansas. SB 323 prohibits the transfer of private property acquired through eminent domain to another private entity with certain exceptions, including (1) property transferred to a common carrier; (2) unsafe property acquired by a municipality; or (3) property approved by the state legislature.   The restrictions do not apply to property in a redevelopment district created prior to the law's enactment.  

Maine. LD 1870 prohibits the use of eminent domain to condemn land improved with residential, commercial, or industrial buildings or land used for agriculture, fishing or forestry, (1) for private retail, office, commercial, industrial or residential purposes; (2) primarily to generate additional tax revenue; or (3) to transfer private property to another private entity.   But these restrictions do not apply to the use of eminent domain by a municipality, housing authority, or other public entity based on a finding of blight in an area covered by a redevelopment or urban renewal plan.

Minnesota. SF 2750 prohibits municipalities from using eminent domain to transfer property from one owner to another for private commercial development. It only allows blighted properties to be condemned for private development if the property is an actual danger to public health and safety. It allows non-blighted properties to be condemned for private development only if they are in an area where a majority of the properties are blighted and there is no feasible alternative to taking them to remediate the blighted properties. However, the act provides an exemption from these provisions running for up to five years for approximately 2,000 tax increment financing districts and a one-time exemption for the cities of Minneapolis and Richfield.

Pennsylvania. H. B. 2054 /S. B. 881 prohibits the use of eminent domain for private enterprise, except where the private enterprise occupies an incidental area within a public project. But the legislation does not apply to takings where the property is blighted or taken pursuant to the urban redevelopment law or taken to provide low-income housing, among other things. The act defines blight to emphasize characteristics that are detrimental to the public health and safety.

Texas. SB 7 bars governmental and or private entities from taking private property by eminent domain if the taking: (1) confers a private benefit on a particular private party through the use of the property; (2) is for a public use that is merely a pretext to confer a private benefit on a particular private party; or (3) is for economic development purposes, unless the economic development results from programs to eliminate the harmful effects of slum or blighted areas. The act specifies that the determination by the governmental or private entity proposing to take the property that it does not violate these restrictions does not create a presumption that the taking does not. The act does not apply to takings for public buildings, infrastructure projects, the new Dallas Cowboys stadium, and certain other projects.

The act also limits:

1. the Texas Department of Transportation's ability to condemn homes in order to build hotels and other "ancillary services" along the toll roads, and

2. the eminent domain power of higher education institutions with regard to building hotels.

Wisconsin. A. B. 657 prohibits the use of eminent domain to condemn non-blighted properties that would be transferred to another private entity. It redefines blight to emphasize properties that are detrimental to the public health and safety.

Restrictions on “Public Use” or “Public Purposes”

Arizona. H. B. 2675 (vetoed) defines public use for which eminent domain may be exercised to be the possession, occupation and enjoyment of property by the public, public agencies or public utilities, and does not include an increase in the tax base, tax revenue, employment or general economic health.

Colorado. HB 1411 specifies that a public use for which eminent domain may be exercised does not include transferring private property to another private entity for economic development purposes or to generate additional tax revenue.

Georgia. HB 1313 defines public use for which eminent domain may be exercised to be the possession, occupation, and enjoyment of property by the public, public agencies, or public utilities, or for the removal of blight.   It redefines blighted areas to emphasize characteristics that are detrimental to the public health and safety.  

Indiana. HB 1010 defines public use for which eminent domain may be exercised to be the possession, occupation and enjoyment of property by the public, public agencies or public utilities, and does not include an increase in the tax base, tax revenue, employment or general economic health. It redefines blighted areas that are subject to eminent domain to emphasize properties that are detrimental to the public health and safety.  

Kentucky. HB 508 defines public use to be ownership, possession, occupation or enjoyment of the property by a governmental entity; removal of blighted properties; or for use by a public utility.  

Utah. S. B. 117 expands the definition of public use to include bicycle paths and sidewalks adjacent to paved roads, while limiting the use of eminent domain for certain recreational purposes and trails.

PROCEDURAL CHANGES

Colorado

H. B. 1411 requires that the government prove that the condemnation of a property is necessary for the eradication of blight.

Delaware

SB 217 requires the power of eminent domain be exercised only for the purposes of a recognized public use described at least six months in advance of the taking in (1) a certified planning document, (2) at a public hearing held specifically to address the taking, or (3) in a published report of the acquiring agency. The act affects takings by municipal and state agencies and other entities authorized to condemn land.

By law, if condemnation proceedings begin but are abandoned or the court determines that the property cannot be acquired by eminent domain, the state agency that sought the condemnation must reimburse the owner for his reasonable attorney, appraisal, and engineering fees incurred because of the proceeding. Under prior law, the agency determined amount of the payment; under the act the court does.

Georgia

HB 1313 requires approval of eminent domain actions by the governing body of a city or county, and greater public notice before proceeding with the taking.

Iowa

House File 2351 (vetoed) would have required blight designations to be made on a property-by-property basis, other than in urban renewal project areas where at least 75% of the properties are blighted. It would have required the condemning authority to prove, by clear and convincing evidence, that the property was blighted. The legislature plans to return this summer for a special session to try and override the veto.

Minnesota

S. F. 2750 makes many procedural changes in the state's eminent domain law. Among other things, it requires condemning authorities to show clear and convincing evidence for certain takings, expands public hearing and notice requirements, and requires a court finding that a taking is necessary in order for it to proceed in certain circumstances.

Utah

S. B. 117 requires the governing body of a local government to approve a taking before eminent domain may be exercised for a public use. It requires a written notice to be sent to the affected landowner at least 10 days prior to the public hearing where the proposed taking will be considered.

West Virginia

H. B. 4048 increases the government's burden when seizing non-blighted private property by eminent domain in blighted areas.

OTHER PROVISIONS

Compensation

In Indiana, SB 1010 requires payment of 150% of fair market value when the property condemned is the person's primary residence. In Kansas, SB 323 requires that compensation for all condemned property be 200% of the average appraised value of the property.

In Minnesota, S. F. 2750 requires that compensation be paid for the removal of legal nonconforming use. It requires that the compensation allow the owner to purchase a comparable property in the community and generally entitles business owners to compensation for their loss of a going concern. It also requires payment of the owner's attorney fees attorney fees if the final award is more than 40% higher than the last offer by the government and allows the fees to be awarded if the final award is more than 20% higher.

Right of First Refusal

Alabama's legislation (SB 68A) gives the former owner of property condemned for a lawful purpose, or his heirs or assigns, a right of first refusal if the property is not used for the purpose for which it was condemned or for some other public use. The former owner can repurchase the property at the price that was paid for the property, less the amount, if any, paid in income and transaction taxes paid in connection with condemnation. The right of first refusal runs for 90 days. Thereafter the property may be sold to any other person at a public sale after legal notice is given.

Similarly, Florida law (H. B. 1567) requires local governments acquiring property through condemnation to offer to sell the land back to the previous owned if the government entity does not use it for the specified purpose. If the previous owner chooses to not buy it back, then the government must wait 10 years before it can sell it through a competitive bidding process.

In Minnesota, S. F. 2750 requires property acquired by condemnation that was not used and is no longer needed to be offered back to the person from whom it was acquired, if he can be located, at the lower of the original price or the current fair market value. However, this provision does not apply to various transportation-related takings.

Moratorium

Legislation adopted in Ohio (SB 167) places a moratorium on the use of eminent domain for economic development purposes that would ultimately result in the property being transferred to another private party in an area that is not blighted until December 31, 2006.   If a municipality violates the moratorium, it will lose state funding for the affected project. The act also creates a task force to study eminent domain issues.

PROPOSED CONSTITUTION AMENDMENTS

Florida

The legislature put a proposed eminent domain constitutional amendment on the November ballot that would require a three-fifths majority in both legislative houses to grant exceptions to a state constitutional prohibition on eminent domain for private use.

Georgia

House Resolution 1306 is a constitutional amendment that would require a vote by elected officials to occur before eminent domain is used for redevelopment.

Louisiana

Senate Bill 1 would prohibit localities from condemning private property merely to generate taxes or jobs. It would also reform the state's blight laws to limit eminent domain takings to properties that threaten to public health and safety. All economic development and urban renewal laws currently on the Louisiana books would be required to conform to these limitations.

Michigan

Senate Joint Resolution E would prohibit taking private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenues. The amendment would also require governments to show, by clear and convincing evidence, that a particular parcel is blighted in order to take it under the blight laws.

New Hampshire

The legislature adopted a proposed amendment (CACR 30) that would prohibit the use of eminent domain if the property is to be transferred to another private entity for private development.

South Carolina

HB 1031 would prohibit municipalities from condemning private property for economic development purposes, unless the condemnation is for public use. It would also require that a property be a danger to public health and safety for it to be designated as blighted.

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