Topic:
LEGISLATION; EMINENT DOMAIN; ECONOMIC DEVELOPMENT;
Location:
EMINENT DOMAIN;

OLR Research Report


September 6, 2005

 

2005-R-0662

POST-KELO EMINENT DOMAIN LEGISLATION IN OTHER STATES

By: Kevin E. McCarthy, Principal Analyst

You asked for a description of legislation to amend eminent domain laws introduced 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). This report does not address (1) resolutions that memorialize Congress to take actions response to the case or express the legislature's views on the case, (2) bills in a particular state that duplicate those described here, and (3) bills establishing task forces or study groups. More information on post-Kelo legislation is available at www.ncsl.org, under programs.

SUMMARY

Since the Kelo decision Alabama, Delaware, and Texas have passed legislation restricting the use of eminent domain. The Alabama law bars the use of eminent domain for economic development purposes except in blighted areas. It also gives the former owner of condemned property a right of first refusal to repurchase the property if it is not used for a public use. The Delaware law requires that 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. The Texas act (which has not yet been signed by the governor) bars the use of eminent domain when (1) the taking confers a private benefit on a particular private party; (2) the public use supporting the taking is merely a pretext to confer a private benefit on a private party; or (3) the taking is for economic development purposes, unless the economic development is a secondary purpose resulting from municipal community development or urban renewal activities to eliminate the harm caused by slum or blighted areas.

In addition, legislation has been introduced but not yet adopted in at least 18 states. Most of these bills would bar or limit the use of eminent domain for economic development or tax revenue enhancement purposes. An Ohio proposal would establish a moratorium through 2006 on the use of eminent domain to take private property in unblighted areas for economic development purposes. A New Jersey proposal would limit the use of eminent domain to acquiring land for essential public purposes. A New York bill would require local governments hold a vote to determine whether or not to condemn property that would be transferred to private developers.

In a number of states, the legislation takes the form of proposed constitutional amendments. For example, a Ohio, proposal would eliminate the constitutional grant of eminent domain power to municipalities and provide that the power only can be used when the legislature grants this authority.

ENACTED LEGISLATION

Alabama

Legislation passed and signed into law this summer (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. However, just compensation must be first made to the owner on all cases.

The act does not limit the exercise of eminent domain by or for the benefit of public utilities or other entities engaged in the generation, transmission, or distribution of utility products or services. Nor does it prohibit a municipality or county from using eminent domain to construct, maintain, or operate streets and roadways, government buildings, or park and recreation facilities.

The act also 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, after which time, the property may be sold to any other person at a public sale after legal notice is given.

These provisions apply to current and future condemnation proceedings.

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 was seeking 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.

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 bill 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 bill does not apply to takings for public buildings, infrastructure projects, the new Dallas Cowboys stadium, and certain other projects.

The act also:

1. makes information collected by a private entity exercising eminent domain powers subject to the state's Freedom of Information laws,

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

3. limits the eminent domain power of high education institutions with regard to building hotels, and

4. establishes an interim committee to study the use of the power of eminent domain.

Governor Rick Perry has not announced whether he will sign the bill, but had called lawmakers into special session to protect residents from takings that the U.S. Supreme Court found constitutional in Kelo.

OTHER LEGISLATION

Table 1 describes other legislation introduced in the wake of Kelo.

State

Bill Number

Purpose

Alabama

102A

Amend the constitution to prohibit government from seizing private property and turning it over to individuals, corporations, or other entities solely to increase tax revenue or create jobs.

     
 

76A

Prohibit municipalities from condemning property for the purpose of commercial retail development.

     
 

81A

Prohibit a county or municipality from exercising eminent domain for retail, commercial, residential, or apartment development

     
 

91A

Amend the constitution to prohibit government from seizing private property and turning it over to private individuals, corporations, or other entities solely to increase tax revenue or create jobs, and provide for the elements of property ownership that must be compensated if taken for public use.

     

California

ACA 22

Amend the constitution to specify that property can only be taken for a stated public use and that if it ceases to be used for this use the former owner or a beneficiary may reacquire the property for the compensated amount or its fair market value, whichever is less, before the property may be sold or transferred.

     
 

AB 590

Specify that public use does not include the taking or damaging of property for private use, including the condemnation of nonblighted property for private business development

     

Delaware

SB 221

Prohibit the taking of private property when no specific public use is to be made to the property.

     

Florida

HJR 31

Amend the constitution to provide that economic development is not a public purpose for which private property may be condemned.

     

Georgia

SB 86

Specify that economic development is not a public purpose for which private property may be taken.

     

Illinois

HB 4091

Specify that eminent domain must be used for “qualified public use,” i.e., public ownership and control, and prohibits the use of eminent domain for private ownership or control, including for economic development, unless specifically and expressly authorized by law.

     

Massachusetts

HB 4634

Bar the use of eminent domain for private economic development unless the property is a blighted area.

     

Michigan

HB 5060

Prohibit the use of eminent domain by state or local government to take private property for the primary benefit of a private entity.

     
 

HB 5078

Specify that a taking of private property is not considered to be for the use or benefit of the public if the property is transferred to a private entity for the primary benefit of the private entity.

     

Minnesota

HB 117A

Bar the use of eminent domain if the property acquired is intended to be sold, leased, transferred, or otherwise conveyed to a person or nongovernmental entity without the power of eminent domain.

     
 

HB 123A

Bar the use of eminent domain to acquire real property for private economic development purposes.

     

New Jersey

AB 4392

Bar the use of eminent domain to acquire residential property under redevelopment laws.

     
 

ACR 255

Limit the exercise of eminent domain to acquisition of land for essential public purposes.

     
 

SB 2739

Bar the use of eminent domain to condemn legally occupied residential property that meets applicable housing codes.

     
     

New York

AB 8865

Require local governments to hold a vote to determine whether or not to condemn property that would be transferred to private developers.

     
 

AB 9015

Requires that if the Onondaga County (Syracuse area) Industrial Development Agency approves the use of eminent domain, the local government must hold a vote to determine whether or not to condemn the property.

     
 

SB 5936

Limit the use of eminent domain for economic development purposes to blighted areas of the state.” To be “blighted” an area must either have a majority of buildings be deteriorated or economically unproductive.

     
 

SB 5938

Restrict the use of eminent domain to public projects. Requires approval of county legislature or city council if industrial development agency decides to use eminent domain.

     

Ohio

HJR 10

Prohibit the use of eminent domain for economic development purposes when the sole or primary driving force behind the acquisition of private property is a private individual or business entity that seeks the private property of another for its own economic benefit.

     
 

SJR 6

Amend the constitution to eliminate its grant of eminent domain power to municipal corporations and provide that the power can be used only when the legislature grants this authority.

     
 

SB 167

Establish a moratorium until December 31, 2006 on the use of eminent domain by the state and its political subdivision to take private property in an unblighted area when the primary purposes is to transfer the property to a private person for economic development.

     

Oregon

HB 3505

Prohibit condemnations except when the primary purpose is to allow the property to be owned, maintained, occupied, and used by the public for public purposes

     

Pennsylvania

SB 1835

Bar municipalities from condemning property to (1) turn it over to a nonpublic interest, (2) increase the municipality's tax base, or (3) condemn land without a clause in the declaration of taking that assures that the property will revert to the condemnee or his heirs or assigns if the property is ever used for a nonpublic purpose.

     

Tennessee

HB 2426

Define 'public purpose' to bar the use of eminent domain solely or principally to improve tax revenue or the tax base or for economic development.

     
     
     
     
 

HB 2413

Forbid using eminent domain to sell, lease, otherwise transferring or allowing the use of property to a private developer, corporation or other private entity solely or primarily to increase tax revenue, expand the tax base, increase the taxable value of the property or to promote economic development. Also contains provisions of HB 2426.

     
 

HB 2419

Bar the state, municipalities, and other condemning authorities from acquiring property for a commercial use or transferring any interest in property to another person for commercial use.

     
 

HB 2420

Bar the use of eminent domain for private economic development or private redevelopment or solely for the purpose of improving tax revenue or the tax base, including condemnation for the purpose of transferring, leasing, or allowing the use of such property to a private developer, corporation, or other entity to attempt to expand tax revenue, increase the taxable value of the property, or promote economic development. Specifies that private economic development or private redevelopment are not public uses or purposes for which private property may be taken by eminent domain.

     
 

HB 2421

Bar the use of eminent domain for the sole or primary purpose of economic development or redevelopment.

     

Texas

HJR 11B

Amend the constitution to bar the use of eminent domain for the sole or primary purpose of economic development or redevelopment.

     
 

HB 12B

Bar the use of eminent domain for economic development purposes, unless the economic development is a secondary purpose resulting from municipal community development.

     
 

HB 15B

Bar the state from taking private property if the primary purpose of the taking is economic development, unless the affected area is blighted or a slum.

     
 

16B

Bar the use of 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, (3) is for economic development purposes unless the activities are meant to alleviate blight, or (4) is to raise revenue.

     
 

SJR 5B

Amend the constitution to prohibit taking private property for economic development purposes.

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