Eminent Domain: Hot Legislative Topic for 2006
The post-Kelo landscape has left state legislators debating new restrictions on the power of eminent domain.

The post-Kelo landscape has left state legislators debating new restrictions on the power of eminent domain.

In June, the U.S. Supreme Court ruled that, when using eminent domain authority, states can decide what constitutes a “public use” under the Fifth Amendment, thus allowing the City of New London (CT) to take unblighted property for economic development purposes.  The decision in Kelo v. City of New London touched off a firestorm of controversy.  The NAHB responded to the decision by adopting a resolution at its fall board meeting.  In the resolution, NAHB board members reiterated support for the proper and traditional use of eminent domain, with just compensation for property owners:

• When a governmental entity will own or control the property for such public uses as government buildings, schools, libraries, and parks
  
  
• When the project addresses public infrastructure needs such as roads, public utilities, water and sewer and treatment plants, and airports
  
  
• When the public’s health, safety, and welfare is being protected by the redevelopment of slums, blighted areas, contaminated sites, and nuisance properties, as defined by law

Specifically, the resolution calls for the NAHB to support legislation “to prevent federal, state and local governments from abusing the power of eminent domain.”

The Kelo decision also left state legislators scrambling to examine their states’ eminent domain statutes.  In its decision, the Court held that state legislatures, courts, and voters can limit the power of eminent domain.  In response to the Court’s holding, Alabama and Texas enacted broad-based legislation restricting the taking of property in certain cases. 

Alabama Senate Bill 68 prohibits property taking for private development or for the primary pupose of increasing tax revenue.  SB 68 does contain a blight exception and an exception for common carriers, including power and telephone providers. 

Texas Senate Bill 7 prohibits the exercise of eminent domain if the taking will confer a private benefit on a private party, or for economic development purposes, except to eliminate slum or blighted areas.  SB 7 also exempts property taken for common carriers as well as land appropriated for voter-approved sports facilities. 

Additionally, Delaware Senate Bill 217 restricts the use of eminent domain to a “recognized public use,” while Ohio Senate Bill 167 would establish a moratorium, until December 31, 2006, on the taking of unblighted private property when the sole or primary purpose for the taking is for economic development resulting in private ownership.  The Ohio Legislature recently passed SB 167, and it currently awaits the governor’s signature.  

At least 34 states are considering legislation placing some limits on the government’s eminent domain powers. 

At its fall board meeting, NAHB’s State and Local Government Affairs Committee assembled a working group to develop eminent domain legislative options for HBAs to consider.  The working group has convened, and options are being drafted.  To find out more about legislative proposals in your state, or to access a copy of NAHB’s property rights resolution, go to www.NAHB.org/infosource. 

For information on the Kelo decision, e-mail Mary Lynn Pickel in NAHB’s Legal Services department, or call her at 800-368-5242 x8485.  For more information on state legislation, e-mail Gerry Keegan in NAHB’s State & Local Government Affairs department, or call him at 800-368-5242 x8326.
[ return to top ]