Friday, May 04, 2007

Eminent domain reform bill is headed to Gov. Perry's desk.

House bills look to limit eminent domain


by Mark Lavergne
Volume 11, Issue 36
The Lone Star Report
Copyright 2007

Reform may be imminent for eminent domain.

Four bills came before the House floor May 2, seeking one way or another to limit governmental and private entities’ ability to nudge private citizens off their own land.

The main intent of the bills was to strengthen SB 7, passed during a special session in 2005 following the infamous Kelo v. New London U.S. Supreme Court decision. The court said it was constitutional for entities with eminent domain authority to acquire private property for the purposes of economic development.

The justices ruled that economic development qualifies as a “public use” – a longtime prerequisite for a government’s exercise of eminent domain. But economic development often requires that private commercial franchises put up shop.

This means a city government may, but is not required to, confiscate (albeit with compensation) a citizen’s private property, then sell the land to a business — often a big one — in the interest of developing the economy.

This would qualify, according to the high court, as serving a “public use.” Of course if that qualifies as public use, pretty much any conceivable purpose would.

But Kelo also allowed states to limit cities’ power of eminent domain if they so chose. SB 7 from Sen. Kyle Janek (R-Houston) was the Legislature’s first step in that direction. It said the state would not use eminent domain for economic development, with certain clear public use exceptions, such as highways, sewers, etc.

But a lot of conservatives including Rep. Bill Callegari (R-Katy) thought SB 7 did not go far enough. So they sought to determine how to make sure that the government would not abuse the authority to force people to sell their land.

Property rights advocates see the use of eminent domain for economic development purposes as inappropriate encroachment on free markets. Urban developers, on the other hand, frown upon limitations of eminent domain by the state. So after SB 7 was made law, legislators decided to spend the interim looking at the issue.

The bills that resulted, all heard May 2, were: HJR 30 by Rep. Jim Jackson (R-Carrollton), HBs 3057 and 1495 by Callegari, and HB 2006 by Rep. Beverly Woolley (R-Houston).

The House passed all but one of them, HB 2006, perhaps, and not surprisingly either, the most sweeping of the lot. When Woolley brought it before the floor, Rep. Senfronia Thompson (D-Houston) called a point of order. The bill was recommitted to committee and taken up right after the adjournment of the House. It was then reported favorably as substituted, and will likely be back before the full House sometime next week.

  • The bill defines “public use” with important new clarity: “a use of property … that allows the state, a political subdivision of the state, or the general public of the state to possess, occupy, and enjoy the property.” In other words, no private businesses or individuals. Pfizer or Merck would not get land purchased by eminent domain under this bill.
  • It includes the “Truth in Condemnation Procedures Act,” which requires governmental entities to take record votes at public meetings for each unit of property in question, before initiating condemnation proceedings. It requires that a motion to exercise eminent domain include the name of the governmental entity, a description of the property, and a description of the public use intended.
  • It sets a “good faith standard” by which eminent domain authorities going after private property must make an effort to acquire it by voluntary purchase or lease.
  • The bills also clear up some vague language that makes it difficult for landowners to protect their rights. Under existing law, economic development can only be a secondary result, not a primary motive, of invoking eminent domain. The primary motive has to be either public use or the elimination of “an existing affirmative harm on society from slum or blighted areas.”

But the devil may be in the lack of detail, becuase “slum area” and “blighted area” are defined so broadly in current law that they could be read to include a building in need of a new paint job. So not only can the purpose of the confiscation be extraordinarily broad, but the pretext could be as well. That is, a city government could condemn an area as “blighted” that isn’t really blighted, and to seize it for a “public use” that isn’t really public.

Callegari looks to eliminate such stretches with CSHB 3057. The bill strikes from existing code the word “slum” and all its variations. It clarifies that a “blighted area” is a unit of property with any two of the following conditions:

*uninhabitable, unsafe or abandoned structures;

*inadequate sanitation provisions;

*the prospect of imminent harm to life or other property caused by disasters like fire, flood, hurricane, tornado, earthquake, or storm;

*a need for remedial investigation or feasibility study as a result of environmental contamination or finding by the Environmental Protection Agency; or

*repeated illegal activity about which the owner knew or should have known.

The property could also be condemned under the new legislation, regardless of the above, if the property is conducive to ill health, transmission of disease, infant mortality or crime in the immediate proximity.

But under Jackson’s HJR 30, even if the government successfully exercises eminent domain, it must follow through with its plans for the land, or lose it back to the private citizen. The joint resolution proposes a constitutional amendment to allow the repurchase of property acquired through eminent domain, for the original price at which the government purchased it, if: 1) the public use for which the property was purchased has been cancelled; or 2) no actual progress was made toward the public use during a prescribed period of time; or 3) the property was unnecessary for the public use.

The resolution was passed by the House 136-0, and received by the Senate the next day. If the Senate and governor sign off, it will be submitted to voters on November 6, 2007.

But all these reforms might not mean much if the landowners themselves don’t know about their own options when confronted with eminent domain. Callegari brought HB 1495, also dubbed the “Landowner’s Bill of Rights Act,” to the floor of the House on May 2.

The bill, passed to third reading without a record vote, requires the attorney general (AG) to create a “bill of rights” for owners whose property might be acquired by a governmental or private entity by eminent domain authority. The statement would have to be written in plain language and made available on the AG’s website.

The legislation would require that landowners be notified of their rights to the following:

*a notice of the property’s proposed acquisition,

*a bona fide good faith effort by the acquiring entity to negotiate,

*an assessment of damages resulting from the property’s acquisition,

*a hearing on those damages, and

*an appeal of a judgment in a condemnation proceeding, including that of a damages assessment.

The AG’s statement would also have to include descriptions of the condemnation procedure laid out in the property code; the condemning entity’s obligation to the property owner; and the owner’s options during a condemnation, including the right to object to and appeal an amount of damages awarded.

The bill also requires a condemning authority to send a bill of rights statement to the property owner before commencing negotiations. If the authority is a governmental entity, the statement would have to be made available on its website before negotiations could begin.O

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