Wednesday, October 03, 2007

Star-Telegram endorses Proposition 7

The purchase price


Fort Worth Star-Telegram
Copyright 2007

The Texas Constitution generally forbids any governmental entity -- city, county, hospital district, school district -- to grant public money or a "thing of value" for the benefit of an individual, business or corporation. There are some exceptions -- economic development dollars certainly benefit specific businesses and corporations -- but Article 3, Section 52 generally has been interpreted to put strict limits on diverting public funds for an individual's use.

So what has that got to do with eminent domain? A government entity sometimes takes land under eminent domain statutes but then doesn't need the property for the project in question. Or perhaps there's been no progress on the project over a prescribed amount of time, or the original project is canceled.

The Texas Legislature thinks that the original landowner (or the heirs) should have the opportunity to get the land back for the same price that the state paid when it took it. Seems reasonable.

The problem is that Article 3, Section 52 prohibits such an exchange because the market value of the land would in most cases be higher than the price paid when eminent domain was exercised. This could be viewed as granting value to the original owner, who now would have a piece of property worth more than what was paid for it.

The key to deciding how to vote on Proposition 7 is simple: An eminent domain "sale" is not a willing one. The government says to a property owner: "We are taking what is yours, and this is what we're willing to give you for it. If you don't like it, too bad, because that's what you're getting."

In a normal property transaction, an owner doesn't have to sell for a theoretical "fair market value" -- he or she can wait until the offer meets what the owner thinks is the value of the land. In an exchange forced on one party, if the merchandise is not "used" by the buyer, the merchandise should revert to the (unwilling) seller, and the original purchase money should revert to the buyer.

The Star-Telegram recommends a yes vote.

Proposition 7

On the ballot: "The constitutional amendment to allow governmental entities to sell property acquired through eminent domain back to the previous owners at the price the entities paid to acquire the property."

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