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Thursday, March 8, 2012

House Bill Would Restrict Eminent Domain by Local Governments

The U.S. House of Representatives has passed a bill, the Private Property Rights Protection Act of 2012, H.R. 1443, that would restrict the use of eminent domain where a state or local government receives federal aid.  The bill also allows for a private right of action for misuse of eminent domain.  The substance of the bill prohibits a state or local government from exercising its power of eminent domain “over property to be used for economic development or over property that is used for economic development within 7 years after that exercise, if that State or political subdivision receives Federal economic development funds during any fiscal year in which the property is so used or intended to be used.”

A state or local government found in violation of this law would be ineligible for any federal economic development funds for two fiscal years “following a final judgment on the merits by a court of competent jurisdiction” of a violation.  “Economic development” is defined generally as “taking private property, without the consent of the owner, and conveying or leasing such property from one private person or entity to another private person or entity for commercial enterprise carried on for profit, or to increase tax revenue, tax base, employment, or general economic health,” but is subject to several exclusions or exceptions (brownfields, takings for public utilities, roadways, and others as listed).  Section 4 of the bill outlines a private cause of action by any owner or tenant of private property whose property is subject to eminent domain and who suffers injury as a result of a violation of any provision of the bill with respect to that property.

Judiciary Committee Ranking Member John Conyers (D-Mich.) was reportedly the only member to speak against the bill, noting that seven years have passed since the Supreme Court’s Kelo decision, and that many states have since addressed eminent domain in their legislation:  “Congress should not now come charging in after seven years of work and presume to sit as a national zoning board, advocating to our national government the right to decide which states have gotten the balance right, and deciding which project are or are not appropriate.”

A summary of this legislation is published in the IMLA News, Issue No. 04, March 07, 2012
Post Authored by Julie Tappendorf, Ancel Glink


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