In its April 21 issue of Legislative News, the National Association of Industrial and Office Properties (NAIOP) reported on new eminent-domain laws in Georgia, Kentucky, Michigan, Utah, Virginia, and Wisconsin. Since then, several more states have passed new condemnation laws.
Alabama already restricted the use of eminent domain in 2005, but SB 654 was signed by Governor Bob Riley on April 25, further restricting its use. The law prohibits the use of eminent domain to acquire non-blighted property for a redevelopment project without the consent of the owner. It defines blighted property to emphasize characteristics that are detrimental to the public health and safety.
In Florida, HB 1567 was signed by Governor Jeb Bush on May 12. The law prohibits the transfer of private property acquired through eminent domain to another private entity with certain exceptions. It prohibits the use of eminent domain to eliminate blight conditions or to generate additional tax revenue, and authorizes the use of eminent domain under the Community Redevelopment Act to remove a threat to the public health or safety. A separate measure, HB 1569, passed both chambers of the legislature and will now appear on the Nov. 7, 2006, ballot for voter approval. It requires a three-fifths vote of both houses of the state legislature to approve the use of eminent domain to transfer private property to another private entity.
Minnesota SF 2750 limits the use of eminent domain to a public use or public purpose, defined as the possession, occupation, ownership, or enjoyment of the property by the general public or a public agency, or for the mitigation of blight. It stipulates that the public benefits of economic development do not, by themselves, constitute a public use or public purpose. The law also requires good-faith negotiations with property owners and increases public notice and public hearing requirements. It was signed by Governor Tim Pawlenty on May 19.
Pennsylvania SB 881 was signed by Governor Ed Rendell on May 4. The law prohibits eminent domain for private business purposes. It recognizes that public use can include redevelopment projects in legitimately blighted areas where properties are abandoned, uninhabitable, condemned, or constitute public nuisances due to dangerous conditions.
In three states, bills have passed the legislature but are awaiting the governor's signature. Colorado HB 1411 stipulates that public use does not include transferring private property to another private entity for economic development purposes or to generate additional tax revenue. Illinois SB 3086 prohibits the use of eminent domain to confer a benefit on a private entity or for a public use that is a pretext for conferring a benefit on a particular private entity. The bill limits the use of eminent domain for private development unless the area is blighted and the state or local government has entered into a development agreement with a private entity.
Missouri HB 1944, also awaiting the governor's signature, prohibits the use of eminent domain solely for an economic development purpose, which is defined to mean an increase in the tax base, tax revenue or employment in the area. It stipulates that eminent domain may only be used to take property in blighted areas or for a public use.
This information was reprinted with permission from the Herndon, VA-based National Association of Industrial and Office Properties (NAIOP). The organization was founded in 1967 and comprises 13,000-plus members in 50 North American chapters. To find out more, visit (www.naiop.org).