August 2005

The Statehouse

By James Lawlor

Eminent Domain: States React to Kelo Decision. The weeks following the U.S. Supreme Court's June 23 decision in Kelo v. City of New London have seen a surge of interest at state capitols in legislation aimed at curbing government's eminent domain power, particularly use of the power to promote economic development. By late July, proposals for change had surfaced in about 25 states, ranging from calls for studies of existing laws to amendments of state constitutions. Because most state legislatures are in recess, little substantive action is likely before the beginning of next year, however.

• Two state legislatures, Nevada and Utah, did make changes in their eminent domain statutes before adjourning this year. Both bills involved placing limits on the power of government to use eminent domain for economic development purposes. Nevada's S.B. 326 provides that the state or a political subdivision may acquire land by eminent domain for redevelopment only if it finds that at least two-thirds of the property within the redevelopment area is blighted. The statute does not include a definition of blight, however. It also provides that a resolution of necessity to acquire property for redevelopment is not judicially reviewable unless there is credible evidence to suggest the resolution of the findings supporting it were procured through bribery or fraud. The bill also puts limits on the ability of the state or its subdivisions to acquire land for open space purposes.

• In Utah, the legislature passed a law (S.B.184) that bars redevelopment agencies from acquiring property by eminent domain, except when acquiring property from an agency board member or officer, among other changes to the Redevelopment Agencies Act. The law also puts a one-year moratorium on redevelopment plans requiring a finding of blight. The legislature appointed an interim committee to study redevelopment agencies, so it is likely the issue will be revisited in the next session.

• Texas legislators failed to reconcile two versions of eminent domain legislation passed during a special session called primarily to address school funding issues. Because the special session also failed to resolve the funding question, the legislature entered a second special session, slated to run until the third week of August. Bills limiting governmental bodies' authority to use eminent domain for economic development purposes were again filed. One, S.B. 7, has been reported favorably out of committee.

• A special session of the Alabama Legislature passed a law (S.B. 68) July 26 barring local governments from acquiring property by eminent domain for the purposes of private development, transfer to a private person or entity, or primarily for enhancement of tax revenues. However, the bill contains an exception for use of eminent domain based on a finding of blight in area covered by a redevelopment plan or urban renewal plan.

• California Sens. McClintock and Florez on July 13 introduced a resolution proposing an amendment to the state constitution limiting government's eminent domain authority. The bill has approximately 43 co-sponsors. The amendment would forbid the taking or damaging of private property for "private use." Property could be taken by eminent domain only for a stated public use and upon an independent judicial determination that no reasonable alternative existed.

• In Connecticut, where the match was struck that lit the current firestorm over takings, state leaders have called for a moratorium on takings for private development until the legislature can examine the issue. Authorities in New London said they would abide by the request and not proceed with any action against the homeowners in the Kelo case. The legislature plans to hold hearings shortly, and it is possible that a special session could be called to consider the issue before the next regular session opens in February.

• Other states considering constitutional amendments include Florida, Oklahoma, New Jersey, and Michigan. The Florida legislature also appointed a committee to study eminent domain issues. Delaware, Georgia, Missouri, New Hampshire, and Oklahoma have committees studying the issue. Legislators in Alaska, Illinois, Oregon Pennsylvania, South Dakota, and Wisconsin plan to introduce bills in upcoming sessions. And, plans are afoot to revive previously introduced legislation in Georgia, New York, and Virginia.

Massachusetts: Zoning Reform Hearing. On June 29, the House Community Development and Small Business Committee and the Senate Municipalities and Regional Government Committee met at the State House to consider a pair of bills (H. 3544 and S. 168) aimed at reforming the state's antiquated zoning enabling laws.

Jeff Lacy, chair of the Zoning Reform Working Group, reported testimony during the day-long hearing was heavily in favor of the bills, by a 2-to-1 ratio, in his estimate. Representatives of the Massachusetts APA chapter, other planning organizations, environmental groups, and the Massachusetts Municipal Association offered supporting testimony. Douglas Foy, representing Gov. Mitt Romney's administration, noted current laws hinder transit-oriented development and other techniques to reduce sprawl.

The hearing was not entirely one-sided, however. Greg Spier, president of the Home Builders Association of Massachusetts, testified in opposition to the bills. He argued the legislation would only make an already difficult permitting process more arduous. "We kind of look at this as a Don't Use Land Act," he said. Nevertheless, he acknowledged that builders would like consistent rules uniformly applied. Currently, zoning bylaws are different in each of the 300-odd cities and towns in the commonwealth. State funding for training citizen planners and the state's land use laws would be useful, Spier suggested. Representatives of various nonprofit and educational institutions also opposed the bills, because of concerns over proposed changes in the law covering what development activity they can undertake without conforming to local zoning.

In broad outline, the Land Use Reform Act would limit the ability of landowners to employ grandfathering and "approval not required" provisions in the current law to circumvent more recently adopted controls on subdivisions and development. Under the "approval not required" provision, for example, owners of lots located on a public street or highway may develop them without having to go through the normal subdivision approval process. This has led in some cases to developers attempting to develop land located on "public" ways of dubious authenticity. It would also make transfers of development rights easier and tie zoning laws more closely to local governments' comprehensive planning process.

Wisconsin: Smart Growth Restored. Gov. Jim Doyle used his partial veto authority July 25 to restore smart growth grant funding to the state budget. He also reversed the legislature's action abolishing the state's comprehensive planning law. In his veto message, the governor said: "The comprehensive planning law allows communities to determine how they want to grow while ensuring the protection of Wisconsin's precious natural resources. ... This knowledge and ability to prepare has a significant positive impact on the effective use of limited taxpayer resources. Unplanned growth leads to uncontrolled local service costs, which results in increased property tax bills for citizens and businesses."