Eminent Domain – New Anti-Kelo Legislation

U.S. Senators Bill Nelson (D-Fla) and John Cornyn (R-TX) have co-sponsored a federal bill that seeks to limit the United States Supreme Court’s ruling in Kelo v. City of New London. Known as the “Protection of Homes, Small Businesses and Private Property Act of 2005”, S. 1313, the proposed legislation prohibits the United States Government and any state or local government that obtains federal funds for a development project, from taking private property for “economic development”. The sponsors are seeking “to restore the vital protections of the Fifth Amendment and to protect homes, small businesses, and other private property rights against unreasonable government use of the power of eminent domain.” The sponsors also stressed the importance of States reviewing their owns laws and consider taking voluntary action to limit the power of eminent domain. The statute is a good start, but far from adequate. First, “economic development” is not defined and is left open for the courts to define. Second, the law only applies to takings “through the use of federal funds.” Condemning authorities can circumvent this limitation by using federal funds for voluntary acquisitions (ie. those property owners that sell before a condemnation action is started), and use state and private funds for the contested takings. Further, what is the penalty if the condemning authority violates the statute? Does the condemning authority lose federal funds for the entire project, or only the acquisition being challenged? Federal and state lawmakers are clearly concerned about the Kelo decision and are seeking to restore the constitutional protections that are being stripped by the United States Supreme Court. However, the constitutional rights must be balanced against the benefits derived from the successful redevelopment plans which have helped numerous cities jump start their local economies. The good news is lawmakers are reacting an taking a good look at the use of the power of eminent domain.