Vermont, Maine and Nebraska Enact Eminent Domain Reform, But More Reform is Needed in All 3 States

PRESS RELEASE: April 19, 2006

John Kramer
Lisa Knepper
(703) 682-9320

Arlington, Va.—Last week, the governors of Vermont, Maine and Nebraska became the latest to sign into law legislation aimed at curbing eminent domain abuse.  According to the Institute for Justice, which litigated the Kelo eminent domain case before the U.S. Supreme Court last year, the laws make incremental improvements by providing citizens with increased protection from condemnation for private use.  Unfortunately, the laws include gaping exceptions for the acquisition of so-called “blighted” properties pursuant to each state’s urban renewal laws.  These loopholes will continue to allow local governments to condemn homes, businesses and places of worship for private profit.  

On Friday, April 14, 2006, Governor Jim Douglas signed into law Senate Bill 246, which purports to reform Vermont’s eminent domain statute.  In addition to its inclusion of a blight loophole, the legislation only prohibits the use of eminent domain where “the taking is primarily for purposes of economic development,” a burden virtually no home or small business owner can prove.

“Vermont at least acknowledged the need for legislative reform with this bill,” said Institute for Justice Senior Attorney Scott Bullock, who argued the Kelo v. City of New London eminent domain case before the U.S. Supreme Court.  “But in practice, the law will continue to allow eminent domain abuse because cities will always claim that their primary purpose is something other than economic development.  That’s a huge flaw and it needs to be addressed.”

Nebraska Legislative Bill 924, which Governor Dave Heineman signed into law on Thursday, April 13, 2006, similarly prohibits the use of eminent domain “if the taking is primarily for an economic development purpose.”  The bill also clarifies that agricultural property cannot be designated as “blighted” by local governments and therefore cannot be subject to condemnation.

Castle Coalition Coordinator Steven Anderson said, “This is a good start.  Nebraska lawmakers should now extend the same protection they gave to farmers to every home, small business and place of worship across the state.  All Nebraskans—regardless of where they live or what they do—deserve protection from the abuse of eminent domain.”

Also on Thursday, Maine Governor John Baldacci signed House Bill 1310, which prohibits the use of eminent domain “for the purposes of private retail, office, commercial, industrial or residential development.”  The bill’s language does provide more protection than the Vermont and Nebraska bills.  Unfortunately, the bill’s increased protections do not apply to the condemnation of property in areas that are designated as “blighted” based on the State’s overly inclusive urban renewal and community development statutes.

“This bill certainly contains helpful language, and if the Legislature had gone the distance and closed its blight loophole, then residents of Maine would really have cause for celebration,” said Bullock.

IJ Senior Attorney Dana Berliner, who authored Public Power, Private Gain, the first-ever nationwide study of eminent domain abuse, said, “The problem with each of these three pieces of legislation is that under each state’s urban renewal laws, perfectly fine homes and businesses can be designated as ‘blighted.’  Unfortunately, these bills do nothing to protect home and business owners from bogus blight designations.”

The Institute for Justice and Castle Coalition have worked with legislators throughout the nation on eminent domain reform.  Since the U.S. Supreme Court decided Kelo last summer, legislators in 47 states have responded to public outcry and introduced, considered or passed legislation aiming to limit the government’s eminent domain powers.

Anderson added, “Legislators in Vermont, Maine and Nebraska still need to strike at the heart of the issue—whether the government can take property from one person and give it to another private party.  Until lawmakers crack down on bogus blight designations and prohibit private-to-private transfers of land through the use of eminent domain, citizens in these states will not have the complete protection they deserve.”

In February, South Dakota became the first state to tackle the fundamental problem by enacting a law that prohibits government agencies from seizing private property by eminent domain “for transfer to any private person, nongovernmental entity, or other public-private business entity.”  In March, Indiana tackled the fundamental problem by enacting a law that redefines “public use” and provides objective criteria for the acquisition of property in other situations.  This month, Georgia enacted broad, comprehensive reforms to its eminent domain laws by prohibiting condemnations for economic development and tightening its blight laws.

Bullock concluded, “These states would be well served to enact the kind of reform that Indiana and Georgia penned into law.  Let’s hope lawmakers realize they still have to finish the task.”

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