Institute for Justice to Iowa Legislature:

Override Governor’s Veto And Do NOT Change Already Moderate Eminent Domain Reform

PRESS RELEASE: July 13, 2006

John Kramer
Lisa Knepper
(703) 682-9320

Arlington, Va.—On Friday, July 14, the Iowa Legislature will meet in a special session to decide whether to override Gov. Tom Vilsack’s June 2 veto of House File 2351.  The legislation, which passed both legislative houses with overwhelming bipartisan support, aimed to reform the state’s eminent domain laws by prohibiting local governments from taking homes and small businesses for economic development and by reforming the state’s blight laws.  Gov. Vilsack has now proposed “compromise” legislation that he hopes the Legislature will pass instead of overriding his veto.   

“Governor Vilsack wants to water down protections for Iowa homeowners, small businesspeople and farmers in favor of city governments and big business interests,” said IJ Senior Attorney Scott Bullock, who argued the Kelo v. City of New London eminent domain case before the U.S. Supreme Court last year.  “Governor Vilsack ignores the fact that not only is HF 2351 overwhelmingly bipartisan, but it is already compromise legislation that takes a moderate position on eminent domain reform.  Any further compromises will place Iowa property owners at even greater risk.”

Gov. Vilsack claims that the legislation passed by the state legislature goes “too far” in protecting home and small business owners.  This is nonsense.  HF 2351 overwhelmingly passed the House by a vote of 89-5 and the evenly divided Senate by a margin of 43-6.  Moreover, HF 2351 is moderate legislation.  It reforms the state’s eminent domain laws by prohibiting local governments from taking homes and small businesses for economic development while still allowing the use of eminent domain for traditional public uses.

HF 2351 also only moderately reforms blight law, preventing the condemnation of perfectly fine homes or businesses unless 75 percent of the properties in an area are designated as “blighted” under state law.  Some states, like Florida, South Dakota and Utah, have recently passed legislation that prohibit all eminent domain takings for private development, including those for so-called blight removal.  Recently enacted legislation in other states, such as Indiana, require that “blight” determinations be made on a property-by-property basis.  HF 2351, reflecting a compromise between strong advocates of property rights and those who wish to preserve greater powers for cities and development interests, still allows for the taking of non-blighted homes and businesses if they are located in an area with significant blight.  Contrary to Gov. Vilsack’s assertion, this legislation by no means goes “too far.” Nevertheless, he wants to lower the standard to 50 percent of properties.  

“The Governor’s proposal would put ordinary working class and moderate-income neighborhoods at risk,” said Castle Coalition Legislative Affairs Attorney Jenifer Zeigler.  “At the very least, the government should have to demonstrate that a neighborhood has serious problems before perfectly fine homes or small businesses can be taken and handed over to other private interests.”

Gov. Vilsack’s legislation would also open the door to condemnations for lakes that are not tied specifically to the need for more drinking water.  This would allow the use of eminent domain to take land that could be used to build upscale homes and other private projects around newly created lakes.  This provision of the bill, along with the 50 percent threshold for blight condemnations, must be rejected.

In Kelo, the nation’s highest court permitted the use of eminent domain for economic development.  Since the June 23, 2005, decision, legislators in 47 states have introduced, considered or passed legislation limiting the government’s eminent domain powers in instances of private use.  Twenty-seven governors have signed legislation into law.  Iowa, Arizona and New Mexico are the only states whose governors vetoed eminent domain reform.

Bullock concluded, “Despite what Governor Vilsack claims, the Legislature recognized that economic development can and will happen without eminent domain abuse.  The bottom line is that an override of the governor’s veto is the only way to protect Iowans from eminent domain for private use.”