A bill imposing strict limits on the use of eminent domain for economic development or urban renewal sailed through a House committee Monday, but the bill's author said he is not yet ready to submit it to the full House for amendments.
Rep. David Wolkins, R-Winona Lake, also rejected some proposed amendments from the Indiana Association of Cities and Towns, which wants more leeway to condemn private property for projects of benefit to entire communities.
Governments have long had that authority for public infrastructure such as roads, schools and airports. Wolkins' bill largely preserves that authority but seeks to nearly stop it for private projects such as factories or shopping centers.
"This bill is going to stifle a big economic development project like that," Wolkins said.
House Bill 1010 does that through new legal and financial hurdles that could make the cost of buying farms, homes or businesses prohibitive.
Example: An acquiring agency would have to pay 125 percent of fair-market value for agricultural land and 150 percent for residential property. Business properties would only receive full market value, but would also receive "damages" for lost profits or income.
The bill also limits a redevelopment authority's ability to declare as blighted either individual properties or entire redevelopment areas.
And it flatly prohibits acquisition if a "reasonable alternative" exists to the proposed condemnation.
"We want eminent domain to be a last-chance opportunity," Wolkins said.
Wolkins' bill flows from previous, failed legislation and a summer study committee in 2005 that gained momentum after the U.S. Supreme Court upheld eminent domain for private development, with some limits.
Wolkins' bill seeks to clarify and tighten those limits in Indiana.
According to the Indiana Association of Cities and Towns, eminent domain law should balance property rights with the public's interest in livable communities "that grows out of public projects."
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