Less than a year after a controversial U.S. Supreme Court decision affecting the taking of private property, eminent domain reform legislation whisked through the Minnesota Legislature on Monday (May 15).
“It (the legislation) takes away the unfair advantage government has when negotiating to take private property,” said Sen. Tom Bakk, DFL-Cook, Senate eminent domain bill author.
The U.S. Supreme Court’s Kelo v. City of New London decision last summer — a decision affirming a city’s right to take private property and transfer ownership to a private developer — amplified the previously quiet eminent domain reform debate at the Capitol.
Republicans and DFLers rallied around the issue — House and Senate quickly passed bills — and the eminent domain conference committee conferees speedily sent a final bill to their respective floors.
Several provisions in the reform legislation affect business.
For example, if a business is destroyed by an eminent domain action — something the owner must claim within 60 days of their first court hearing — the owner could be compensated beyond the loss of buildings but for the entire business.
Another provision could have them paid for the loss of driveway access.
In one of the more controversial provisions, the attorney fees and cost of fighting an eminent domain action must be picked up by the condemning authority when the final cost of damages is judged at least 40 percent greater than the last offer.
Attorney fees may be awarded
Courts may award attorney fees when final judgement is determined to be from 20 percent to 40 percent higher than last offer.
“The attorney fee provision was a big victory for small business and any other landowner and it will help a lot of people,” said Mike Hickey, state director of the National Federation of Independent Business.
In another business-related provision, condemning authorities must reimburse business owners up to $50,000 to help reestablish their displaced business.
Rep. Mary Liz Holberg, R-Lakeville, said the reform legislation could increase the cost of highway projects.
But she believes the public will accept the additional cost as long as people are being treated fairly.
House Minority Leader Matt Entenza, DFL-St. Paul, called the legislation a “good accomplishment,” a credit to bipartisanship.
Not all lawmakers were pleased.
Rep. Barb Goodwin, DFL-Columbia Heights, argued passage of the bill will leave her city stuck with a redevelopment project already costing $1 million and likely to cost more. “I’m disappointed, obviously. My city is disappointed. My taxpayers are disappointed,” she said.
But Rep. Jeff Johnson, R-Plymouth, House eminent domain bill author, countered that it was “a bit of a stretch” to believe the reform would result in Columbia Heights being stuck with a untenable project.
The eminent domain bill passed the Senate on a 56-9 vote.
It passed the House 115-17.
Other bill provisions:
- The “right of eminent domain” will be changed to the “power of eminent domain” in state law.
- Prior to the start of an eminent domain proceedings, the condemning authority must hold a public hearing at which interested parties must be given time to testify.
- When a condemning authority is taking property for blight mitigation, to address a public nuisance, or for contamination remediation, it must identify the public costs and benefits — how the action serves the public good.
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