Alarmed by a U.S. Supreme Court ruling and a controversial ballot measure this fall, two state lawmakers are trying to limit the circumstances under which government can seize private property.
“I'm touchy about government overreaching its authority, and to take someone else's land because someone else will pay more taxes (on it) on it is a heinous reason,” said Sen. Jim Elliott (D-Trout Creek).
Elliott has introduced two bills on the issue, and Sen. Christine Kaufmann (D-Helena), has introduced one. All three would keep government from using its power of eminent domain to take private property and give it to a private business.
The U.S. Supreme Court determined such “takings” were legal in 2005's Kelo v. City of New London. In the Connecticut case, Susette Kelo's home stood in good shape but city officials condemned it to allow the transnational drug company Pfizer to build a research branch to help boost the local economy.
Montana courts have tended to favor the private landholder in cases involving eminent domain, but the senators said their bills are necessary regardless.
Elliott said property owners shouldn't have to worry that the state's courts might change direction. That worries Kaufmann, too, though she mainly wants to avoid a re-run of last fall's I-154, which would have restricted eminent domain but also required that governments compensate landowners for any land-use regulation that limited the use or value of private land.
“If the backers of I-154 want to come back with their plans to stop government regulation of land use to protect the public health, the passage of this bill will take the eminent domain issues of Kelo out of the discussion,” Kaufmann said.
Montana's Supreme Court struck down I-154 just before the November election after finding “a pervasive and general pattern and practice of fraud” in the gathering of signatures for the measure.
Kaufmann's Senate Bill 363, is drawing support from conservation and public interest groups that opposed I-154.
Specifically, it would keep eminent domain from being used in urban renewal projects if the property isn't “blighted,” or if the main purpose of the project is to increase tax revenue, both major points of contention in the Kelo decision.
The I-154 fiasco bothered Elliott too. When a lobbyist asked him if one of his bills would include compensating landowners for the effect of local regulations, Elliott replied “Hell, no.”
Instead Elliott's bills aim directly at what he has long considered potential problems in Montana's laws that the Kelo decision only recently brought to the public eye.
In 2005 Elliott offered a version of his Senate Bill 316, which would keep cities from annexing and possibly condemning small parcels of farmland, but it died in committee. The current bill passed to the House Wednesday 49-1.
“Kelo hadn't been decided in ‘05,” Elliott said. “There wasn't the outrage then that there is now.”
Elliott's other bill, Senate Bill 41, would force government agencies to wait 10 years before land appropriated under eminent domain could be sold to a private developer or used for a non-public use.
While a private developer could still do the work, the development would have to serve an immediate public purpose.
The two senators expect smooth sailing for their bills, but they have heard concerns of redevelopment planners and local governments.
In Montana, eminent domain is rarely used and usually at the request of the seller, said Ellen Buchanan, director of the Missoula Redevelopment Agency.
When an owner gives up their land in an eminent domain case, they get more time to reinvest before the money becomes subject to capital gains taxes, usually up to three years.
If the willing owner only wants give up their land under this condition, Elliott's bill would keep the land from being given over to a private company that might help the project to pay itself off, said Buchanan.
Riley Johnson, a lobbyist and the director of the Montana branch of the National Federation of Independent Businesses, said this is just what he hopes would happen.
“If you're going to come take my land, it has to be used for a road or something of that nature,” said Johnson.
However, a lobbyist for Montana's League of Cities and Towns thinks some rare cases warrant eminent domain for urban renewal.
“If the property is clearly blighted, which is difficult to prove, and if it's a threat to public health and safety, then it needs to be removed,” said the League's Alec Hansen.
Even so, Hansen agrees that the way Montana's courts have long protected property owners from some uses of eminent domain ought to be placed into statute.
In 1995's City of Bozeman v. Vaniman, the State Supreme Court decided that government couldn't use eminent domain to move land to another private holder. But the ruling doesn't specifically apply to blight, and Johnson doesn't want small businesses to have to worry about it.
“We aren't attorneys, and we don't have money to go out and buy attorneys,” said Johnson.”
The Institute for Justice, which tracks eminent domain nationwide gives Montana its highest rating. In 10,000 cases between 1998 and 2003, Montana had only one instance of government threatening eminent domain for the purpose of economic development, and eminent domain didn't end up being used in that case.
If Montana's Legislature passes these bills, it will be following the lead of 36 other states that have adopted laws limiting eminent domain since the Kelo decision. And though the need may not exist right now, neither Elliott nor Kaufmann wants to wait until it's too late.
“Quite frankly it's not used a lot,” said Elliott. “But the threat is there and the threat shouldn't be there.”
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