Anti-Takings Abuse Bill Introduced in the House

As we approach the five year anniversary of the Supreme Court’s notoriously poorly-reasoned Kelo v. New London decision, the lack of meaningful legislative progress on curbing eminent domain abuse has been disheartening. While legislation was previously introduced in the House of Representatives by Rep. John Sullivan (R-Okla.), it was nixed by an unfriendly committee referral, and proponents of property rights and economic liberty have little to show for their efforts on this front.

The good news is that Congress is making another go at eminent domain reform. The Strengthening the Ownership of Private Property Act of 2009 (STOPP Act, H.R. 4288), introduced by Rep. Stephanie Herseth Sandlin (D-S.D.), would prevent any federal economic development funding–regardless of the federal agency or program–from being disbursed to state or local governments that seize private property in order to transfer it to another private party or for another private party’s benefit. While the legislation exempts takings for utilities, roads, pipelines, and right-of-way companies, it would–if passed–cut off significant funding to governments found to have engaged in Kelo-style eminent domain abuse.

The bill is by no means perfect. For example, funds would only be withheld from abusers for two years, instead of the 10 proposed by Rep. Sullivan in the previous legislative session. There are also no strings attached to federal highway funding, which is particularly obnoxious because Congress has no problem with tying highway funds to state behavior when, say, booze is involved. But it is worth remembering that eminent domain abuse is almost exclusively a municipal issue, and Congress ultimately has little control over how state’s police their local governments. Because of this, state legislative reform should take center stage.

Previously, I described a few of the most politically feasible state-level eminent domain reforms. They are:

  1. Enacting state legislation mandating the creation and maintenance of a public eminent domain database accessible via the Internet. Currently, data on development takings are difficult to obtain due to the fact that eminent domain condemnations are ordered at the local level. Right now, an empirical analysis of takings within a state would require contacting every county clerk and requesting specific filings. A central state database would allow social scientists, journalists, and the public to examine the economic effects of eminent domain use and abuse.
  2. Enacting state legislation defining “public use” as “use by a government body,” which would deny municipalities the opportunity to claim that their takings deals with private developers serve the “public purpose” because they will ostensibly increase tax revenue at some future date.
  3. Enacting state legislation mandating that blight be determined on a parcel-by-parcel basis.
  4. Enacting state legislation mandating that Tax Increment Financing (TIF) be limited to the length of time required to complete public infrastructure improvements within a given TIF district. This would reduce the ability of rent-seeking private developers to collude with local officials to subsidize development projects.