By Larry Jones
May 21, 2007

By voice vote, the House Agriculture Committee approved H.R. 926, a bill that would prohibit federal economic development assistance to any state or local government that uses the power of eminent domain to obtain property for private commercial development. The bill would also prohibit such assistance to any state or local government that fails to pay relocation costs to persons displaced by the use of eminent domain for economic development purposes.

An exception would be allowed for state and local governments to obtain property for use by a public utility companies; for a road or other right of way or means, open to the public or common carries, for transportation; for an aqueduct, pipeline, or similar use; for a prison or hospital; or for any use during a national emergency or national disaster declared by the President.

Any use of eminent domain to obtain property from a private entity and transfer the ownership or the leasehold interest to another private entity except for the uses mentioned above, could disqualify a state or local government for any federal economic development assistance for a period of two years. Federal economic development assistance is broadly defined in the bill to include most federal aid programs related to economic development including community development block grants, public works programs, brownfields economic development, community service block grants and many more. Qualification for federal economic development assistance could be restored immediately if the property is returned to the private entity from which it was taken.

This proposed legislation would impose undue restrictions on local governments’ use of eminent domain and interfere with their ability to carry out many critical public service objectives including revitalizing distressed communities, cleaning up polluted land and providing affordable housing. The bill, sponsored by Representatives Stephanie Herseth Sandlin (SD) and Bob Goodlatte (VA), is similar to one passed by the Agriculture Committee last year, which was in response to the Supreme Court’s decision in Kelo v City of New London. Although many members of Congress disagreed with the decision, which affirmed the city’s use of eminent domain to take property for economic development, most states have adopted legislation addressing concerns raised by the decision and there is no need for federal legislation.

The Conference adopted strong policy last year opposing federal preemptions, such as H.R. 926, and urging respect for the state and local political and judicial process for resolving eminent domain disputes.