Condemnation of Private Property for Economic Development: Legal Comments on the HousePassed Bill (H.R. 4128) and Bond Amendment (CRS Report for Congress)
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| Release Date |
Revised Jan. 20, 2006 |
| Report Number |
RL33208 |
| Report Type |
Report |
| Authors |
Robert Meltz, American Law Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
On June 23, 2005, the Supreme Court handed down Kelo v. City of New London ,
holding that under
the Fifth Amendment Takings Clause, the sovereign power of eminent domain ("condemnation")
can be used to transfer private property to new private owners for the purpose of economic
development. Kelo sparked a public outcry and a flurry of legislative proposals in
Congress and the
states to restrict the use of eminent domain.
The principal Kelo bill in Congress is H.R. 4128 , the "Sensenbrenner bill,"
which
passed the House on November 3, 2005. Its key provision prohibits states and their political
subdivisions (hereinafter "states") from using eminent domain to transfer private property to other
private parties for economic development -- or allowing their delegatees to do so. The prohibition
applies to any fiscal year after the bill's enactment in which the state received federal economic
development funds. A state that violates the prohibition is ineligible to receive federal economic
development funds for two fiscal years following a judicial determination of violation -- a penalty
enforceable by private right of action.
H.R. 4128 raises several legal issues. The prohibition on economic development
condemnations extends not only to land taken for the explicit purpose of economic development but
also to land subsequently so used. The latter coverage raises the possibility that although a parcel
was initially condemned for a non-prohibited purpose, its use years later for a prohibited one would
trigger the two-year cut-off of federal funds. Nor does there seem to be any proportionality
requirement between the prohibited condemnations and the length and scope of the federal funds
suspension. If Congress's Spending Power includes a proportionality requirement for
conditions on
federal funds, as the Court suggests, the absence of proportionality in some of the bill's applications
may raise a constitutional issue.
Persons forced to move by a prohibited condemnation may run into a standing problem should
they attempt to use the bill's right of action to impose a funds suspension. Standing requires that the
remedy sought in an Article III court will redress the complained-of injury. A suspension of federal
funding to the offending jurisdiction does not redress the fact that the person was made to move,
unless it can be argued that the funding cut-off makes it more likely that the jurisdiction will elect
to return the wrongfully condemned property.
The Bond Amendment, inserted into an FY2006 appropriations bill by Senator Bond, is now
enacted law. Like H.R. 4128 , it attaches a condemnation-restricting condition to
federal funds, though limited to funds appropriated under the statute. The Amendment's list of
acceptable and unacceptable condemnation purposes largely echoes existing case law construing the
"public use" prerequisite for condemnation in the Constitution.
