EMINENT DOMAIN REFORM: SENATE BILL 18 GETS LOADED UP WITH BAD AMENDMENTS

In the April 30, 2009, edition of the TML Legislative Update, the League reported on S.B. 18, relating to the use of eminent domain authority. As passed by the Senate, the bill attempted to strike a balance between property owners and entities (including cities) with eminent domain authority.

The bill then moved on to the House, where detrimental committee amendments were added without the benefit of a hearing or public testimony. How did that happen? The House voted to suspend its rules that require advance notice of committee meetings. Shortly thereafter, the House Land and Resource Management Committee met at the chairman’s desk in the House chamber to vote on a House committee substitute for the bill.

The text of that substitute bill wasn’t available to the public when the committee met, but it has since been released. It contains the following detrimental provisions, some of which came from other eminent domain House bills that are procedurally dead.

Urban Renewal and Relocation amendments provide that:

  1. a governmental or private entity may not take private property through the use of eminent domain if the taking is for economic development purposes, unless the economic development results from municipal community development or municipal urban renewal activities to eliminate an existing affirmative harm on society from blighted areas or is not for a “public use”;
  2. the term "blighted area" means an area that presents four or more of the following conditions for one year after a property owner receives notice of the condition: (a) the area contains uninhabitable, unsafe, or abandoned structures; (b) the area has inadequate provisions for sanitation; (c) there exists at the area an imminent harm to life or other property caused by fire, flood, hurricane, tornado, earthquake, storm, or other natural catastrophe declared to be a disaster; (d) the area has been identified by the federal Environmental Protection Agency as a Superfund site or as environmentally contaminated to an extent that the property requires remedial investigation or a feasibility study; (e) the area has been the location of substantiated and repeated illegal activity of which the property owner knew or should have known; (f) the maintenance of the property is below county or municipal standards; (g) the property is abandoned and contains a structure that is not fit for its intended use because the utilities, sewerage, plumbing, heating, or a similar service or facility of the structure has been disconnected, destroyed, removed, or rendered ineffective; or (h) the property presents an economic liability to the immediate area because of deteriorating structures or hazardous conditions;
  3. the current statutory provisions relating to urban renewal eminent domain apply only to blighted areas (as opposed to "slum" areas);
  4. a municipal governing body must determine that each unit of property (as opposed to an “area,” as is current law) be designated as blighted, and make corresponding procedural changes to urban renewal laws;
  5. notwithstanding any other law, an area may not be considered a blighted area on the basis of a condition described in number (1) above unless the city has given notice in writing to the property owner regarding the imminent harm to life or other property caused by the condition of the property, and the property owner fails to take reasonable measures to remedy the harm caused by the property;
  6. an area may not be considered blighted solely for aesthetic reasons;
  7. a city shall provide a relocation advisory service for an individual, a family, a business concern, a farming or ranching operation, or a nonprofit organization that is compatible with the Federal Uniform Relocation Assistance Advisory Program;
  8. a city shall, as a cost of acquiring real property, pay moving expenses and rental supplements, make relocation payments, provide financial assistance to acquire replacement housing, and compensate for expenses incidental to the transfer of the property if an individual, a family, the personal property of a business, a farming or ranching operation, or a nonprofit organization is displaced in connection with the acquisition; and
  9. the provisions of the bill shall supersede broad eminent domain powers relative to tax increment financing.

Compensation amendments would provide that the special commissioners in a condemnation proceeding shall admit evidence on the financial injury to the property owner including—if the condemnation makes relocation of a homestead or farm necessary—the financial damages associated with the cost of relocating from the condemned property to another property that allows the property owner, without the necessity of incurring additional debt, to: (1) have a standard of living comparable to the property owner's standard of living immediately before the condemnation; or (2) operate a comparable farm, if the condemned property is a farm.

Compared to other bills that have been filed, S.B. 18 as it passed the Senate was a reasonable compromise. The House committee version is not. The bill will now be heard by the full House, where lawmakers will probably try to add additional, detrimental provisions. The final version of the bill – if there is one – will be hammered out in a conference committee.

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No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the
Texas Municipal League.

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