Tennessee Stands Up for Property Rights

Property rights in Tennessee just got a little more secure after the state legislature overwhelmingly passed Senate Bill 1184 earlier this month, which has now gone into effect with Gov. Bill Haslam’s signature.

The new law, now known as Public Chapter Number 422, significantly strengthens legal protections against eminent domain statewide, marking a critical victory in the increasingly global fight against eminent domain.

Tennessee lawmakers adopted the previous set of eminent domain laws after the U.S. Supreme Court’s infamous Kelo v. New London decision effectively allowed governments to take private property for almost any reason. Those initial reforms were part of a wave of state constitutional and legislative changes across the country aimed at resisting that horrific and deeply unpopular precedent.

Unfortunately, the post-Kelo reforms that Tennessee lawmakers implemented in2006 left a major loophole for local officials and private developers to exploit:  Governments maintained the power to condemn and take private property for the development of “industrial parks.” In East Tennessee’s Jefferson County, a failed attempt at a “megasite development” and other potential industrial park projects led the County Commission to pass a resolution calling for eminent domain reform. This loophole was one of the reasons the Institute for Justice’s (IJ) Castle Coalition gave Tennessee a grade of D-minus for the eminent domain laws that were in effect before this month.

Fortunately, PC 422 restricts eminent domain to “public use,” while finally removing the “industrial parks” loophole from that definition. Under Tennessee law, “public use” explicitly “shall not include either private use or benefit, or the indirect public benefits resulting from private economic development and private commercial enterprise, including increased tax revenue and increased employment opportunity,” with narrow exceptions for public projects like roads, utilities and actual blight. The new law also raises the cost of eminent domain for the government by requiring the condemning body to pay appraisal and engineering fees, along with, in certain circumstances, legal fees for the property owners. These new reforms make it substantially more difficult for government officials to take private property from law-abiding citizens.

In fact, David Seal, a Jefferson County commissioner who sponsored the county’s reform resolution, spearheaded SB 1184 from its conception to ultimate passage precisely in order to protect his community from eminent domain. According to Seal, the critical difference between 2006 and 2017 is the Tennessee General Assembly is now controlled by lawmakers, like bill sponsors Sen. Frank Niceley and Rep. Andrew Farmer, who respect the property rights of farmers, small businesses and home owners.

“This reform is an incredible win for my community and everybody in Tennessee,” Seal said of the new law’s enactment. “I fought for this because our property rights were under attack when private developers tried to kick us off our land for a development ‘megasite.’ This new law corrects serious flaws in the old law and will now protect all of us from eminent domain shenanigans in the future.”

IJ has long led the opposition to eminent domain, including Kelo and its aftermath.  In Atlantic City, IJ attorneys are preventing the New Jersey Casino Reinvestment Development Authority from condemning a man’s home because a recently-bankrupt casino happens to be nearby. In Long Branch, New Jersey, IJ stopped the city from colluding with a private developer to destroy a lower-income scenic community and build upscale condominiums in its place. IJ’s ongoing legal battles include stopping Elberton, Georgia from forcibly reducing an office building to a hotel walkway and preventing Charlestown, Indiana Mayor Bob Hall from skirting constitutional and legislative protections against eminent domain to replace the working-class Pleasant Ridge neighborhood with upscale “redevelopment.”

Tennessee’s new PC 422 is an important victory in the campaign to restore robust property rights protections for hardworking Americans. Hopefully, more states will follow suit.

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