2007 Eminent Domain Report Card: Montana Gets A “D”

Arlington, Va.—Montana home and small business owners have reason to be concerned according to a 50-state eminent domain report card released today. In the two years since the infamous Kelo eminent domain ruling from the U.S. Supreme Court that allowed eminent domain for private gain, Montana has done little to protect property owners across the state.

“Montana homeowners are not much more protected from eminent domain abuse today than they were the day the Kelo decision was announced,” said Steven Anderson, director of the Castle Coalition, a national grassroots organization that examined and graded eminent domain laws for each of the 50 states since the Kelo ruling. Read the report at: www.CastleCoalition.org/publications/report_card.

According to the report, the Montana Legislature was not in session in 2006, but citizens hoped to place a property rights initiative on the November 2006 ballot. However, Initiative 152 was challenged in court over issues regarding signature gathering and subsequently was struck from the ballot.

In 2007, the Legislature passed Senate Bills 41 and 363. These companion bills open up the two precise sections of code needing reform—the definitions of public use and blight. Unfortunately, the reform that passed barely increases property rights protections.

The Montana Code, like the statutes of almost every state prior to Kelo, provides a back door for municipalities to acquire private property through bogus blight designations. Unfortunately, SB 41 only rearranges a few words in the laundry list of vague criteria necessary to declare an area blighted. The bill was originally intended to prohibit the government from serving as a “pass through” (doing the dirty work of condemning property for private developers) with a strong provision prohibiting the transfer of condemned property to a private entity for ten years. Instead, the bill was amended to remove the time limit and add “intent” language, making it an easy provision to work around.

SB 363 addresses public use but fails to remove old, problematic definitions such as “and all other public uses authorized by the legislature of the state.” The bill also attempts to limit the blight loophole by reducing the criteria that qualify an area as blighted, but “deterioration” and “age obsolescence” remain on the list.

Other language in the bill purports to stop the use of eminent domain when its “purpose” is increased tax revenue. Like the “intent” language of SB 41, this provision will be easy to get around since local governments can always claim a different reason for acquiring property, and courts will not question that assertion.

These bills represent a first step toward eminent domain reform, but the state has more work to do to ensure that every Montanan is protected against the abuse of eminent domain.

Among the states that passed the strongest reforms protecting property owners are Florida, Michigan, Nevada, New Mexico, North Dakota and South Dakota, each of which received an A or A- grade. States that received F’s were: Arkansas, Connecticut, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, Oklahoma and Rhode Island.

“In only two years since Kelo, 41 states have reformed their laws to offer greater protection to small property owners,” said Jenifer Zeigler, legislative affairs attorney with the Castle Coalition. “But much more work remains if homeowners, small business owners, farmers and churches in Montana and beyond are to be safe from the unholy alliance of tax-hungry governments and land-hungry developers.”

The report seeks to step back and evaluate the legislative work that has been done and is left to do. It finds, “Some states have passed model reforms that can serve as an example for others. Some states enacted nominal reform—possibly because of haste, oversight or compromise—and need to know what is left to fix. And finally, there are those states that have failed to act altogether, leaving home, farm, and business owners threatened by Kelo-type takings and beyond.”

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[NOTE: To arrange interviews on this subject, journalists may call John Kramer, the Institute for Justice’s vice president for communications, at (703) 682-9320 ext. 205 or in the evening/weekend at (703) 527-8730. For more information on eminent domain abuse, visit www.ij.org or www.castlecoalition.org.]