2007 Eminent Domain Report Card: Texas Gets A “C-”

Arlington, Va.—Texas 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, Texas failed to address bogus “blight” declarations in the state, but pending legislation would provide comprehensive property rights protection if it is signed by the governor.

“Texas 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, “Texas acted fairly quickly, though incompletely, to curtail eminent domain abuse in the aftermath of the Supreme Court’s Kelo decision.” During a special session on another issue, the Texas Legislature passed Senate Bill 7 (2005), which has both positive and negative aspects. On the positive side, the new law says the government or a private entity may not take property if doing so confers a private benefit, is “pretextual,” or is for economic development (unless economic development is secondary to the main objective of eliminating real “blight”). Additionally, courts are not to give any deference to a condemning authority’s decision that a condemnation will be for a public use. These are important reforms that should go a long way to preventing future abuses in Texas.

On the down side, however, the bill created specific exceptions to those prohibitions so that they do not apply to utilities, port authorities, and other specific agencies and projects, including the new Cowboys’ stadium. And, as seen in other states, there is a specific exemption for blight removal. By failing to close the “blight” loophole, Texas is allowing local governments to continue taking properties for private benefit—it is just requiring them to use different terminology.

The Texas Legislature was not in session in 2006, but in 2007, it passed a bill that would redefine public use. Under House Bill 2006, condemnation only qualifies as a public use when it “allows a state, a political subdivision of the state, or the general public of the state to possess, occupy, and enjoy the property.” If signed by the governor, this bill would close the blight loophole and effectively close the chapter on eminent domain abuse in Texas.

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.

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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.]