John Locke Update / Research Newsletter

New Report: How to Protect Against Eminent Domain Abuse (Includes a Model Amendment)

posted on in Property Rights

Yesterday, my report entitled "Blocking Eminent Domain Abuse in NC: It’s past time for a well-crafted constitutional amendment" was released.

Below are some of the key points on why North Carolina needs an eminent domain amendment and what an amendment needs to address. Finally, I have provided readers the language of my model amendment. To really understand the issues, including the reasoning behind the amendment language, I strongly recommend reading the report.


Key Points

  • There is optimism that an eminent domain amendment will pass this upcoming legislative session. The amendment must be carefully drafted, however, to properly protect property owners.

  • The amendment (HB 8) introduced in the House on Wednesday, while a good start, needs to be strengthened.
  • An amendment is necessary for many reasons including:

– There is no state constitutional protection from eminent domain abuse, such as the government seizing private property for economic development.

– In fact, North Carolina has the weakest property rights protection in the country; it is the only state in the country that does not have a Constitution that expressly addresses eminent domain.

– The North Carolina Supreme Court has held that the government can take private property and transfer an interest in that property to a private company for its sole and exclusive use.

– The government seizes private property for other private parties through various means, such as blight laws.

  • After Kelo, eight states passed constitutional amendments, including the two neighboring states of Georgia and South Carolina.

  • A model amendment would, among other things:

– Prohibit takings for private uses. A prohibition on takings for economic development is not enough, since many takings that involve the transfer of property from one private party to another private party are not connected to economic development.

– Prohibit the government from improperly using "blight" and other pretexts for seizing private property in order to promote economic development or to achieve some other improper objective.

– Require the government to have the burden of proof to demonstrate that a taking is for a proper public use.

– Require just compensation to make property owners whole, by including the payment of relocation costs, loss of business goodwill, and attorneys fees.


The Model Amendment

Private property shall not be taken except for a public use. Public use shall not include the transfer of any interest in property from one private party to another private party, unless the transfer is to a common carrier or public utility for the use of the public generally or the transfer is clearly unrelated to the reason for the taking. Public use may include the taking of property to address blight only when the physical condition of the specific parcel of property poses a concrete threat to health or safety.

Just compensation shall be paid to property owners and shall include loss of business goodwill, relocation costs, reasonable attorneys fees and other costs necessary to put the property owners in the same position they would have been in had their properties not been taken. If demanded, a jury shall determine just compensation. Condemnors shall prove by clear and convincing evidence that a taking is for a public use and that compensation is just.


Forced Annexation Moratorium Bill: How Does it Work?

On the first day of the legislative session, the House introduced a bill (HB 9) that would put a moratorium on annexations that are still "in the process."

The House members should be commended for introducing a moratorium bill on the first day of session. The bill appears to be good, but it also is very confusing to figure out. Below is my initial analysis of the bill in order to help the public make sense of the bill (the analysis is subject to change).

1) What happens when an annexation ordinance has not been adopted prior to the effective date of the moratorium bill?

A municipality can’t move forward with any part of the annexation process until July 1, 2012. Municipalities still can do things such as planning and research, but they can’t take actions that move the annexation forward in the process.

2) What happens when an annexation ordinance has been adopted, but the effective date of the annexation is on or after the moratorium bill becomes law?

The ordinance doesn’t become effective until July 1, 2012.

3) Is there protection when an annexation ordinance has been adopted and the effective date of the ordinance is before the effective date of the moratorium bill?

Yes, so long as the annexation is subject to litigation in any court on the effective date of the moratorium bill. The ordinance can’t become effective until July 1, 2012.

4) Is there protection when an annexation ordinance has been adopted and the effective date of the ordinance is before the effective date of the moratorium bill but the annexation is not subject to litigation?

This becomes a moot question because if the ordinance effective date is before the effective date of the annexation bill, and there is no litigation, then the process is already over — the annexation is law.

An annexation ordinance can’t become effective less than 70 days after passage of the ordinance. To appeal an annexation, property owners have 60 days after passage of the ordinance. This means that property owners will have had their chance to make the annexation "subject to litigation" prior to the ordinance becoming effective.

It may be possible, I guess, for a court (state or federal) to look past the 60-day requirement for an appeal, but it is highly unlikely.

5) What happens to all litigation pending in state court?

The litigation is stayed upon enactment of the moratorium bill.

6) Does the bill cover all forced annexations in the process?

Yes, it appears to.

7) What are my thoughts on a moratorium?

A moratorium bill is helpful, but there is a much bigger need for a real reform bill. Please recognize that a reform bill can stop annexations in process too, and may have retroactive provisions.

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Daren Bakst is the Research Fellow in Agricultural Policy at the Heritage Foundation.  In this position, Bakst studies and writes about agricultural and environmental policy and property rights, among other issues.  He has done extensive work on the farm bill… ...

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