1. Introduction: Eminent Domain & The Kelo Concern
In the last several years, few U.S. Supreme Court cases have created more controversy than the Kelo v. New London decision regarding the exercise of eminent domain. This case generated attention largely because it involved a fundamental question about the balance between one of our government's most awesome powers—the power to take citizens' property against their will for public use—and one of our citizens' most fundamental rights—the right to own property. Typically, city, county, or state governments exercise the power of eminent domain as they take property from private owners—a practice called condemning—for a public use such as an essential highway or water line. Although government entities can do this even if the owners are not willing to sell the property voluntarily, the government is required to compensate owners for such takings.
In the controversial five to four decision in the Kelo v. New London case, the majority held that the city of New London, Connecticut, acted within its eminent domain power when it sought to condemn the property of fifteen landowners who had refused to sell to the city’s development agency. The fact that the city used the power of eminent domain in order to make room for new development—the construction of new, more expensive housing; a hotel; and a conference center—made the ruling controversial. As a result of this exercise of eminent domain, the land was taken by the city from one set of private owners and transferred to another set of private owners. The “public use” justification was that it would boost economic development by creating jobs and bringing in higher tax revenues to the city. Although the area around the properties was generally economically distressed, the fifteen properties in question were in good condition, making the ruling even more controversial.
Critics of this decision span the political spectrum from the conservative libertarian group Institute for Justice, which argued the case for the property owners, to the American Association of Retired Persons (AARP), to liberal groups like the National Association for the Advancement of Colored People (NAACP), and Martin Luther King's Southern Christian Leadership Conference, which filed "friends of the court" briefs on behalf of the plaintiffs. These critics argue that under such an expansive view of “public use,” all private property owners are at risk of being forced off their property anytime a government entity determines that there is a higher economic use for that property, even if it is a private use. Many agree with a central point that Justice Sandra Day O’Connor made in her dissenting opinion when she argued that the ruling created a reverse Robin Hood effect in which large corporations and development firms would benefit at the expense of those with lower incomes and less political power.
The majority, however, emphasized that "nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power." As a consequence of both the intense criticism of the Kelo case and of the court's stated deference to state legislatures, bills are being introduced in legislatures across the country to address the concerns raised by the Kelo decision. In Idaho, no fewer than nine separate bills and a constitutional amendment have been introduced in this session of the legislature. We review these items in Sections 3, 4, and 5 of these briefing materials. Section 3 focuses on the constitutional amendment that addresses one concern raised by Kelo—the fact that government may exercise eminent domain to promote economic development. Section 4 focuses on two bills that address another two concerns raised by Kelo—the fact that government may exercise eminent domain to transfer property from one private owner to another private owner and the fact that government, while exercising eminent domain to promote economic development, may condemn a property that is itself in good condition. Section 5 focuses on the seven bills that seek to provide greater assurances to property owners that the process by which the government exercises eminent domain in general is fair and not prone to abuse.
Prior to the discussions the amendment and bills before the legislature, we use Section 2 to review the relevant provisions in Idaho's Constitution and statutes. The analysis of the relevant eminent domain legal provisions as well as current eminent domain practice in Idaho reveals that as important as it may be for our legislature to address the concerns Kelo raises, the vast majority of concerns private property owners in Idaho have regarding the actual exercise of eminent domain arise as the government exercises its legitimate and long-standing authority to take property for traditional public use—concerns which the seven bills discussed in Section 5 aim to address.
2. Eminent Domain in Idaho
Like all states, Idaho has struggled to strike the right balance between government's awesome power of eminent domain and the fundamental right of individual citizens to own property. A review of the provisions regarding eminent domain in Idaho's Constitution and statutes reveals that the balance we have struck reflects the circumstances under which our state struggled at critical moments in its past. As a result, Idahoans today may be surprised to learn that, in some profound ways, our state privileges eminent domain power over individual property rights more than any other state in the nation. In this section, we review Idaho's sometimes surprising constitutional provisions regarding eminent domain, as well as Idaho's relevant statutes.
As we might expect, Idaho's Constitution contains profound expressions of individual rights generally as well as private property rights specifically. The very first article, Article I, is entitled "Declaration of Rights" and the first section, entitled "Inalienable Rights of Man," states:
All men are by nature free and equal, and have certain inalienable rights, among which are enjoying and defending life and liberty; acquiring, possessing and protecting property; pursuing happiness and securing safety. [Emphsis added]
In addition to this Section 1 provision, Article I contains an additional section dedicated exclusively to the topic of eminent domain. This section, however, may be rather surprising. Instead of a section dedicated to enumerating the protections of personal property rights against the encroachment of eminent domain, we find provisions that work in the opposite direction. Section 14 is dedicated mostly to enumerating the protections of eminent domain against the encroachment of private property rights. Titled "Right of Eminent Domain" [emphasis added], it begins with a rather long (69 word) enumeration of the many uses of lands for which eminent domain may be exercised for the development of irrigation and mines. To guard against any gaps in this enumeration, the section goes on to state that eminent domain may be exercised for "any other use necessary to the complete development of the material resources of the state" and concludes that such uses are "hereby declared to be a public use, and subject to the regulation and control of the state." Strikingly, the section does not limit the exercise of eminent domain to government entities. Rather, Idaho's Constitution provides for the exercise of eminent domain by a private party, so long as it is exercised for the declared public use of development of the material resources of the state.
In the era during which the Idaho Constitution was drafted, the state confronted challenges that made the exercise of eminent domain seem particularly critical to many delegates. The delegates who drafted the Idaho Constitution in the summer of 1889 lived in a large territory with few people, scarce water, and abundant mineral resources. Virtually everyone's welfare was closely connected to the development of mining and agriculture. Farmers in this arid state needed irrigation water, which itself required reservoirs, canals, and ditches that had to cross private property. Mining required roads, railroads, and tunnels that also had to be built over other people's lands. These circumstances led many of the delegates to the Constitutional Convention to conclude that the use of private property in the development of the "material resources of the state" was a "public use," even when the entity using the property for such a purpose was a private party who had taken that property from another private party. In its enumeration that eminent domain was a private right, the Idaho Constitutional Convention went beyond any other state Constitutional Convention (Colorado had moved in this direction, but not as far as Idaho).
Such bold innovation, however, did create significant controversy, even within the convention. One delegate left the convention on this account, never to return. Another delegate, Aaron Parker from Idaho County, concluded that by seeming to grant great property right protection in Section 1 and then by taking it away in Section 14, the convention was "in the position of a cow which gives a bucket of good milk and then kicks it over." It should be noted that Section 14 does contain a second paragraph that does guarantee that private property may not be condemned "until a just compensation, to be ascertained in the manner prescribed by law, shall by paid therefor."
Idaho statutes also regulate the use of eminent domain. Chapter 7 of Title 7 of Idaho Code, titled "Special Proceedings," is dedicated to the power of eminent domain and specifies the public uses for which eminent domain may be exercised. Many of these uses are traditional public uses in which the government takes and retains private property to provide buildings and roads for public use. Some of the uses allow for the transfer of private property to private entities such as utility companies in order to provide public uses such as electricity or telephone service. Other uses allow for the transfer of private property to private entitites when these entities are engaged in the type of activities, identified in the Constitution, that develop "the material resources of the state." Chapter 7 of Title 7 requires that all takings be necessary for the particular public use specified and outlines in detail the procedures that government entities must follow when properties are condemned.
Many takings of this "public use" variety occur in Idaho. Although no formal statistics are kept on the number or nature of such takings in the state, Idaho's growth results in the fairly frequent need for the government to acquire property to build or upgrade roads and highways as well as other public infrastructure. Through these takings, both public and private entities acquire condemned properties in order to promote the "public use." As some measure of the frequency of takings in the state, it may be useful to note that the Idaho law firm with the largest eminent domain legal practice has three attorneys who primarily practice eminent domain law and who currently have over seventy active cases.
Although traditional "public use" takings might not seem likely to result in the troubling Kelo-like takings in which private property is transfered to another private party under the banner of economic development, some argue that Kelo-like transfers do occur in indirect ways. For instance, many argue that the phenomenon of "excess condemnation"—in which the government takes more property than is immediately necessary for a public use on the grounds that additional property may be needed in the future—can lead, indirectly, to the transfer of condemned property from one private party to another. For example, imagine that the Idaho Transportation Department concludes that it needs to widen a major intersection. Although it requires only ten or twenty feet for the immediate expansion, the department takes the entire corner lot given the possibility that even greater expansion will be necessary in the future. Later, however, the department sells the excess property to another private party. Many concerned about this kind of taking argue that it creates a Kelo-like effect in the sense that it takes property from one private party and gives it to another. Such takings may benefit the wealthy and powerful at the expense of those with less power and wealth. Although all individuals can contest a taking, once the government has possession of a property—which, in this example, is a property very likely to increase in value due to increased traffic—the wealthy and powerful may be better positioned to wield their influence to persuade the government to sell that property to them.
In addition to the discussion of eminent domain in Chapter 7 of Title 7 of Idaho Code, eminent domain is discussed at length in Chapter 20 of Title 50 of Idaho Code, titled the "Urban Renewal Law." By 1965, when this law was passed, Idaho faced challenges quite different than those that the delegates to the Constitutional Convention of 1889 contemplated. The Urban Renewal Law authorizes cities and counties to establish urban renewal agencies that can acquire property in areas found to be "deteriorated" or "deteriorating" in order to revitalize those areas. The Urban Renewal Law authorizes urban renewal agencies to acquire property through voluntary methods such as purchase or lease. It also authorizes urban renewal agencies to exercise eminent domain. The Urban Renewal Law is used with regularity. It is of interest to note that, however, that urban renewal agencies almost always acquire prorpery through voluntary means. Legislators concerned by Kelo have found only one case in the forty-year history of the law in which an urban renewal agency's use of eminent domain to condemn a private property has been an issue.
Still, given its pursuit of renewal and revitalization, the Urban Renewal Law is the source of eminent domain power in Idaho that most clearly poses the threat of Kelo-like actions. Although actual takings of this sort have not caused great concern so far, the statute expressly authorizes urban renewal agencies to transfer property taken by eminent domain to another private party so long as the transferred property is used in accordance with the urban renewal plan. Many, including the Speaker of the House, argue that, even now, urban renewal agencies' power to exercise eminent domain is the threat by which they induce propery owners to sell their properties "voluntarily." Many argue that this reality and the very possibility that the Urban Renewal Law may be used to transfer properties in a Kelo-like manner in the future is serious enough to warrant corrective legislation.
Revising Idaho's Constitution and Statutes
As a direct result of the concerns that the Kelo case raises, one constitutional amendment and two bills have been introduced to the Idaho legislature this session. Indirectly, seven additional bills respond to the attention Kelo generated by addressing the process by which the government exercises the power of eminent domain in general. Some feel that these proposed pieces of legislation should become critical safeguards of our rights. Others feel that no legislation is needed to address the concerns raised by Kelo. These latter individuals argue that Idaho law currently provides adequate protection for property owners and that Idaho's political culture would tend to prevent a Kelo-like incident in any event. Many individuals fall somewhere in between these two positions.
Now, you have an opportunity to decide whether you think the following pieces of legislation are critical safeguards for private property owners, stumbling blocks to government entities that are trying to work for the public good, or somewhere in between. As you review the following proposed constitutional amendment and bills, you might imagine yourself as both a property owner whose property is required by the government for a public use and as a government entity attempting to pursue the public interest. As you imagine yourself in each role, consider whether the legislation before you ensures the proper balance between the government's awesome power of eminent domain and the individual's right to own private property.
3. A Constitutional Amendment Addressing the Kelo Concern: House Joint Resolution 3
The proposed constitutional amendment, House Joint Resolution 3, introduced by Representative Lenore Barrett, is among the most restrictive proposals addressing the Kelo concern. In response to O'Connor's fear, expressed in her dissent, that "all private property is now vulnerable to being taken and transferred to another private owner" as long as a state legislature accepts "economic development" as a "public use" for which eminent domain may be exercised, this amendment would simply prohibit all governmental and public entities in Idaho from using economic development as a reason for exercising their power of eminent domain. Specifically, the proposed language reads:
No department, agency, or instrumentality of the state, or any county, or any municipality, or other political subdivision, or any other public entity with power of eminent domain shall use economic development as a reason for exercising its power of eminent domain. For the purpose of this section, "economic development" shall mean, but is not limited to, any activity including increasing tax revenues, or any project which promotes, stimulates, develops or advances the economic prosperity of a jurisdiction.
Supporters of this constitutional amendment observe that it would prohibit Kelo-like takings by prohibiting economic development takings entirely. Since private property is such a fundamental individual right, supporters further argue, it is appropriate for such protections to have the status of a constitutional prohibition.
Opponents to the Barrett amendment argue, however, against the breadth of her particular prohibition against economic development takings. In particular, opponents argue that prohibiting governmental or public entities from exercising the power of eminent domain where economic development is "a reason" (emphasis added) is inherently problematic. Imagine, for instance, that the Idaho Transportation Department intended to condemn a property in order to expand a highway. Such expansion, intended to facilitate the safe and efficient transportation of the state's growing population, would also, undoubtedly, stimulate "economic development." By this standard that any incidental stimulation of economic prosperity, opponents argue, essentially no exercise of eminent domain would ever by allowed.
Opponents similarly argue that Barrett's amendment would cripple Idaho's Urban Renewal Law. Although that law protects the public good by addressing deteriorated or deteriorating properties that threaten public safety, urban renewal knowingly promotes "economic development."
4. Legislation Directly Addressing the Kelo Concern
The constitutional amendment is not the only proposal that directly addresses concerns raised by Kelo. Two bills would revise Idaho's statutes governing the exercise of eminent domain in order to guard against the specific threats of takings that transfer private property to another private party where the condemned property is itself in good condition in order to promote economic development.
As you review each bill, imagine yourself, again, as both a property owner whose property is required by the government for a public use and as a government entity attempting to pursue the public interest. As you imagine yourself in each role, consider whether an appropriate balance is struck by the proposed legislation between the government's awesome power of eminent domain and the individual's private property rights.
Senate Bill 1244: Prohibition Against Transferring Takings to Private Parties
Senate Bill (SB) 1244 is another quite restrictive proposal that directly responds to the concerns raised by the Kelo case. Introduced by Senator Skip Brandt, a candidate for Congress in the 1st Congressional District, and co-sponsored by Representative Mike Moyle, SB 1244 would absolutely prohibit takings that transfer property from one private party to another. It would also prevent the Kelo-like effect resulting from "excess condemnation" takings or other takings by prohibiting the transfer of property from one private party to another for twenty years following the taking. Specifically, the proposed language reads:
Eminent domain shall not be used to acquire real property:
(1) For any purpose authorized by law if the property acquired is intended to be sold, leased, transferred, or otherwise conveyed to a person or nongovernmental entity without the power of eminent domain.
(2) For any purpose authorized by law if the property is transferred or conveyed to a person or nongovernmental entity without the power of eminent domain within twenty (20) years of the filing of a complaint in accordance with the provisions of section 7-706, Idaho Code. [Emphasis added]
Supporters of SB 1244 argue that any right as fundamental as the right to own property deserves this kind of clear and unambiguous protection from so great a governmental power as eminent domain. Indeed, there can be no doubt that this bill would both prohibit the kind of taking found in the Kelo case and prevent the abuse of "excess condemnation" discussed above by prohibiting the later transfer of condemned property originally "intended" for public use to a private party for twenty years. As Senator Brandt states, "The right to protect and control one's home and property is a fundamental right and an essential tenet of our free society."
Opponents of SB 1244 argue that the bill goes too far. SB 1244 certainly goes far beyond the concerns O'Connor expressed in her Kelo dissent. While SB 1244 would prohibit the transfer of private property to another private party in all takings, O'Connor identified at least two categories of takings in which the transfer of private property to another private party was "relatively straightforward and uncontroversial." First, O'Connor acknowledged that the government frequently exercises the power of eminent domain to transfer property to private parties that she called "common carriers." These private parties "make the property available for the public's use--such as with a railroad, a public utility, or a stadium." Such takings, in which government or public entities exercise the power of eminent domain and transfer the condemned properties to private parties, occur regularly in Idaho. Privately owned railroads, public utilties, irrigation works, and canal companies are among the many private entities that acquire condemned properties and turn these properties to the public good. Such takings would be prohibited under SB 1244. SB 1244 would also prohibit the public-private parnerships that government entities forge in order to economically and efficiently build many public facilities.
Opponents further argue that SB 1244 would prohibit the appropriate transfer of a property that is condemned because it endangers public health and safety to another private party under the Urban Renewal Law. The Kelo case generated concern, in part, because the condemned properties were well-maintained. SB 1244, however, does not distinguish between well-maintained and dangerously deteriorated properties. In this regard, again, it goes far beyond the reservations O'Connor expressed in her Kelo dissent. In that dissent, O'Connor argued that it was both appropriate and constitutional for government to exercise eminent domain in order to transfer a condemned property to a private party so long as the condition of the property created an affirmative harm to the public. In Idaho, the Urban Renewal Law currently allows for such transfers. When a property is "deteriorated" or "deteriorating" to the extent that it threatens public health and safety, an urban renewal agency may transfer that property to a private party, such as a developer. Under SB 1244, however, the government would be prohibited from transfering such a property to a private party.
Senator Brandt offers several responses to this second concern. First, he notes that since the power to use eminent domain for urban renewal has actually been exercised so rarely, the concern is more theoretical than real. Second, he observes that other regulations, such as environmental and health regulations as well as building codes, cover many of the real dangers a property may pose. Third, he points out that if the government concludes that a property is truly harmful it could still condemn and retain that property. Fourth, he argues that the market value of properties that are blighted should be quite low. Consequently, these properties should be relatively easy to acquire through a voluntary purchase. If a voluntary purchase is not possible and it becomes necessary to condemn and retain the property, the government should be able to do so while compensating the private party without great expense. Here, Senator Brandt acknowledges the possibility of the "holdout" phenomenon in which a property owner recognizes that the appraised value of a property is quite low, but also recognizes that they are the last obstacle to a comprehensive urban renewal plan and can hold out for an exorbitant price. He suggests that other mechanisms should be explored for dealing with this problem. Finally, Senator Brandt argues that when dealing with so fundamental a right as private property, it is wise to err on the side of protection against government abuse. Particularly, Senator Brandt argues, when exercise of this government power so often benefits the wealthy and politically powerful at the expense of those with modest financial resources and little political power.
The Speaker's House Bill: Limitation of Transferring Takings to Private Parties & Limitation of Takings to Promote Economic Development
Speaker of the House Bruce Newcomb in cooperation with Governor Dirk Kempthorne and Attorney General Lawrence Wasden introduced House Bill (HB) 408 to address several of the concerns addressed by Barrett's constitutional amendment and SB 1244. Because of several questions raised by The Common Interest and others about the specific language in HB 408, the Speaker has decided to withdraw this bill and introduced a revised version. Although the revised version has not yet been formally introduced, the Speaker has shared with us the provisions that it will include. Since this bill is likely to be voted on in committee in less than a week, we have decided not to wait for the formal introduction of the bill to brief and poll on it.
In general terms, the Speaker's new bill aims to address the concerns raised by Kelo in more targeted ways than the proposed constitutional amendment or SB 1244. Specifically, the Speaker's bill has two key provisions. First, like SB 1244, the Speaker's bill would address the Kelo concern that eminent domain is exercised inappropriately to transfer private property from one private owner to another. Rather than prohibiting the transfer of condemned properties to private parties entirely, however, the Speaker's bill would only prohibit the exercise of eminent domain in instances where the resulting "public use" is merely a pretext for transfering the property to another private party.
Supporters of the Speaker's Bill argue that the bill would successfully address concerns raised by Kelo by enacting a sensible balance between the demands of the government's need to exercise eminent domain and the individual's right to own property. The Speaker's bill would not prohibit all transfers of condemned properties to private parties as would SB 1244. Instead, it would only prohibit those transfers in which the transfer would benefit not primarily the public, but the private recipient. As a result, supporters argue, the Speaker's bill would continue to enable transfers to private parties which work to the public good—transfers, for instance, to private railroad companies, irrigation works, and canal companies who would actually turn the property to public use—while prohibiting transfers that would accrue benefits only to the private party recipient.
Critics of the Speaker's bill argue that while prohibiting transfers of property that actually benefit only the private party recipient is a laudable goal, the Speaker's bill would actually offer property owners little additional protection in this regard. These critics point to the Kelo case itself. In Kelo, the properties of fifteen individuals were condemned in order to make way for new, more expensive housing, a hotel, and a conference center. The individual owners argued that the transfer of their properties to the firm undertaking this development was a "pretext" transfer that would result not in substantial "public use," but in great profit for the firm. Critics of the Speaker's bill point to the majority decision—a decision that, having investigated the owners' arguments, decided against them—and to O'Connor's dissent in which she argued that there is no "practical way to isolate the motives behind a given taking" and thus identify "pretext" takings. "The trouble with economic development takings," O'Connor wrote, "is that private benefit and incidental public benefit are, by definition merged and mutually reinforcing." The portion of the Speaker's bill that would prohibit "pretext" takings, its critics argue, may not actually offer property owners substantial protection.
The second key provision of the Speaker's bill addresses the concern that well-maintained properties are inappropriately condemned in the pursuit of economic development. The Speaker's bill would prohibit economic development takings not in all instances, as the proposed constitutional amendment does, but in instances in which the specific property does not clearly endanger public health and safety in specific and demonstorable ways. Supporters argue that the Speaker's bill thus prohibits takings of well-maintained properties such as occurred in the Kelo case, but without eviscerating urban renewal efforts in cases of genuinely blighted properties. Unlike SB 1244, the Speaker's bill would allow transfers to private parties in such cases.
5. Legislation Addressing the Exercise of Eminent Domain:
Senate Bills 1242, 1243, 1245, 1246, 1247, 1248, and 1273
In addition to the two bills that respond directly to the Kelo concern, seven additional bills respond to Kelo in the general sense that they revisit the requirements made upon the government as they exercise their power of eminent domain with the intent of demanding that when the government exercises such an awesome power at the expense of the fundamental rights of property owners, extra care should be taken that this power is exercised fairly and without abuse. Three of these seven bills—Senate Bills 1242, 1243, and 1246—aim to make the process by which the government can condemn private property more fair and less prone to abuse by, respectively, prohibiting excess condemnation, demanding that the entity exercising eminent domain specify in exact detail the property being condemned, and by demanding that the owners of condemned property be offered uniform relocation assistance. The other four of these seven bills—Senate Bills 1245, 1247, 1248, and 1273—aim to make the process more fair and less prone to abuse by making it more feasible for property owners who have a legitimate disagreement with the government about the condemnation to challenge the government. While property owners rarely challenge the actual act of condemnation, they occasionally take issue with the amount of compensation offered. These four bills would allow property owners to more feasibly challenge the whether the government's compensation offer was just.
Once again, we encourage you to imagine yourself as both a property owner whose property is required by the government for a public use and as a government entity attempting to pursue the public interest. As you imagine yourself in each role, consider whether the right balance between the government's awesome power of eminent domain and the individual's right to own private property is properly ensured.
Legislation Changing the Condemnation Process: Senate Bills 1242, 1243, and 1246
Three of the eminent domain bills before the legislature—Senate Bills 1242, 1243, and 1246—seek to provide greater assurances that the process by which the government condemns property is fair and not prone to abuse. All three have been introduced by Senator Brandt and are co-sponsored by Representative Mike Moyle.
Senate Bill 1242: Prohibition of Excess Condemnation
The first of the three bills, Senate Bill 1242, would prohibit the practice of "excess condemnation." This would mean that if the government only needed one acre of your property for "public use," it could not condemn another twenty acres on the chance that it might need more property in the future. As noted earlier, government or public entities may currently condemn more property than is immediately necessary on the very grounds that the additional property may be needed in the future. SB 1242 would prevent this practice by adding a provision to the Idaho Code that states:
That the property and all property rights to be acquired are necessary for a public use at the time the complaint is filed, and that no additional property or property rights not needed for public use are being required.
Supporters of SB 1242 argue that eliminating the practice of "excess condemnation" is fair and would also eliminate the Kelo-like problem of indirectly transfering condemned property to another private party at a latter date if and when the government recognizes that it condemned property in excess of its needs.
Opponents of SB 1242 raise two primary arguments. First, they argue that on occasion condemning part of a property leaves the owner with an "uneconomic remainder" or a piece of leftover land that is virtually worthless. Second, they argue that occasionally government entities really can foresee future needs and that condemning additional property for those needs makes sense.
Some supporters of SB 1242 are open to addressing opponents' first concern. These supporters would be willing to alter the language of the bill to allow the government to acquire uneconomic remainders, or bits of virtually worthless leftover land, for the benefit of the land owner. But supporters and opponents of SB 1242 persist in their disagreement over the second issue. Should government be able to take property for current needs only or for current needs and anticipated future needs? People on both sides acknowlege this is a hard policy question. SB 1242 resolves it in favor of property owners.
Senate Bill 1243: Specification of Property Rights to be Acquired
The second of the three bills, Senate Bill 1243, would require that the government entity seeking to condemn a property clearly identify the exact property it means to condemn. Supporters of SB 1243 argue that, currently, government entities may identify the property they intend to condemn, but then, when individual property owners spend money to establish what they believe just compensation would be, the government entity may realize that that amount is more than they anticipated. Consequently, the government may redefine the extent of property they intend to take, thus ignoring their previous representations and forcing the property owner to spend additional money to if they want to again investigate what would be just compensation for themselves. SB 1243 would require that the complaint inititiating the condemnation process—a document in which the government is currently required to specify the owners, the entity who will use the property, and a general description of the property—specify the exact extent of the property to be taken.
Supporters of SB 1243 argue that this bill, by requiring due diligence from government entities in advance of the complaint, would relieve property owners of an unreasonable hardship caused when the government alters its proposed taking. Supporters of SB 1243 argue that Idaho is unusual in not having such a provision already. They argue that other states require government entities exercising the power of eminent domain to incur the costs of doing due diligence to identify exactly what amount of property or exactly what rights associated with that piece of property they require in advance of initiating the condemnation process.
We haven't heard any opposition to SB 1243.
Senate Bill 1246: Uniform Relocation Benefits
The third of the three bills, Senate Bill 1246, would ensure that relocation benefits are uniformly payable to individuals displaced by eminent domain. Currently, if your house is taken in order to build a road, the government pays for your relocation. If, however, it's taken for any other purpose, the government isn't required to pay relocation assistanbce. SB 1246 would require that all individuals displaced by the exercise of eminent domain—regardless of the public use made of their property—receive relocation assistance.
Supporters of SB 1246 argue that making relocation assistance uniform not only makes the exercise of eminent domain more fair, but that it also guards against the abuse of the eminent domain power. Supporters argue that guaranteeing relocation assistance to all property owners would prevent government entities that currently exercise discretion about whether or not to offer relocation assistance from threatening to withhold that assistance from property owners who won't agree to sell their property "voluntarily."
We haven't heard any opposition to SB 1246.
Legislation Changing the Process by which Takings can be Challenged: Senate Bills 1245, 1248, 1273, 1247
Four additional eminent domain bills before the legislature—Senate Bills 1245, 1248, 1273, and 1247—propose changes to the process by which a property owner can challenge a taking. While property owners rarely oppose the government's exercise of eminent domain, they occasionally challenge the amount the government intends to pay in "just compensation." Proponents of the following four bills argue that these bills would make the challenging process more fair and limit abuses against property owners who have a legitimate disagreement with the government over the amount of just compensation. All four bills have been introduced by Senator Brandt and are co-sponsored by Representative Moyle.
For a final time, we encourage you to imagine yourself as both a property owner whose property is required by the government for a public use and as a government entity attempting to pursue the public interest. As you imagine yourself in each role, consider whether the balance between the government's awesome power of eminent domain and the individual's right to own private property is being properly struck.
Senate Bill 1245: "Setting the Floor" on Compensation Amounts
The first of the four bills—Senate Bill 1245—would require that the government pay property owners who challenge a just compensation offer at least the amount of its highest prelitigation offer. Supporters of SB 1245 argue that this bill would prohibit the government from punishing property owners who exercise their right to challenge the amount of just compensation. Currently, supporters of SB 1245 contend, some entities exercising the power of eminent domain penalize property owners who resist their offers by firing their initial appraisers and hiring appraisers who come in with far lower appraisals. For instance, if the government initially offers a property owner $100,000 for their property, but then, in response to a challenge, comes up with an appraisal that values the property at $70,000, current statute allows the government to pay $70,000 if judge or jury agreed with that assessment along as it is at least as much as the value for which the property has been assessed for property tax purposes. SB 1245, sometimes referred to as the "setting the floor" bill, would require, that the government pay at least the greater of either that assessed value or its own "highest prelitigation offer." Supporters of SB 1245 observe that the Idaho Constitution requires the government to pay just compensation, not the lowest amount they can convince a judge or jury to award.
Opponents argue that requiring government entities to pay the higher of the assessed value or the highest pre-litigation offer will cause attorneys on both sides to be engaged earlier, limit offers made in an effort to settle, and discourage the settlement process. They argue that the proposal seems designed to drive litigation rather than promote settlements which are in the best interest of both the government and landowners.
In response, supporters observe that existing law requires the government to attempt to purchase property through good faith negotiations prior to seeking condemnation. Supporters argue that by requiring the government to stand by their initial offer, SB 1245 does not alter the negotiation procedure at all. The government would still seek, through right-of-way agents, to negotiate a volunatry sale of the property. If this process didn't succeed, the government would still file a complaint and possibly enter litigation. Supporters argue that the government is already obligated to make a full, fair offer in good faith before filing suit and that SB 1245 doesn't change that, but simply ensures that the government would stick by that offer. Supporters argue that SB 1245 doesn't drive litigation or hamper settlement, but that it prohibits the government from seeking retribution against property owners who challenge the amount of just compensation.
Senate Bill 1248: Recovery of Legal Costs when Owner Proves Condemnor's "Just Compensation" Is Too Low
The second of the four bills—Senate Bill 1248—would require the government to pay the property owner's legal costs if the property owner proves that the government's just compensation offer was too low. Supporters argue that although the government is obligated to pay "just compensation," many govenment entities attempt to acquire property for the lowest price rather than a fair price. They know that many property owners can't afford to challenge their offers, especially since these owners would incur substantial legal costs to do so. While some states require the government to pay legal costs for property owners who prove that the government's just compensation offer was too low, Idaho allows judges to exercise discretion. Supporters of SB 1248 argue that a great variance among judges results in inequity. SB 1248 would eliminate judges' discretion by replacing the word "may" in the current statute with "shall" so that it would read:
Reasonable costs and attorneys fees shall be awarded to the defendant in eminent domain actions if the amount of just compensation determined by the court, jury, arbitrator or commissioners exceeds the condemnor's last pre-litigation offer by ten percent (10%) or more. [Emphasis added]
Supporters argue that property owners should not face an out-of-pocket cost when they succeed in proving the government wrong.
Some opponents have argued that in order to promote settlement, limit the burden on tax payer and control attorney-driven condemnation actions, the law should apply equally to both sides. In this case, if the jury award exceeded the government entity's offer by 10% the condemning authority would pay the legal costs. However, if the jury award was not within 10% of the government entity's last offer, the owner would pay the government's legal costs. Supporters of SB 1248 argue, in response, that no state allows this and that the Idaho Supreme Court has held that it cannot envision a situation where this would be appropriate. Supporters note that opponents have not argued that making the government pay the owners' legal costs isn't fair or good, just that it would be more expensive. They also argue that SB 1248 would not stimulate frivilous litigation since the government would not pay legal costs if the final award was within 10% of the pre-litigation offer. Supporters persist in their argument that given the government's awesome power of eminent domain, the government—not the property owner—should bear that expense when their just compensation offers are proven to be too low. Supporters argue that SB 1248 would help to ensure that the government negotiates in good faith.
Senate Bill 1273: Jury Option for All Questions of Fact
The third of the four bills—Senate Bill 1273—would specify that either party could request that a jury decide all questions of fact (e.g. the highest and best use of the property prior to the takings, the property's value, etc.) during condemnation proceedings.
Supporters of SB 1273 argue that it is important to have the option for juries to decide questions of fact. First, supporters argue that judges tend to give greater deference to governments than juries do and therefore provide a less independent check on the power of eminent domain. Second, supporters argue that variance among judges—some judges are more sympathetic to property owners than others—results in inequities. Fundamentally, supporters of SB 1273 argue that the greatest protection that people have against abuses of government power is trial by jury and that owners facing eminent domain takings deserve the protection of having a jury decide the facts. What jury—supporters of SB 1273 ask—would have allowed the taking of a well-maintained home to give that property to a development firm as occurred in Kelo?
Opponents argue that SB 1273 goes too far by potentially removing the judge from determining certain questions of fact typically reserved to a judge in other civil cases. Supporters of SB 1273 argue that it gives the same jury option on questions of fact given in all other civil cases.
Senate Bill 1247: "Quick Take" Available to All Condemning Authorities
The fourth of the four bills—Senate Bill 1247—would extend the "Quick Take" procedure, by which the condemnor takes possession of the property and compensates the owner in an expedited manner, to all condemning authorities. Through the "Quick Take" procedure, the court makes an initial determination of just compensation. After the acquiring entity deposits that amount, it can take possession of the property and the original owner can withdraw the deposit. If, later, the court determines tha the amount of compensation exceeds this initial determination, the acquiring entity pays the difference to the original owner while, if the amount is less, the original owner pays back the difference to the acquiring entity. Current eminent domain statute does not allow some condemning entities—such as educational entities—to use the "Quick Take" procedure.
Supporters of SB 1247 argue that the bill extends the benefits of the "Quick Take" procedure to all property owners. For instance, if a property is taken by an educational institution, that institution can require the owner to go through two separate proceedings and substantially raise the costs an owner confronts. Extending the "Quick Take" procedure would allow for a single proceeding in all takings and limit costs for property owners.
Although, in some respects, this bill would seem to benefit primarily government entities rather than property owners, property rights advocates support this measure for two reasons. First, they argue that it allows the property owner to receive compensation while still challenging the fairness of that compensation. Second, they argue that in many instances, it is actually easier to assess fair compensation after the acquiring entity has taken possession of the property. For instance, if some portion of a person's property is being condemned to put in a new street, it is easier to determine the damage that construction has done to the remainder of the property once construction is completed.
We haven't heard any opposition to SB 1247.