June 13, 2006

The Rhode Island Legislature Fails to Reform Eminent Domain

Carroll Andrew Morse

Two different versions of eminent domain have been passed by the Rhode Island legislature, one by the Senate, one by the House. Sadly, neither bill clearly limits the power claimed by the state government to seize private homes and give them away to new owners who promise to increase the tax-value of the seized property.

The House passed eminent domain legislation (H6739A) officially introduced by Representative Charlene Lima. (The version of the bill passed by the House bears no resemblance to the bill introduced by Representative Lima this past January. This is not a bad thing in and of itself; her original bill was not very good either). Here's the full text of H6739A as passed...

(a) Notwithstanding any provision of law to the contrary, no public corporation, municipality, quasi-state agency, state agency, or any political subdivision thereof, shall exercise their power of eminent domain to acquire private property for the purpose of conferring a private benefit or use for a particular private entity.

(b) Nothing in this chapter shall abrogate or diminish the provisions of Chapters 31 and 32 of Title 45.

There are at least two problems with the House bill (beyond the part (b) exception, which basically says that the government reserves the right to seize homes in areas determined to be blighted). The first problem with H6739A is its ambiguity as to whether it even addresses the core controversy surrounding eminent domain for economic development. If a tax-revenue increase is the expressed reason for the taking of a private home, does this mean the purpose of the taking goes sufficiently beyond "conferring a private benefit" to a point where H6739A does not apply? Why wasn't the clearer language proposed in other bills prohibiting the use of eminent domain for "transfer to a person, nongovernmental entity, public-private partnership, corporation or other business entity" approved instead?

The second problem with H6739A was pointed out by Representative Nick Gorham on the House floor; the meaning of "use for a particular private entity" is not well defined. Suppose eminent domain seizures are proposed that would give seized property to a shopping mall developer. Since a shopping mall will be used by more than a "particular" private entity -- multiple shop owners as well as private citizens would "use" the facility -- does H6739A apply or not?

I am not sure of the answers to these questions. They would have to be decided in court, which means that H6739A keeps us right where we are at the present moment, where the right combination of lawyers and city councils and economic redevelopment authorities can throw someone of out their home raise by making arguments about increased tax revenues to a sympathetic panel of judges.

The Senate bill (S2155A), much longer and more precise, looks nothing like the House bill. However, S2155A also fails to protect Rhode Island citizens from the possibility of losing their homes to economic development seizures. The clause supposedly limiting the power of the state to use eminent domain for economic development begins as follows...

No entity subject to the provisions of the chapter shall exercise eminent powers to acquire any property for economic development purposes unless it has explicit authority to do so and unless it conforms to the provisions of this section.
Red flag right away. The "unless" clause pre-supposes that the government intends to continue asserting its right to use eminent domain for economic development.

The biggest problem with S2155A, however, is not what is there, but what is not. The original version of S2155 contained strong, clear and explicit protection for homeowners...

The entity shall not take by eminent domain property for economic development purposes that is significantly residential and is not in substantial violation of applicable state laws and regulations and/or municipal ordinances and codes, regulations governing land use or occupancy at the time of the proposal of the development plan for development, but may acquire such property in accordance with the development plan for a negotiated, mutually agreed on price.
This existence of this strong "shall not" clause in the original bill led me to label the original incarnation of S2155 as one of the "good" eminent domain reform bills. Unfortunately, the Senate was sure to strip the unambiguous protection for "significantly residential" property out of the bill before passing it.

Now, all S2155A says is that the government has to have a written plan before throwing someone out of their home in the name of economic development and that the government must give an owner being evicted some time to sell the home first. This may be the most offensive part of the new "improved" S2155A; how much will someone be able to get for a home on the open market once it's under the cloud of being seized by the state?

With ample opportunity to protect the interests of the people, the Rhode Island legislature chose to protect the government's broad power to seize your home instead. To see the better eminent domain reforms the legislature decided not to implement, check out the text of Senate bill S2408 and House bill H7151.

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RE: Eminent Domain

S2155 clearly states that state agencies, namely the the Economic Development Corp., cannot seize private property unless approved by the General Assembly. THAT is a significantly higher threshold than just having a plan as Ms. Morse mistakenly cites.

But, hey hey, why let facts get in the way of a good story!


Posted by: John at June 13, 2006 10:17 PM

John, you’re wrong on multiple fronts.

1. S2155A does not, in every case, require the General Assembly to approve an eminent domain for economic development seizure. The bill is very clear that a taking by a “local government entity” only requires the approval of a town or city council…

No local government entity shall implement any eminent domain proceeding for economic development purposes unless the acquisition of the property by eminent domain has been approved by the city or town council, and no state government entity shall implement any eminent domain proceeding for economic development purposes unless the acquisition of the property by eminent domain has been approved by an act of the general assembly.
2. And a number of cities and towns have already been given “explicit authority” by the General Assembly to use eminent domain for economic development, buried deep in the bowels of a Rhode Island law passed in 2002 (44-18-30.C to be exact)…
(a)(1) Various sections of several towns in the state, including, but not limited to, the town of West Warwick, are deteriorated, blighted areas which have created very difficult challenges to economic development;

(2) Several areas of the state are in a distressed financial condition as defined by § 45-13-12(b) and cannot finance economic development projects on its own without the participation of private enterprise;

(3) The general assembly has found that it is nearly impossible for private enterprise alone to meet these challenges…

(c)(1) The city or town council of a financially distressed community may designate in accordance with the provisions of this section one [Municipal Economic Development] zone in the municipality…

(3) …The city or town council in implementing the MED zone plan shall have the power of eminent domain as set forth in § 45-32-24, and the provisions of §§ 45-32-25 – 45-32-41 shall apply to all such condemnations.
The Senate was very careful to amend S2155 so that it makes little change, if any, to the power of eminent domain for economic development that has already been granted to some municipalities. A reform is not a reform if it doesn’t change anything.

3. And it would only take a small change in 44-18-30.C (changing or removing the definition of "financially distressed community") to extend the power of eminent domain to any city or town, circumventing the requirement that the GA approve any specific plan.

If you want to claim that this scenario is far-fetched, then you have to explain why the Senate sure to leave the "local government entities only require town or city council approval" provision in S2155

In the end, the Senate opted to protect maximal government flexibility to authorize eminent domain for economic development, instead of providing bright-line protection for property owners.

Posted by: Andrew at June 14, 2006 9:51 AM