Eminent Domain Legislation Advances in Congress – Brownfields Properties Exempted

Background

On November 3, 2005, the U.S. House of Representatives passed legislation, by a vote of 376-38, that would withhold federal money from state and local governments that use powers of eminent domain to take property intended for private “economic development.” Governments that violate the law would be forbidden from collecting federal money for economic development projects for two years.

The bill, H.R. 4128, the Private Property Rights Protection Act of 2005, is a direct response to the Supreme Court’s Kelo v. New London decision on June 23, which held that local governments can force homeowners to sell their properties for economic development. H.R. 4128 defines “economic development” as private, for-profit projects or those intended to increase tax revenue, the tax-base or jobs. The bill would also bar the federal government from using eminent domain powers. However, H.R. 4128 would permit the transfer of private property that has been abandoned, or was going to be used for public-use roads, hospitals, or military bases. The bill would also permit eminent domain to be exercised on land considered an immediate threat to public health and safety.

Several amendments were adopted by voice vote during debate on the House floor. The following is a brief summary of the amendments:

• Reps. Gary Miller (R-CA) and Eddie Bernice Johnson (D-TX) – This amendment exempts brownfields, areas that have not been developed because of pollution or perceived pollution.

• Rep. James Sensenbrenner (R-WI) – This amendment clarifies that private roads open to the public and flood control facilities will be included among the bill’s exceptions.

• Rep. Mike Sodrel (R-IN) – This amendment clarifies that the burden of proof is on governments to show that takings are not for “economic development.”

• Rep. Phil Gingrey (R-GA) – This amendment prevents governments from taking land from religious organizations because of their nonprofit or tax-exempt status.

• Rep. Henry Cuellar (D-TX) – This amendment requires federal agencies to review their regulations for compliance with the legislation.

• Rep. Sheila Jackson-Lee (D-TX) – This amendment expresses Congress’ intent that the government should not attempt to take land from Hurricane Katrina survivors for economic development.

Brownfields Carve Out

As amended, the House bill directs that the reference to “economic development” does not include the redevelopment of brownfield sites as defined in the Small Business Liability Relief and Brownfields Revitalization Act (Pub. L. No. 107-118). Congressman Miller noted that experts estimate that the United States has more than 450,000 vacant or underused industrial sites as a result of environmental contamination caused by chemical compounds and other hazardous substances. Congressman Miller argued that returning the nation’s brownfields sites to productive economic development could generate more than 550,000 additional jobs and up to $2.4 billion in new tax revenues for cities and towns.

“Although eminent domain should not be the first option pursued in acquiring brownfields for cleanup and redevelopment - judicious, responsible, and warranted eminent domain serves as an invaluable tool to enable the cleanup and redevelopment of brownfields.” Congresswoman Johnson said.

Congressman Miller argued on the floor that “[o]wners of brownfield sites are frequently unwilling to sell them for fear of cleanup and cost of contamination they find. Eminent domain can often help break through legal and procedural barriers to the sale of the land … Without using eminent domain as provided for in CERCLA, a local government would be held strictly liable for all costs and cleanup of polluted land as the owner and operator of the site.”

Outlook

The bill now moves on to the Senate where Senator John Cornyn (R-TX), has introduced similar legislation, S. 1313, with 30 bipartisan co-sponsors. Hearings have been held on the bill, but no legislative action has been scheduled. Senator Cornyn has been pushing for the Judiciary’s Constitution, Civil Rights and Property Rights Subcommittee to mark up the bill. While Senator Cornyn is seeking a full committee markup before the end of the year, there is the possibility that the Senate will take up the House measure and substitute the text with Senator Cornyn’s language.

Congress had originally targeted October 1 as its 2005 adjournment date. For a variety of reasons, this target was not met. The schedule for the remainder of the year is very fluid. At this point, it is unclear if eminent domain legislation will be addressed this year, or if it will be pushed to 2006.

For more information, e-mail Michael Galano at michael.galano@hklaw.com or call toll free, 1.888.688.8500.