News: CJ Exclusives

House Committee Passes Eminent Domain Limits

Full chamber could vote today on proposed constitutional amendment

A House Judiciary committee on Wednesday endorsed the latest proposal to protect property owners from what supporters consider eminent domain abuse. The measure could go before the full House chamber Thursday.

The committee unanimously approved a proposed amendment to the N.C. Constitution that would allow the taking of property by eminent domain only for public use. It also would require that just compensation be paid to landowners and give parties involved the right to demand a jury trial.

House members have passed an eminent domain constitutional amendment in that chamber each of the past three sessions only to see the measure die when the Senate refused to vote on it.

House Bill 3 responds to a 2005 U.S. Supreme Court decision that allowed the city of New London, Conn., to acquire private property to sell to private developers.

“It is essentially the same bill that passed the House by a vote of 110-to-8 in the last session,” said Rep. Chuck McGrady, R-Henderson, one of the bill’s sponsors.

The bill also would change state statutes allowing property to be taken for “public use,” but not for “public benefit.”

“So what is a public use?” McGrady asked rhetorically, explaining his bill to the committee. “Roads, schools, sewers, courthouses, and it’s also a public utility’s acquisition of right of ways, even though they’re owned by a private entity, because a utility is by definition something to which the public has a right to obtain a service upon a payment of a fee.”

Mc Grady noted that some courts have muddled the definition of public use, substituting “terms of public purpose or public benefit. At times, the test has gotten fuzzy. And that fuzziness is reflected in a U.S. Supreme Court case.” He was referring to the 2005 case, also known as the Kelo case.

In Kelo, “the Supreme Court said that a public purpose was sufficient under the U.S. Constitution” to justify taking private property, McGrady said. The ruling allowed the city of New London to condemn private property and then sell it to a developer.

“Fortunately, in Kelo, the Supreme Court said that the states were free to restrict eminent domain more than that,” McGrady said. “And that is precisely what we’re trying to do with this bill. We’re trying to clearly establish a constitutional standard under the North Carolina Constitution.”

Rep. Paul “Skip” Stam, R-Wake, another bill sponsor, said any property taken for public benefit rather than public use would not qualify for eminent domain condemnation. He said the statutory changes were intended to keep the law’s language consistent with contemporary English usage.

Stam noted that the changes would allow for eminent domain use for natural gas distribution, but not for natural gas production. “An energy company can’t use eminent domain to go out and put down a drill site,” Stam said.

The proposed constitutional amendment requires approval of three-fifths of the membership of both the House and the Senate before going to voters for ratification.

If the measure gains the approval of both chambers, it would be placed on the ballot as a referendum on May 3, 2016.

Barry Smith (@Barry_Smith) is an associate editor of Carolina Journal.