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Eminent domain amendment defeated

March 07, 2006
By: Jason Rosenbaum
State Capital Bureau
Links: HB 1020

JEFFERSON CITY - The House overwhelmingly rejected an amendment which would have banned use of eminent domain for tax-payer funded developments by private developers.

By a vote of 129-26, the House rejected the amendment that had been offered to a broader bill imposing restrictions on program that provides tax breaks for private developers -- called Tax Increment Financing (TIF).

TIF projects, approved by local governments, often include awarding private developers power to force private land owners to sell their property for projects such as shopping malls.

"That mom and pops made a living there all those years, then we don't want to sell that because of condemnation," said the amendment's sponsor, Rep. J.C. Kuessner, D-Eminence. "This bill simply says that if use condemnation or eminent domain to seize that property, that you can not use TIFs."

But critics charged eminent domain is needed to facilitate redevelopment of blighted areas.

"This amendment does nothing except stifle economic growth for all communities," said Rep. Shannon Cooper, R-Henry.

Defeat of Kuessner's amendment to ban eminent domain for TIF projects was the first full-chamber vote on a ban on eminent domain for private development that had gotten widespread attention from state officials after the U.S. Supreme Court upheld the practice.

A TIF project diverts some taxpayer funds to private developers, for projects designed to spur economic development in blighted areas.

Although hailed by some legislators and local government officials as a way to boost economic growth in depressed parts of communities, lawmakers have been critical of TIF projects around the state which use property obtained through eminent domain in middle-income neighborhoods.

The main bill would tighten the definition of blight and impose other restrictions on TIF projects, while retaining the right for private land to be condemned.

Although the condemnation ban was defeated in the House on the TIF bill, another measure has been filed that could bring the issue back to the House.

The measure, co-sponsored by the House Speaker, would prohibit condemnation for "solely economic" reasons.

"[The bill] stops the use of condemnation in an economic development environment," said the bill's primary sponsor -- Rep. Steve Hobbs, R-Mexico. "You can't use condemnation to enhance your tax base or create jobs or to promote economic health. Those things you can't do in private situations."

Along with numerous other changes to eminent domain regulations, Hobbs said his bill protects the ability of MoDOT, utilities and common carriers "to do what they need to do."

He also said the bill provides transparency to the process by notifying the public about a project thirty days before they can negotiate with the property owner on a price.

"Eminent domain's not going to be a shrouded thing in the dark corner that nobody wants to talk about," Hobbs said. "We notify the public and inform them, so if there's a project going on, they're going to know about it."

Hobbs' bill comes after months of debate about how to change regulations concerning eminent domain and tax increment financing. The issue revealed a split between legislators who want to spur private economic development and others who want to protect property rights.