HCS HB 1944 -- EMINENT DOMAIN

SPONSOR:  Pratt (Hobbs)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Judiciary
by a vote of 10 to 1.

This substitute changes the laws regarding the use of eminent
domain.  The power of eminent domain will be vested in
governmental entities or agencies whose governing body is elected
or appointed by elected officials, private utility companies,
public utilities, rural electric cooperatives, municipally owned
utilities, pipelines, railroads, and common carriers.  In its
main provisions, the substitute specifies that:

(1)  Private property may only be taken through the use of
eminent domain after determining blight of the property or that
the taking is for a public use and not without just compensation.
Compensation will be determined by considering the comparable
sales in the area, current use of the property, fair market value
of the property based on its highest and best use, availability
of comparable property in the area, and any other relevant
factors;

(2)  Farmland will not be determined to be blighted;

(3)  At least 30 days prior to initiating negotiations to acquire
a property interest, the condemning authority must give actual
notification to the owner of record identifying the interest in
real property to be acquired; the purpose for which the property
is being condemned; an appraisal paid for by the condemning
authority if the damages due to the taking are greater than
$15,000; a statement of the property owners rights including the
right of the property owner to seek legal counsel; and the right
to make a counteroffer and engage in negotiations, to obtain the
landowner's own appraisal, to contest the condemnation
proceeding, and to have just compensation determined
preliminarily by court-appointed condemnation commissioners and,
ultimately, a jury.  The jury will consider the same factors as
those used for determining just compensation when blighted
property or property for a public use is taken.  If the property
owner employs an appraiser to appraise the property to be
acquired, the appraisal must be delivered to the condemning
authority within 60 days;

(4)  A written offer must be presented to the property owners of
record at least 30 days before filing a condemnation petition;

(5)  Before a condemning authority may proceed with condemnation,
there must be a court determination that proper and timely notice
was given to all property owners, an initial offer no lower than
the appraisal amount was given, and that the landowner was given
an opportunity to obtain his or her own appraisal from a
state-licensed or state-certified appraiser of his or her choice.
If the court finds good faith negotiations have not taken place,
the court must dismiss the condemnation petition and order the
condemning authority to reimburse the owner for his or her actual
reasonable attorneys fees and costs;

(6)  The court may order payment of the landowner's legal fees
and expenses and award damages accruing as a direct and proximate
result of the pendency of the condemnation if the condemning
authority abandons condemnation prior to the final judgment of
the court;

(7)  Unless it is a total taking, a landowner may propose an
alternative location on his or her property which must be
considered by the condemning authority;

(8)  No condemning authority will acquire private property
through the process of eminent domain for solely economic
purposes;

(9)  The condemning authority must individually consider each
parcel of property in the area with regard to whether the
property is blighted.  If the condemning authority finds that the
area is predominately blighted, it may proceed with condemnation
of any parcel in the area;

(10)  Property interests acquired through eminent domain by
private utility companies, public utilities, rural electric
cooperatives, municipally owned utilities, or common carriers are
fixed and determined by the particular use for which the property
was acquired.  Any expanded use of the property will require
additional eminent domain proceedings to acquire the additional
rights;

(11)  An Office of Ombudsman will be established in the Office of
the Governor to assist citizens seeking information regarding the
condemnation process and procedures;

(12)  Any financial gain to the property owner arising from a
condemnation action will be deducted from the taxpayer's federal
adjusted gross income;

(13)  Any easements that are acquired after the effective date of
the substitute that are not used in whole or in part for the
purpose for which they were acquired for a period of 15
consecutive years must be vacated by the holder of the easement
upon written request from the then-owner of record of the
burdened property.  If the holder of the easement does not vacate
the easement within 90 days after receiving the request, the
landowner has the right to petition the circuit court to obtain
vacation of the easement and the holder has the right to petition
the circuit court to grant an extension of 15 years; and

(14)  Any legislative determination that an area is blighted,
substandard, or insanitary must not be arbitrary or capricious
and must be supported by substantial evidence.  Upon the filing
of any appeal of a legislative determination of blight, the
circuit court must give preference in the order of hearing to all
other cases, except elections cases, to the extent necessary to
conclude the case within 30 days of having been filed.  Any
subsequent appeals must be given preference and concluded in an
expedited manner similar to the manner set forth for a hearing in
circuit court.

FISCAL NOTE:  No impact on General Revenue Fund in FY 2007, FY
2008, and FY 2009.  Estimated Cost on Other State Funds of
Unknown in FY 2007, FY 2008, and FY 2009.

PROPONENTS:  Supporters say that the bill provides protections
for future generations of landowners and protects property
owners' rights without stopping development in the state.  The
definition and characterization of blight will not be changed;
however, the bill will not allow any condemnation by eminent
domain for purely economic purposes.  Eminent domain should be a
last resort for condemning authorities and not a tool for
inexpensive acquisition of land.  Abuse of condemnation
proceedings for acquisition of land continues to be a major
problem in this state.

Testifying for the bill were Representative Hobbs;  Missouri
Family Network; Missouri Baptist Convention, Christian Life
Commission;  Missouri Farm Bureau; Bill McLaren; Riley Godfrey;
Rob Korff; David Reigel; Maxine Johnson; John Garagnani; Carter
Freeman; Doug McDaniel; Phillis Hardy; Fred O'Neill; Sara
Barwinski; William Peppes; Jilly Kelly-Miles; Loren Keen;
Clifford Dronzda; Byron Baker; Claire Kramer; Pamela Schaefer;
Stephanie Reynolds; Karen Smith; and Greg Tumlin.

OPPONENTS:  Those who oppose the bill say that it has numerous
unintended consequences that, left unrevised, will create
problems for municipalities and governmental authorities in
acquiring land by eminent domain.  The bill allows for punitive
damages which will discourage acquisition of land for public use
projects.  Just compensation, which includes payment for heritage
value and anticipated profits, are unfair and will greatly
increase the fiscal burden for governmental authorities and
taxpayers.  The necessity for eminent domain is clear.  In some
situations, the collective need outweighs individual rights.  The
bill makes procedural changes for condemnors; and it is,
therefore, inappropriate to place substantive limitations, such
as a redefinition of blight, on eminent domain proceedings.  The
right of reversion will penalize and cloud the ownership
interests in the property.

Testifying against the bill were Gregory Smith, Forward Metro HBA
of St. Louis; Union Electric Company; Association of Missouri
Electric Cooperatives; Honorable Kay Barnes, Mayor of the City of
Kansas City; City of St. Louis; Missouri Railroad Association;
Union Pacific Railroad; Honorable T. R. Carr, Mayor of the City
of Hazelwood; Honorable Pat Kelly, Mayor of the City of
Brentwood; County Commissioners Association of Missouri; City of
Independence; Missouri Municipal League; Department of
Transportation; Associated General Contractors of Missouri
Spencer Thomson; Kathy Tripp; and Stella Erondu.

OTHERS:  Others testifying on the bill say that it will be
ineffective unless it addresses assemblage rights.  The economic
reality of condemnation makes being able to take multiple
properties and adjoining properties for public use necessary.
The bill must promote a business-friendly environment that will
encourage development of areas that are blighted.

Others testifying on the bill were Boone County Farm Bureau;
TransCanada; St. Louis County Municipal League; Missouri Chamber
of Commerce and Industry; Greater Kansas City Local Initiatives
Support Corporation; Robert Denlow; William Peppes; JoAnn Bailey;
Reverend Eugene Fowler; Jim Roos; and Ron Calzone.

Alex Curchin, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:45 am