Four years have passed since the U.S. Supreme Court’s infamous Kelo decision, which essentially changed private property ownership from a fundamental civil right to a privilege granted by the state at its sole discretion.
Texas has failed to adequately respond to this decision. The first attempt in 2005 missed the mark. In 2007, the Legislature passed strong property rights protections in HB 2006, but the bill was subsequently vetoed over concerns about compensation.
SB 18 is this legislative session’s eminent domain reform bill. However, it was recently stripped in the Senate State Affairs Committee of two key reforms. As it stands today, there is a good chance that after the legislature adjourns, Texas property owners will still be subject to the same takings that outraged the nation in the Kelo case.
The cities that exercise the power of eminent domain-and have consistently opposed reform-are generally of the same opinion. One analysis of SB 18 concluded:
S.B. 18 … attempts to strike a reasonable balance between the needs of condemnors and the property rights of landowners. …
S.B. 18 appears to make more subtle changes in an effort to promote fairness for property owners. …
The provisions of S.B. 18, in its current form, might make the use of eminent domain more complicated, and nominally more expensive. But the bill is not nearly as bad as virtually every other alternative.
In other words, SB 18 allows cities to carry on their eminent domain business as usual.
One of the major protections stripped from SB 18 was a definition of public use. The justification offered in support of this was that “public use is already defined in case law.” While it is true that the courts have determined over the years what constitutes a public use, this is a cause for action-not inaction-by the Texas Legislature.
Kelo exposed years of jurisprudence that has undermined the Texas Constitution’s standard that property may be taken only for a public use. As the Texas Supreme Court has noted, our courts have “adopted a rather liberal view as to what is or is not a public use.” It is this liberal view that allows property to be taken from one property owner and given to another in order to increase tax revenues for local governments. SB 18 defers to the judicial blessing on these takings and does nothing to stop them.
Fixing Texas’ Kelo problem involves three things: 1) eliminating the ability of governments to transfer taken property from one private owner to another, 2) eliminating the ability of governments to use blight designations as an end run around the ban on takings for economic development purposes, and 3) ending government land speculation by requiring that property not put to the public use for which it was taken within five years, be offered for sale back to the original owner at the price the government paid for it.
The Texas Legislature needs to pass, and Gov. Rick Perry needs to sign, legislation containing these reforms. To date, SB 18 contains none of them. Only with these reforms will Texans be assured that cities like El Paso, with its downtown redevelopment plan already in place, won’t use eminent domain to achieve the dreams of the well-connected at the expense of the rest of us.
Bill Peacock is the director for the Center for Economic Freedom with the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.