The U.S. House of Representatives has passed a bill that restricts use of eminent domain for economic development. H.R. 1443 (the Private Property Rights Protection Act of 2012) would prohibit a state or political subdivision from exercising its power of eminent domain “over property to be used for economic development or over property that is used for economic development within seven years after that exercise, if that state or political subdivision receives federal economic development funds during any fiscal year in which the property is so used or intended to be used.”

“Economic development” is defined generally as “taking private property, without the consent of the owner, and conveying or leasing such property from one private person or entity to another private person or entity for commercial enterprise carried on for profit, or to increase tax revenue, tax base, employment, or general economic health.” The bill contains several “safe harbor” takings, including those for public utilities, roadways, and other public facilities.

A violation by a state or political subdivision would make the entity ineligible for any federal economic development funds for two fiscal years “following a final judgment on the merits by a court of competent jurisdiction that” a violation occurred. The bill also creates a private cause of action by any owner or tenant of private property whose property is subject to eminent domain and who suffers injury as a result of a violation of the bill.

Moreover, the bill flat-out prohibits a state or political subdivision that has received any federal economic development funds from exercising the power of eminent domain to acquire the property of a religious or other nonprofit organization.

House Judiciary Committee Ranking Member John Conyers (D-Michigan) was reportedly the only member to speak against the bill.  He noted that seven years have passed since the U.S. Supreme Court’s Kelo decision, and that many states have since addressed eminent domain at the state level:

Congress should not now come charging in after seven years of work and presume to sit as a national zoning board, advocating to our national government the right to decide which states have gotten the balance right, and deciding which projects are or are not appropriate.

H.R. 1443 is now being considered by the Senate.

The Texas Legislature passed limitations on the use of eminent domain for economic development in 2005 (Chapter 2006, Texas Government Code) and 2009 (Article I, Section 17, Texas Constitution).

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