Eminent Domain Reform
Issue Status: NFIB scored a major victory for small business in 2007 with the defeat of faux eminent domain reform legislation. In 2005, the U.S. Supreme Court ruled that the City of New London, Conn., was justified in taking a private home against the owner's wishes in order to give that property to a private developer because it increased tax revenue.
Historically, the power of eminent domain has been reserved for use in public projects, such as schools, roads or highways, and public utilities, where the owner is offered fair market value for the loss of their home. However, the use of eminent domain has been taken up by many local governments as a way to 'redevelop' or 'rebuild' their areas for the purpose of generating additional property and sales tax revenue. Expanded use of quasi-public economic redevelopment corporations rapidly accelerated this abusive trend, putting millions of small businesses and homeowners at risk of finding themselves in the way of 'progress'.
As a result of the national outcry against eminent domain abuse, many states took quick action to set strong protections for private property owners. Two of the primary protections being enacted across the country would prohibit the taking of private property for the purpose of increasing tax revenues and require that the government entity using eminent domain to take property to maintain title on that property. The California Legislature responded with ACA 8 that did little to protect small business, leaving them at the whim of local government. NFIB and a coalition, including the Howard Jarvis Taxpayers' Association, lobbied successfully for the defeat of fake reform and it never made it off the Assembly floor.
NFIB Position: NFIB supports true eminent domain reform, such as that which is proposed in the California Property Owners and Farmland Protection Act California Constitutional Amendment. Survey research shows more than 67 percent of Californians support an eminent domain reform ballot initiative -- Republicans, Democrats, Independents, seniors and baby boomers all support this initiative. This initiative reaffirms and strengthens the private property protections set forth in our state constitution.
Key provisions in the initiative:
- Private property may not be taken by eminent domain for private use under any circumstances (i.e. to build a shopping center, auto mall or industrial park).
- Property may be taken by eminent domain only for public use (i.e. freeways, parks, schools).
- Property may not be taken by government for the same purpose (i.e. residential housing cannot be used for government housing).
- Family farms and open space are protected from seizures by government for the purpose of selling the natural resources.
- If a public agency takes property under false pretenses, or abandons its plans, the property must be offered for sale to the original owner at the original price and the property tax would be assessed at the value of the property when it was originally condemned.
- If farmers or business owners are evicted by eminent domain, they would be entitled to compensation for temporary business losses, relocation expenses, business reestablishment costs and other reasonable expenses.
- Government may not set the price at which property owners sell or lease their property.
Issue Status: The California Property Owners and Farmland Protection Act has qualified for the June 2008 ballot and is sponsored by the Howard Jarvis Taxpayers Association, the California Farm Bureau Federation and the California Alliance to Protect Private Property Rights. The ballot measure has been endorsed by NFIB, the Hispanic Chambers of Commerce, the Black Chamber of Commerce and a diverse coalition of taxpayer, faith-based groups and good government organizations. For more information regarding the CPOFPA measure, visit www.yesonpropertyrights.com.
