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News 'Takings' advantage 

The Ledge likely won't pass an eminent-domain bill this session, which means government plans trump private property for now

After kicking up a dust storm worthy of a Larry McMurtry novel, the 79th Texas Legislature is likely to leave the Supreme Court's recent eminent-domain ruling roaming freely over Texas' pastures and subdivisions, at least until it next convenes in 2007. The Supremes' ruling in Kelo v. City of New London, announced June 23, affirmed that a government entity can take private property for economic development in neighborhoods that are not considered blighted or slums, but merely not as lucrative as shops, condos, or - in the case of Freeport, Texas - a marina for boating tourists. Most alarming for property owners, the ruling confirmed that governments can transfer property or completed developments to private hands under the pretext of more jobs or taxes for the community, raising the specter that deep-pocketed developers can persuade their friends in government to "buy" them land on the cheap.


Conservative political pundits rushed to cast the decision as another example of a liberal court run amok, but the zeitgeist is more complicated than that. As other commentators have noted, Kelo represents two traditionally conservative ideals in conflict: the supremacy of private-property rights versus states' rights. The Court simply deferred to the states' presumed ability to best make the decisions that will affect their communities.

Of course, some states are more able than others. During the first special session this summer, Democrats and Republicans in both Texas houses drafted joint resolutions that would have put a constitutional amendment before voters in November. In one form or another, the various proposals would have prevented local and state governments from taking private property for redevelopment if the primary purpose was economic. At the last minute, Frank Corte (R-San Antonio) pulled his joint resolution, which the House passed unanimously, because he did not want to compromise with the Senate's approved version. Governor Perry has declined to add the issue to the second special session agenda so, although the House has three proposed bills and the Senate two on the table this time around, none are likely to come to fruition.

"`Corte` didn't want to pull a bait and switch," said Kathi Seay, Corte's policy advisor, of the last-minute ditch. "This is probably one of the most nearest and dearest issues to constituents' hearts." Seay said Corte was concerned key provisions would be stripped in the conference committee. Among other differences, the House and Senate split on whether to put the burden on government to prove that it was taking property for a permissible purpose and whether to define "just compensation."

The Kelo ruling did not address what "fair market value" or just compensation should mean in such cases, but during oral arguments several justices expressed concern that if the final developed-property value would far exceed its present value, owners might be entitled to more than the current market rate. Supreme Court watchers speculate that this issue could swing future rulings.

Nonetheless, an eminent-domain bill seemed much closer to passing than, say, a school-reform solution, so the reason Perry's office gave for not scheduling it in the second special session - that there was no consensus between the houses - seems lame at best. (To be fair, Perry has made property-tax relief a priority of the second session. No more property = no more taxes. That just leaves school reform. Gosh, governing is easy.)

To others it sounds downright suspicious. Senate staff have speculated privately that Perry did not want an eminent-domain bill to close a loophole in the transportation bill passed during the regular session, which allows the Texas Department of Transportation, after a three-year moratorium, to condemn private land along the Trans-Texas Corridor tollway for gas stations and convenience stores, the construction and operation of which could be leased to private entities. "That is completely false," said Robert Black of the governor's media office. If lawmakers present the governor with a united front before the session ends on August 19, says Black, Perry will put the issue on the agenda. "We'd like this issue addressed and if it's not addressed now it will be addressed at the next opportunity."

Fortunately, the sausage-making machine grinds at the federal level, too, where Representative Henry Bonilla (R-San Antonio) authored a bill filed July 27 that would withhold funds from all state and local economic-development projects. Others, such as House Republican James Sensenbrenner of Wisconsin, are taking a more targeted approach - publicly advocated by House Speaker Tom DeLay - that would deny funds to economic development projects that use eminent domain to take private property.

In the meantime, Texans are right where they were before Kelo. In August 2004, a U.S. District Judge for the Southern District of Texas ruled against one of the private parties in Freeport, where city officials plan to redevelop three waterfront properties owned by seafood processors into a privately owned marina. The Texas ruling was made under the Supreme Court's two most recent decisions on the definition of public use in eminent-domain actions, including 1954's Berman v. Parker, in which the court upheld condemnation of a blighted area in Washington, D.C. for redevelopment. After Kelo, the Freeport plaintiffs are even less likely to find relief higher up the court ladder. Of equal concern to Texans might be the 1987 ruling in Hawaii Housing Authority v. Midkiff, in which the Supremes blessed the island state's use of eminent domain to break up land-ownership monopolies. Hello, King Ranch?

By Elaine Wolff

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