Legislative Update on Eminent Domain’s Public Use Requirement
Posted on: June 21st, 2013

Cotton farming, ranching, and other agricultural activities are our lifeblood, particularly on the South Plains, where oil and gas is not the dominant economic force.  So it stands to reason that many of the rights most near and dear to West Texans are those rights we have in our real property.  Most would agree that “eminent domain,” which is the power of the government to take private property for public use (by way of a compulsory purchase), is not exactly considered a boon to those freedoms in property ownership that are valued by West Texans.

Consider the U.S. Supreme Court’s Kelo v. City of New London opinion from 2005, which said that private property may be taken from one private owner and given to another private owner to further economic development.  Most notably, the Court defined “public use” as including a general community benefit in the increased property value that would come from the further development.  The Kelo decision was highly controversial and spawned reactions from at least forty state legislatures, which attempted to reign in the broad power in the Court’s definition of “public use.”  Texas curtailed the Kelo decision’s effect on Texas property owners by excluding economic development from the definition of “public use.”

Currently, Texas law requires the governmental entity to make a showing of two variables to institute eminent domain: the taking must be (i) for a public use, and (ii) necessary to advance the public use.  An amendment to the Texas Constitution provides that the government must allow the prior landowner to buy back his property if the project is canceled or otherwise unsuccessful, if no progress is made in a prescribed period of time, or if the property is not necessary for the public use.  However, current state law does not necessarily state that the property must be necessary for the initial public use, even though it would seem to be common sense that the drafters of the amendment did not intend for the intended public use to change.  This distinction produces strange results, like the ill-fated Applewhite Reservoir in San Antonio.

Several state representative and senators have introduced legislation that seek to rectify this anomaly.  House Bill 1250 and Senate Bill 829, which are currently pending in the Texas legislature, require that “[a] real property interest acquired through eminent domain must initially be used for the public use for which the property was acquired.”  Only after a buy-back offer is made and declined may a governmental entity “repurpose” the property.  If the prior owner is no longer in existence, whether it be by death or dissolution, the governmental entity may repurpose the property after it makes a good faith effort in locating the prior owners.

If you have questions or need counsel as to how this or any other property-related legislation might affect you, one of the experienced real estate attorneys at McCleskey can help.

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