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State eminent domain amendment would restrict property seizure

Monday, November 5, 2012

By BULLETIN STAFF REPORTS -

A proposed state constitutional amendment on the Nov. 6 ballot would further restrict the taking of private property for public use, called eminent domain.

It also would require that property owners be compensated not only for the property taken but also lost profits and lost access, and damages to the property owner’s remaining property as a result of the taking.

According to the Virginia State Board of Elections website, the ballot question is: “Shall Section 11 of Article I (Bill of Rights) of the Constitution of Virginia be amended (i) to require that eminent domain only be exercised where the property taken or damaged is for public use and, except for utilities or the elimination of a public nuisance, not where the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development; (ii) to define what is included in just compensation for such taking or damaging of property; and (iii) to prohibit the taking or damaging of more private property than is necessary for the public use?”

The website gives the following explanation of the proposed amendment.

Article I, Section 11 of the current state constitution prohibits taking or damaging private property for public uses without just compensation. The power to take private property for public uses is known as the power of eminent domain. If a private property owner and the entity acquiring property for a public use cannot agree on the sale of the property, the property may be taken by eminent domain, and a court decides the amount of just (or appropriate) compensation.

In a 2005 case from Connecticut, the U.S. Supreme Court upheld taking private property and transferring to a private business for economic development purposes, and the court also said that states could restrict the use of eminent domain (Kelo v. City of New London, 545 U.S. 469).

Two years later, the Virginia General Assembly enacted a law (1-219.1) to limit the use of eminent domain powers. For example, the law provides that no more private property may be taken than is necessary for the stated public use, that the public interest for the taking must outweigh any private gain, and that private property cannot be taken for certain primary purposes such as increasing the tax base, revenues or employment.

The proposed constitutional amendment continues that approach and those concepts. But, while limits in Virginia’s code can be amended by any future General Assembly, the proposed amendment, if approved by the voters, could be changed only by a future constitutional amendment approved by voters.

The right to private property is a “fundamental” right, according to the full text of the amendment.

“A public service company, public service corporation or railroad exercises the power of eminent domain for public use when such exercise is for the authorized provision of utility, common carrier or railroad services,” according to the full text of the amendment. Elimination of a public nuisance may be a public use. It is not a public use if the “primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue or economic development,” according to the full text of amendment and the explanation.

Just compensation for property taken is expanded and defined to be “no less than the value of the property taken, lost profits and lost access, and damages to the residue caused by the taking,” according to the explanation and the full text of the amendment.

Henry County Attorney George Lyle explained “damages to the residue caused by the taking” through this example. A person has 10 acres worth $100,000, and a government takes half of it, the better half, through eminent domain. Through court proceedings, the value of the five acres taken is determined. But the original property owner says the five remaining acres he has are worthless because he doesn’t have all 10 acres or the remaining five acres are not as developable.

Lyle said that under the proposed constitutional amendment, the government or other entity with power to take the property through eminent domain would have to pay the value determined, through court proceedings, for the five acres being taken plus the damages, such as loss of value, to the remaining five acres.

According to the State Board of Elections explanation of the proposed amendment, the terms “lost profits” and “lost access” are to be defined by the General Assembly, and it has done so by separate legislation that will become law if this proposed amendment is approved by the voters (Chapters 699 and 719, 2012 Acts of Assembly).

The entity condemning the property, known as the condemnor, has the burden of proving that the property is being taken for a public use, the explanation says. Lyle said that “the entity condemning the property” refers to the entity, such as a government, with the power to take property through eminent domain.

 

 
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