Don’t Believe the Denials – Alabama Really Did Undermine its Post-Kelo Eminent Domain Reform Law

Last week, I blogged about how the Alabama state legislature recently adopted a bill that undermines its post-Kelo eminent domain reform law and opens the door to the taking of private property for transfer to a wide range of politically connected private interests. Two state senators who sponsored the law have claimed that their bill doesn’t really expand eminent domain authority [HT: John Ross, who is similarly skeptical about the sponsors' denials]:

A new law designed to help lure high-tech manufacturing jobs to Alabama does not give cities greater eminent domain powers, several people involved in the legislation said Monday….

state Sen. Arthur Orr, R-Decatur, said that’s simply not the case. Orr said the “Major 21st Century Manufacturing Zone Act” does nothing to change or broaden eminent domain laws….

State Sen. Bill Holtzclaw, R-Madison, said he is “very big on personal property owner rights” and would not have co-sponsored the legislation if he thought it might be used to expand the use of eminent domain.

“I’ve been adamantly opposed to that,” Holtzclaw said Monday. “If there’s something there that was unintentional, we’ll close the loop on it.”

These denials are dubious, at best. The relevant legislation, Senate Bill 96 contains the following language:

It is further found and declared that the powers conferred by this chapter are for public and, in the case of automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical, semiconductor, computer, electronics, energy conservation, cyber technology, and biomedical industry manufacturing facilities, private uses and purposes imbued with a public interest and for which public money may be expended, either directly or indirectly, in the case of automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical, semiconductor, computer, electronics, energy conservation, cyber technology, and biomedical industry manufacturing facilities, and the power of eminent domain and police power exercised.

The language in bold is wording that the new bill added to preexisting law. Note that the whole section is, among other things, a list of purposes – now including “private” purposes – for which “the power of eminent domain” may be “exercised.” Those purposes now include private firms that are “automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical, semiconductor, computer, electronics, energy conservation, cyber technology, and biomedical industry manufacturing facilities.” In other words, an enormous range of private businesses can now lobby to have the power of eminent domain used to transfer property to them, usually at the expense of the poor and politically weak.

This new authority is mostly limited to areas that contain “underutilized large tracts of real property suitable for the location of automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical, semiconductor, computer, electronics, energy conservation, cyber technology, and biomedical industry manufacturing facilities which, when serving as the site therefor, enhances the public benefit and welfare by, among other things, facilitating the creation of skilled manufacturing jobs, promoting local economic development and the stimulation of the local economy, creating additional tax revenues, and enhancing the public’s overall quality of life.” But this is not much of a constraint. Almost any area can be considered “underutilized” relative to some other more intensive use of the same property. In addition, the new owners of the condemned land are not legally required to in fact ensure that the local economy will indeed improve relative to what would have happened otherwise. And, obviously, if the area were not “suitable” for the business the new owner operates, they probably would not try to have it seized for their benefit in the first place. Similar laws in other states have simultaneously endangered property rights and set back the very economic development they are supposedly intended to produce. We cannot know for certain what Alabama courts will make of the new law. But the most likely result is a major expansion of eminent domain authority.

I don’t know whether Senator Orr and Senator Holtzclaw are being disingenuous, got bad advice from staff or outside lawyers, or simply don’t realize what was in the bill they sponsored. The latter is certainly possible in an age where lawmakers often vote for laws they have little understanding of. If it really was an “unintentional” error, as Holtzclaw suggests might have occurred, he and his colleagues can demonstrate their good intentions by passing a new bill that repeals the language quoted above.

Finally, I should acknowledge that the two senators issued their denials before I wrote my initial post on this issue on April 3. I wrote that post in a hurry, did not do as much research as I should have, and as a result, did not run across their statements until today. I regret that oversight, even though the denials do not change my evaluation of the bill.