By Steve Lawrence, Associated Press

California governments would be prohibited from using their eminent domain powers to acquire owner-occupied homes for shopping malls or other private development under legislation proposed Monday by a Democratic lawmaker and backed by a coalition of business, homeowner and environmental groups.
The constitutional amendment and an accompanying bill by Assemblyman Hector De La Torre, D-South Gate, also would restrict the use of eminent domain on small business properties public agencies buy up for private developments.The companion measures, which supporters say would help both small businesses and homeowners, were introduced as a compromise by opponents of an unsuccessful 2006 California ballot measure that attempted to impose broad limits on the use of eminent domain.Tom Adams, chairman of the California League of Conservation Voters and one of the supporters of the De La Torre legislation, said that in campaigning against Proposition 90 opponents promised to support “carefully crafted” eminent domain reform.

“We think this is the kind of carefully crafted reform that’s necessary,” he said in a conference call with reporters.

The bills also are a response to a 2005 U.S. Supreme Court decision that upheld New London, Conn.’s right to take homes for an economic development project, but allowed several states to pass laws limiting eminent domain for non-public uses.

Besides the provisions limiting the use of eminent domain on owner-occupied homes, the De La Torre legislation would:

  • Prohibit the transfer of small businesses acquired through eminent domain to private parties unless the taking is part of a comprehensive program to eliminate blight.
  • Allow small business owners to avoid the mandatory sale of their properties by agreeing to make physical improvements as part of the revitalization project that raised the prospect of an eminent domain proceeding.
  • Give small business owners who refuse to participate in the revitalization plan the choice of either selling the business or moving and receiving compensation.

Business owners who decide to relocate would receive fair market value for their properties, if they owned the targeted building.

The owner also would receive moving expenses up to $50,000 to set up operations at a new location and up to three years of compensation to make up for having to pay higher rent or a bigger mortgage.

If the business did not relocate, the owner could receive fair market value for the property. The owner also would receive 125 percent of the value of the business entity if it could not be moved and still remain economically viable.

The legislation would also give small businesses and homeowners the right to repurchase their properties if they were seized by eminent domain for a public facility and that facility was never built.

Betty Jo Toccoli, president of the California Small Business Association, which claims to represent more than 200,000 business owners, said the legislation “ensures fairness.”

But Tim Sandefur, a staff attorney with the conservative Pacific Legal Foundation, said the legislation would provide “virtually no protection for property owners.”

The measure would not cover farms, churches, rental housing, second homes, investment property and businesses with more than 25 employees, Sandefur said.

Undercutting the protections it does provide, are loopholes and weak legal definitions, he added. For example, California law defines “blight” so vaguely that “any property can be taken” through eminent domain proceedings, he said.

Adams said the definition of blight has been strengthened by lawmakers and court rulings in recent years. But he also said that supporters of the De La Torre legislation were willing to accept changes to it, if critics point out real weaknesses.

“This is not a ballot measure where you have a take-it-or-leave-it proposition,” he said. “This is a legislative proposal that can be worked on by both parties” before going on the ballot.

If lawmakers approve it, the constitutional amendment would go on the ballot next year for considerations by voters.

San Jose CA Mercury News: