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13 In sum, of interest to transportation departments is redevelopment plan.141 The court held that although the that at least 16 states' post-Kelo laws include a prohibi- effect of the taking would benefit a religious organiza- tion on using eminent domain for the purpose of trans- tion's mission, the effect was "clearly not the principal ferring property to another private party.135 Based on or primary effect," which was to eliminate blight.142 the post-Kelo cases discussed in this section, it appears In response to the survey, although the DOTs in to be unlikely that a transportation department's emi- three states (California, Nevada, and Pennsylvania) nent domain actions will be affected unless a taking is reported generally that the new laws had affected tak- for the purpose of transferring property to a private ings by eminent domain for transportation projects, no interest. As discussed in the next subpart, some states department indicated that an incidental private use permit such transfers if a private use is incidental to exception had affected the use of eminent domain or a the public use. taking for a transportation project. D. No Effect on Takings for a Public Use When a E. Summary of the Effects of Post-Kelo Changes Private Use Is Incidental on Transportation Departments In at least 10 states, a taking for economic develop- Some states' more restrictive definition of public use ment or for transfer to a person or private interest or exempts a condemnation of property for transportation entity is allowed if the private use is incidental to the projects.143 Some statutes also provide that a taking public use of the condemned property136 or if the private must result in public ownership of the condemned prop- use is "secondary."137 In Iowa, the definition of a public erty. Pursuant to some post-Kelo laws, a transfer to a use, public purpose, or public improvement permits a private party of a property acquired by eminent domain "[p]rivate use that is incidental to the public use of the is prohibited, whereas under some of the new laws, a property, provided that no property shall be condemned taking is permissible as long as the public use predomi- solely for the purpose of facilitating such incidental pri- nates or any private use is incidental or secondary to vate use."138 the taking. Kentucky's statute provides: As a group, at least 22 states have one or more of the No provision in the law of the Commonwealth shall be foregoing provisions as part of their post-Kelo re- construed to authorize the condemnation of private prop- forms.144 Of the aforesaid 22 states, the DOTs in 11 of erty for transfer to a private owner for the purpose of eco- them responded to the survey, with the DOTs in three nomic development that benefits the general public only states, California, Nevada, and Pennsylvania, reporting indirectly, such as by increasing the tax base, tax reve- that post-Kelo changes in their state had affected de- nues, or employment, or by promoting the general eco- partmental takings. However, the meaning of public nomic health of the community. However, this provision use, or one of the other changes noted immediately shall not prohibit the sale or lease of property to private above restricting the use of eminent domain, was not entities that occupy an incidental area within a public reported by any department as having affected the de- project or building, provided that no property may be condemned primarily for the purpose of facilitating an in- partment's use of eminent domain. cidental private use.139 As stated, in Louisiana, a condemnor may not take V. THE EFFECT OF POST-KELO LAWS ON THE USE property for the "predominant use by any private per- OF EMINENT DOMAIN FOR ECONOMIC son or entity...."140 DEVELOPMENT An incidental or secondary purpose was at issue in a Pennsylvania case that involved a taking of property A. Post-Kelo Reforms' Prohibitions on the Use of that had been declared blighted 30 years earlier but Eminent Domain for Economic Development that was to be conveyed to a religious entity as part of a Since Kelo, at least 21 states have limited or prohib- dergo the same schedule impacts and considerations in the ited the use of eminent domain for the taking of private post-Kelo world as do non-PPP projects. property for economic development,145 but only Florida 135 See note 76, supra. 136 CAL. CONST. art. 1, 19(e)(5); IOWA CODE 141 In Re: A Condemnation Proceeding in Rem by the Rede- 6A.22(2)(a)(3); KAN. STAT. ANN. 26-501b(a); KY. REV. STAT. velopment Authority of the City of Philadelphia, etc., 595 Pa. ANN. 416.675(3); LA. CONST. art. 1, 4(B)(1); NEV. REV. STAT. 241, 249, 938 A.2d 341, 346 (2007). 37.010(2)(b)(1); N.H. REV. STAT. ANN. 205:3-b(I)(d); 26 PA. 142 Id. at 251, 938 A.2d at 347 (emphasis in original). CONS. STAT. 204(b)(2)(iii); R.I. GEN. LAWS 42-64.12-7(a); 143 There is some overlap in the states' post-Kelo changes TEX. GOV'T CODE ANN. 2206.001(b)(3). See also GA. CODE discussed in Pt. III of the digest. ANN. 22-1-1(4)(A); LA. CONST. art. 1, 4(B)(2)(b) (public pur- 144 pose limited to "continuous public ownership"); R.I. GEN. LAWS Alabama, Alaska, Arizona, California, Delaware, Flor- 42-64.12-5(e) (defining "public ownership") and 42-64.12-6. ida, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, 137 Michigan, Nevada, New Hampshire, North Dakota, Pennsyl- TEX. GOV'T CODE ANN. 2206.001(b)(3). 138 vania, Rhode Island, South Dakota, Texas, Vermont, and Vir- IOWA CODE 6A.22(2)(a)(3). ginia. 139 KY. REV. STAT. ANN. 416.675(3) (emphasis supplied). 145 ALASKA STAT. 09.55.240(d) and 29.35.030(b); ARIZ. 140 LA. CONST. art. 1, 4(B)(1)(a). REV. STAT. 12-1136(5)(b); COLO. REV. STAT. ANN. 38-1-

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14 and New Mexico have prohibited takings of blighted development to increase employment150 or to improve property for redevelopment.146 As one source observes, the community's general economic health.151 "[m]ost states that passed legislative reforms focused In Iowa, a primarily on tightening their definition of public use to "public use" or "public purpose" or "public improvement" exclude development projects or projects aimed at in- does not mean economic development activities resulting creasing tax revenue while leaving an exception for in increased tax revenues, increased employment oppor- blighted areas."147 The exception for takings of blighted tunities, privately owned or privately funded housing and property is discussed in Section V of the digest. residential development, privately owned or privately Some of the post-Kelo constitutional or statutory re- funded commercial or industrial development, or the forms prohibit the use of eminent domain for economic lease of publicly owned property to a private party.152 development, such as for the purpose of enlarging the Likewise, in New Hampshire, a public use does "not tax base148 or increasing tax revenue.149 Other reforms include the public benefits resulting from private eco- also prohibit the use of eminent domain for economic nomic development and private commercial enterprise, including increased tax revenues and increased em- ployment opportunities" unless permitted elsewhere in the code.153 Other states define public use to exclude the use of 101(1)(b)(I); GA. CODE ANN. 22-1-1(4); IDAHO CODE ANN. 7- eminent domain for economic development, as in Michi- 701A(2)(b); IND. CODE ANN. 32-24-4.5-(a)(3); IOWA CODE gan where both the state's constitution and its code 6A.22(2)(b); KY. REV. STAT. ANN. 416.675(3); LA. CONST. art. prohibit the use of eminent domain for such a purpose. 1, 4(B)(3); MICH. CONST. art X, 2 and MICH. COMP. LAWS 213.23, 3(3); MINN. STAT. 117.025, subd. 11(b); MO. REV. The Michigan Constitution provides that a "`[p]ublic STAT. 523.71(1) and 523.71(2); N.H. REV. STAT. ANN. use' does not include the taking of private property for 205:3-b(II); N.D. CONST. art. 1, 16; R.I. GEN. LAWS 42- transfer to a private entity for the purpose of economic 64.12-3, 42-64.12-5(a), 42-64.12-7, 42-64.12-7(c), and 42-64.12- development or enhancement of tax revenues." Pursu- 8(a) (authorizing minimum compensation of 150 percent of ant to the state code, a "`public use' does not include the market value of property taken for economic development); taking of private property for the purpose of transfer to S.C. CONST. art. 1, 13(A); S.D. CODIFIED LAWS 11-7-22.1 a private entity for either general economic develop- (not specifically including the term "economic development"); ment or the enhancement of tax revenue."154 TENN. CODE ANN. 29-17-101(2); TEX. GOV'T CODE ANN. Also appearing in some statutes is a provision that 2206.001(b) (including an exception for economic develop- the term "public use" does not include, or that eminent ment when it has "a secondary purpose resulting from munici- pal community development or municipal urban renewal ac- domain may not be used for, the development of private tivities to eliminate an existing affirmative harm on society housing,155 retail businesses,156 or private businesses or from slum or blighted areas"); VT. STAT. ANN. tit. 12, 1040(a); enterprises,157 or for commercial158 or industrial pur- VA. CODE ANN. 1-219.1 (not specifically using the term "eco- nomic development" but restricting the use of eminent domain 150 ARIZ. REV. STAT. 12-1136(5)(b); GA. CODE ANN. 22-1- use for takings or property for public use or owner for public 1(4); IND. CODE ANN. 32-24-4.5-1(a)(3); IOWA CODE use and ownership or the elimination of blighted property). 6A.22(2)(b); KY. REV. STAT. ANN. 416.675(3); MINN. STAT. 146 See Pt. V, infra. 117.025, subd. 11(b); MO. REV. STAT. 523.71(2); N.H. REV. 147 Nedzel, supra note 51, at 1014. STAT. ANN. 205:3-b(II); N.D. CONST. art. 1, 16, R.I. GEN. 148 ARIZ. REV. STAT. 12-1136(5)(b); GA. CODE ANN. 22-1- LAWS 42-64.12-5(a); VA. CODE ANN. 1-219.1(D). 151 1(4); IND. CODE ANN. 32-24-4.5-1(a)(3); KY. REV. STAT. ANN. ARIZ. REV. STAT. 12-1136(5)(b); GA. CODE ANN. 22-1- 416.675(3); MINN. STAT. 117.025, subd. 11(b); MO. REV. 1(4); IND. CODE ANN. 32-24-4.5-1(a)(3); KY. REV. STAT. ANN. STAT. 523.71(2); N.D. CONST. art. 1, 16; R.I. GEN. LAWS 416.675(3); MINN. STAT. 117.025, subd. 11(b); MO. REV. 42-64.12-5; VA. CODE ANN. 1-219.1(D). STAT. 523.71(2); N.D. CONST. art. 1, 16. 149 152 ALA. CODE 11-47-170(b) and 11-80-1(b); ARIZ. REV. IOWA CODE 6A.22(2)(b). STAT. 12-1136(5)(b); COLO. REV. STAT. ANN. 38-1- 153 N.H. REV. STAT. ANN. 205:3-b(I) and (II). 101(1)(b)(I); CONN. GEN. STAT. 8-193(b)(1); GA. CODE ANN. 154 MICH. COMP. LAWS 213.23, 3(3). See also GA. CODE 22-1-1(4); IND. CODE ANN. 32-24-4.5-1(a)(3); IOWA CODE ANN. 22-1-(9)(B); KY. REV. STAT. ANN. 416.675(3). 6A.22(2)(b); KY. REV. STAT. ANN. 416.675(3); LA. CONST. art. 155 1, 4(B)(3); MICH. CONST. art. X, 2; MICH. COMP. LAWS IOWA CODE 6A.21(b) and 6A.22(2)(b). 156 213.23, 3(3); MINN. STAT. 117.025, subd. 11(b); MO. REV. ALA. CODE 11-47-170 ("Notwithstanding any other STAT. 523.71(2); N.H. REV. STAT. ANN. 205:3-b(II); N.D. provision of law, a municipality or county may not condemn CONST. art. 1, 16, OHIO REV. CODE ANN. 1.08(C); S.D. property for the purposes of private retail, office, commercial, CODIFIED LAWS 11-7-22.1(2); TENN. CODE ANN. 13-20- industrial, or residential development; or primarily for en- 201(a) (in connection with defining blighted areas and welfare hancement of tax revenue; or for transfer to a person, nongov- of the community); VA. CODE ANN. 1-219.1(D). ernmental entity, public-private partnership, corporation, or other business entity."); see also ALA. CODE 11-80(b). 157 26 PA. CONS. STAT. 204(a) and (b); S.D. CODIFIED LAWS 11-7-22.1 and 11-7-22.2. 158 ALA. CODE 11-47-170(b) and 11-80-1(b); IOWA CODE 6A.21(1)(b), (c) and 6A.22(2)(b); N.H. REV. STAT. ANN. 205:3-b(II).