Private Property Rights; Kelo v. City of New London, 10 Years Later

kelo1June 23, 2015 marks the ten year anniversary of the United States Supreme Court’s ruling in Kelo v. City of New London which struck considerable fear into the hearts of private property owners nationwide.

 

The Supreme Court has not returned to the subject, and its decision therefore stands as the Court’s last word on the meaning of the Public Use Clause. The problem for public and property rights advocates is that Kelo has essentially been forgotten.

If Kelo should return to prominence because some state or city prefers one private property owner over another, the U.S. Constitution will likely offer property owners no protection against whatever public benefits a majority of a state or local government can imagine.

Government uses its eminent domain power for a host of reasons. Classic examples are the need to construct a road or bridge, a port, a national park, or a government office building. More contemporary instances include the elimination of a public nuisance like an unprotected hazardous waste dumping site or a row of dilapidated crack houses.

The public generally understands that the government will exercise its eminent domain power to take private property in only three circumstances; when government will use it, when the public will use it, or when private parties will use or develop it for the public’s benefit in a quasi-governmental capacity (such as a regulated utility).

A decade ago, however, the Supreme Court of the United States gave its approval to an unprecedented and remarkable use of the eminent domain power. In Kelo v. City of New London, the Court ruled that as long as a property owner is paid the fair market value of what is taken, the U.S. Constitution permits a city to transfer that property from one private party to another, in this case, from a homeowner to a real estate developer, because the city prefers what, in their opinion, is a better use of the land.

Kelo decided that certain particular tracts of private property would be more profitable to the community if the property belonged to different owners and was put to a different use. Unlike what is supposed to happen in an urban renewal program, the city took perfectly maintained and functioning homes away from long-term city residents and gave the homes and the ground land to a private real estate developer in the hope of enticing a large corporation to locate a facility in the area.

The homeowners challenged the takings in court. They lost in the state courts, but the U.S. Supreme Court agreed to hear their plea. Unfortunately for the landowners, however, the Court ruled by a five-to-four vote that as long as just compensation is paid, the government may transfer property from one private party to another not to remedy a social ill, but as long as the government can mount the claim that the latter party will use the land in a manner that improves the local economy.

kelo2The sad irony in this instance is that the property, that was taken ten years ago, sits idle today. As the picture to the left indicates, no development ever materialized.  And the people that were displaced have essentially all left the area.

 

So what was the response to Kelo in Alabama?

Alabama was the very first state to react legislatively to the Kelo decision. Senate Bill 68 (2005) specified that eminent domain could not be used for “private retail, office, commercial, industrial, or residential development; or primarily for enhancement of tax revenue; or for transfer to a person, nongovernmental entity, public-private partnership, corporation, or other business entity.”

However the law left an exception for the seizure of so-called blighted properties. This would have allowed property to be condemned under blight law if it might become blighted in the future, or if the property is deemed “obsolescent”; which is code for “We want something else here.” And, if the property was condemned for blight, cities could then turn it over to private interests.  This problem was addressed in House Bill 654 (2006) which significantly closed the blight loophole by narrowing the criteria by which property could be designated as blighted.

This legislative fix however was not imbedded in the state’s constitution, and thus is subject to the whims of future lawmakers to amend as they see fit.

As we watch our current legislators, county commissioners and mayors frantically searching for every available source of revenue possible, we need to be particularly diligent to make sure the thrill and excitement in the guise of “economic development” does not overwhelm their sensibilities.

Maybe, now that ten years has gone by, it’s time to amend the constitution to protect private property ownership rights in perpetuity. AFA is studying the issue and may propose legislation in the next year to accomplish that objective.

U.S. Supreme Court Rules in Favor of the State of Alabama in Lynch Case

ussupremecourt

In a great victory today for property owners in Alabama, the United States Supreme Court has issued an order denying certiorari in Case number 13-1232, Lynch, India, et al. v. the State of Alabama.

 

Attorney Gluthereneral Luther Strange’s office represented the State successfully in a case that began its journey through the court system in March of 2008. Filed in the Federal District Court in Huntsville, the plaintiffs were seeking to show that Alabama property tax revenues fail to adequately fund K-12 public schools and that this shortfall unconstitutionally shortchanges black public school students.

Success by the plaintiffs would have resulted in application of existing state and local tax millage rates to the full fair market value of all property. This would mean that timberland and farmland owners would see an increase in property taxes by at least a factor of ten, unless millage rates were reduced by subsequent local or state legislative action.

The case was brought under the equal protection clause of the 14th Amendment and Title VI of the Civil Rights Act of 1964. Section 2000d of the Civil Rights Act provides that no person can be denied, on the basis of race, color or national origin, the benefits of a state program that receives public financial assistance. Generally speaking, in cases brought under the Civil Rights Act, proof of discriminatory intent is not required, simply proof that there is a disparate impact on minorities.

The trial was held in March 2011 and on October 21, 2011, Judge Lynwood Smith issued an 854 page opinion finding in favor of the State. The plaintiffs immediately appealed to the United States Court of Appeals for the Eleventh Circuit and oral arguments were held in December 2012. The Eleventh Circuit also ruled in favor of the State and in April 2014, the plaintiffs once again appealed, this time to the United States Supreme Court.

The denial of the Supreme Court to take up the case means that the case is finally over.

Meanwhile, Attorney General Strange is facing stiff opposition in his bid for re-election for another four year term. He and his office did a tremendous job in representing the State of Alabama and landowners. Take a moment to reflect on the consequences to timberland ownership and the forest products industry had an adverse ruling come in this case.

It hasn’t been long ago that the political environment within the Office of Attorney General would have been such that we wouldn’t have had such an advocate for us. We need to keep Luther Strange as Attorney General.

Please consider supporting Luther’s campaign. He needs your financial support and your vote. Elections have consequences! Contact AFA to learn more about how to assist in this election.

Private Property Rights vs. Public Use- The Ongoing Debate

train

“I hear the train a comin’, It’s rolling round the bend
And I ain’t seen the sunshine since I don’t know when” – Johnny Cash

Tunnel Springs, Monroe County, Alabama

On December 10, 2013, the Monroe County Commission approved a resolution authorizing the county to purchase a 7 mile strip of abandoned railway property from Pioneer Railcorp. The property, which is more than 80 acres, was appraised for $142,000 and the purchase price was $89,000. The Monroeville/Monroe Economic Development Authority secured a grant from the Alabama Department of Economic and Community Affairs for 80% of the purchase price and the remainder was provided by a private trust contribution. At the meeting, Glen Haab, MMEDA’s Executive Director said a recreational trail will be built on the property.

On April 8, 2014, the Commission indicated that it was applying for an additional $500,000 grant from ADECA to continue work on the project that was characterized as a “biking/walking” trail along the abandoned railroad in the Tunnel Springs community.
Probate Judge (and presiding officer of the Commission) Greg Norris said the county would be required to provide a 20% match ($100,000) and the matching funds would come from “private funds.” The funds would be used to construct an asphalt trail along the right of way. The trail will reach the mouth of the railroad tunnel, but not enter the tunnel at this time. When complete, the project will continue through the tunnel and on to Beatrice.

On April 24, 2014, The Monroe Journal reports that the Commission was honored earlier this month by the Alabama Trails Commission for its exemplary work on the proposed Tunnel Springs Rail Trail in North Monroe County. Commission Chairman Greg Norris was quoted “We are excited about the Tunnel Springs Rail Trail and the outdoor recreational impact it will have on Monroe County and Southwest Alabama.”

The Journal article states that “the project will offer runners, walkers and bicyclists access to scenic and historic areas that have been inaccessible for years. One of the most unique landmarks associated with this project is the rail tunnel, which is only accessible by the proposed trail and provides an enormous opportunity for the historic preservation of this unique asset.” The article goes further, “this tunnel along with three wooden trestles and numerous fields, forest lands and streams is geared to draw outdoor recreational enthusiasts from across Alabama and the southeastern United States.” (Emphasis added)

Unfortunately, these “numerous fields, forest lands and streams” are not part of the project footprint. In fact they are owned by private landowners that are not enthusiastic about having their property invaded by the public.

On July 3, 2014, the Monroe Journal reports that Judge Norris called a press conference to announce that the Commission has been awarded a $400,000 grant to complete the first phase of a walking/biking trail at Tunnel Springs. The grant requires a 20% match of $80,000 through the Federal Transportation Alternatives Program (TAP Grant). Norris stated that private funds, not taxpayer money, will cover the $80,000 match.

The Alabama Trails Commission was established by Act 2010-585 during the 2010 Regular Session of the Alabama Legislature. HB376 was sponsored by then Representative (now Senator) Cam Ward and directs that the Commission be established within ADECA. The Recreational Trails Program (RTP) is funded by the U.S. Department of Transportation and provides funding assistance to federal agencies, states and local governments for the development and improvement of recreational areas such as walking, jogging, cycling, skating, backpacking, horseback riding and off-highway vehicle trails.

The federal Transportation Equity Act for the 21st Century established a vehicle for distributing financial assistance to the states for the purpose of providing and maintaining recreational trails. Section 1112(c)(2) of the Act requires that each state establish “a recreational trail advisory board on which both motorized and non-motorized trail users are represented…”

According to the ADECA website, “the purpose of the Alabama Trails Commission is to make Alabama a nationally recognized destination for hiking, biking, running, horseback riding, motorized off-highway vehicles and water sports by residents and visitors alike. It employs a ground-up, statewide coordinated approach fostering vigorous participation by local, regional, state and federal agencies, stakeholders, higher education centers and non-profit organizations. The ultimate framework would link trails with people; people with their communities; and explorers of all ages with Alabama’s wild places.”

The “Rails to Trails” program has not been without controversy. In March, 2014, the Wall Street Journal reported that the United States Supreme Court sided with landowners in Wyoming. During America’s westward expansion in the 19th century, Congress gave public land to private railroads to spur development of a transcontinental transportation network. In 1996, a railroad in Wyoming became abandoned and tore out the tracks. The U.S. Forest Service then sought to use the rights of way- which passed through a national forest and 31 parcels of private land- for public trails. All but one property owner acquiesced to the plan; Marvin Brandt, whose 83 acre property was the largest, and one associated with his family since his father began working at a local sawmill in 1939.

The government argued that when the railroad ended operations, some property rights reverted to the government, like using the right of way for a trail. The Court, relying on a 1942 case, rejected the government’s argument stating that Congress only granted the right of easement and nothing more. The Justice Department is now defending more than 90 lawsuits challenging Rails-to-Trails projects involving 10,000 properties in 30 states, amounting to aggregate claims in the hundreds of millions of dollars.

The Monroe County project is different in that the railroad held a “fee simple” ownership of the property as opposed to an easement. Therefore, it appears that the railroad has the right to transfer its ownership interest to the county (note: this issue is still not completely determined at this time).

There are several unanswered questions-

First, is the proposed trail limited to the 7 mile purchase from Tunnel Springs to Beatrice?

Second, where will the $80,000 match, supposedly from private sources, come from?

Third, what is the total project cost for the 7 mile stretch? According to the Monroe Journal report, the grant appears to fund only “Phase One” which extends from the Tunnel Springs community to the mouth of the historic tunnel. Where will the additional funds come from that will be needed to address the other “phases” of the project?

Fourth, what is the County going to do to address issues that adjacent property owners have with the project. By its own admission, the County intends for this project to provide unique access to “numerous fields, forest lands and streams and is geared to draw outdoor recreational enthusiasts.” Heretofore, this has been private property. Does the county expect that this project will somehow not interfere with these landowners right to quiet enjoyment of their property?

Stay tuned….we will continue to monitor events in Monroe County. Not only does this issue affect our landowner members in this particular instance but also because the Rails-to-Trails program could have similar impact in other parts of the State.

 

No Assembly Required

Isn’t it nice to receive a gift and see that there is no assembly required?  You open the package and its ready to go…you get the immediate benefit….

 Well that is the very reason that the Alabama Forestry Association and ForestPAC is supporting Steve French for the Alabama House of Representatives.

 Steve is a former legislator, having served in Alabama Senate for 12 years, and was recognized at the time as being one of the Senate’s most fiscally conservative members.  Unfortunately, as a Republican, Steve served in the minority at the time and his efforts were not appreciated.

 Steve is ready to govern from day one…let me remind you of some of his past actions…

 In the 2004 legislative session he sponsored a bill (SB424) to create a responsible budgeting process (the precursor to the Rolling Reserve Act) six years prior to its eventual passage.  Two important parts of this bill did not survive ultimate enactment; first it applied to the General Fund as well as the Education Trust Fund and second, it was intended to be enacted in conjunction with a constitutional amendment to lock in the requirements and avoid the conflict of laws issue we have today.

 In 2005, he sponsored a bill (SB25) that would prohibit the legislature to use non-recurring income to fund ongoing expenses.  Still a good idea…still an initiative that needs to be enacted and certainly one that AFA would aggressively support.

 In 2006, he sponsored a bill (SB202) that would have created a constitutional amendment that would have significantly limited the use of eminent domain.  Legislation was ultimately passed, but not nearly as helpful to private property owners as SB202 would have been.

 In 2008, he sponsored a bill (SB367) to change the auditing function of the state by abolishing the Office of Examiners of Public Accounts.  In the recent 2014 session, AFA strongly supported similar legislation, but it still has not been enacted.

 Finally, in the first special session of the 2009 legislative session, Steve introduced and passed a bill (SB14) setting forth a constitutional amendment (later ratified by general vote of the people) to create the proration prevention accounts within the Alabama Trust Fund to assist the budgets during challenging economic times.  These accounts were drained the very next fiscal year to allow the state to survive during one of the worst recessions in our country’s history.

 Some of his ideas have been implemented since the Republicans have gained the majority, but several have not.  These are good ideas that need to be enacted.

 Steve faces three opponents in the June Republican Primary for House District 46 (Birmingham area- mainly Mountain Brook, Homewood and Hoover) and he needs our help to get elected. 

 We need a powerful voice in the House of Representatives that will be the champion for initiatives that address fiscal responsibility, accountability and transparency.  Steve French is ready to serve, and there will be no on the job training required…

 There is much left to do and he will be ready to go day one…..with no assembly required.

 

Alabama Senate Considers Procedure for Vacating Roads

Ron Johnson (R-Sylacauga) is forwarding legislation, HB148, that sets forth new procedures allowing for the vacation of public roads.  Having already passed the House of Representatives, HB148 emerged from the Senate’s Government Affairs Committee on March 4th and now is positioned for consideration by the full Senate.  The Committee passed a substitute bill that limits the application of the new procedures.  If passed by the Senate, the substitute bill will have to return to the House for concurrence.

The bill requires the owner(s) of the land abutting the road to provide a written petition to the governing body that has jurisdiction over the road.  A public hearing will be held within 100 days and requires 30 day notice to utility companies and all other owners. After the public hearing, if the governing body denies or does not take action on the petition, the legislation sets up a procedure for appeal to the circuit court.

AFA is monitoring the legislation.