Relates to the use of eminent domain

Section 2 -- Adds a section 204-a to the Eminent Domain Procedure Law to require that any eminent domain takings by non-elected industrial development agency (IDA) board must be approved by the elected governing body of the municipality for whose benefit the agency was created and where the property proposed to be condemned is located.

Section 3 -- Amends subdivision (A) of section 702 of the Eminent Domain Procedure Law to require that the owner of property being taken by eminent domain be paid relocation costs.

Section 4 -- Effective date.

Justification

In 2005, the Supreme Court of the United States ruled in the case of KELO V. CITY OF NEW LONDON , that the various benefits associated with economic development can provide a valid "public purpose" which justifies the taking of property by eminent domain for projects that substantially benefit a private party. In that case, the City of New London approved a revitalization plan which authorized the use of eminent domain to take private properties which were clearly not blighted, but rather would be included in a larger project focused on a research facility to be built by Pfizer corporation. In declining to provide any definitive rule on the use of eminent domain when a private party is a significant beneficiary of the action, the Court's opinion cited a long standing policy of deference to legislative judgments. The opinion further noted that a state may place further restrictions on its exercise of the takings power, as many do through statute or constitutional limitations.

This legislation clarifies that the exercise of eminent domain powers should be reserved for those public infrastructure and services purposes commonly provided by government. Such projects, including transportation, public safety, recreation, water supply and sanitation facilities, are essential functions that can require the utilization of private property, for which the property owner should be fully compensated. The compensation currently provided for under New York's eminent domain process includes the value of the property and certain other costs, such as prepayment penalties on a mortgage. For many property owners, however, the relocation costs associated with moving to a new location can represent an undue burden. Businesses in particular may be unable to reestablish operations in the face of such costs, placing existing investment in a community, and associated jobs, at risk. The bill includes such relocation costs as an incidental expense which must be paid to the owner of a property being taken by eminent domain. To ensure that the overall impact on a community is fully considered in those circumstances where an industrial development agency (IDA) is exercising eminent domain powers to take a property, any such action will be subject to a vote by the elected governing body of the municipality for whose benefit the agency was created and where the property proposed to be condemned is located to determine whether or not to condemn the property.

The provisions of this bill will enhance oversight of the use of eminent domain and more fairly compensate those owners that have property taken for important public uses.

Legislative history

2005-2006 -- S.5938 (reported from the Judiciary Committee)/A.9079 (referred to the Judiciary Committee) 2007-2008 -- S.915-A (reported from the Judiciary Committee)/A.661-A (referred to the Judiciary Committee)

Fiscal implications

None.

Effective date

Immediately.