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F I S C A L I M P A C T R E P O R T

SPONSOR Anderson

ORIGINAL DATE

LAST UPDATED

1/24/2007

HJR 1

SHORT TITLE Limit Private Property Takings, CA

SB

ANALYST Schuss

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Conflicts with/Relates to: SJR 3 and House Bill 159

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

Administrative Office of the Courts (AOC)

SUMMARY

Synopsis of Bill

House Joint Resolution 1, if approved by the voters, would amend Article II Section 20 of the

New Mexico Constitution to define the term “public use" as used in that section authorizing the

“taking" of private property for that purpose. The term is defined by the Resolution as “the pos-

session, occupation or enjoyment of property, as authorized by law, by the public at large, public

agencies, public utilities, pipeline common carriers and those seeking to put water to beneficial

use. In addition, "public use" means the addressing of a threat to the personal health or safety of

members of the public from structures or activities on or in property."

The Resolution would also prohibit the taking of private property for private use (unless the

owner consents) or to allow the transfer from one private owner to another on the grounds that

the public will benefit from a more profitable use of the property.

House Joint Resolution 1 – Page

2

FISCAL IMPLICATIONS

The Administrative Office of the Courts (AOC) notes that there will be a minimal administrative

cost for statewide update, distribution, and documentation of constitutional changes. Any addi-

tional fiscal impact on the judiciary would be proportional to passage of this amendment and re-

sultant proceedings. Such proceedings have the potential to increase caseloads in the courts, thus

requiring additional resources to handle the increase.

SIGNIFICANT ISSUES

According to the Attorney General’s Office this Joint Resolution is presumably in response to

the United States Supreme Court decision in Kelo v. City of New London, 545 U.S. 469 (2005).

On July 23, 2005 the Supreme Court, by a 5-4 decision, allowed the City of New London, Con-

necticut to exercise its power of eminent domain to condemn privately owned real estate so it

could be used as part of a comprehensive redevelopment plan. The decision was based upon the

city’s desire to address its economic downturn by allowing the New London Development Cor-

poration, a private entity under the control of the city government, to revitalize the “Fort Trum-

bull" neighborhood after Pfizer Pharmaceuticals began to build a large research facility on the

outskirts of that neighborhood. The corporation offered to purchase the properties involved, but

the owners of 15 out of 115 lots refused to sell. The City exercised its power of eminent domain

and condemned the holdout lots. The Supreme Court upheld the City’s action.

The dissent, authored by Justice O’Conner, and subsequent criticism of the case, suggested that

the use of this power in a reverse Robin Hood fashion—take from the poor, give to the rich—

would become the norm, not the exception. She stated: "Any property may now be taken for the

benefit of another private party, but the fallout from this decision will not be random. The bene-

ficiaries are likely to be those citizens with disproportionate influence and power in the political

process, including large corporations and development firms."

Several states are considering banning “takings" as authorized by Kelo. However, New Mexico

specifically allows a city to exercise its power of eminent domain to address “slum clearance and

development". NMSA 3-46-1 to 3-46-45 1978 comp.

The AOC list the following significant issues:

In the final paragraph of the majority’s opinion in Kelo v. City of New London

, Justice

Stevens wrote:

In affirming the city's authority to take petitioners' properties, we do not minimize

the hardship that condemnations may entail, notwithstanding the payment of just

compensation. We emphasize that nothing in our opinion precludes any State

from placing further restrictions on its exercise of the takings power. [Emphasis

added.] Indeed, many States already impose "public use" requirements that are

stricter than the federal baseline. Some of these requirements have been estab-

lished as a matter of state constitutional law, while others are expressed in state

eminent domain statutes that carefully limit the grounds upon which takings may

be exercised. As the submissions of the parties and their amici make clear, the ne-

cessity and wisdom of using eminent domain to promote economic development

are certainly matters of legitimate public debate.

Note

: The U. S. Supreme Court declined on Tuesday, January 16, 2007, to revisit or limit

House Joint Resolution 1 – Page

3

its 2005 ruling in Kelo

upholding governmental power to exercise eminent domain for

economic development.

HJR 1 and SJR 3 are worded differently, but appear to differ in HJR 1’s inclusion of the

“addressing of a threat to the personal health or safety of members of the public from

structures or activities on or in property" as a “public use" that would allow for the taking

of private property upon payment of just compensation.

CONFLICT, RELATIONSHIP

Conflicts with/Relates to: SJR 3 and HB 159

BS/sb