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

SPONSOR Park

ORIGINAL DATE

LAST UPDATED

1/26/2006

1/30/06 HB HJR 2

SHORT TITLE Limit Public Taking of Private Lands, CA

SB

ANALYST McOlash

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to, but not a duplicate of SJR 1 and relates to the duplicate bills SB 231 and HB 27

Relates to: SM3, HM6, SJR1, and duplicate bills SJR4 HB27, SB231

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

Secretary of State (SOS)

Administrative Office of the Courts (AOC)

New Mexico Department of Transportation (NMDOT)

SUMMARY

Synopsis of Bill

House Joint Resolution 2 would amend Article 2, section 20 of the New Mexico Constitution to

prevent taking of private property--even when just compensation is paid--for use by private

commercial enterprise, for economic development or for any other private use. The only excep-

tion is when the owner consents (who would still be entitled to just compensation), or when the

taking by privately owned common carriers, who are authorized to exercise eminent domain un-

der the conditions set out in sections 42A-2-1 through 4, NMSA 1978 (1981) (which applies to

railroads, telephone and telegraph companies). The language of this amendment also makes

clear that the determination of whether a taking is for public use is a judicial rather than legisla-

tive question.

House Joint Resolution 2 – Page 2

FISCAL IMPLICATIONS

There is no fiscal impact if the amendment is included in the general election. However, there

would be an estimated cost of $ 1.8 million if the constitutional amendment were proposed for a

special election, according to the Secretary of State’s staff.

SIGNIFICANT ISSUES

AGO

Last year, the United States Supreme Court, in Kelo v. City of New London, Conn., 125 S.Ct.

2655 (2005), recognized and applied its longstanding policy of deference to legislative judgment

as to what public needs justify use of the takings power. In Kelo, the Court upheld the city’s tak-

ing under a Connecticut state statute specifically authorizing the use of eminent domain to pro-

mote economic development. This constitutional amendment, if passed by the legislature and

approved by the voters, appears to prevent the type of takings allowed (as authorized by a Con-

necticut state statute) in that case.

New Mexico courts have consistently read this section of the Constitution to require a public use

to justify condemnation of private property. See Kaiser Steel Corp. v. W.S. Ranch Co., 81 NM

414 (1970) at 416; Kennedy v. Yates Petroleum, 104 NM 596 (1986) at 589-590. Further, the

provision in the proposed amendment that the question of whether a particular taking constitutes

public use appears consistent with New Mexico law, in that our courts have determined that

question to be in the last analysis a judicial one, while recognizing a presumption, in deference to

the legislature being a coordinate branch of government, that a use is public if the legislature de-

clares it so. Kaiser at 420.

The legislature has previously granted the power of eminent domain to certain private entities

other than common carriers for certain public uses, including water and natural gas lines. Those

powers may be called into question if this amendment becomes law. Questions may also arise

concerning the ultimate use to which a public entity puts real property it has acquired through

condemnation—for example leasing all or part to private entity such as a coffee shop, or sale of

the property once it is no longer needed for public use.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

SB 231/HB 27 would amend the Eminent Domain Code to expressly prevent a taking “to pro-

mote private or commercial development” when title is transferred to another private entity. It

does not address who would determine whether a particular taking would violate this bar.

SM 3/HM 6 requests the New Mexico Congressional delegation to work to protect intellectual

and physical property rights.

SJR 1 is effectively, but not literally, a duplicate.

BMC/mt:yr