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

SPONSOR Fox-Young

ORIGINAL DATE

LAST UPDATED

02/17/07

02/20/07 HB HJR 11

SHORT TITLE Limit Eminent Domain Uses, CA

SB

ANALYST Hanika Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to: HJR 1; SJR 3; SJR 8; HB 393; HB 159; HB 370; SB 759; SB 401; SB 469

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

SUMMARY

Synopsis of Bill

House Joint Resolution 11, if approved by the voters, amends Article 2, Section 20 of the

Constitution of New Mexico to allow the “taking" of private property after payment of “just

compensation" and then only when necessary for the possession, occupation or enjoyment of

land by the public at large, public agencies or political subdivisions of the state. The resolution

provides that except for privately owned common carriers, private property shall not be taken for

use by private commercial enterprise, for economic development or for any other private use,

except with the consent of the owner. The resolution further provides that property shall not be

taken from one owner and transferred to another on the grounds that the public will benefit from

a more profitable private use, and whenever an attempt is made to take private property for a use

alleged to be public, the question of whether the contemplated use is really public shall be a

judicial question and determined as such without regard to any legislative assertion that the use is

public

.

FISCAL IMPLICATIONS

Indeterminate fiscal impact, but unlikely to be large.

House Joint Resolution 11 – Page

2

There will be a minimal administrative cost for statewide update, distribution and documentation

of statutory changes. Any additional fiscal impact on the judiciary would be proportional to

challenges to the exercise of eminent domain under the Act. New laws, amendments to existing

laws and new hearings have the potential to increase caseloads in the courts, thus requiring

additional resources to handle the increase.

SIGNIFICANT ISSUES

AGO reports this bill is one of many this session in response to the United States Supreme Court

decision in Kelo v. City of New London. On July 23, 2005 the Supreme Court, by a 5-4 decision,

allowed the City of New London, Connecticut 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 Corporation, a private entity under the

control of the city government, to revitalize the “Fort Trumbull" 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.

Justice O’Conner, who dissented, 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 beneficiaries 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 v. City of New London.

Current New Mexico state law allows a city to exercise its power of eminent domain in acquiring

by condemnation interest in real property for an urban renewal project or land development

project under the Urban Renewal Law (Section 3-46-32 NMSA); and, to sell property acquired

to private entities for economic development purposes (Section 3-46-34 NMSA).

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to: HJR 1; SJR 3; SJR 8; HB 393; HB 159; HB 370; SB 759; SB 401; and SB 469

all relate to the use of the power of eminent domain by governmental entities.

OTHER SUBSTANTIVE ISSUES

Although “common carriers" generally transport people or goods, in the United States the term

may also refer to telecommunications providers and public utilities.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Article 2, Section 20 of the Constitution of New Mexico will continue to read that private

property shall not be taken or damaged for public use without just compensation.

AHO/csd