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

SPONSOR Carraro

ORIGINAL DATE

LAST UPDATED

02/07/07

HB

SHORT TITLE Prohibit Use of Eminent Domain, CA

SB SJR 8

ANALYST Hanika Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

SUMMARY

Synopsis of Bill

Senate Joint Resolution 8, if approved by the voters, will amend Article 2, Section 20 of the New

Mexico Constitution to prohibit taking or damaging private property by eminent domain for

private ownership or use. The bill further clarifies that private property may be taken or damaged

for public use only when necessary for the public at large; by public agencies, except if used for

private commercial enterprise, economic development or any other private use unless consent of

the owner is obtained; except for privately owned “common carriers". The bill requires the

payment of “just compensation" whenever the power of eminent domain is exercised. The

Resolution will also prohibit the transfer from one private owner to another on the grounds that

the public will benefit from a more profitable use.

FISCAL IMPLICATIONS

Indeterminate fiscal impact, but unlikely to be large.

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.

Senate Joint Resolution 8 – Page

2

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."

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HJR 1 and SJR 3 propose to amend the New Mexico Constitution to prohibit the use of the

power of eminent domain for private purposes or for economic development.

House Bill 159 prohibits the exercise of the power of eminent domain for private purposes by

enacting the “Private Property Rights Protection Act".

House Bill 393 specifically prohibits a public body from exercising its power of eminent domain

for the purpose of acquiring property for economic development.

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/nt