Order Code RL33208
CRS Report for Congress
Received through the CRS Web
Condemnation of Private Property for Economic
Development: Legal Comments on the House-
Passed Bill (H.R. 4128) and Bond Amendment
December 22, 2005
Robert Meltz
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

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Condemnation of Private Property for Economic
Development: The House-Passed Bill (H.R. 4128)
and Bond Amendment
Summary
On June 23, 2005, the Supreme Court handed down Kelo v. City of New
London, holding that under the Fifth Amendment Takings Clause, the sovereign
power of eminent domain (“condemnation”) can be used to transfer private property
to new private owners for the purpose of economic development. Kelo sparked a
public outcry and a flurry of legislative proposals in Congress and the states to
restrict the use of eminent domain.
The principal Kelo bill in Congress is H.R. 4128, the “Sensenbrenner bill,”
which passed the House on November 3, 2005. Its key provision prohibits states and
their political subdivisions (hereinafter “states”) from using eminent domain to
transfer private property to other private parties for economic development — or
allowing their delegatees to do so. The prohibition applies to any fiscal year after
the bill’s enactment in which the state received federal economic development funds.
A state that violates the prohibition is ineligible to receive federal economic
development funds for two fiscal years following a judicial determination of violation
— a penalty enforceable by private right of action.
H.R. 4128 raises several legal issues. The prohibition on economic
development condemnations extends not only to land taken for the explicit purpose
of economic development but also to land subsequently so used. The latter coverage
raises the possibility that although a parcel was initially condemned for a non-
prohibited purpose, its use years later for a prohibited one would trigger the two-year
cut-off of federal funds. Nor does there seem to be any proportionality requirement
between the prohibited condemnations and the length and scope of the federal funds
suspension. If Congress’ Spending Power includes a proportionality requirement for
conditions on federal funds, as the Court suggests, the absence of proportionality in
some of the bill’s applications may raise a constitutional issue.
Persons forced to move by a prohibited condemnation may run into a standing
problem should they attempt to use the bill’s right of action to impose a funds
suspension. Standing requires that the remedy sought in an Article III court will
redress the complained-of injury. A suspension of federal funding to the offending
jurisdiction does not redress the fact that the person was made to move, unless it can
be argued that the funding cut-off makes it more likely that the jurisdiction will elect
to return the wrongfully condemned property.
The Bond Amendment, inserted into an FY2006 appropriations bill by Senator
Bond, is now enacted law. Like H.R. 4128, it attaches a condemnation-restricting
condition to federal funds, though limited to funds appropriated under the statute.
The Amendment’s list of acceptable and unacceptable condemnation purposes
largely echoes existing case law construing the “public use” prerequisite for
condemnation in the Constitution.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
H.R. 4128 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
What the Bill Says . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2: The Heart of the Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8: Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4: Private Right of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Other Bill Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Legal Comments on Section 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Legal Comments on Section 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Legal Comments on Section 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Legal Comments on Section 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Bond Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Condemnation of Private Property for
Economic Development: The House-Passed
Bill (H.R. 4128) and Bond Amendment
Introduction
On June 23, 2005, the Supreme Court handed down Kelo v. City of New
London,1 addressing whether, under the Fifth Amendment Takings Clause, the
sovereign power of eminent domain (“condemnation”) can be used to transfer private
property to new private owners for the purpose of economic development.2 The
Court held 5-4 that New London’s use of private-to-private condemnations to further
its economic revitalization project satisfied the Takings Clause’s demand that
eminent domain be employed for a “public use,”3 despite the private nature of the
transferees. The City’s good-faith purpose, said the majority, was to carry out a
carefully considered areawide redevelopment plan believed by the city (and state) to
be needed to reverse decades of economic decline. On these facts, the majority
deemed the public use requirement satisfied, especially given the strong deference
owed by courts to legislative determinations of local needs.
Many observers argue that Kelo does not depart from established eminent
domain law — that its view of public use as covering New London’s revitalization
plan is indistinguishable from prior Court precedent sustaining eminent domain for
mixed private and public gain. Contrariwise, a vocal minority (starting with the four
dissenters) argues that the decision represents a major expansion of public use, while
still others counter that it actually narrows public use. For present purposes, this
debate is unimportant. What matters here is that Kelo cast a bright spotlight on a
controversial and increasingly frequent practice: the use of land condemnation by
state and local governments solely to increase tax base or tax revenues, and create
jobs. The new attention given by Kelo to the possibility that people’s homes can be
taken involuntarily for such purposes (upon payment of compensation) provoked a
popular outcry and media coverage such as few recent Supreme Court decisions have
generated. Following Kelo, the majority of state legislatures saw the introduction of,
or talk of the introduction of, bills limiting the use of eminent domain.4 Congress
1 125 S. Ct. 2655 (2005).
2 See generally CRS Report RS22189, Condemnation of Private Property for Economic
Development: Kelo v. City of New London, by Robert Meltz.
3 The Takings Clause of the Fifth Amendment states: “[N]or shall private property be taken
for public use, without just compensation.”
4 Kelo made clear that it was construing only the U.S. Constitution. So, it said, state courts
(continued...)

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CRS-2
entered the fray through the introduction of roughly a dozen bills, most of them
seeking to discourage state and local use of eminent domain for economic
development through the device of attaching restrictive conditions on federal grant
money. The use of funding conditions, rather than a direct federal command that
localities not condemn for economic development, presumably reflects the
constitutional federalism concerns raised by the latter approach under the Commerce
Clause, Fourteenth Amendment (Section 5), and Tenth Amendment.5
The main topic of this report is the principal “Kelo bill” in Congress at this time,
H.R. 4128, the Private Property Protection Act of 2005. H.R. 4128 hews to the
prevalent congressional approach to Kelo: imposing a condemnation-restricting
condition on the grant of federal money. It was originally introduced as H.R. 3135
by Representative Sensenbrenner, chairman of the House Committee on the
Judiciary, one week after the Kelo decision. It was reported in greatly expanded form
as H.R. 4128 and passed the House 376-38 on November 3, 2005.
This report also examines a bill amendment introduced by Senator Bond, like
H.R. 4128 a federal-money-restricting provision. The Bond Amendment was added
on the Senate floor to H.R. 3058, the Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act for FY2006. H.R. 3058 was enacted November 30, 2005, as P.L.
109-115, with the Bond Amendment as Section 726.
Other bills and resolutions responding to the Kelo decision are not treated here,
either because they have been eclipsed by H.R. 4128, have seen little activity, or are
nonbinding resolutions. These include S. 1313 (restricting federal funds), S. 1704
(restricting federal funds), S. 1883 (creating an Office of Property Rights
Ombudsperson), H.J.Res. 60 (amending the Constitution), H.Res. 340 (expressing
disagreement with the majority opinion in Kelo; passed House on June 30, 2005 by
365-33), H.R. 3083 and 3087 (each identical to S. 1313), H.R. 3315 (restricting
federal funds), and H.R. 3405 (restricting federal funds).
4 (...continued)
remain free to interpret the public use clauses in state constitutions more restrictively, and
state and local legislatures are at liberty to impose limits on the use of eminent domain. 125
S. Ct. at 2668.
Accepting the Court’s invitation, four states so far have enacted Kelo-related laws.
Alabama (SB 68, 2005 Special Session) and Texas (SB 7, 2005 Second Special Session) bar
the use of eminent domain for specified purposes. Delaware (SB 217, 2005 Session) merely
declares that eminent domain can be exercised only for a “recognized public use.” Ohio (SB
167, 2005 Session) imposes a moratorium on eminent domain for certain economic
development purposes until December 31, 2006, and creates a task force to study eminent
domain issues. For a summary of the post-Kelo state legislation, see National Conference
of State Legislatures memorandum to State Legislators Interested in Eminent Domain Issues,
Nov. 30, 2005, at [http://www.ncsl.org/programs/natres/emindomain.htm]. In addition,
three states enacted Kelo-related laws in advance of the Supreme Court’s decision: Nevada,
Utah, and Colorado. More state enactments are expected in 2006.
5 See CRS Report RS22189, Condemnation of Private Property for Economic Development:
Kelo v. City of New London, by Robert Meltz.

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H.R. 4128
What the Bill Says
Section 2: The Heart of the Bill.
The key provisions in H.R. 4128 are Sections 2(a) and 2(b). Section 2(a) sets
out the state and local activities that the bill prohibits —
No State or political subdivision of a State shall exercise its power of eminent
domain, or allow the exercise of such power by any person or entity to which
such power has been delegated, over property to be used for economic
development or over property that is subsequently used for economic
development, if that State received Federal economic development funds during
any fiscal year in which it does so.
Section 2(b) states a consequence under the bill when a state or local government
violates Section 2(a) —
A violation of subsection (a) by a State or political subdivision shall render such
State or political subdivision ineligible for any Federal economic development
funds for a period of 2 fiscal years following a final judgment on the merits by
a court of competent jurisdiction that such subsection has been violated ....
Under Section 2(c), the Section 2(b) ineligibility period is terminated if the offending
state or locality elects to return all real property the taking of which was judicially
determined to offend Section 2(a).6
Section 3 of the bill is the federal-condemnation counterpart to Section 2,
barring federal agencies from using eminent domain for economic development.
Section 3, however, is much less important than Section 2; at least as defined in the
bill, federal condemnation for economic development is rare.
Section 8: Definitions.
Section 8 determines which government condemnations are prohibited by
Sections 2(a) and 3 above through its definition of “economic development.” Given
the huge variety of purposes for which eminent domain is used around the country,
crafting such a definition is a difficult task, attempted by many of the Kelo bills in
Congress. In Section 8’s version, economic development means “taking private
property, without the consent of the owner, and conveying or leasing such property
from one private person or entity to another private person or entity for commercial
enterprise carried on for profit, or to increase tax revenue, tax base, employment, or
general economic health.” Seven exemption categories are stated. The first allows
the conveyance of private property to public ownership or an entity that makes the
6 Section 2(c)’s use of the qualifier “real” in “real property” is not picked up in other
provisions of the bill, which refer only to “property” or “private property.” Nonetheless, the
context of the bill, local economic development projects, would appear to implicate
primarily, if not exclusively, real property.

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property available to the general public as of right (e.g., common carriers), or for use
as a road or other right of way open to the public. Other categorical exemptions
include removing harmful uses of land that constitute an imminent threat to public
health or safety, acquiring abandoned property, clearing defective chains of title, use
by a public utility, and redeveloping brownfields.
The bill uses the words “economic development” in a second context in addition
to Section 2(a). The phrase “Federal economic development funds” in Section 2(b)
defines which federal monies are to be suspended should a court find that prohibited
condemnations have occurred. Notwithstanding the word overlap, the bill defines
the Section 2(b) phrase in completely different language than it uses for the Section
2(a) phrase. “Federal economic development funds,” according to Section 8(2), are
those federal monies distributed to or through states or their political subdivisions
“under Federal laws designed to improve or increase the size of [their] economies
....” The Attorney General is charged under Section 5(a)(2) with compiling a list of
such federal laws, to delineate the particular federal funds that must be suspended in
the event of Section 2(a) transgressions.7
Section 4: Private Right of Action.
Section 4 gives the bill an enforcement mechanism in the form of a private right
to sue. A property owner “who suffers injury as a result of a violation of any
provision of this Act may bring an action to enforce any provision of this Act in the
appropriate Federal or State court ....” Unlike the typical suit, where the plaintiff has
the burden of showing the elements of the cause of action, H.R. 4128 shifts the
burden of proof to the defendant government “to show by clear and convincing
evidence that the taking is not for economic development.” Any such suit must be
brought within a prescribed time window — namely, after the condemnation and the
property’s subsequent use for economic development, but before seven years
following such economic-development use. (But see “Legal Comments on Section
4,” infra, on the possibility that Section 4 also allows suits before and during an
improper condemnation as well.)
Prevailing plaintiffs are to be awarded attorneys’ fees; no comparable provision
is included for prevailing government defendants.
Other Bill Provisions.
Other bill provisions are as follows. Section 13 is a counterpart to Section 2(a)
and 2(b) for the specific case where property of religious and nonprofit organizations
is condemned. In the case of Section 13, condemnation triggers a funds cut-off if the
condemnation occurs “by reason of the non-profit or tax-exempt status of such
organization.” This may be a rough analog to the prohibited “economic
development” purpose in Section 2. House Judiciary Committee proceedings make
clear that the inclusion of Section 13 was motivated by a belief on the part of
7 H.R. 4128 does not actually say that is the purpose of the mandated Attorney General list,
but it would seem the most plausible reading of the bill, and the House committee report
construes it so. H.Rept. 109-262 at 12 (2005).

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committee Members that because religious and nonprofit organizations pay no or
fewer taxes, they are tempting condemnation targets for municipal officials looking
to increase tax revenue.8
Section 11 commands that the bill “be construed in favor of a broad protection
of private property rights ....” In the same spirit but less substantively, Section 10
declares that “[i]t is the policy of the United States to encourage ... the private
ownership of property ...,” and Section 7 expresses the sense of Congress that the use
of eminent domain for economic development is a threat to agricultural and other
property in rural America.
Finally, Section 9(b) instructs that the bill, if enacted, applies prospectively only:
it takes effect in the fiscal year that begins after the date of enactment, and does not
apply to projects for which condemnation has been initiated before enactment.
Legal Comments on Section 2
Delegatees. Section 2(a)’s prohibition on condemnations for, or followed by,
economic development explicitly reaches not only condemnations by states or their
political subdivisions, but also those by entities to which eminent domain power has
been delegated by states and political subdivisions. The inclusion of delegatees,
public or private, presumably reflects the fact that economic-development
condemnations are often carried out not by the state or local government itself, but
by government-created non-profit entities created to implement the project (as in the
Kelo case).
Absence of Time Limit. The Section-2(a) phrase “subsequently used for
economic development” appears to have no outer time limit. This omission raises
the possibility that while a parcel was initially condemned in good faith for a non-
economic-development purpose (as defined in the bill), its use many years or even
decades later for economic development due to unforeseen change in the law, policy
priorities, or funding availability would trigger loss of federal funds per Section 2(b).9
Bear in mind here, as elsewhere in the bill, the broad-construction mandate of
Section 11 favoring private property rights. To avoid a funds cut-off, the condemnor
government would have to return the property, a problematic option after the
condemnee has moved — see discussion of Section 2(c) below.
Absence of Nexus and Proportionality Requirements. The plain meaning of
Section 2(b) is that the suspended federal economic development funds need not be
connected in any way to the economic development project at which the offending
condemnation took place. Indeed, the project need not be slated to receive federal
economic development funds at all. Nor would it appear to matter how many or how
significant the offending condemnations: the condemnation and economic
development of a single, small tract of land triggers the two-year funds cut-off every
8 See, e.g., H.Rept. 109-262 at 8 (2005).
9 Whether the possibility of a future federal funds cut-off would have present consequences
for a municipality’s creditworthiness or bond rating is beyond the scope of this report. See
H.Rept. 109-262 at 26-27 (dissenting views of Reps. Nadler and Scott).

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bit as effectively as a jurisdiction-wide pattern of using condemnation for economic
development.
Spending Power and Necessary and Proper Clause. At first blush, H.R. 4128
appears to be an exercise of Congress’ Spending Power,10 under which it is well-
established that Congress may attach conditions to the grant of federal money so as
to induce the recipients to cooperate voluntarily with federal policy.11 And doubtless,
many of the Kelo bills in Congress are straightforward exercises of this power —
federal money available to the state or locality is made subject to some condition that
there be no condemnation for economic development. If such condemnation is
planned or actually occurs, the same money cannot be transferred.
H.R. 4128 takes a fundamentally different tack. The funds granted during the
year in which the offending condemnations take place are not themselves at risk.
Rather, the funds come with a condition that if a violative condemnation occurs
during the same fiscal year as the money is received, other federal monies are
blocked — namely, economic development funds for the two fiscal years after a court
discerns the prohibited condemnation. This shift from loss of the conditioned money
to loss of separate funds means that the constitutional basis of H.R. 4128 arguably
is not the Spending Clause alone, but rather the Spending Clause together with
Congress’ authority under the Necessary and Proper Clause.12 That Clause has been
construed to empower Congress “to see to it that taxpayer dollars appropriated under
[the Spending Power] are in fact spent for the general welfare ....”13
As either an exercise of the Spending Power alone or the Spending Power and
Necessary and Proper Clause in combination, a discussion of the constitutional limits
on Congress’ use of funding conditions is relevant. One such limit is that the
condition must be related to the federal interest for which the funds are expended.14
This prerequisite has been little explicated by the Court and a spending condition has
yet to be found deficient because of it. Because H.R. 4128 punishes condemnation
for economic development by cutting off only funds promoting economic
development, it would seem to pass this amorphous test.15
10 U.S. Const. art. I, sec. 8, cl. 1: “The Congress shall have Power ... to pay the Debts and
provide for the ... general Welfare ....”
11 South Dakota v. Dole, 483 U.S. 203, 206 (1987).
12 U.S. Const. art. I, sec. 8, cl. 18: “The Congress shall have Power ... To make all Laws
which shall be necessary and proper for carrying into Execution the foregoing Powers ....
The “foregoing Powers” include the Spending Power.
13 Sabri v. United States, 541 U.S. 600, 605 (2004). Sabri explicitly holds that the federally
undesired conduct targeted by Spending Power conditions need not always occur through
use of the conditioned federal money, as is the case with the condition imposed by H.R.
4128 Section 2(a).
14 South Dakota, 483 U.S. at 207-208, 208 n.3.
15 Rep. Sensenbrenner, chairman of the House Committee on the Judiciary and chief sponsor
of H.R. 4128, emphasized the “clear connection between the Federal funds that would be
denied and the abuse Congress is intending to prevent. The policy is that States or localities
(continued...)

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Whether a second (possible) constraint on Spending Power conditions is
satisfied by H.R. 4128 is a closer question. The Supreme Court has suggested that
in some circumstances the financial inducement created by Congress might be so
coercive as to pass the point at which “pressure turns into compulsion”16 — though
once again the Court has never found a congressional condition to violate this
criterion. It is conceivable that the threat of a two-year cut-off of millions of dollars
under many federal programs, triggered by condemnation of a single, small property
later used for economic development, could be viewed as such unacceptable
compulsion.17 Certainly H.R. 4128 presents a sharp contrast to some of the other
Kelo bills in Congress, which terminate only those funds destined for the particular
project at which the offending condemnation took place. The bill contrasts sharply
as well with the facts in the leading Supreme Court decision on Spending Power
conditions, upholding Congress’ creation of “relatively mild encouragement” to the
States — loss of a”relatively small percentage of certain federal highway funds” —
to enact a higher minimum drinking age.18 Again, however, any such compulsion
test is only suggested in the Court’s decisions, and is of poorly understood content.
Returning the Condemned Property. Section 2(c), allowing the offending
condemnor to return the property and thereby end the funds cut-off, does not
explicitly state that the condemnee has to return the money received for the property.
Such a reimbursement requirement is arguably implied, however, possibly including
interest, since the bill otherwise would allow unjust enrichment of the condemnee at
the government’s expense.
Assuming a reimbursement requirement, another issue arises: some condemnees
might not want their property back, having long since moved somewhere else, spent
the compensation on a new home, and settled in. Under a literal reading of Section
2(c), which requires that the state or political subdivision “return[] all real property”
to restore federal funding, such a refusal by the condemnee forecloses the
condemnor’s use of Section 2(c). Query whether a court would read “returns all real
property” more liberally to include bona fide return offers by the condemnor
government that are rejected by the former property owner.
15 (...continued)
that abuse their eminent domain power by using economic development as the rationale for
the takings should not be trusted with Federal economic development funds that could
contribute to similarly abusive land grabs.” H.Rept. 109-262, Part 2 at 32 (2005).
16 South Dakota, 483 U.S. at 211, quoting Steward Machine Co. v. Davis, 301 U.S. 548, 590
(1937).
17 If found to offend the Spending Clause in certain applications by reason of a
“compulsion” standard, the two-year funds cut-off would still be available in others. Section
9(a) contains a severability clause: “[i]f any provision of this Act, or any application thereof,
is found unconstitutional, that finding shall not affect any provision or application of the Act
not so adjudicated.”
18 South Dakota, 483 U.S. at 211.

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Legal Comments on Section 8
Entities Open to the Public “As of Right.” Section 8(1) defines “economic
development,” the prohibited condemnation purpose under the bill, but exempts “an
entity, such as a common carrier, that makes the property available to the general
public as of right, such as a railroad or public facility.” In committee markup, the
question whether this exemption includes sports stadiums and shopping centers was
debated at length.19 Representative Nadler argued that it does. In response,
Representative Goodlatte contended that shopping centers and private stadiums are
not within the exemption because they are not open to the public “as of right,” but
that public stadiums might very well be.
“Removing Harmful Uses.” Section 8(1) offers another exemption from
“economic development” for “removing harmful uses of land provided such uses
constitute an immediate threat to public health and safety.” The “immediate threat”
qualifier is of interest, because as the following paragraph argues, it seems to extend
H.R. 4128 well beyond the sort of economic development project involved in Kelo.
One of the leading Supreme Court precedents leading up to Kelo was Berman
v. Parker,20 holding that private-to-private condemnation for blight-removal
redevelopment is a public use. Another leading Kelo precedent is Hawaii v.
Midkiff,21 where the Court found a public use in a Hawaii statute allowing private-to-
private condemnation to alleviate the economic harms of highly concentrated land
ownership. In Kelo, Justice O’Connor’s four-justice dissent explicitly left these
precedents intact. While private-to-private condemnation for economic development
as in Kelo was constitutionally objectionable, she wrote, the elimination of property
uses that “inflict[] affirmative harm on society,” as the urban blight in Berman and
concentrated land ownership in Hawaii, was a legitimate public use. As noted above,
however, Section 8(1)(B) does not exempt use of condemnation to remove any
harmful property use, but only those involving an immediate threat. Thus, it seems
H.R. 4128 would punish certain private-to-private condemnations that Justice
O’Connor and her fellow dissenters would find unobjectionable.
The “immediate threat” qualifier may serve to discourage the use of eminent
domain for redevelopment in marginal cases of blight. Accusations in the literature
are common that the term “blight” is construed overly expansively by localities, and
is often applied to neighborhoods not exhibiting the classic blight-related ills of
generally dilapidated structures, crime, drugs, etc. In these milder instances of
blight, an “immediate threat” may not be judicially deemed present. And, the
interpretational latitude in a vague term such as immediate threat, combined with the
serious funding consequence if a jurisdiction guesses wrong, would likely deter
condemnation in a wide “grey area” of moderate blight as well.
19 H.Rept. 109-262 Part 2 at 43-49 (2005).
20 348 U.S. 26 (1954).
21 467 U.S. 229 (1984).

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Condemnations and Projects with Multiple Objectives. It often happens that
a condemnation, or the project it serves, aims at more than one goal — e.g., both
increasing tax revenue and removing a harmful use of property. Query whether a
mixed-purpose condemnation constitutes “economic development” for purposes of
the bill if some of its purposes fall within the bill’s definition of economic
development and others do not.
Legal Comments on Section 4
Owners Only. Section 4, creating a private right of action to enforce the bill,
applies by its terms only to owners of property, not lessees (renters). But displaced
lessees could still, like displaced owners, receive compensation under the Takings
Clause of the Constitution, plus moving expenses and replacement housing costs
under the Uniform Relocation Act22 or its state-enacted counterparts.
Third Parties. Section 4 makes its right of action available to “[a]ny owner of
private property who suffers injury as a result of a violation of any provision of this
Act ....” This language might lead one to think that the right of action can be asserted
not only by the condemnee, but by third parties, such as a property-owner neighbor
whose property value tumbles (“suffers injury”) when the prohibited condemnation
for economic development results in a big-box retailer next door. Coverage of third
parties is undercut, however, by subsequent language in Section 4 stating that such
actions are to “follow[] the conclusion of any condemnation proceedings condemning
the private property of such owner.”23
Remedies Available. Does Section 4 allow a court to enjoin an improper
condemnation before or during the condemnation proceeding, in addition to
suspending federal funds afterwards? The sounder argument, it seems, is that it does
not. Section 4(b), which forecloses suits until “the property is used for economic
development following the conclusion of any condemnation proceedings,” is best
read as applying to all actions under Section 4.24 If the action cannot be filed until
the “conclusion” of the condemnation proceeding, plainly it cannot be used to
prevent it from happening. The dual-remedy reading cannot be completely
discounted, however. Section 4(b) says that an action “may be brought” if the
property is used for economic development after the condemnation, not that such
action “may only be brought” at that time. Arguably, this suggests that Section 4(b)
speaks to a different type of private right of action than Section 4(a) — one following
the condemnation, seeking a funds cut-off — leaving 4(a) as the authority for
22 More formally, the Uniform Relocation and Real Property Acquisition Policy Act, 42
U.S.C. §§ 4601-4655. The act compensates “displaced persons” at both federal projects and
those undertaken by non-federal entities with federal financial assistance. See definition of
“displaced person” at Section 101(6)(A) of the act, 42 U.S.C. § 4601(6)(A).
23 Emphasis added.
24 Section 4(b) is titled “Limitation on Bringing Action,” not “Limitation on Bringing
Certain Actions.” In addition, Section 6 requires the Attorney General to make annual
reports to Congress identifying states and political subdivisions that have lost federal
economic development funds for violating the bill, but makes no mention of condemnations
terminated pursuant to the bill.

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injunctive actions before or during the condemnation, aimed at thwarting it. And
again, Section 11 calls for the bill to be construed in favor of broad property rights
protection.
There appears to be no authorization in the bill for a damages (money paid to
the plaintiff) remedy. Further, it might be contended that Section 2(c)’s
“opportunity” for states and localities to cure the violation by returning the real
property25 is only that, a choice to be made by the state or locality in its sole
discretion. That is, return of the real property (assuming the displaced property
owner wishes to buy it back) probably cannot be compelled by a court.
If the foregoing arguments are correct, then the only remedy available in a
Section 4 action (for non-federal condemnations) is for the court to order the two-
year cut-off, and return of any federal funds mistakenly granted during this period.
Standing to Sue. As to the remedy of blocking federal funds to the offending
jurisdiction and mandating reimbursement of improperly disbursed funds, Section 4
raises a constitutional question. Does the plaintiff seeking such remedy satisfy the
standing to sue requirements derived from Article III of the Constitution? As the
Supreme Court explains, the Article III “case” or “controversy” prerequisite for
invoking the federal judicial power means that to establish standing, a plaintiff must
show
(1) it has suffered an “injury in fact” that is (a) concrete and particularized and
(b) actual or imminent ... ; (2) the injury is fairly traceable to the challenged
action of the defendant; and (3) it is likely, as opposed to merely speculative, that
the injury will be redressed by a favorable decision.26
Section 4 plaintiffs seeking funds termination plainly meet the “injury in fact”
requirement (they have been forced to move, and possibly have uncompensated
costs) and traceability requirement (being forced to move was caused by the
challenged condemnation by the defendant). But whether redressability is satisfied
is more doubtful. Obviously a funds cut-off does not of itself redress the injury that
the plaintiff has suffered. But query whether redressability would be satisfied if the
funds cut-off greatly increases the likelihood that the condemnor government will
elect to return the property, pursuant to Section 2(c).
Eleventh Amendment/State Sovereign Immunity. The Eleventh Amendment27
bars private actions against unconsenting states in either federal or state court, with
exceptions for congressional abrogation under the Fourteenth Amendment Section
25 The word “opportunity” is used in the title of Section 2(c) — “Opportunity to Cure
Violation” — not in its text.
26 Friends of the Earth v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 180
(2000), quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992).
27 U.S. Const. amend. XI: “The Judicial power of the United States shall not be construed
to extend to any suit in law or equity, commenced or prosecuted against one of the United
States by Citizens of another State ....”

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5 and prospective injunctions against state officials.28 The issue is whether the
Amendment is an impediment to suits against states under Section 4.
As a threshold matter, the Eleventh Amendment does not apply to political
subdivisions of states.29 Thus the Amendment is not implicated in most economic-
development condemnations, done as they are by political subdivisions or their
delegatees. In this connection, we read bill Section 2(a) to mean that when a political
subdivision or its delegatee violates Section 2(a), the ineligibility for federal funds
imposed by Section 2(b) is visited exclusively upon the political subdivision, not the
state.
As for suits against states, Section 4 pronounces that “a state shall not be
immune under the eleventh amendment ... from any [action under Section 4] in a
Federal or State court of competent jurisdiction.” The question is whether this
language is adequate to effect a state waiver of Eleventh Amendment immunity by
virtue of the state’s acceptance of federal economic development funds following the
bill’s enactment. The answer appears to be yes: the Supreme Court in dicta, and a
majority of the federal circuits in holdings, have interpreted nearly identical language
in another federal statute to be sufficient to waive state sovereign immunity upon
state acceptance of federal funds.30
Legal Comments on Section 3
The Section 3 prohibition on federal condemnations for economic development
raises issues distinct from those in the state/political subdivision sections of the bill.
For one thing, the Section 3 prohibition arguably covers only condemnations with the
direct purpose of economic development. Recall that Section 2’s prohibition on
states and political subdivisions applies not only to the use of eminent domain “over
28 The description of the Eleventh Amendment’s coverage in the footnoted sentence is
plainly quite different from the text of the Amendment itself (previous footnote). The
discrepancy comes about through numerous Supreme Court decisions interpreting the
Amendment and associated principles of state sovereign immunity. See generally CRS
Report RL30315, Federalism, State Sovereignty, and the Constitution: Basis and Limits of
Congressional Power, by Ken Thomas.
29 Mt. Healthy School Dist. v. Doyle, 429 U.S. 274, 280 (1977).
30 In Lane v. Pena, 518 U.S. 187 (1996), the Court addressed the Rehabilitation Act of 1973,
which bans discrimination solely on the basis of disability in any federally funded program
or activity. 29 U.S.C. § 794(a). The question before the Court was whether the act waived
the federal government’s sovereign immunity from suit. In answering no, the Court noted
language amending the act stating that “A State shall not be immune under the Eleventh
Amendment ... from suit in Federal court for a violation of Section 504 of the Rehabilitation
Act of 1973 ...” — words similar to those used in H.R. 4128 Section 4. Though this H.R.
4128-like language did not aid the private claimant’s suit against the United States, said
Lane, it was an “unambiguous waiver” of the states’ Eleventh Amendment immunity.
Since the dicta in Lane, at least eight federal circuits have held that the Rehabilitation Act
amendment’s phrase waives the sovereign immunity of states electing to participate in
federally funded programs. See Koslow v. Pennsylvania Dep’t of Corrections, 302 F.3d 161
(3d Cir. 2002) (collecting cases).

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property to be used for economic development,” but also “over property subsequently
used for economic development.”31 Given that Section 3, a provision of the same
bill, omits the latter phrase, the presumption arises that Congress had a narrower
vision for Section 3. If so, this relieves the United States of concern that should it in
the future use eminent domain to assemble tracts of land for a federal facility (such
as a military base), the property upon termination of federal use may be conveyed to
private owners without running afoul of the bill.32
A second issue is what remedies are available when a federal agency violates
Section 3. The funds cut-off in Section 2 applies only to states and political
subdivisions. If one takes the view (see “Legal comments on Section 4” section) that
a Section 4 claim can only be brought after the condemnation has occurred, an
injunction against the improper federal condemnation is ruled out. Perhaps the lack
of an explicit remedy in the bill for federal violations would be judicially viewed as
giving courts leeway to fashion equitable remedies against the offending federal
condemnor.
The Bond Amendment
The Bond Amendment to the Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act for FY2006 is now enacted law: P.L. 109-115, Section 726. Its
full text states
No funds in this Act may be used to support any federal, state, or local projects
that seek to use the power of eminent domain, unless eminent domain is
employed only for a public use:
Provided, That for purposes of this section, public use shall not be construed to
include economic development that primarily benefits private entities:
Provided further, That any use of funds for mass transit, railroad, airport, seaport,
or highway projects as well as utility projects which benefit or serve the general
public (including energy-related, communication-related, water-related and
wastewater-related infrastructure), other structures designated for use by the
general public or which have other common-carrier or public-utility functions
that serve the general public and are subject to regulation and oversight by the
government, and projects for the removal of blight ... or brownfields ... shall be
considered a public use for purposes of eminent domain:
Provided further, That the Government Accountability Office ... shall conduct a
study to be submitted to the Congress within 12 months of the enactment of this
Act on the nationwide use of eminent domain, including the procedures used and
31 Emphasis added.
32 Federal facilities sitting on acreage condemned prior to H.R. 4128’s taking effect are
unaffected by the bill. Thus military bases now being conveyed into private hands per the
Defense Base Closure and Realignment Act of 1990 are not covered.

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the results accomplished on a state-by-state basis as well as the impact on
individual property owners and on the affected communities.
By its reference to “funds in this Act,” the Bond Amendment limits itself to federal
monies used or disbursed by the agencies receiving appropriations under the statute,
and applies only to FY2006 funds.
The second paragraph of the Amendment, excluding from public use instances
of economic development that “primarily” benefits private entities, is a rough
paraphrase of the often-stated rule that condemnations producing private benefits
constitute a “public use” only if the private benefit is merely incidental or secondary
to a primary public purpose.33 Some condemnation decisions, however, declare or
suggest a broader view of public use — namely, that even projects primarily
benefitting private entities can be deemed for a public use, as long as there is some
public benefit.34 Supreme Court decisions, too, suggest such a broad view of public
use — stating that condemnation not be solely for a private use and be “rationally
related to a conceivable public purpose.”35 Within the ambit of the Amendment, the
second paragraph makes clear that the former and narrower of these public use
standards applies.
The third paragraph of the Amendment, declaring various projects to be public
uses under the Amendment, conforms closely to existing Takings Clause
jurisprudence as to what constitutes a public use. Particularly is this so because the
paragraph uses the descriptors “benefit or serve the general public,” “designated for
use by the general public,” and “serve the general public” — echoing the Supreme
Court’s modern reading of constitutional public use as meaning “for a public
purpose.”36 Many of the listed items are facilities to which the public has physical
33 See, e.g., Swan Lake Hunting Club v. United States, 381 F.2d 238 (5th Cir. 1967)
(condemnation of land for migratory bird refuge is for public use where private benefit to
hunters is “incidental” to primary conservation purpose); Bailey v. Myers, 76 P.3d 898, 904
(Ariz. App. 2003) (condemnation of automotive repair facility for relocation of hardware
store yielded insufficient public benefit; state constitution requires that anticipated public
benefits must “substantially outweigh” private nature of the end use); Waldo’s, Inc. v.
Village of Johnson City, 543 N.E.2d 74 (N.Y. 1989) (condemnation of land to enlarge
intersection is for public use of relieving traffic congestion; incidental private benefit to
adjacent private property does not invalidate dominant public purpose).
34 See, e.g., Town of Corte Madera v. Yasin, 2002 WL 1723997, *5 n.5 (Cal. App. 2002)
(unpublished) (“mere [public] benefit is enough”).
35 See, e.g., Nat’l R.R. Passenger Corp. v. Boston and Maine Corp., 503 U.S. 407, 422
(1992) (emphasis added). See also Kelo, 125 S. Ct. at 2663, 2666 (stating that the case
“turns on ... whether the City’s development plan serves a ‘public purpose,’” while
acknowledging that “the government’s pursuit of a public purpose will often benefit
individual private parties”). Senator Bond, too, appeared in his statement accompanying
introduction of his amendment to read Kelo as supporting the any-public-benefit-is-enough
view. 151 Cong. Rec. S11513 (daily ed.) (Kelo “would essentially allow the use of eminent
domain in virtually any circumstance where the locality believes some benefit could be
derived.”).
36 Kelo, 125 S. Ct. at 2662. Kelo explains that the Supreme Court’s embrace of this “public
(continued...)

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access, satisfying even the narrow, nineteenth century sense of public use under
which condemnation into private ownership required that the public still have
physical access to the property. Another item listed in the third paragraph, private-to-
private transfer for purposes of blight removal, has been specifically anointed by the
Court as a public use under the Takings Clause.37 There can be little doubt as well
that private-to-private transfer for cleanup of a contaminated brownfield would be a
constitutional public use.
Despite the alignment of the Amendment’s itemized public uses and non-public
use with Takings Clause case law, the Amendment does work one change in the law:
its funding prohibition. Under pre-existing law, the judicial invalidation of a state
or local condemnation as not for a public use did not require a cut-off of federal
funding for the associated project. This change effected by the Bond Amendment is
enhanced in importance if the first paragraph is construed broadly to trigger a funds
cut-off when eminent domain is used for other than a public use anywhere in the
jurisdiction, rather than solely as part of the project in question.
As to both the second and third paragraphs of the Amendment, the enumeration
of public uses and non-public uses cannot be read as exhaustive — plainly, there are
countless other, non-listed purposes for which condemnation is used. Presumably,
such other project purposes would have to meet the constitutional standard of public
use.
The final paragraph of the Bond Amendment calls for a GAO study “on the
nationwide use of eminent domain ....” By its literal terms, this mandate is of
expansive scope: it includes federal, state, and local condemnations, and is not
limited to, or even specially focused on, the Kelo issue of condemnation for
economic development. Senator Bond’s statement on introducing the Amendment,
however, does suggest such a constrained focus for the report, dwelling as it does
exclusively on Kelo and similar circumstances.38 Similarly, the Senator’s statement
implies that report coverage of inverse condemnation, literally included in the term
“eminent domain,” was not intended.39
36 (...continued)
purpose” standard originated over a century earlier. See Fallbrook Irrigation Dist. v.
Bradley, 164 U.S. 112, 161-162 (1896).
37 Berman v. Parker, 348 U.S. 26 (1954). Even the vigorous four-justice dissent in Kelo
endorsed the use of private-to-private condemnations for blight removal. 125 S. Ct. at 2674.
38 151 Cong. Rec. S11515 (Oct. 19, 2005) (daily ed.).
39 “Inverse condemnation” is the name given to the procedural reverse of a traditional
condemnation action: the property owner sues the government, rather than the other way
around. The property owner argues that a de facto exercise of eminent domain has “taken”
his or her property, as through severe regulation, even if no formal condemnation action has
been filed by the government. Because inverse condemnation is at bottom an
unacknowledged exercise of eminent domain, the possibility arises that the Amendment’s
mandate for a study on eminent domain includes inverse condemnation.

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