Iowa Ponders a Legislative Change
Three Iowa legislators plan to co-sponsor bills that some have suggested will “strengthen Iowans’ private property rights” by limiting the taking of private property through the use of eminent domain. Two new bills are reportedly in the works. The first would limit electric transmission line projects to those which provide a “significant portion” of the power transmitted to customers in Iowa, while the second would limit the use of eminent domain to “public use” purposes.
The proposed legislation appears to be triggered by the Rock Island Clean Line, a new $2 billion merchant transmission line that, if built, would deliver 3,500 megawatts of wind power from northwest Iowa and the surrounding region to Illinois and other states to the east. The power would be transmitted by a 500-mile overhead, direct current transmission line.
The proposal prohibiting the use of eminent domain unless the transmission line supplies a “significant portion” of its power to Iowa customers is interesting and problematic. This is a common complaint of electric transmission line opponents, particularly when a line is built, like the Rock Island Clean Line, to move either cheaper or cleaner electric power to locations that want it. Apparently northwest Iowa is an ideal location to generate cheap, clean electric power that Iowans do not need or want (or do not want to pay for), so the producers want to move it to areas where it can be sold. How is this different than the production and transmission of natural gas or liquid petroleum gases, which Iowans do not produce but use in large amounts (particularly by the ethanol industry), because other states allow gas pipelines to run through them? In addition, one wonders how much of the power would have to be used by Iowans to reach the “significant” threshold.
The second bill, which would limit the use of eminent domain to “public use” purposes, is not controversial at all. State legislation relating to the “public use” concept has been commonplace since the 2005 U.S. Supreme Court decision in Kelo v. City of New London, where a divided court held the city’s condemnation of private property, and subsequent transfer of that property to a private developer for future economic development, constituted a “public use” within the meaning of the 5th Amendment. In other words, the court found that the ‘takings clause’ of the Fifth Amendment (‘nor shall private property be taken for public use without just compensation’) placed virtually no restrictions on the power of government agencies to acquire private property under eminent domain and then transfer the property to private entities engaged in economic development projects.
In response to Kelo, a majority of states adopted some form of legislation restricting government agencies’ acquisition of private property and subsequent transfer to private developers. In Wisconsin, 2005 Act 233, which became effective on April 12, 2006, accomplished this by redefining blight and providing that property that is not blighted property may not be acquired by condemnation if the condemnor intends to convey or lease the acquired property to a private entity.
The stated purpose of the legislation is to “protect private property rights” of predominantly agricultural property owners. The proposed “public use” legislation will do that, and most would agree this legislation strikes a better balance between private property rights and the public need (although, oddly, a similar provision failed to pass the last legislative session). But the shortsighted, protectionist proposal requiring a “significant portion” of the power to used by Iowans is far more problematic and likely should be abandoned.