Subcommittee approves bill to raise eminent-domain compensation floor to 150%

The appropriations and budget subcommittee for transportation on Monday approved Representative Sterlings proposed committee substitute for House Bill 3758, which would require that when property is taken or damaged through eminent domain for new state infrastructure, compensation be the greater of 150% of the taken propertys fair market value or the amount needed for the owner to purchase a comparable replacement property. The subcommittee voted 5-4 to move the measure forward.

"This bill provides that if property is taken or damaged through eminent domain to build a new state infrastructure, the compensation must be greater of 150% of the taken property's fair market value or the amount needed for the owner to buy a comparable replacement property," Representative Sterling said while explaining the PCS. He added that deductions for remaining property benefits would be allowed only if they were "measurable and supported by clear evidence," and that "general benefits to the community are not valid reasons to reduce compensation."

Members questioned the scope and fiscal effects of the benchmark. Representative Eddie Dempsey asked whether the change would prevent the state from later pursuing litigation to recover what it deemed an overpayment after an owner accepted a check. "After they agree on a price and stuff, will they be able to come back and sue them to get money back?" Dempsey asked. Sterling said staff are still working on language to address such concerns and that he would research whether the bill should include anti-recapture protections.

Representative Crosswhite Hater and others raised potential cost impacts, citing estimates over the weekend that the change could increase costs for road projects "up close to $200,000,000." Sterling said the intent is to set an upfront benchmark that could reduce court costs and provide predictable relief for owners, and he pointed to discretionary budget authority within OTA and rising acquisition costs as factors that could absorb some fiscal impact. "Were trying to take care of people that's gonna be affected by this," Sterling said, adding he could not predict litigation outcomes but that courts frequently award additional money after cases proceed.

Representative Archer asked whether setting a 150% minimum would remove a landowners right to contest an award. Sterling answered that 150% would be a minimum and that owners would still have opportunities to negotiate or contest awards.

The PCS was adopted as the working draft before Sterlings explanation. The subcommittee recorded five ayes and four nays; the chair declared the motion passed. Sterling thanked members and said he would continue working on the bills language with staff.

Next steps: the bill passed out of the subcommittee and will proceed according to the Legislatures committee process; Sterling said he will continue to solicit input and refine the draft.