The New York Times reports that the U.S. House approved H.R. 4127 entitled the “Private Property Protection Act of 2005” by a vote of 376 to 38 on Thursday, November 3, 2005. The bill would deny federal economic development assistance to any State or local entity that uses the power of eminent domain for economic development and would prohibit Federal agencies from engaging in this practice. The bill would also specifically prohibit State and local governments from taking private property and conveying or leasing that property to another private entity, either for a commercial purpose or to generate additional taxes, employment, or general economic health.
A State or local government found to have violated this prohibition would be ineligible for certain federal economic development funds for two years, but could become eligible by returning or replacing the property. The bill would give private property owners the right to bring legal actions seeking enforcement of these provisions and would waive States’ constitutional immunity to such suits.
The bill was introduced in response to the U.S. Supreme Court decision, Kelo v. City of New London. In Kelo, the Court held that economic development as a public use for the taking of private property under the U.S. Constitution's Fifth Amendment.
A similar bill is under consideration in the U.S. Senate.