Opinion: Potential eminent domain trend may favor property owners

Alec Martinez

During the 2022 legislative session, the Missouri General Assembly passed legislation amending Missouri’s eminent domain laws in a manner that provides greater protections to private agricultural property owners. House Bill 2005, which was delivered to Gov. Mike Parson on May 18, requires, most notably, that electrical corporations relying on eminent domain to erect electric transmission lines across private agricultural land compensate the landowner for 150% of the fair market value of the easement across the land.

As a legal doctrine, eminent domain gives the state and its political subdivisions, along with limited categories of private entities, the ability to take private property for public use in exchange for just compensation. Most commonly, eminent domain is invoked to use private land for transportation, utilities, electric lines and the like.

In practice, and as it relates to HB 2005, electrical corporations rely on eminent domain actions (also commonly referred to as condemnation actions) in Missouri courts to obtain necessary easements to construct electric lines across private property, when they are unable to agree to terms with a property owner. Such was the case for farmers in northern Missouri who became involved in eminent domain proceedings as a result of the Grain Belt Express project, which certain legislators are citing as the inspiration for the amendments contained in HB 2005.

Eminent domain lawsuits are subject to, and governed by, Missouri statutes and a breadth of case law, which endeavor to balance the significant competing interests at play.

On one hand, Missouri law establishes a mechanism to give providers of public goods and services the ability to obtain the right to access and use private property, when necessary. At the same time, however, applicable law imposes a number of requirements and jurisdictional prerequisites, which clearly acknowledge the fundamental importance of private property rights.

Unsurprisingly, determining the amount of compensation for property taken by eminent domain often leads to disputes between the landowner and condemning party, driving the parties into litigation and increasing costs for all involved.

Through HB 2005, which is likely to be signed into law, the Missouri General Assembly has taken steps to lighten the financial burden of electric transmission line condemnation proceedings on agricultural landowners. Among other changes, HB 2005 makes the following amendments to existing law governing eminent domain proceedings instituted by electrical corporations for Missouri farming property:

• Private agricultural property owners in eminent domain proceedings for electric transmission lines must be compensated for 150% of the fair market value of the property;
• The court-appointed commissions tasked with determining the fair market value of the condemned land during eminent domain proceedings must contain at least one farmer who has lived in the county where the property is situated for at least 10 years; and
• The condemning authority must begin putting the easement to use within seven years of the date that the easement rights are recorded or must return the easement to the private owner without reimbursement of the compensation paid to the private owner.

By increasing the base compensation for landowners and including agricultural professionals on property value commissions, the bill ensures that eminent domain proceedings will become more expensive for electrical corporations, if and when it takes effect. This, paired with a “use it or lose it” obligation for the electrical corporation to put the easement to use within seven years of obtaining the property right, requires the corporation to engage in thorough planning and due diligence before initiating eminent domain actions.

These changes will be significant for Missouri’s private agricultural landowners, and they’ll hint at a potential trend toward greater protections for landowners in eminent domain proceedings. In the wake of the passage of HB 2005, Missouri lawmakers have called for broader reforms to the laws governing eminent domain, including portions of eminent domain law affecting nonagricultural property.

Based on the language of HB 2005, it is fair to expect that future amendments to Missouri’s eminent domain statutes will take similar steps to benefit private property owners and increase costs to condemning authorities.

Alec Martinez is an attorney for Spencer Fane LLP. He can be reached at
ammartinez@spencerfane.com.