Eminent domain inaction could delay projects

HELENA — As the legislative session winds down to its final days, Montana lawmakers appear to be no closer to taking action on eminent domain than they were at the beginning, opening the possibility that massive utility line projects will be put on hold for another year or more.

How to resolve disputes over eminent domain, which allows the taking of private property for public use, and private property rights has proven challenging to the Republicans who control the Legislature.

The conflict is dividing some Republican lawmakers on how to prioritize between two basic conservative tenants: business development and private property.

With less than two weeks left in the session, the party seems unable to resolve the disputes in its own caucus and Democrats have yet to signal their support for any one measure.

A last-minute effort to introduce a compromise measure has received a tepid first reception from lawmakers and lobbyists, bringing closer to reality the possibility that the body may take no action

Few people on either side of the debate are happy about that prospect, utility companies may have to stop million dollar projects and lay off workers, while landowner groups are left without strong bargaining rights to sell their land.

Ten months ago, the Montana Alberta Tie Line, plans for a 215-mile, $213 million power line across northern Montana, ran into a jam. Shirley Salois and the Canadian company building the line could not reach a settlement for the project to cross her property east of Cut Bank. Salois argued teepee rings and wetlands are threatened by the project.

Montana Alberta Tie Ltd took legal action in July to condemn the land for what it says is public use.

District Judge Laurie McKinnon of Cut Bank ruled in that case that such a private corporation does not have the power of eminent domain, bringing the proposed project to a standstill. Many landowners lined up behind Salois and the court ruling, not wanting to be forced to sell their property on unfavorable terms.

Utility companies, on the other hand, grew concerned.

NorthWestern Energy says it needs the power of eminent domain to build a separate transmission line through southwestern Montana.

The businesses feared the ruling could let one obstinate landowner halt multi-million dollar business projects and asked something to be done to let their businesses continue to use eminent domain.

Democratic Gov. Schweitzer said something needed to give. In his address to the Legislature at the beginning of the session, Schweitzer implored lawmakers to take action so businesses could continue their projects. The governor said solving the issue could be the most important issue of the session, one that could cost the state thousands of jobs if not acted on.

"Montana expects you to fix the eminent domain laws. Do it soon, do it now," Schweitzer said.

Republican leaders agree that it's an issue that needs to be resolved.

"You have to have at some point eminent domain so you don't have a lone holdout stop the state's economy from growing," said Majority Leader Jeff Essmann, R-Billings, after he drafted the most recent proposal on the issue.

Yet inaction, leaving businesses without the power of eminent domain, could easily rule the day.

Early on in the session, two Republican-backed measures became the clear frontrunners to resolve the dispute between landowners and businesses.

House Bill 240 was billed as a landowner-friendly measure, giving property owners more power when bargaining with businesses to resolve a land dispute.

Strong Republican property rights advocate Rep. Kerry Flynn of Townsend carried the bill, shepherding the bill from committee to committee and finally to the House floor. But there, Flynn decided he had lost control of his measure.

Flynn told the chamber he no longer felt his bill would bolster property owners like he intended and it was possible businesses would take advantage of the proposal as it was written. Flynn voted against his measure, and told the rest of the representatives to do the same. The measure failed 90-9.

A bill to give businesses the power of eminent domain, House Bill 198, cleared the House but is now tied up in the Senate Energy and Telecommunications Committee. Republicans' struggles with the dispute of business development and landowner rights remain unresolved and Democrats seem to be in no hurry to give their votes to resolve the issue.

Chairman of the Committee Sen. Alan Olsen, R-Roundup, wouldn't rule the bill out, but said it would be very tough to move the bill forward.

Pressure is building to take action on the measure that has languished in committee for over a month.

Planning in case both bills to fail, Senate Republican leaders have tried to patch together a last minute bill, LC 335, to break the log jam over landowner and business interests.

Senate Majority Leader Essmann said the measure aims at strengthening the hand of the landowner when resolving disputes but also allowing for the use of eminent domain as a last resort for utilities.

The measure didn't go far enough for some property rights advocates and had a lukewarm reception from business lobbyists.

MATL spokesperson Darryl James said the way the bills have progressed so far in the Legislature has been disappointing and the new measure did little to resolve their problems. Eyeing the impending morass, MATL is hoping to have their issue determined by the Montana Supreme Court if lawmakers can't take action on eminent domain.

If things stay the same, James said it could be a year before the court takes up their case and the company may have to shut down its operations in the meantime forcing the company to let workers go.

"If we are facing a shutdown, the construction crews are between 80-100 people," James said.

People on the other side of the issue are no happier about how things have deadlocked in the Legislature.

Errol Rice of the Montana Stockgrowers Association said he would rather have seen the Legislature innovate a solution than take no action at all.

The only step to deal with the problem that looks to be moving through the Legislature is SJ 21, a study bill that would delay definitive action on the issue for another two years.

"We obviously have not come to an agreement on it right now," Rep. Flynn said.

"I don't think it's a victory for either side," he said.