The truth about HB 198 - eminent domain

The 2011 Montana Legislature is over. House Bill 198, the eminent domain bill, passed and is now law. The bill did NOT expand the traditional scope of eminent domain in Montana. Since Montana's early days, eminent domain has been an essential (but rarely used) tool to build important infrastructure. HB 198 simply clarified that this would still be the case in the future.

HB 198 faced strenuous opposition from groups in north-central and southwestern Montana attempting to obstruct construction of the Montana Alberta Tie Limited and Mountain States Transmission Intertie transmission lines. They were joined by far right conservatives who tried to make eminent domain a property rights issue and the Northern Plains Resources Council, an environmental group, which latched onto eminent domain as a way of obstructing coal, oil and gas development in eastern Montana. The opposition groups falsely claimed that HB 198 greatly expanded the use of eminent domain; granted such authority to foreign corporations and for-profit companies; eliminated the "public need" justification for acquiring private property; and that HB 198 would hurt landowners.

But, those claims are not true. The substantive text of HB 198 states:

Section 1. Power of eminent domain. A public utility as defined in 69-3-101 may acquire by eminent domain any interest in property, as provided in Title 70, chapter 30, for a public use authorized by law to provide service to the customers of its regulated service.

Section 2. Power to exercise eminent domain. A person issued a certificate pursuant to this chapter may acquire by eminent domain any interest in property, as provided in Title 70, chapter 30, for a public use authorized by law to construct a facility in accordance with the certificate.

The entities now recognized as public utilities have had the power of eminent domain since Montana was a territory. In December 2010, a district court in Glacier County ignored almost 140 years of legal precedent and invalidated that law.

Section 2 of HB 198 simply affirms a Montana Supreme Court decision rendered in 1986 (Montana Power v. Fondren) which recognized that a party who obtained a permit from the Montana Department of Environmental Quality to build a large power line or pipeline has the right to use eminent domain to acquire the necessary right-of-way to construct the project. Without such authority one or two landowners would be able to veto projects essential to society or hold the project hostage until their ransom demands were met.

Contrary to assertions made by the opponents, HB 198:

1. Did not increase a utility's powers of eminent domain. HB 198 simply restored those powers to what they were before the December 2010 district court decision.

2. Did not grant eminent domain authority to foreign corporations. They've had that authority since the Legislature enacted a bill in 1907. The Legislature did so with good reason. Montana benefits from capital investment in infrastructure.

3. Did not grant private businesses or individuals a new or unprecedented right to use eminent domain. Those parties have always had the right of eminent domain, not just in Montana, but in all states. Private businesses provide many of the services necessary for society including, but not limited to, electricity, natural gas, telecommunications, railroads and often water.

4. Did not eliminate the "public need" test before using eminent domain. Before any party can use eminent domain, it must be for a public use as described in Section 70-30-102, Montana Code Annotated. Montana law recognizes 45 public uses including "electricity energy lines." Likewise, before the state can issue a permit under the Major Facility Siting Act, the project must show "the basis of the need for the facility" and that it "will serve the public interest, convenience, and necessity" (Section 70-20-301, MCA).

5. Did not harm landowners. HB 198 didn't change a single word in the eminent domain statute (Title 70, chapter 30) where the due process protections for landowners are found. Nor did HB 198 change the obligation of a party exercising eminent domain to pay just compensation for the property acquired.

HB 198 is a straightforward piece of legislation vital to the provision of utility services throughout Montana, in a manner consistent with the rest of the country and essential for economic development, and that's why the legislation passed.