Tuesday, May 10, 2011

Montana's eminent domain bill HB 198 becomes law without Governor's amendment

On Thursday, May 12, Montana Governor Brian Schweitzer allowed Montana House Bill 198 (HB 198) concerning eminent domain to become law. Despite the imbalanced aspects within HB 198 favoring big business over landowners' rights, Gov. Schweitzer chose to not veto the bill allowing it to become law.

In April, Gov. Schweitzer expressed his desire for an expiration date to the bill allowing it to only exist as a temporary measure for 2 years which would allow the Legislature time to work out a more balanced bill. At that time, Schweitzer indicated that he would use an amendatory veto to ask the Legislature to terminate the bill in 2013. Although Schweitzer complained last week that the bill left land owners at a disadvantage, he explained that he would allow the bill to become law in an effort to protect the state's economy. HB 198 has been touted as a "jobs bill" by supporters.

HB 198 expands the power of eminent domain to private utilities constructing "merchant" lines (for-profit, private utility lines). Historically, in Montana public utilities have used the power of eminent domain to condemn private property for public utility projects. HB 198, however, grants the power to condemn private property to private utility companies. Specifically, HB198 was introduced and championed through the Montana Legislature for the purpose of allowing Canadian-based Tonbridge Power to take property for the Montana Alberta Tie Limited (MATL) and NorthWestern Energy to take property for its Mountain States Transmission Intertie (MSTI).

When constructed MATL will be a private "merchant" (for-profit) 214-mile transmission line that spans from Lethbridge, Alberta across Montana ranches, farms and homesteads into Great Falls, Montana allowing the transmission of power between the two markets. The MSTI project will run through Montana property connecting substations in Townsend, Montana and Jerome, Idaho. Energy carried on both the MATL and MSTI line will be largely generated on Montana wind farms for the benefit of out-of-state and Canadian consumers.

Prior to the recent passage of HB 198 and the Governor's decision to let it become law, the MATL project has been on hold as the result of a 2010 court ruling in favor of Montana's private property owners. In December, District Judge Laurie McKinnon opined that “MATL does not possess the power of eminent domain, either express or implied, and it has no authority to take the private property of a nonconsenting landowner.” Judge McKinnon's ruling halted MATL's use of eminent domain to take private property for the transmission line. MATL appealed the case to the Montana Supreme Court. However, the attorney representing MATL filed a motion last week with the Court requesting that the case be returned to the lower court with instructions to enter an order permitting MATL to condemn the property, pursuant to HB 198, which is retroactive.

In the meantime, a grassroots initiative by Concerned Citizens Montana seeks to repeal HB 198 via a citizens' referendum on the 2012 ballot. The initiative seeks to gather enough voter signatures to suspend the law until Montana voters can decide whether to repeal it or allow it remain as law. More information about the referendum initiative is available on CCM's website here.

For more information about HB 198 see also:

Eminent domain bill to become law without Schweitzer's signature
Frustration in Montana
In high-profile case, Montana landowner argues condemnation power must be explicit
Eminent domain expiration date makes sense
Kelo in the Country...HB 198 and the Taking of Rural Property
District Judge denies MATL's claim of eminent domain

Disclosure: Hertha Lund is an attorney in Bozeman, Montana who represents Montana property owners statewide in property rights, water rights and wind energy development matters. Ms. Lund represents a number of landowners throughout Montana currently defending their properties against condemnation, including the Salois family who is the Appellee in the Montana Supreme Court Case with MATL referenced in the above post. Ms. Lund is a member of the Owners' Counsel of America.

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