Eminent Domain Reforms in 2016

by Tony Helland

This legislative session we will hopefully see the start of the process to reform the state’s eminent domain laws. The process will take time but there are a couple important changes that should take place with some immediacy. These changes include outlining the process of negotiation between the pipeline company and landowners as well as stipulating when the pipeline company can begin to condemn land through the use of eminent domain.

This past year, landowners to be crossed by Dakota Access were met by a one-time offer for their land and if it wasn’t accepted, the threat of court proceedings and eminent domain ensued. This all occurred before the state permit for the pipeline had been granted to the company. This is the wrong way to do business in South Dakota and highlights the imbalance in regulation between the pipeline company and citizen landowners.

Some initial discussions around reforms for the 2016 legislative session aim to rectify these imbalances. Legislation currently under discussion would define what negotiations should look like when pipeline companies seek the use of private property. The process would protect landowners and promote healthy terms that are agreeable to both parties. The disrespectful treatment of landowners by incoming pipeline companies is not new to the state and should more proposed projects seek the use of private land, these reforms will make the process transparent and balanced – the right way to do business. An outlined process of negotiation between companies and landowners is already in place and adhered to in many neighboring states. This reform will bring South Dakota in line with what is becoming the norm when pursuing oil and gas infrastructure projects.

Proposed reforms being discussed would stipulate that pipeline company cannot pursue eminent domain claims until after the project has earned its permit. This will take the pressure off landowners and give them time to negotiate a good deal for the use of their land. It will also promote an appropriate use of eminent domain. The argument goes, if the company doesn’t have a permit for the project they should have no right to condemn the land. Public Utilities Commissioner Gary Hanson made this clear in stating that lawsuits before the granting of Dakota Access’ permit were “reprehensible.” But the power of the PUC is only what state law mandates. A reform making this change should correct this improper use.

I’m hopeful that these reforms will make it to the legislature and progress will be made in the needed reforms to the state’s eminent domain laws. These reforms are by no means all that need correcting but are great start. Time and again we have witnessed business conducted poorly when it comes to pipelines and private property as well as the governmental inaction to correct it. Reforms at the state level will begin to change that for the better.

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Comments

  1. Jake Kammerer says:

    Most definitely needed legislation.!!

  2. Paulene Staben says:

    In 2012, significant eminent domain legislation was introduced and very nearly passed. This legislation also included condemnation by private railroads, stemming mainly from the DM&E fiasco. Property rights protection is needed so badly.

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