November 7, 2006 Ballot Prop. 90

Proposition 90 would amend the California Constitution by requiring the government to pay property owners for economic losses when new laws and rules are enacted that cause a decrease in property value. It would also limit the government's power to take ownership of private property. The measure's requirements would apply to all forms of California government, including city and county governments. Many backers of the proposition oppose the government taking away citizens property without recompense and believe the Prop. 90 will provide regulations to protect property owners. Opposition forces believe Proposition 90 is poorly written and will cost Californians millions when corporate landowners are reimbursed under the measure.

Background

Article I, Section 19 of the California Constitution allows the state government and local government the power of "eminent domain" for public use. Eminent domain is the right of the federal, state and local governments to take private property provided it is for the benefit of the public as a whole. California law states that the government must pay "just compensation." If the owner does not wish to sell his or her property, the government can still exercise its right to seize the property. Traditionally, the government's right of eminent domain has been used for projects such as highways, schools, libraries and public utilities. More recently, critics have accused state governments of using eminent domain to develop or revitalize specific areas as a means to bring in additional property and sales tax revenues. Governments are also required to compensate land owners if new laws are passed which affect parcels and create economic losses for that owner.

Proposition 90 is a constitutional amendment which would draw up strict new rules on eminent domain and property rights in California. The issue of eminent domain has been in the news a great deal recently, especially with the June 2005 Supreme Court decision in Kelo v. City of New London, which was a ruling that specified that local governments may force property owners to sell and make way for economic redevelopment even when there is no evidence that the property that is being taken is in a state of blight. 
The Kelo decision spurred activists in 12 states, including supporters of California's Proposition 90, to take action to put so-called property-rights measures on the ballot. Proposition 90, in fact, is based on language in a similar measure that was passed in Oregon in 2004, Measure 37. The Kelo decision also helped spur action by the Hercules City Council in May 2006 to prevent Walmart from building a store on 17 acres of property on San Pablo Bay.

Compensation for Economic Loss

Proposition 90 would require the government to pay property owners for substantial economic losses when new laws and rules are enacted that cause a decrease in property value — for example, if the government attempted to limit development on property for environmental reasons. Proposition 90 would exempt all current laws and rules from this new compensation. New laws that were enacted to protect public safety or to facilitate rate regulation by the California Public Utilities Commission would also be exempt. Proposition 90 would require the government to compensate owners for economic losses in several general situations. If a new law required the restriction of development on a parcel, limits the height at which an owner can build on his or her parcel, or if a new law closed off access to a parcel, under the terms of the ballot measure, the government must pay the owner for economic loss. Proposition 90's requirements would also apply to new laws regarding employment conditions, rental prices, historical preservation, and financial protection for consumers.

The California Constitution currently requires the government to compensate owners for losses that deprive the owner of all profitable uses of the property. Proposition 90 would change the current law by requiring the government to compensate owners for "substantial economic losses". Since this new definition is more fluid, it would be up to courts to determine what a substantial economic loss includes. It is likely that the government's compensation to land owners would be higher under the measure.

Limiting Government's Power of Eminent Domain

Proposition 90 would allow the government to take private property to build schools, public spaces or public roads. The government would have to declare what public use the seizure would be for. The government could also use a seized parcel and allow private companies to lease it, provided that the company was building for public use. The government could take a parcel if it was determined that a public nuisance existed on it. It could also seize property for use in the event of a state emergency.

Under the measure, the government could not take land if the intention of the taking were shown to include changing the type of business in a given area to increase revenue. Governments also could not take land simply to increase tax revenues. The proposition requires the government to prove that the taking is for a public use. Any legal challenges would require the government to provide proof to a jury. The government would also have to sell any taken property back to the original owner in the event the government stopped using the parcel for the purpose it stated at the time the property was taken.

Arguments For and Against

Supporters of Proposition 90 say that eminent domain is abused in California and that it is important to regulate the government's power to use it. Proponents believe that Propositions 90's provisions would force the state to adopt fairer approaches when seizing land, compensating property owners and making laws that affect the economic stability of land owners. Supporters come from self-described eminent domain abuse victims as well as members of the business community.

Opponents of the measure believe that Proposition 90's economic loss compensation would unfairly cost tax payers billions of dollars each year. Critics believe the measure was written poorly and deceives the public by giving the impression it is about eminent domain alone. Opponents believe that the measure would result in thousands of payout requests which would burden the courts and would cost local governments billions of dollars to facilitate. Finally, critics are concerned the Prop. 90's provisions would rob the state of money for essential services. Opponents come from taxpayer advocacy groups, individual homeowners, and public services coalitions.

Official Voter Information

Voter Information Guide
Includes title and summary, arguments for and against, and text of the initiative.

Government Acquisition, Regulation of Private Property
Analysis by California Legislative Analyst, 2006.

Individual Campaign Committees
Total Contributions and Expenditures (select "Nov. 2006 election" and "Prop. 90" in drop down boxes)

Key Websites and Links

Podcast: Forum with Michael Kransy (KQED)

Public Opinion

Voters closely divided on Props. 87, 86 and 85 one week before the election. Field Poll, Release 2215, Nov. 2, 2006.
[Includes survey on Proposition 90]

Big early leads for Prop. 86 (cigarette taxes), Prop. 87 (alternative energy/oil tax) and especially Prop. 83 (sex offenders). Field Poll, Release 2208, Aug. 8, 2006. 
[Includes survey on Proposition 90]

Reports and Studies

More than meets the eye: What would Proposition 90 mean for California? 
Sacramento: The California Budget Project, Sept. 2006.