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Senate adopts tighter redevelopment rules, adds property-owner protections and limits eminent-domain use
Summary
After lengthy floor discussion, the Senate approved a third substitute of House Bill 278 tightening definitions of blight, strengthening property-owner notice and rights, limiting use of eminent domain for economic development, and adding time limits and a grandfathering provision for projects underway.
The Senate considered and approved the third substitute to House Bill 278, a package of redevelopment amendments designed to address complaints about redevelopment agencies' use of eminent domain and project timeframes.
Sponsor Senator Bartle described the substitute as a compromise that allows projects already underway to finish under the old law while tightening language for new projects. Key changes include raising the threshold for a 'blight' finding (requiring three conditions rather than two), requiring a property-owner bill of rights and certified-mail notice to affected owners and those within 300 feet, mandating two public hearings (one on the blight study and one on adoption), and imposing time limits (a preliminary plan time limit, a one-year deadline for the blight study adoption, a three-year implementation window and a typical 12-year limit—extendable by the committee to 25 years under certain circumstances).
The third substitute preserved eminent-domain authority for projects addressing actual blight but removed the use of eminent domain for projects based solely on economic development. It also created a stronger role for local taxing authorities (two representatives each from school district and county and others) to participate; those taxing authorities can collectively veto a redevelopment plan and must be notified.
Senators debated grandfathering language to protect projects that had already spent significant sums and clarified the phase-in language to prevent new RDAs from forming immediately while protecting existing work. After floor debate the Senate approved the third substitute under suspension of the rules; the roll-call result was reported as 27 ayes, no nays, and 2 absent. The bill returns to the House for further consideration under the adopted substitute.
Next steps: The Senate sent the substitute back to the House for consideration and further action.
