Summary: Tennessee Property Rights Protection Act (SB 480 / HB 444)
Jurisdiction: Tennessee | Session: 114 | Title: Housing
Effective date: Upon becoming law (public welfare requiring it)
Key purpose
- Replace the current broad definition of “blighted area” with a more precise, property-by-property standard called “blighted property” for purposes of condemnation by housing authorities.
- Limit the use of eminent domain to properties that meet the new blighted-property criteria or are being acquired for a public-use purpose.
- Improve due process for property owners by allowing a court to review takings intended to remediate blight.
What the bill does (substantive changes)
1. Redefinition of blight
- Replaces the old definition of “blighted area” with a definition of “blighted property.”
- Blighted property is an improvement that:
- Has been cited by the local government for enforceable housing, maintenance, or building code violations affecting safety.
- Violations involve specified structural, safety, or utility elements (e.g., roof, walls, foundation, ventilation, fire protection, utilities, flooring, insulation, exterior envelope).
- Has not been remedied within a reasonable time after two notices to cure.
- Land used primarily for agriculture is excluded.
Limits on eminent domain
- Eminent domain may be used to acquire:
- Blighted property (under the new definition), or
- Property that is for public use.
- Housing authorities may acquire other real property only via negotiated sale (without eminent domain) and may pay more than fair market value for properties that are not blighted.
Procedural rights and remedies
- When a housing authority or condemning authority approves a prospective or actual taking of blighted property, the property owner has a right to seek judicial determination on whether the taking is to remediate blight and resell the property.
- The act preserves the ability of municipalities to designate redevelopment areas, establish tax increment financing zones, and pursue grant funding for redevelopment, subject to the new limitations.
Agency and contracting flexibility
- Housing authorities may contract with third-party agents (at the authority’s expense) to negotiate purchase prices for property within urban renewal or redevelopment areas if the property is not subject to eminent domain.
Statutory alignments
- Updates to sections 13-20-201, 13-20-202, 13-20-203, 13-20-209, and 13-20-216 to reflect the new terminology and to narrow the scope of eminent domain to blighted property or public-use acquisitions.
- Section 29-17-102 updated to reflect the new limitation on eminent domain to blighted property or public-use acquisitions.
Who is affected
- Housing authorities and community development agencies: Receive clarified authority to acquire property via negotiated sale for redevelopment (including paying above market value for non-blighted properties) and restricted use of eminent domain to blighted properties or public-use acquisitions.
- Property owners: Gain new procedural avenues to contest takings intended for blight remediation and may benefit from potentially narrower use of eminent domain.
- Local governments and redevelopment authorities: Retain tools for urban renewal and tax increment financing, but under the revised criteria and safeguards.
Estimated fiscal impact
- The fiscal note indicates variable effects and uncertainty. Potential for increased housing-authority expenditures when negotiating above-market purchases for non-blighted properties, though overall impact on local government fiscal balances is not readily estimable. Court caseload impact is not expected to be significant.
Effective date and enactment
- The act is enacted as the "Tennessee Property Rights Protection Act" and takes effect upon becoming law.
Notes for readers
- The bill seeks to balance property rights with redevelopment goals by focusing eminent-domain authority on truly blighted properties and providing due-process protections for owners.
- It preserves redevelopment tools (e.g., urban renewal zones, TIFs, grant programs) while narrowing the justification for takings.
