Definition of Eminent Domain
Here is the definition of Eminent Domain in the US. Maybe you should re-read it.
Here's the text in case you don't want to go the link.
United States
The power of governments to take private real or personal property has always existed in the United States, being an inherent attribute of
sovereignty. This power reposes in the legislative branch of the government and may not be exercised unless the legislature has authorized its use by
statutes that specify who may use it and for what purposes. The legislature may delegate the power to private entities like public utilities or
railroads, and even to individuals for the purpose of acquiring access to their landlocked land. Its use was limited by the Takings Clause in the
Fifth Amendment to the U.S. Constitution in 1791, which reads, "...nor shall private property be taken for public use, without just compensation".
The Fifth Amendment did not create the national government's right to use the eminent domain power, it simply limited it to public use.[6]
The U.S. Supreme Court has consistently deferred to the right of states to make their own determinations of public use, although the reason why the
constitutional term "public use" should not be subject to judicial interpretation, the same as other constitutional terms, has not been explained.
In 1832 the Supreme Court ruled that eminent domain could be used to allow a mill owner to expand his dam and operations by flooding an upstream
neighbor. The court opinion stated that a public use does not have to mean public occupation of the land; it can mean a public benefit.[7] In Clark
vs. Nash (1905), the Supreme Court acknowledged that different parts of the country have unique circumstances and the definition of public use thus
varied with the facts of the case. It ruled a farmer could expand his irrigation ditch across another farmer's land (with compensation), because that
farmer was entitled to "the flow of the waters of the said Fort Canyon Creek... and the uses of the said waters... [is] a public use." Here in
recognizing the arid climate and geography of Utah, the Court indicated the farmer not adjacent to the river had as much right as the farmer who was,
to access the waters.[8] However, until the 14th Amendment was ratified in 1868, the limitations on eminent domain specified in the Fifth Amendment
applied only to the federal government and not to the states. That view ended in 1896 when in the Chicago B. & Q. Railroad v. Chicago case the court
held that the eminent domain provisions of the Fifth Amendment were incorporated in the Due Process Clause of the Fourteenth Amendment and thus were
now binding on the states. This was in-tune with the beginning of what is known as the "selective incorporation" doctrine.
An expansive interpretation of eminent domain was reaffirmed in Berman v. Parker (1954), in which the U.S. Supreme Court reviewed an effort by the
District of Columbia to take and raze blighted structures, in order to eliminate slums in the Southwest Washington area. After the taking, held the
court, the taken and razed land could be transferred to private redevelopers who would construct condominiums, private office buildings and a shopping
center. The Supreme Court ruled against the owners of a non-blighted property within the area on the grounds that the project should be judged on its
plans as a whole, not on a parcel by parcel basis. In Hawaii Housing Authority v. Midkiff (1984), the Supreme Court approved the use of eminent domain
to transfer a land lessor's title to its tenants who owned and occupied homes built on the leased land. The court's justification was to break up a
housing oligopoly, and thereby lower or stabilize home prices, although in reality, following the Midkiff decision, home prices on Oahu escalated
dramatically, more than doubling within a few years.
The Supreme Court's decision in Kelo v. City of New London, 545 U.S. 469 (2005) affirmed the authority of New London, Connecticut, to take
non-blighted private property by eminent domain, and then transfer it for a dollar a year to a private developer solely for the purpose of increasing
municipal revenues. This 5-4 decision received heavy press coverage and inspired a public outcry that eminent domain powers were too broad. As a
reaction to Kelo, several states enacted or are considering enacting state legislation that would further define and restrict the state's power of
eminent domain. The Supreme Courts of Illinois, Michigan (County of Wayne v. Hathcock (2004)), Ohio (Norwood, Ohio v. Horney (2006)), Oklahoma, and
South Carolina have recently ruled to disallow such takings under their state constitutions.
The redevelopment in New London, the subject of the Kelo decision, proved to be a failure and as of the early 2010 (over four years after the court's
decision) nothing has been built on the taken land in spite of the expenditure of over $80 million in public funds. The Pfizer corporation, who would
have been the primary beneficiary of the additional development, announced in 2009 that it would close its New London research facility. 2009.[9]
American libertarians argue that eminent domain is unnecessary. Bruce L. Benson notes that utilities, for instance, have a variety of methods at their
disposal, such as option contracts and dummy buyers, to obtain the contiguous parcels of land needed to build pipelines, roads, and so forth. These
methods are routinely used to acquire land needed for shopping malls and other large developments.[10] Defending the Undefendable argues that the
problem of recalcitrant landowners (i.e. "the curmudgeons") who refuse reasonable offers for the sale of their land is solved in the long term by
the fact that their failure to accumulate wealth through such trades will give them a relative disadvantage in attempting to accumulate more land.
Thus, the vast majority of land will tend to ultimately end up in the control of those who are willing to make profitable exchanges.[11]
[edit]Tax Implications
In the event of a taxpayers private property [12] being destroyed, stolen, condemned, or disposed of, they receive a payment in property or money in
the form of insurance or a condemnation award.[13] If property is compulsorily or involuntarily converted (eminent domain) only into property similar
or related in service or use to the property so converted, no capital gain shall be recognized.[14]
[edit]Bush executive order
On June 23, 2006 - on the one-year anniversary of the Kelo decision (see above), President George W. Bush issued Executive Order 13406 which stated in
Section I that the federal government must limit its use of taking private property for "public use" with "just compensation", which is also
stated in the constitution, for the "purpose of benefiting the general public." The order limits this use by stating that it may not be used "for
the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken".[15] However, eminent domain is
more often exercised by local and state governments, albeit often with funds obtained from the federal government.
[edit]Examples
Controversy on the Delaware: A Look Upstream at the Tocks Island Dam Project
United States v. Carmack
United States v. Gettysburg Electric Railway Company 160 U.S. 668 (1896)
Berman v. Parker, 348 U.S. 26 (1954)
Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984)
Norwood, Ohio v. Horney
Kelo v. City of New London