A violation of subsection (a) by a State or political subdivision shall render such State or political subdivision ineligible for any Federal economic development funds for a period of 2 fiscal years following a final judgment on the merits by a court of competent jurisdiction that such subsection has been violated, and any Federal agency charged with distributing those funds shall withhold them for such 2-year period, and any such funds distributed to such State or political subdivision shall be returned or reimbursed by such State or political subdivision to the appropriate Federal agency or authority of the Federal Government, or component thereof.The bill comes in response to the Supreme Court's 5-4 decision in the case of Kelo v. City of New London this June. According to an AP article, the court "recognized the power of local governments to seize property needed for private development projects that generate tax revenue." Rep. Sensenbrenner denounced the decision saying the decision changed established constitutional principles by holding that "any property may now be taken for the benefit of another private party."
Disturbingly enough, 36 of the 38 "NAY" votes came from Democrats, including Minority Leader Nancy Pelosi (D-CA). A brilliant commentary by one of the "NAY"sayers was;
"We should not change federal law every time members of Congress disagree with the judgment of a locality when it uses eminent domain for the purpose of economic development," said Rep. Bobby Scott, D-Va.Well, not necessarily my good chum. The Congress did exactly what it is supposed to do and certainly hasn't done enough of in the modern era. This bill is an example of one of the sacred Constitutional checks on judicial power. When the judiciary goes out of control, it becomes the legislature's job to decide where to draw the line.
In this case, the judiciary clearly overstepped the bounds of the eminent domain guidelines which require that seized land be put to "public use". Accordingly, the legislature took steps to ensure that any abuse of this new power by local, state, and federal authorities would result in the loss of federal "economic development" funds. This is the common penalty that allows the federal government to restrict state and local power without violating the Tenth Amendment (see legal drinking age).
It's a glorious thing to know that there are people in Congress willing to take charge when they notice an injustice being committed against the very people that make this country great. This bill is another example of what happens when good men (and women) fight for what they know is right.