The legislation, HR 4128, puts the heaviest restraints on the federal government, completely restricting it from exercising eminent domain for economic development purposes. For the most part, however, eminent domain guidelines are determined by the state, and HR 4128 addresses these regulations in the bill text: "In general, no State or political subdivision of a State shall exercise its power of eminent domain, or allow the exercise of such power by any person or entity to which such power has been delegated, over property to be used for economic development or over property that is subsequently used for economic development, if that State or political subdivision receives Federal economic development funds during any fiscal year in which it does so." The bill stipulates that any such violation will result in a determination of the offending state or local entity's ineligibility for federal economic development funding for two fiscal years. The bill now goes to the Senate.

"The legislation strikes the perfect balance," says Institute for Justice senior attorney Dana Berliner, who represented the homeowners vying to retain ownership of their property in the Kelo Supreme Court case. "It serves to reassure every American that federal dollars--their own money--won't be used to kick them off their land, while allowing state and local governments to use federal dollars for actual public uses, like roads and military bases."

"The Supreme Court didn't say anything that was new; the Berman decision 40 years ago held that condemnation powers could be used to eliminate blight in the form of deteriorated housing," attorney Ted Zangari of law firm Sills Cummis Epstein & Gross PC in Newark, NJ, tells GlobeSt.com. In Kelo, the Supreme Court went just a step sideways to also permit eminent domain to eradicate another form of blight--a deteriorated tax base and employment base."