In just compensation and measure of damages, providing for compensation for loss of goodwill.
SB 225 amends Pennsylvania’s Eminent Domain Code to require compensation for a business’s loss of goodwill when property is taken, or when the remainder of a larger parcel is injured by the taking. To qualify, the business owner must prove that the loss was caused by the taking or injury and that the loss is not already included in other compensation awarded. The bill defines goodwill broadly to include benefits tied to location, reputation, cultural heritage value to the community, dependability, skill, quality, and other factors that help retain or attract customers.
The bill also gives the acquiring agency a chance to rebut goodwill compensation by showing the loss could reasonably have been avoided through relocation or through steps a prudent business owner would take to preserve goodwill. If the parties use a leaseback agreement, the bill bars additional goodwill from accruing during the lease and requires any goodwill liability to be determined at the time of acquisition or after notice of a possible taking. When the parties disagree on value, the owner must make state tax returns available for confidential review by the board of viewers or court, and then to the acquiring agency, solely for determining compensation.
SB 225 would add a new section to Title 26 of the Pennsylvania Consolidated Statutes and expand the types of damages available in eminent domain cases. It applies retroactively to declarations of taking filed on or after January 1, 2024, and takes effect immediately. In practical terms, the bill would affect condemning authorities, property owners, and businesses operating on taken property by creating a statutory path to recover business goodwill losses in addition to other just compensation.
The available voting history shows strong support and no recorded opposition at each stage, including unanimous committee action and unanimous Senate final passage. There is no committee transcript provided, but the vote pattern suggests the bill was broadly viewed favorably and moved without controversy in the Senate. The later House action was a re-referral to another committee rather than a recorded vote against the measure.
The main point of potential contention is the valuation and proof of goodwill, since the bill requires business owners to prove causation and non-duplication while allowing agencies to challenge claims by arguing the loss could have been mitigated. Confidential use of state tax returns may also raise privacy and evidentiary concerns, though the bill attempts to limit disclosure. Another possible issue is the retroactive application, which could affect already-filed takings and may draw scrutiny from acquiring agencies or parties involved in pending eminent domain cases.
SB 225 would amend Title 26 of the Pennsylvania Consolidated Statutes by adding a new eminent-domain damages provision for compensation for loss of goodwill. It expands just compensation in condemnation cases to include certain business losses tied to customer patronage, reputation, and location-based value, while also setting proof requirements, mitigation defenses, confidentiality rules for tax-return review, and special treatment for leaseback agreements. The bill would affect condemning authorities, business owners, courts, and boards of viewers in eminent domain proceedings, and it applies retroactively to takings filed on or after January 1, 2024.
The bill appears to have been received positively overall. It advanced through the Senate State Government Committee and Senate Appropriations Committee unanimously, and it passed the Senate floor unanimously as well. The lack of recorded dissent suggests broad bipartisan support or at least no visible opposition during the stages reflected in the voting history. The House action shown is procedural re-referral rather than a substantive vote, so the strongest available signal is that the Senate considered the measure noncontroversial.
The most likely areas of contention are how goodwill is defined and valued, whether the owner can adequately prove the loss was caused by the taking, and whether the loss overlaps with other compensation. Acquiring agencies may also object to the burden of proving mitigation and to the requirement that confidential state tax returns be made available for valuation purposes, even with confidentiality protections. The retroactive effective date could also be disputed because it reaches declarations of taking filed before enactment.