AIKEN - Gov. Mark Sanford signed legislation in Aiken on Monday that calls for the study of eminent domain powers by local governments across the state.

"I think it is very important that we deal with it so we don't have government out there taking property," the governor told about 20 people outside city hall.

He called the issue urgent, citing the U.S. Supreme Court's ruling last year in favor of a local government in Connecticut that wanted to take land from a private homeowner and sell it to a developer.

The legislation Mr. Sanford signed into law, Senate Bill 1029, calls for the creation of a committee to identify local governments that can take property. The committee also is supposed to issue recommendations for reform.

The governor signed the law in Aiken in reference to a heated debate last year over a proposed bond deal between the Aiken County Council and private developers who are building about 5,000 homes near Graniteville.

When developers asked the county to issue bonds worth $36.3 million for utilities in their neighborhoods, they asked the county to use tax increment financing.

Historically, such financing was done only by cities trying to improve rundown urban areas. Governments would borrow and invest money into blighted places and pay it back with tax revenue generated by new businesses and homes that came there.

But the law was changed in 2004 and the definition of blight was expanded to include under-developed rural areas. Mr. Sanford vetoed the law, writing that the wider definition gave local governments too much power to condemn private property, but the Legislature overrode him.

In May 2005, the county council announced a tentative bond agreement with the FineDeering Development Group, which includes local businessman Weldon Wyatt among its members. The developers withdrew their request after public backlash from residents who said the deal amounted to a taxpayer gift.

FineDeering has since moved forward with its residential development.

State Sen. Greg Ryberg, R-Aiken, publicly railed against the FineDeering proposal and introduced legislation this year to repeal the expanded use of tax increment financing.

His legislation did not pass. But he supported Mr. Sanford's stance on eminent domain Monday and reiterated the need to amend the definition of blight.

"It basically opens up all land to public taking," Mr. Ryberg said of the current definition.

Reach Josh Gelinas at (803) 648-1395, ext. 110, or josh.gelinas@augustachronicle.com.