August 2006

The Statehouse

By James Lawlor

California: Opposition to Prop 90. As of July, a coalition of organizations opposed to a proposal to amend the state constitution to bar taking of property by eminent domain to benefit private parties, had gained 38 members, including the California APA chapter. "No on 90" argues that the proposition, ostensibly aimed at curbing abuse of eminent domain power, also would render state and local land-use controls unenforceable by requiring compensation of landowners for loss of land value from future laws and regulations.

Proposition 90 is one of a number of a similar voter initiatives that have sprung up in western states this year, as APA Executive Director Paul Farmer, FAICP, noted in July's Domestic Policy Watch column. The double-barreled initiatives have appeared in nine states, buried behind language purporting to protect homeowners from eminent domain abuse. The proposals are on the ballot in four states — California, Idaho, Montana, and Washington — and are pending in Arizona and Colorado.

A measure in Nevada attracted enough signatures to qualify for the ballot but is being challenged by a lawsuit claiming it violates the state constitution's single subject rule. Courts in Missouri and Oklahoma ruled measures off the ballot, holding they violated the single subject rule. Most states have similar constitutional provisions, requiring legislation to deal with only one subject whether it is enacted by the state legislature or by popular initiative. However, courts differ on how strictly they interpret that provision.

Washington: Chapter Opposes 'Pay or Waive.' The chapter has joined the Communities Protection Coalition/NO on 933 campaign, a coalition of organizations dedicated to the defeat of Initiative 933, a ballot measure similar in many respects to Oregon's Measure 37. Proponents of the initiative, led by the Washington State Farm Bureau, filed 315,000 signatures with the Washington Secretary of State July 6, more than enough to qualify the initiative for the November ballot.

Like Measure 37, I-933 would give a state or local government agency the choice of either paying compensation or waiving the requirements of a law or regulation that a property owner claims damages his ability to use his property or reduces its value. In its analysis of the initiative, the chapter charges it would cripple communities' ability to regulate location, height, and bulk of commercial uses; take it impossible to enforce billboard regulations; make floodplain regulations unenforceable; and create uncertainty in the residential real estate market.

Oregon: 'Big Look' Gets Underway. The Oregon Task Force on Land Use Planning has begun its three-year review of planning in Oregon by identifying six key issues for further evaluation at its meeting July 26. Phrased as questions, the issues are:

• What are the appropriate roles of state and local governments in land use in Oregon?
• What is the appropriate role of citizen involvement in land use?
• What role should land-use planning play in enhancing Oregon's economy now and in the future?
• What are the most effective tools to manage population growth to achieve community goals?
• How should Oregon's system of infrastructure, finance and governance influence land use?
• How can the land-use process appropriately address the benefits and burdens that fall on individual landowners and the general public?

Six workgroups of task force members will begin to address these issues, and report back at the task force's next meeting on August 18. The task force plans to have identified more specific issues under each of these topics by the end of this year. The 2005 legislation that established the task force directed it to study and make recommendations on:

• the effectiveness of Oregon's present land-use planning program in meeting the current and future needs of citizens
• the roles of state and local government in land-and use planning
• land-use issues inside and outside of urban growth boundaries.

Indiana: Eminent Domain Changes. House Bill 1010, signed by Gov. Mitch Daniels on March 24, makes substantial changes to eminent domain procedures. A new chapter added to the Indiana Code covers takings of property by a government agency with the intent to ultimately transfer it to another private owner for a use that is not "public." It specifies that the term "public use" does not include the public benefit of economic development, including increases in the tax base, tax revenues, employment, or general economic health.

The condemning agency must be able to establish that any structure on the property to be taken is a public nuisance; dilapidated, unsanitary, or unsafe; has been abandoned; or is subject to tax delinquencies exceeding the assessed value of the property. It must also show that acquiring the property is expected to accomplish more than simply increasing a government entity's tax base. And finally, the condemning agency must submit to mediation if the property owner requests it.

The new law also requires that the owner of residential property be paid 150 percent of its fair market value and relocation costs. If the question of damages goes to trial and the amount awarded to the owner is more than the condemner's last offer, the condemning agency must pay the owner's litigation costs, up to 25 percent of the cost of the acquisition. Also, the chapter provides that the condemning agency may not acquire the property if the owner establishes by clear and convincing evidence that the location is essential to the viability of the owner's commercial activity, and payment of damages and relocation costs would not be adequate compensation.

New Mexico: Eminent Domain Study Panel. Following up on a promise made when he vetoed the legislature's attempt to tighten up eminent domain procedures, Gov. Bill Richardson established a task force to study current procedures and recommend any changes needed to avoid abuse. The task force was appointed June 14 and is expected to make its recommendations to the governor by November 1.

Gov. Richardson vetoed the eminent domain bill, H.B. 746, because he considered it to be overly vague and likely to make it difficult for state and local government to build roads and extend water and utility lines. City and town officials from all parts of the state urged the government to issue a veto.

Iowa: Veto Override. An eminent domain bill passed by the legislature prompted a rare override of a gubernatorial veto last month. It has been 43 years since the last veto override. H.F. 2351 defines "public use" for which eminent domain may be employed as possession and use by the general public or a public utility, where any private use is only incidental; or redevelopment of blighted areas where at least 75 percent of the properties in the area are blighted. The bill also states that public use does not include economic development intended to generate tax revenue or employment, or results in private residential, commercial, or industrial development.

Gov. Tom Vilsack said he vetoed the bill because he considered it to be a threat to the economy of the state. Opponents of the legislation expect to challenge its validity in court. They argue the bill is unconstitutional because the legislature overrode a veto in a special session, not the session in which the bill originated.

Eminent Domain legislation tracker. Click here for up-to-date legislation information.