1.1 	A bill for an act
1.2 	relating to  real property; eminent domain; providing a definition of public 
1.3 	use; providing for loss of going concern; providing and prohibiting attorney 
1.4 	fees;amending Minnesota Statutes 2004, sections 117.025; 117.036; 117.075, 
1.5 	by adding subdivisions; proposing coding for new law in Minnesota Statutes, 
1.6 	chapter 117.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 117.025, is amended to read:
1.9 	117.025 DEFINITIONS.
1.10 		Subdivision 1.Words, terms, and phrases. Unless the language or context clearly 
1.11 	indicates that a different meaning is intended, the words, terms, and phrases defined in 
1.12 	this section have the meanings given them.
1.13 		Subd. 2.Taking. Taking and all words and phrases of like import include every 
1.14 	interference, under the right of eminent domain, with the possession, enjoyment, or value 
1.15 	of private property.
1.16 		Subd. 3.Owner. "Owner" includes all persons interested in such property as 
1.17 	proprietors, tenants, life estate holders, encumbrancers, or otherwise.
1.18 		Subd. 4.Abandoned property. Abandoned property means a property not occupied 
1.19 	by a person with a legal or equitable right to occupy it and for which the condemning 
1.20 	authority is unable to identify and contact the owner despite making reasonable efforts.
1.21 		Subd. 5.Condemning authority. "Condemning authority" means any person or 
1.22 	entity with the power of eminent domain.
1.23 		Subd. 6.Blighted area. "Blighted area" means an area in which, in its present use 
1.24 	and condition, all of the buildings in the area are dilapidated.
2.1 		Subd. 7.Dilapidated building. A building is dilapidated if (1) the building has 
2.2 	been cited for building code violations that are uncured at the time of filing of the petition, 
2.3 	and (2) the cost of repairs required to remedy the building code violations exceed the 
2.4 	assessor's estimated market value for the building as determined under section 273.11, for 
2.5 	property taxes payable in the year in which the condemnation is commenced.
2.6 		Subd. 8.Environmentally contaminated area. "Environmentally contaminated 
2.7 	area" is an area that contains throughout any substances, defined, regulated, or listed 
2.8 	as a hazardous substance, hazardous material, hazardous waste, toxic waste, pollutant, 
2.9 	contaminant, or toxic substance, or identified as hazardous to human health or the 
2.10 	environment under state or federal law or regulation.
2.11 		Subd. 9.Public nuisance. The definition of public nuisance for the purpose of 
2.12 	establishing a public use for takings under eminent domain law is the same as in section 
2.13 	609.74.
2.14 		Subd. 10.Public use or public purpose. "Public use" or "public purpose" means, 
2.15 	exclusively:
2.16 	(1) the possession, occupation, and enjoyment of the land by the general public, or 
2.17 	by public agencies;
2.18 	(2) the creation or functioning of a utility or other public service corporations;
2.19 	(3) mitigation of blight, remediation of an environmentally contaminated area, 
2.20 	reduction of abandoned property, or removal of a public nuisance.

2.21 	Sec. 2. [117.027] LIMITATIONS ON USE OF EMINENT DOMAIN.
2.22 		Subdivision 1.Economic development not a public use. The public benefits of 
2.23 	economic development, including an increase in tax base, tax revenues, employment, 
2.24 	general economic health, shall not by themselves, constitute a public use.
2.25 		Subd. 2.Cannot take nondilapidated buildings or noncontaminated land. A 
2.26 	condemning authority taking property to mitigate blight or remediate environmental 
2.27 	contamination is prohibited from taking buildings that are not dilapidated or land that is 
2.28 	not environmentally contaminated in all cases, including if the nondilapidated buildings or 
2.29 	nonenvironmentally contaminated land is adjacent to blighted buildings or contaminated 
2.30 	land or the taking is absolutely necessary to remedy blight or environmental contamination.
2.31 		Subd. 3.Replacement property as compensation. The condemning authority 
2.32 	may not compel or otherwise require the owner of the property to accept as part of the 
2.33 	compensation due any substitute or replacement property.
3.1 		Subd. 4.Return of property taken. The condemning authority may not compel or 
3.2 	otherwise require the owner of the property to accept the return of property acquired or 
3.3 	any portion thereof.
3.4 		Subd. 5.Cannot require owner to mitigate costs. The condemning authority may 
3.5 	not compel or otherwise require the owner of the property to mitigate costs related to 
3.6 	the condemnation.

3.7 	Sec. 3. [117.028] TAKING OF NONCONFORMING USE.
3.8 	The requirement by any political subdivision of the state or local zoning authority 
3.9 	that a legal nonconforming use be removed as a condition or prerequisite for the issuance 
3.10 	of a permit, license, or other approval for any use, structure, development, or activity 
3.11 	constitutes a taking that is prohibited without just compensation. This section does not 
3.12 	apply if the permit, license, or approval is requested for the construction of a building or 
3.13 	structure which cannot be built without physically moving the nonconforming use.

3.14 	Sec. 4. [117.031] ATTORNEY FEES.
3.15 		Subdivision 1.Benefits defined. As used in this section, the term "benefits" means 
3.16 	the difference, exclusive of interest, between the final judgment or settlement and the last 
3.17 	written offer made by the condemning authority before the defendant hires an attorney. 
3.18 	If no written offer is made by the condemning authority before the defendant hires an 
3.19 	attorney, benefits must be measured from the first written offer after the attorney is hired. 
3.20 		Subd. 2.Award based on benefits to client. The court, in eminent domain 
3.21 	proceedings, shall award attorney fees based solely on the benefits achieved for the client. 
3.22 		Subd. 3.Business damages. Benefits for amounts awarded for business damages 
3.23 	must be based on the difference between the final judgment or settlement and the last 
3.24 	written counteroffer made by the condemning authority provided.
3.25 		Subd. 4.Nonmonetary benefits. The court may also consider nonmonetary benefits 
3.26 	obtained for the client through the efforts of the attorney, to the extent such nonmonetary 
3.27 	benefits are specifically identified by the court and can, within a reasonable degree of 
3.28 	certainty, be quantified.
3.29 		Subd. 5.Fee schedule. Attorney fees based on benefits achieved shall be awarded 
3.30 	in accordance with the following schedule:
3.31 	(1) 33 percent of any benefit up to $250,000; plus
3.32 	(2) 25 percent of any portion of the benefit between $250,000 and $1,000,000; plus
3.33 	(3) 20 percent of any portion of the benefit exceeding $1,000,000.
4.1 		Subd. 6.Other considerations. In assessing attorney fees incurred in defeating 
4.2 	an order of taking, or for apportionment, or other supplemental proceedings, when not 
4.3 	otherwise provided for, the court shall consider:
4.4 	(1) the novelty, difficulty, and importance of the questions involved;
4.5 	(2) the skill employed by the attorney in conducting the cause;
4.6 	(3) the amount of money involved;
4.7 	(4) the responsibility incurred and fulfilled by the attorney;
4.8 	(5) the attorney's time and labor reasonably required to adequately represent the 
4.9 	client in relation to the benefits resulting to the client;
4.10 	(6) the fee, or rate of fee, customarily charged for legal services of a comparable or 
4.11 	similar nature;
4.12 	(7) any attorney fee award made under clause (1).
4.13 		Subd. 7.Submittal of fee details. At least 30 days prior to a hearing to assess 
4.14 	attorney fees under subdivision 2, the owner's attorney shall submit to the condemning 
4.15 	authority and to the court complete time records and a detailed statement of services 
4.16 	rendered by date, nature of services performed, time spent performing such services, 
4.17 	and costs incurred.
4.18 		Subd. 8.Owner's fee agreement submitted to court. The owner shall provide to 
4.19 	the court a copy of any written fee agreement that may exist between the owner and the 
4.20 	owner's attorney, and the court must reduce the amount of attorney fees to be paid by the 
4.21 	owner by the amount of any attorney fees awarded by the court.

4.22 	Sec. 5. [117.032] PROHIBITION AGAINST ATTORNEY FEES BEING 
4.23 	ASSESSED ON PROPERTY OWNERS.
4.24 	No court or government entity shall award attorney fees and expenses to the state of 
4.25 	Minnesota or any political subdivision thereof or any condemning authority to be paid 
4.26 	by owners for defending their property against a threatened or actual taking by eminent 
4.27 	domain or financing related thereto.

4.28 	Sec. 6. Minnesota Statutes 2004, section 117.036, is amended to read:
4.29 	117.036 APPRAISAL AND NEGOTIATION REQUIREMENTS 
4.30 	APPLICABLE TO ACQUISITION OF PROPERTY FOR TRANSPORTATION 
4.31 	PURPOSES.
4.32 		Subdivision 1.Application. This section applies to the acquisition of property 
4.33 	for public highways, streets, roads, alleys, airports, mass transit facilities, or for other 
4.34 	transportation facilities or purposes under this chapter.
5.1 		Subd. 2.Appraisal. (a) Before commencing an eminent domain proceeding under 
5.2 	this chapter, the acquiring authority must obtain at least one appraisal for the property 
5.3 	proposed to be acquired. In making the appraisal, the appraiser must confer with one or 
5.4 	more of the owners of the property, if reasonably possible. At least Notwithstanding 
5.5 	section 13.44 or any other law to the contrary, the condemning authority must provide 
5.6 	the owner with a copy of the appraisal at the time an offer is made, but no later than 20 
5.7 	days before presenting a petition under section  117.055, the acquiring authority must 
5.8 	provide the owner with a copy of the appraisal and inform the owner of the owner's right 
5.9 	to obtain an appraisal under this section. 
5.10 	(b) The owner may obtain an appraisal by a qualified appraiser of the property 
5.11 	proposed to be acquired. The owner is entitled to reimbursement for the reasonable costs 
5.12 	of the appraisal from the acquiring authority up to a maximum of $1,500 within 30 days 
5.13 	after the for single-family and two-family residential property and the actual reasonable 
5.14 	cost of an appraisal for other types of property, provided that the owner submits to the 
5.15 	acquiring authority the information necessary for reimbursement, provided that the owner 
5.16 	does so within 60 days after the owner receives the appraisal from the authority under 
5.17 	paragraph (a). The condemning authority must pay the reimbursement to the owner 
5.18 	or contract purchaser within 30 days after receiving a copy of the appraisal and the 
5.19 	reimbursement information. Upon agreement between the condemning authority and the 
5.20 	owner, the condemning authority may pay the reimbursement directly to the appraiser.
5.21 		Subd. 3.Negotiation. (a) In addition to the appraisal requirements under 
5.22 	subdivision 2, before commencing an eminent domain proceeding, the acquiring authority 
5.23 	must make a good faith attempt to negotiate personally with the owner of the property
5.24 	in order to acquire the property by direct purchase instead of the use of eminent domain 
5.25 	proceedings. In making this negotiation, the acquiring authority must consider the 
5.26 	appraisals in its possession, including any appraisal obtained and voluntarily furnished 
5.27 	by the owner if available, and other information that may be relevant to a determination 
5.28 	of damages under this chapter.
5.29 	(b) Any offer made by the condemning authority to the owner must be made in 
5.30 	writing.
5.31 	(c) The owner may accept any offer from the condemning authority, made before or 
5.32 	after the filing of the petition, at any time during the entire condemnation process.

5.33 	Sec. 7. Minnesota Statutes 2004, section 117.075, is amended by adding a subdivision 
5.34 	to read:
6.1 		Subd. 1a.Evidentiary standards. (a) The condemning authority must show by 
6.2 	the preponderance of the evidence  to the district court that a taking is necessary and for a 
6.3 	public use when the taking is for the possession, occupation, and enjoyment of the land 
6.4 	by the general public, or by public agencies or the creation or functioning of a utility or 
6.5 	other public service corporations.
6.6 	(b) The condemning authority must show by clear and convincing evidence to the 
6.7 	district court that a taking is necessary and for a public use when the taking is to mitigate 
6.8 	blight, remedy an environmentally contaminated area, or reduce abandoned property.
6.9 	(c) The condemning authority must show beyond a reasonable doubt to the district 
6.10 	court that a taking is necessary for a public use when the taking is for the removal of 
6.11 	a public nuisance.

6.12 	Sec. 8. Minnesota Statutes 2004, section 117.075, is amended by adding a subdivision 
6.13 	to read:
6.14 		Subd. 1b.De novo review on appeal. In any appeal of the district court's 
6.15 	determination of whether the taking is necessary and for a public use, the court of appeals 
6.16 	must review the district court's determination of facts and law de novo.

6.17 	Sec. 9. [117.186] COMPENSATION FOR LOSS OF GOING CONCERN.
6.18 		Subdivision 1.Compensation for loss of going concern. The owner of a business 
6.19 	or trade conducted on any property taken, damaged, or destroyed, or on the remainder 
6.20 	if such property is part of a larger parcel, or where access to the property is removed or 
6.21 	restricted shall be compensated for loss of its going concern, whether that loss is partial 
6.22 	or total, unless the condemning authority establishes any of the following by clear and 
6.23 	convincing evidence:
6.24 	(1) the loss is not caused by the taking of the property or the injury to the remainder;
6.25 	(2) the loss can be reasonably prevented by relocating the business or trade in the 
6.26 	same or similar and reasonably suitable location as the property that was taken; or
6.27 	(3) compensation for the loss of going concern will be duplicated in the 
6.28 	compensation otherwise awarded to the owner.
6.29 		Subd. 2.Going concern defined. For purposes of this section, "going concern" 
6.30 	means the benefits that accrue to a business or trade as a result of its location, reputation 
6.31 	for dependability, skill or quality, customer base, good will, or any other circumstances 
6.32 	resulting in probable retention of old or acquisition of new patronage.
6.33 		Subd. 3.Procedure. In all cases where an owner will seek compensation for loss of 
6.34 	going concern, the damages, if any, shall in the first instance be determined and reported 
7.1 	by the commissioners under section 117.105 as part of the compensation due to the owner. 
7.2 	The owner shall notify the condemning authority of its intent to claim compensation for 
7.3 	loss of going concern no later than 30 days prior to the commissioners' hearings.  The 
7.4 	decision of the commissioners regarding any award for loss of going concern may be 
7.5 	appealed by any party in accordance with section 117.145.

7.6 	Sec. 10. [117.189] PUBLIC HEARING.
7.7 		Subdivision 1.Definitions. (a) For the purposes of this section, "local government" 
7.8 	means the elected governing body of a statutory or home rule charter city, county, or 
7.9 	township.
7.10 	(b) For the purposes of this section "agency" means any subdivision, agency, 
7.11 	authority, or other entity of the local government, including a port authority, economic 
7.12 	development authority, housing and redevelopment authority, or other similar entity 
7.13 	established under general or special law.
7.14 		Subd. 2.Public hearing; vote by local government body. Before a local 
7.15 	government or agency acquires property by the exercise of the power of eminent domain, 
7.16 	the local government must notify each property owner in writing of a public hearing on 
7.17 	the proposed taking, post the hearing information on the local government's Web site, if 
7.18 	any, and publish notice of the public hearing in the official newspaper. Notice must be 
7.19 	provided at least 30 days but not more than 60 days before the hearing. Any interested 
7.20 	party must be allowed reasonable time to present testimony at the public hearing. The 
7.21 	proceedings of the hearing must be recorded, broadcasted, if possible, and available to the 
7.22 	public for review and comment at reasonable times and a reasonable place. At the next 
7.23 	regular meeting of the local government that is at least 30 days after the public hearing, the 
7.24 	local government must vote on the question of whether to authorize the local government 
7.25 	or agency to use eminent domain to acquire property

7.26 	Sec. 11. [117.58] RELOCATION HEARING OFFICER QUALIFICATIONS.
7.27 		Subdivision 1.Request for administrative appeal hearing. Any aggrieved person 
7.28 	under sections 117.50 to 117.57 may file a written appeal with the condemning authority 
7.29 	in any case in which the person believes that the condemning authority has failed to 
7.30 	properly consider the person's application for assistance. Such assistance may include, 
7.31 	but is not limited to, the person's eligibility for, or the amount of, relocation payment 
7.32 	required under section 117.52. The condemning authority shall consider a written appeal 
7.33 	regardless of form.
8.1 		Subd. 2.Appointment of hearing officer. If the aggrieved person in subdivision 
8.2 	1 files a written appeal with a condemning authority lacking statewide jurisdiction, the 
8.3 	condemning authority shall appoint a disinterested person to serve as the hearing officer 
8.4 	for the administrative appeal hearing.
8.5 		Subd. 3.Hearing officer qualifications. Before appointing the hearing officer as 
8.6 	required in subdivision 2, the condemning authority shall inquire whether each prospective 
8.7 	hearing officer has any relationship, business or otherwise, to any of the parties in the 
8.8 	proceedings, or any interest in the proceeding, which may constitute a conflict of interest, 
8.9 	or which may create the appearance of impropriety should that person be appointed. 
8.10 	Responses to this inquiry must be either written, or on the record, and available to any 
8.11 	party in the proceeding before and after appointment. No person who has the appearance 
8.12 	of impropriety, or an actual conflict of interest, may be appointed to serve as the hearing 
8.13 	officer for the administrative appeal hearing. A hearing officer must be an attorney 
8.14 	licensed by the state of Minnesota who is not employed by any condemning authority.

8.15 	Sec. 12. EFFECTIVE DATE; APPLICATION.
 8.16 	This act is effective the day following final enactment and applies to condemnation 
8.17 	proceedings commenced on or after February 27, 2006.