HF 2630

as introduced - 87th Legislature (2011 - 2012) Posted on 03/01/2012 11:23am

A bill for an act
relating to eminent domain; providing for compensation in regulatory takings
that do not arise to the level of a taking under constitutional analysis; authorizing
payment of attorney fees; proposing coding for new law in Minnesota Statutes,
chapter 557.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [557.13] REGULATORY TAKINGS COMPENSATED.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section:
new text end

new text begin (a) "Existing use" means (1) an actual, present use or activity on the real property,
including periods of inactivity that are normally associated with or are incidental to the
nature or type of use; or
new text end

new text begin (2) activity or reasonably foreseeable, nonspeculative land uses that are suitable for
the real property and compatible with adjacent land uses and that have created an existing
fair market value in the property greater than the fair market value of the actual, present
use or activity on the real property.
new text end

new text begin (b) "Government action" means a governmental entity's application of a law,
ordinance, rule, policy, or guideline that affects real property, including action on an
application or permit.
new text end

new text begin (c) "Governmental entity" means the state or a political subdivision of the state, and
any entity that has been granted the power of eminent domain.
new text end

new text begin (d) "Inordinate burden" or "inordinately burdened" means an action of a
governmental entity that has directly restricted or limited the use of real property such that
the owner is permanently unable to attain the reasonable, investment-backed expectation
for the existing use of the real property or a vested right to a specific use of the real
property with respect to the real property as a whole, or that the owner is left with
existing or vested uses that are unreasonable such that the owner bears permanently a
disproportionate share of a burden imposed for the good of the public, which in fairness
should be borne by the public at large.
new text end

new text begin "Inordinate burden" or "inordinately burdened" does not mean: (1) temporary
impacts on real property other than a moratorium on development under section 462.355,
subdivision 4, lasting more than one year; (2) impacts on real property occasioned by
governmental abatement, prohibition, prevention, or remediation of a public nuisance at
common law or a noxious use of private property; or (3) impacts on real property caused
by an action of a governmental entity taken to grant relief to the owner of the real property.
new text end

new text begin In determining whether reasonable, investment-backed expectations are inordinately
burdened, consideration may be given to the factual circumstances leading to the time
elapsed between enactment of the law or regulation and its first application to the subject
property.
new text end

new text begin (e) "Owner" includes all persons with any interest in the real property subject to a
taking, whether as proprietors, tenants, life estate holders, encumbrancers, beneficial
interest holders, or otherwise.
new text end

new text begin (f) "Vested right" is to be determined by applying the principles of equitable estoppel
or substantive due process under the common law or by applying the statutory law of
this state.
new text end

new text begin Subd. 2. new text end

new text begin Government action; right to compensation. new text end

new text begin When a governmental action
inordinately burdens an existing use of real property or a vested right to a specific use of
real property, the owner is entitled to relief, which may include compensation for the actual
loss to the fair market value of the real property caused by the governmental action. This
section provides a cause of action arising out of governmental actions that may not rise to
the level of a taking under the state constitution or the Constitution of the United States.
new text end

new text begin Subd. 3. new text end

new text begin Procedure; notice of claim to governmental entity. new text end

new text begin Not less than 150
days before filing an action under this section against a governmental entity, an owner
who seeks compensation under this section must present the claim in writing to the
governmental entity. The owner must submit, along with the claim, a valid appraisal that
supports the claim and demonstrates the loss in fair market value to the real property.
If the governmental action is the culmination of a process that involves more than one
governmental entity, or if a complete resolution of all relevant issues, in the view of
the owner or the governmental entity to which a claim is presented, requires the active
participation of more than one governmental entity, the owner shall present the claim
to each governmental entity. The governmental entity shall provide written notice of
the claim to all parties to any administrative action that gave rise to the claim, and to
owners of real property contiguous to the owner's property at the addresses listed on
the most recent county tax rolls.
new text end

new text begin Subd. 4. new text end

new text begin Procedure; settlement offer required. new text end

new text begin During the notice period, unless
extended by agreement of the parties, the governmental entity shall make a written
settlement offer to effectuate one or more of the following options:
new text end

new text begin (1) an adjustment of land development or permit standards or other provisions
controlling the development or use of land;
new text end

new text begin (2) increases or modifications in the density, intensity, or use of areas of development;
new text end

new text begin (3) the transfer of developmental rights;
new text end

new text begin (4) land swaps or exchanges;
new text end

new text begin (5) mitigation, including payments in lieu of on-site mitigation;
new text end

new text begin (6) location on the least sensitive portion of the property;
new text end

new text begin (7) conditioning the amount of development or use permitted;
new text end

new text begin (8) a requirement that issues be addressed on a more comprehensive basis than a
single proposed use or development;
new text end

new text begin (9) issuance of the development order, a variance, special exception, or other
extraordinary relief;
new text end

new text begin (10) purchase of the real property, or an interest in the real property, by an
appropriate governmental entity or payment of compensation; or
new text end

new text begin (11) no changes to the action of the governmental entity.
new text end

new text begin Subd. 5. new text end

new text begin Procedure; statement of allowable uses. new text end

new text begin During the notice period, unless
a settlement offer is accepted by the owner, each governmental entity provided notice
pursuant to subdivision 3 shall issue a written statement of allowable uses identifying the
allowable uses to which the property may be put. The failure of the governmental entity to
issue a statement of allowable uses during the notice period shall be deemed a denial for
purposes of allowing an owner to file an action in the district court under this section. If a
written statement of allowable uses is issued, it constitutes the last prerequisite to judicial
review for the purposes of the judicial proceeding created by this section, notwithstanding
the availability of other administrative remedies.
new text end

new text begin Subd. 6. new text end

new text begin Procedure; if settlement reached. new text end

new text begin If the property owner accepts the
settlement offer, the governmental entity may enter into a settlement agreement with
the owner. The settlement agreement must protect the public interest served by the
regulations at issue and be the appropriate relief necessary to prevent the governmental
regulatory effort from inordinately burdening the real property. Whenever a governmental
entity enters into a settlement agreement under this section that would have the effect of
contravening the application of a statute as it would otherwise apply to the real property,
the governmental entity and the property owner shall jointly file an action in the district
court for the county in which the real property is located for approval of the settlement
agreement by the court to ensure that the relief granted protects the public interest served
by the statute at issue and is the appropriate relief necessary to prevent the governmental
regulatory effort from inordinately burdening the real property.
new text end

new text begin Subd. 7. new text end

new text begin Procedure; if settlement rejected. new text end

new text begin If the owner rejects the governmental
entity's settlement offer and statement of allowable uses, the owner may file a claim for
compensation in the district court for the county in which the property is located, a copy
of which shall be served contemporaneously on each governmental entity that made a
settlement offer and a statement of allowable uses that was rejected by the owner.
new text end

new text begin Subd. 8. new text end

new text begin District court determination of inordinate burden. new text end

new text begin (a) The district
court shall determine whether an existing use of the real property or a vested right to a
specific use of the real property existed and, if so, whether, considering the settlement
offer and statement of allowable uses, the governmental entity or entities have inordinately
burdened the real property. If the actions of more than one governmental entity,
considering any settlement offers and statement of allowable uses, are responsible for the
action that imposed the inordinate burden on the real property of the owner, the court shall
determine the percentage of responsibility each governmental entity bears with respect
to the inordinate burden.
new text end

new text begin (b) A governmental entity may take an interlocutory appeal of the court's
determination that the governmental action resulted in an inordinate burden. An
interlocutory appeal does not automatically stay the proceedings; however, the court may
stay the proceedings during the pendency of the interlocutory appeal. The district court's
determination is not final until any interlocutory appeal is concluded. If the governmental
entity does not prevail in the interlocutory appeal, the court shall award to the owner costs
and reasonable attorney fees incurred by the owner in the interlocutory appeal.
new text end

new text begin Subd. 9. new text end

new text begin Jury trial on compensation. new text end

new text begin If the court determines that governmental
action resulted in an inordinate burden on the private property, and has determined the
percentage of responsibility of each governmental entity, the court shall impanel a jury to
determine the total amount of compensation due to the owner for the loss in value due to
the inordinate burden to the real property. The compensation award shall be determined by
calculating the difference in the fair market value of the real property, as it existed at the
time of the governmental action at issue, as though the owner had the ability to attain the
reasonable investment-backed expectation or was not left with uses that are unreasonable,
whichever the case may be, and the fair market value of the real property, as it existed at
the time of the governmental action at issue, as inordinately burdened, considering the
settlement offer together with the statement of allowable uses, of the governmental entity
or entities. In determining the award of compensation, consideration may not be given
to business damages relative to any development, activity, or use that the governmental
action, considering the settlement offer together with the statement of allowable uses has
restricted, limited, or prohibited. The award of compensation shall include a reasonable
award of prejudgment interest from the date the claim was presented to the governmental
entity.
new text end

new text begin Subd. 10. new text end

new text begin Attorney fees. new text end

new text begin The court may award costs and reasonable attorney fees to
an owner who prevails in an action brought in district court under this section and incurred
by the owner from the date of filing the district court action if the court determines that the
governmental entity's settlement offer did not constitute a bona fide offer to the owner
that reasonably would have resolved the claim, based upon the knowledge available to
the governmental entity and the owner during the notice period. The court may award
costs and reasonable attorney fees to the governmental entity that prevails in an action
brought under this section and incurred by the governmental entity from the date of filing
the district court action if the court determines that the owner did not accept a bona fide
settlement offer that reasonably would have resolved the claim, based upon the knowledge
available to the governmental entity and the owner during the notice period. Any proposed
settlement offer or any proposed decision, except for the final written settlement offer or
the final written statement of allowable uses, and any negotiation or rejection in regard
to the formulation, either of the settlement offer or the statement of allowable uses,
is inadmissible in the subsequent proceeding established by this section except for the
purposes of the determination pursuant to this paragraph.
new text end

new text begin Subd. 11. new text end

new text begin Alternative dispute resolution. new text end

new text begin This section does not supplant methods
agreed to by the parties and lawfully available for arbitration, mediation, or other forms of
alternative dispute resolution, and governmental entities are encouraged to utilize methods
to augment or facilitate the processes and actions contemplated by this section.
new text end

new text begin Subd. 12. new text end

new text begin Section 15.99 does not apply. new text end

new text begin A claim brought under this section is not a
request subject to section 15.99.
new text end