1.1                                         A bill for an act&#10;1.2      relating to eminent domain; defining public use or purpose; prohibiting the use &#10;1.3      of eminent domain for economic development; requiring clear and convincing &#10;1.4      evidence for certain takings; providing for attorney fees and other additional &#10;1.5      elements of compensation; making other changes in the exercise of eminent &#10;1.6      domain; amending Minnesota Statutes 2004, sections 117.025; 117.075, &#10;1.7      subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 117.&#10;1.8      BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:&#10;&#10;<a id="go.0.1.0"></a>1.9          Section 1. <ins><b>[117.012] PREEMPTION; NO IMPLIED AUTHORITY.</b></ins>&#10;1.10         <ins>Subdivision 1.</ins> <ins><b>Preemption.</b></ins> <ins>Notwithstanding any other provision of law, including </ins>&#10;1.11     <ins>any charter provision, ordinance, statute, or special law, all condemning authorities, </ins>&#10;1.12     <ins>including home rule charter cities and all other political subdivisions of the state, must </ins>&#10;1.13     <ins>exercise the power of eminent domain in accordance with the provisions of this chapter, </ins>&#10;1.14     <ins>including all procedures, definitions, remedies, and limitations. Additional procedures, </ins>&#10;1.15     <ins>remedies, or limitations that do not deny or diminish the substantive and procedural rights </ins>&#10;1.16     <ins>and protections of owners under this chapter may be provided by other law, ordinance, </ins>&#10;1.17     <ins>or charter.</ins>&#10;1.18         <ins>Subd. 2.</ins> <ins><b>No implied authority.</b></ins> <ins>The power of eminent domain shall not be implied. </ins>&#10;1.19     <ins>In order to exercise the power of eminent domain, the condemning authority must have an </ins>&#10;1.20     <ins>express grant of eminent domain authority. </ins>&#10;&#10;<a id="go.0.2.0"></a>1.21         Sec. 2. Minnesota Statutes 2004, section 117.025, is amended to read:&#10;1.22     <b>117.025 DEFINITIONS.</b>&#10;1.23         Subdivision 1. <b>Words, terms, and phrases.</b> <del>Unless the language or context clearly </del>&#10;1.24     <del>indicates that a different meaning is intended,</del> <ins>For the purposes of this chapter and any </ins>&#10;2.1      <ins>other general or special law authorizing the exercise of the power of eminent domain, </ins>the &#10;2.2      words, terms, and phrases defined in this section have the meanings given them.&#10;2.3          Subd. 2. <b>Taking.</b> <ins>"</ins>Taking<ins>"</ins> and all words and phrases of like import include every &#10;2.4      interference, under the right of eminent domain, with the possession, enjoyment, or value &#10;2.5      of private property.&#10;2.6          Subd. 3. <b>Owner.</b> "Owner" includes all persons <del>interested in such</del><ins> with any interest </ins>&#10;2.7      <ins>in the </ins> property <ins>subject to a taking, whether </ins>as proprietors, tenants, life estate holders, &#10;2.8      encumbrancers, <ins>beneficial interest holders, </ins>or otherwise.&#10;2.9          <ins>Subd. 4.</ins> <ins><b>Condemning authority.</b></ins> <ins>"Condemning authority" means any person or </ins>&#10;2.10     <ins>entity with the power of eminent domain.</ins>&#10;2.11         <ins>Subd. 5.</ins> <ins><b>Abandoned property.</b></ins> <ins>"Abandoned property" means property not occupied </ins>&#10;2.12     <ins>by a person with a legal or equitable right to occupy it and for which the condemning </ins>&#10;2.13     <ins>authority is unable to identify and contact the owner despite making reasonable efforts.</ins>&#10;2.14         <ins>Subd. 6.</ins> <ins><b>Blighted area.</b></ins> <ins>(a) "Blighted area" means, exclusively, at the time of </ins>&#10;2.15     <ins>condemnation, an area: </ins>&#10;2.16     <ins>(1) that is zoned and used for urban use; and</ins>&#10;2.17     <ins>(2) where more than 50 percent of the buildings are dilapidated.</ins>&#10;2.18         <ins>Subd. 7.</ins> <ins><b>Dilapidated building.</b></ins> <ins>"Dilapidated building" means, exclusively, a </ins>&#10;2.19     <ins>building:</ins>&#10;2.20     <ins>(1) that was inspected by the appropriate local government and cited for one or more </ins>&#10;2.21     <ins>building code violations at least 12 months before the condemnation is commenced;</ins>&#10;2.22     <ins>(2) in which the building code violations cited have not been remedied, as </ins>&#10;2.23     <ins>determined by at least one reinspection that finds noncompliance after the due date for </ins>&#10;2.24     <ins>compliance with an order to correct a building code violation; and</ins>&#10;2.25     <ins>(3) that, as of the date the condemnation is commenced, is unfit for human use </ins>&#10;2.26     <ins>because it is unsafe, structurally unsound, or lacking in basic equipment.</ins>&#10;2.27         <ins>Subd. 8.</ins> <ins><b>Environmentally contaminated area.</b></ins> <ins>"Environmentally contaminated </ins>&#10;2.28     <ins>area" means an area:</ins>&#10;2.29     <ins>(1) that contains, on or below more than 50 percent of its surface area, any substance </ins>&#10;2.30     <ins>or substances defined, regulated, or listed as a hazardous substance, hazardous material, </ins>&#10;2.31     <ins>hazardous waste, toxic waste, pollutant, contaminant, or toxic substance, or identified as </ins>&#10;2.32     <ins>hazardous to human health or the environment under state or federal law or regulation; and</ins>&#10;2.33     <ins>(2) for which the costs of investigation, monitoring and testing, and remedial action </ins>&#10;2.34     <ins>or removal, as defined in section 115B.02, subdivisions 16 and 17, respectively, including </ins>&#10;2.35     <ins>any state costs of remedial actions, exceed 100 percent of the assessor's estimated market </ins>&#10;3.1      <ins>value for the contaminated area, as determined under section 273.11, for property taxes </ins>&#10;3.2      <ins>payable in the year in which the condemnation commenced.</ins>&#10;3.3          <ins>Subd. 9.</ins> <ins><b>Public nuisance.</b></ins> <ins>"Public nuisance" means a public nuisance under </ins>&#10;3.4      <ins>section 609.74.</ins>&#10;3.5          <ins>Subd. 10.</ins> <ins><b>Public service corporation.</b></ins> <ins>"Public service corporation" means a </ins>&#10;3.6      <ins>public utility; gas, electric, telephone, or cable communications company; cooperative </ins>&#10;3.7      <ins>association; natural gas pipeline company; crude oil, or petroleum products pipeline </ins>&#10;3.8      <ins>company; municipal utility; municipality when operating its municipally owned utilities; </ins>&#10;3.9      <ins>or municipal power agency; as otherwise regulated by law, including but not limited to </ins>&#10;3.10     <ins>chapters 216B, 237, 300, and 302A.</ins>&#10;3.11         <ins>Subd. 11.</ins> <ins><b>Public use; public purpose.</b></ins> <ins>(a) "Public use" or "public purpose" means, </ins>&#10;3.12     <ins>exclusively:</ins>&#10;3.13     <ins>(1) the possession, occupation, ownership, and enjoyment of the land by the general </ins>&#10;3.14     <ins>public, or by public agencies;</ins>&#10;3.15     <ins>(2) the creation or functioning of a public service corporation; or</ins>&#10;3.16     <ins>(3) mitigation of a blighted area, remediation of an environmentally contaminated </ins>&#10;3.17     <ins>area, reduction of abandoned property, or removal of a public nuisance.</ins>&#10;3.18     <ins>(b) The public benefits of economic development, including an increase in tax base, </ins>&#10;3.19     <ins>tax revenues, employment, or general economic health, do not by themselves constitute </ins>&#10;3.20     <ins>a public use or public purpose.</ins>&#10;&#10;<a id="go.0.3.0"></a>3.21         Sec. 3. <ins><b>[117.027] CONDEMNATION FOR BLIGHT MITIGATION, </b></ins>&#10;3.22     <ins><b>CONTAMINATION REMEDIATION.</b></ins>&#10;3.23         <ins>Subdivision 1.</ins> <ins><b>Nondilapidated buildings in areas of blight mitigation; absolute </b></ins>&#10;3.24     <ins><b>necessity.</b></ins> <ins>In taking property to mitigate blight, a condemning authority must not take </ins>&#10;3.25     <ins>nondilapidated buildings in the area unless it is absolutely necessary in order to remove </ins>&#10;3.26     <ins>the dilapidated buildings.</ins>&#10;3.27         <ins>Subd. 2.</ins> <ins><b>Uncontaminated property in environmental contamination </b></ins>&#10;3.28     <ins><b>remediation areas; absolute necessity.</b></ins> <ins>In taking property to remediate environmental </ins>&#10;3.29     <ins>contamination, a condemning authority must not take uncontaminated parcels in the area </ins>&#10;3.30     <ins>unless it is absolutely necessary in order to complete remediation of the contaminated area.</ins>&#10;3.31         <ins>Subd. 3.</ins> <ins><b>Contribution to condition by developer disallowed.</b></ins> <ins>If a developer </ins>&#10;3.32     <ins>involved in the redevelopment of the project area contributed to the blight or environmental </ins>&#10;3.33     <ins>contamination within the project area, the condition contributed to by the developer must </ins>&#10;3.34     <ins>not be used in the determination of blight or environmental contamination.</ins>&#10;&#10;<a id="go.0.4.0"></a>4.1          Sec. 4. <ins><b>[117.031] ATTORNEY FEES.</b></ins>&#10;4.2      <ins>(a) If the final judgment or award for damages, as determined at any level in the </ins>&#10;4.3      <ins>eminent domain process or by the parties themselves, is more than 20 percent greater than </ins>&#10;4.4      <ins>the last written offer of compensation made by the condemning authority prior to the </ins>&#10;4.5      <ins>filing of the petition, the court shall award the owner reasonable attorney fees, litigation </ins>&#10;4.6      <ins>expenses, appraisal fees, other experts fees, and other related costs in addition to other </ins>&#10;4.7      <ins>compensation and fees authorized by this section.</ins>&#10;4.8      <ins>(b) In any case where the court determines that a taking is not for a public use or </ins>&#10;4.9      <ins>is unlawful, the court shall award the owner reasonable attorney fees and other related </ins>&#10;4.10     <ins>expenses, fees, and costs in addition to other compensation and fees authorized by this </ins>&#10;4.11     <ins>section.</ins>&#10;&#10;<a id="go.0.5.0"></a>4.12         Sec. 5. Minnesota Statutes 2004, section 117.075, subdivision 1, is amended to read:&#10;4.13         Subdivision 1. <b>Hearing on taking</b><ins><b>; evidentiary standard</b></ins><b>.</b> <ins>(a) </ins>Upon proof being &#10;4.14     filed of the service of such notice, the court, at the time and place therein fixed or to which &#10;4.15     the hearing may be adjourned, shall hear all competent evidence offered for or against the &#10;4.16     granting of the petition, regulating the order of proof as it may deem best.&#10;4.17     <ins>(b) If the taking is for the mitigation of a blighted area, remediation of an </ins>&#10;4.18     <ins>environmentally contaminated area, reducing abandoned property, or removing a </ins>&#10;4.19     <ins>public nuisance, then, notwithstanding any other provision of general or special law, a </ins>&#10;4.20     <ins>condemning authority must show by clear and convincing evidence to the district court </ins>&#10;4.21     <ins>that the taking is necessary and for the designated public use.</ins>&#10;4.22     <ins>(c) In any appeal of the district courts determination of whether the taking is </ins>&#10;4.23     <ins>necessary and for a public use, the court of appeals must review the district court's </ins>&#10;4.24     <ins>determination of facts and law de novo.</ins>&#10;&#10;<a id="go.0.6.0"></a>4.25         Sec. 6. <ins><b>[117.186] COMPENSATION FOR LOSS OF GOING CONCERN.</b></ins>&#10;4.26         <ins>Subdivision 1.</ins> <ins><b>Going concern defined.</b></ins> <ins>For purposes of this section, "going </ins>&#10;4.27     <ins>concern" means the benefits that accrue to a business or trade as a result of its location, </ins>&#10;4.28     <ins>reputation for dependability, skill or quality, customer base, good will, or any other </ins>&#10;4.29     <ins>circumstances resulting in probable retention of old or acquisition of new patronage.</ins>&#10;4.30         <ins>Subd. 2.</ins> <ins><b>Compensation for loss of going concern.</b></ins>&#10; 4.31     <ins>If a business or trade is destroyed by a taking, the owner shall be compensated for </ins>&#10;4.32     <ins>loss of going concern, unless the condemning authority establishes any of the following </ins>&#10;4.33     <ins>by clear and convincing evidence:</ins>&#10;4.34     <ins>(1) the loss is not caused by the taking of the property or the injury to the remainder;</ins>&#10;5.1      <ins>(2) the loss can be reasonably prevented by relocating the business or trade in the </ins>&#10;5.2      <ins>same or a similar and reasonably suitable location as the property that was taken, or by </ins>&#10;5.3      <ins>taking steps and adopting procedures that a reasonably prudent person of a similar age </ins>&#10;5.4      <ins>and under similar conditions as the owner, would take and adopt in preserving the going </ins>&#10;5.5      <ins>concern of the business or trade; or</ins>&#10;5.6      <ins>(3) compensation for the loss of going concern will be duplicated in the </ins>&#10;5.7      <ins>compensation otherwise awarded to the owner.</ins>&#10;  5.8      &#10;5.9          <ins>Subd. 3.</ins> <ins><b>Procedure.</b></ins> <ins>In all cases where an owner will seek compensation for loss of </ins>&#10;5.10     <ins>going concern, the damages, if any, shall in the first instance be determined and reported </ins>&#10;5.11     <ins>by the commissioners under section 117.105 as part of the compensation due to the </ins>&#10;5.12     <ins>owner.  The owner shall notify the condemning authority of the owner's intent to claim </ins>&#10;5.13     <ins>compensation for loss of going concern no later than 30 days prior to the commissioner's </ins>&#10;5.14     <ins>hearing. The commissioner's decision regarding any award for loss of going concern may </ins>&#10;5.15     <ins>be appealed by any party in accordance with section 117.145.</ins>&#10;&#10;<a id="go.0.7.0"></a>5.16         Sec. 7. <ins><b>[117.187] MINIMUM COMPENSATION.</b></ins>&#10;5.17     <ins>When an owner must relocate, the amount of damages payable, at a minimum, must </ins>&#10;5.18     <ins>be sufficient for an owner to purchase a similar house or building of equivalent size in </ins>&#10;5.19     <ins>the community and not less than the condemning authority's payment or deposit under </ins>&#10;5.20     <ins>section 117.042.</ins>&#10;&#10;<a id="go.0.8.0"></a>5.21         Sec. 8. <ins><b>[117.188] LIMITATIONS.</b></ins>&#10;5.22     <ins>The condemning authority may not require the owner to accept as part of the </ins>&#10;5.23     <ins>compensation due any substitute or replacement property.  Nor shall the condemning </ins>&#10;5.24     <ins>authority require the owner to accept the return of property acquired or any portion thereof.</ins>&#10;&#10;<a id="go.0.9.0"></a>5.25         Sec. 9. <ins><b>[117.189] PUBLIC SERVICE CORPORATION EXCEPTION.</b></ins>&#10;5.26     <ins>Sections 117.031, 117.186, 117.187, and 117.188 do not apply to public service </ins>&#10;5.27     <ins>corporations.</ins>&#10;&#10;<a id="go.0.10.0"></a>5.28         Sec. 10. <ins><b>[117.1905] PUBLIC HEARING.</b></ins>&#10;5.29         <ins>Subdivision 1.</ins> <ins><b>Definitions.</b></ins> <ins>(a) For the purposes of this section, "local government" </ins>&#10;5.30     <ins>means the elected governing body of a statutory or home rule charter city, county, or </ins>&#10;5.31     <ins>township.</ins>&#10;6.1      <ins>(b) For the purposes of this section, "agency" means any subdivision, agency, </ins>&#10;6.2      <ins>authority, or other entity of the local government, including a port authority, economic </ins>&#10;6.3      <ins>development authority, housing and redevelopment authority, or other similar entity </ins>&#10;6.4      <ins>established under general or special law.</ins>&#10;6.5          <ins>Subd. 2.</ins> <ins><b>Public hearing; vote by local government governing body.</b></ins> <ins>Before a </ins>&#10;6.6      <ins>local government or agency acquires property by the exercise of the power of eminent </ins>&#10;6.7      <ins>domain, the local government must notify each property owner in writing of a public </ins>&#10;6.8      <ins>hearing on the proposed taking, post the public hearing information on the local </ins>&#10;6.9      <ins>government's Web site, if any, and publish notice of the public hearing in the official </ins>&#10;6.10     <ins>newspaper.  Notice must be provided at least 30 days but not more than 60 days before the </ins>&#10;6.11     <ins>hearing.  Any interested person must be allowed reasonable time to present testimony at </ins>&#10;6.12     <ins>the public hearing.  The proceedings of the hearing must be recorded and available to the </ins>&#10;6.13     <ins>public for review and comment at reasonable times and a reasonable place.  At the next </ins>&#10;6.14     <ins>regular meeting of the local government that is at least 30 days after the public hearing, the </ins>&#10;6.15     <ins>local government must vote on the question of whether to authorize the local government </ins>&#10;6.16     <ins>or agency to use eminent domain to acquire the property.</ins>&#10;&#10;<a id="go.0.11.0"></a>6.17         Sec. 11. <ins><b>REVISOR'S INSTRUCTION.</b></ins>&#10;6.18     <ins>The revisor shall change the phrase "right of eminent domain" where found in </ins>&#10;6.19     <ins>Minnesota Statutes and Minnesota Rules to "power of eminent domain."</ins>&#10;&#10;<a id="go.0.12.0"></a>6.20         Sec. 12. <ins><b>EFFECTIVE DATE.</b></ins>&#10;6.21     <ins>This act is effective the day following final enactment and applies to condemnation </ins>&#10;6.22     <ins>proceedings commenced on or after March 1, 2006.</ins>&#10;