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SF 2750

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
1.1                                         A bill for an act
1.2      relating to eminent domain; defining public use or purpose; prohibiting the use 
1.3      of eminent domain for economic development; requiring clear and convincing 
1.4      evidence for certain takings; providing for attorney fees and other additional 
1.5      elements of compensation; making other changes in the exercise of eminent 
1.6      domain; amending Minnesota Statutes 2004, sections 117.025; 117.075, 
1.7      subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 117.

1.9          Section 1. [117.012] PREEMPTION; NO IMPLIED AUTHORITY.
1.10         Subdivision 1. Preemption. Notwithstanding any other provision of law, including 
1.11     any charter provision, ordinance, statute, or special law, all condemning authorities, 
1.12     including home rule charter cities and all other political subdivisions of the state, must 
1.13     exercise the power of eminent domain in accordance with the provisions of this chapter, 
1.14     including all procedures, definitions, remedies, and limitations. Additional procedures, 
1.15     remedies, or limitations that do not deny or diminish the substantive and procedural rights 
1.16     and protections of owners under this chapter may be provided by other law, ordinance, 
1.17     or charter.
1.18         Subd. 2. No implied authority. The power of eminent domain shall not be implied. 
1.19     In order to exercise the power of eminent domain, the condemning authority must have an 
1.20     express grant of eminent domain authority. 

1.21         Sec. 2. Minnesota Statutes 2004, section 117.025, is amended to read:
1.22     117.025 DEFINITIONS.
1.23         Subdivision 1. Words, terms, and phrases. Unless the language or context clearly 
1.24     indicates that a different meaning is intended, For the purposes of this chapter and any 
2.1      other general or special law authorizing the exercise of the power of eminent domain, the 
2.2      words, terms, and phrases defined in this section have the meanings given them.
2.3          Subd. 2. Taking. "Taking" and all words and phrases of like import include every 
2.4      interference, under the right of eminent domain, with the possession, enjoyment, or value 
2.5      of private property.
2.6          Subd. 3. Owner. "Owner" includes all persons interested in such with any interest 
2.7      in the  property subject to a taking, whether as proprietors, tenants, life estate holders, 
2.8      encumbrancers, beneficial interest holders, or otherwise.
2.9          Subd. 4. Condemning authority. "Condemning authority" means any person or 
2.10     entity with the power of eminent domain.
2.11         Subd. 5. Abandoned property. "Abandoned property" means property not occupied 
2.12     by a person with a legal or equitable right to occupy it and for which the condemning 
2.13     authority is unable to identify and contact the owner despite making reasonable efforts.
2.14         Subd. 6. Blighted area. (a) "Blighted area" means, exclusively, at the time of 
2.15     condemnation, an area: 
2.16     (1) that is zoned and used for urban use; and
2.17     (2) where more than 50 percent of the buildings are dilapidated.
2.18         Subd. 7. Dilapidated building. "Dilapidated building" means, exclusively, a 
2.19     building:
2.20     (1) that was inspected by the appropriate local government and cited for one or more 
2.21     building code violations at least 12 months before the condemnation is commenced;
2.22     (2) in which the building code violations cited have not been remedied, as 
2.23     determined by at least one reinspection that finds noncompliance after the due date for 
2.24     compliance with an order to correct a building code violation; and
2.25     (3) that, as of the date the condemnation is commenced, is unfit for human use 
2.26     because it is unsafe, structurally unsound, or lacking in basic equipment.
2.27         Subd. 8. Environmentally contaminated area. "Environmentally contaminated 
2.28     area" means an area:
2.29     (1) that contains, on or below more than 50 percent of its surface area, any substance 
2.30     or substances defined, regulated, or listed as a hazardous substance, hazardous material, 
2.31     hazardous waste, toxic waste, pollutant, contaminant, or toxic substance, or identified as 
2.32     hazardous to human health or the environment under state or federal law or regulation; and
2.33     (2) for which the costs of investigation, monitoring and testing, and remedial action 
2.34     or removal, as defined in section 115B.02, subdivisions 16 and 17, respectively, including 
2.35     any state costs of remedial actions, exceed 100 percent of the assessor's estimated market 
3.1      value for the contaminated area, as determined under section 273.11, for property taxes 
3.2      payable in the year in which the condemnation commenced.
3.3          Subd. 9. Public nuisance. "Public nuisance" means a public nuisance under 
3.4      section 609.74.
3.5          Subd. 10. Public service corporation. "Public service corporation" means a 
3.6      public utility; gas, electric, telephone, or cable communications company; cooperative 
3.7      association; natural gas pipeline company; crude oil, or petroleum products pipeline 
3.8      company; municipal utility; municipality when operating its municipally owned utilities; 
3.9      or municipal power agency; as otherwise regulated by law, including but not limited to 
3.10     chapters 216B, 237, 300, and 302A.
3.11         Subd. 11. Public use; public purpose. (a) "Public use" or "public purpose" means, 
3.12     exclusively:
3.13     (1) the possession, occupation, ownership, and enjoyment of the land by the general 
3.14     public, or by public agencies;
3.15     (2) the creation or functioning of a public service corporation; or
3.16     (3) mitigation of a blighted area, remediation of an environmentally contaminated 
3.17     area, reduction of abandoned property, or removal of a public nuisance.
3.18     (b) The public benefits of economic development, including an increase in tax base, 
3.19     tax revenues, employment, or general economic health, do not by themselves constitute 
3.20     a public use or public purpose.

3.21         Sec. 3. [117.027] CONDEMNATION FOR BLIGHT MITIGATION, 
3.23         Subdivision 1. Nondilapidated buildings in areas of blight mitigation; absolute 
3.24     necessity. In taking property to mitigate blight, a condemning authority must not take 
3.25     nondilapidated buildings in the area unless it is absolutely necessary in order to remove 
3.26     the dilapidated buildings.
3.27         Subd. 2. Uncontaminated property in environmental contamination 
3.28     remediation areas; absolute necessity. In taking property to remediate environmental 
3.29     contamination, a condemning authority must not take uncontaminated parcels in the area 
3.30     unless it is absolutely necessary in order to complete remediation of the contaminated area.
3.31         Subd. 3. Contribution to condition by developer disallowed. If a developer 
3.32     involved in the redevelopment of the project area contributed to the blight or environmental 
3.33     contamination within the project area, the condition contributed to by the developer must 
3.34     not be used in the determination of blight or environmental contamination.

4.1          Sec. 4. [117.031] ATTORNEY FEES.
4.2      (a) If the final judgment or award for damages, as determined at any level in the 
4.3      eminent domain process or by the parties themselves, is more than 20 percent greater than 
4.4      the last written offer of compensation made by the condemning authority prior to the 
4.5      filing of the petition, the court shall award the owner reasonable attorney fees, litigation 
4.6      expenses, appraisal fees, other experts fees, and other related costs in addition to other 
4.7      compensation and fees authorized by this section.
4.8      (b) In any case where the court determines that a taking is not for a public use or 
4.9      is unlawful, the court shall award the owner reasonable attorney fees and other related 
4.10     expenses, fees, and costs in addition to other compensation and fees authorized by this 
4.11     section.

4.12         Sec. 5. Minnesota Statutes 2004, section 117.075, subdivision 1, is amended to read:
4.13         Subdivision 1. Hearing on taking; evidentiary standard. (a) Upon proof being 
4.14     filed of the service of such notice, the court, at the time and place therein fixed or to which 
4.15     the hearing may be adjourned, shall hear all competent evidence offered for or against the 
4.16     granting of the petition, regulating the order of proof as it may deem best.
4.17     (b) If the taking is for the mitigation of a blighted area, remediation of an 
4.18     environmentally contaminated area, reducing abandoned property, or removing a 
4.19     public nuisance, then, notwithstanding any other provision of general or special law, a 
4.20     condemning authority must show by clear and convincing evidence to the district court 
4.21     that the taking is necessary and for the designated public use.
4.22     (c) In any appeal of the district courts determination of whether the taking is 
4.23     necessary and for a public use, the court of appeals must review the district court's 
4.24     determination of facts and law de novo.

4.25         Sec. 6. [117.186] COMPENSATION FOR LOSS OF GOING CONCERN.
4.26         Subdivision 1. Going concern defined. For purposes of this section, "going 
4.27     concern" means the benefits that accrue to a business or trade as a result of its location, 
4.28     reputation for dependability, skill or quality, customer base, good will, or any other 
4.29     circumstances resulting in probable retention of old or acquisition of new patronage.
4.30         Subd. 2. Compensation for loss of going concern.
 4.31     If a business or trade is destroyed by a taking, the owner shall be compensated for 
4.32     loss of going concern, unless the condemning authority establishes any of the following 
4.33     by clear and convincing evidence:
4.34     (1) the loss is not caused by the taking of the property or the injury to the remainder;
5.1      (2) the loss can be reasonably prevented by relocating the business or trade in the 
5.2      same or a similar and reasonably suitable location as the property that was taken, or by 
5.3      taking steps and adopting procedures that a reasonably prudent person of a similar age 
5.4      and under similar conditions as the owner, would take and adopt in preserving the going 
5.5      concern of the business or trade; or
5.6      (3) compensation for the loss of going concern will be duplicated in the 
5.7      compensation otherwise awarded to the owner.
5.9          Subd. 3. Procedure. In all cases where an owner will seek compensation for loss of 
5.10     going concern, the damages, if any, shall in the first instance be determined and reported 
5.11     by the commissioners under section 117.105 as part of the compensation due to the 
5.12     owner.  The owner shall notify the condemning authority of the owner's intent to claim 
5.13     compensation for loss of going concern no later than 30 days prior to the commissioner's 
5.14     hearing. The commissioner's decision regarding any award for loss of going concern may 
5.15     be appealed by any party in accordance with section 117.145.

5.16         Sec. 7. [117.187] MINIMUM COMPENSATION.
5.17     When an owner must relocate, the amount of damages payable, at a minimum, must 
5.18     be sufficient for an owner to purchase a similar house or building of equivalent size in 
5.19     the community and not less than the condemning authority's payment or deposit under 
5.20     section 117.042.

5.21         Sec. 8. [117.188] LIMITATIONS.
5.22     The condemning authority may not require the owner to accept as part of the 
5.23     compensation due any substitute or replacement property.  Nor shall the condemning 
5.24     authority require the owner to accept the return of property acquired or any portion thereof.

5.25         Sec. 9. [117.189] PUBLIC SERVICE CORPORATION EXCEPTION.
5.26     Sections 117.031, 117.186, 117.187, and 117.188 do not apply to public service 
5.27     corporations.

5.28         Sec. 10. [117.1905] PUBLIC HEARING.
5.29         Subdivision 1. Definitions. (a) For the purposes of this section, "local government" 
5.30     means the elected governing body of a statutory or home rule charter city, county, or 
5.31     township.
6.1      (b) For the purposes of this section, "agency" means any subdivision, agency, 
6.2      authority, or other entity of the local government, including a port authority, economic 
6.3      development authority, housing and redevelopment authority, or other similar entity 
6.4      established under general or special law.
6.5          Subd. 2. Public hearing; vote by local government governing body. Before a 
6.6      local government or agency acquires property by the exercise of the power of eminent 
6.7      domain, the local government must notify each property owner in writing of a public 
6.8      hearing on the proposed taking, post the public hearing information on the local 
6.9      government's Web site, if any, and publish notice of the public hearing in the official 
6.10     newspaper.  Notice must be provided at least 30 days but not more than 60 days before the 
6.11     hearing.  Any interested person must be allowed reasonable time to present testimony at 
6.12     the public hearing.  The proceedings of the hearing must be recorded and available to the 
6.13     public for review and comment at reasonable times and a reasonable place.  At the next 
6.14     regular meeting of the local government that is at least 30 days after the public hearing, the 
6.15     local government must vote on the question of whether to authorize the local government 
6.16     or agency to use eminent domain to acquire the property.

6.17         Sec. 11. REVISOR'S INSTRUCTION.
6.18     The revisor shall change the phrase "right of eminent domain" where found in 
6.19     Minnesota Statutes and Minnesota Rules to "power of eminent domain."

6.20         Sec. 12. EFFECTIVE DATE.
6.21     This act is effective the day following final enactment and applies to condemnation 
6.22     proceedings commenced on or after March 1, 2006.