You asked for a summary of referenda and initiatives in other states this fall dealing with eminent domain and related issues.

Much of the information in this report is taken from a report compiled by the National Conference of State Legislatures, which is available at http: //www. ncsl. org. We enclose a summary table from this report. The text of the measures is available at http: //www. castlecoalition. org/ legislation/ballot-measures/index. html.

SUMMARY

Voters in 13 states (Arizona, California, Florida, Georgia, Idaho, Louisiana, Michigan, Nevada, New Hampshire, North Dakota, Oregon, South Carolina, and Washington) considered ballot referenda and initiatives on eminent domain and related issues. The measures in Arizona, Idaho, Oregon, and Washington proposed changes to the statutes; in the remaining states they proposed amendments to the state constitution. The measures failed in California, Idaho, and Washington and passed in the remaining states.

Most of the measures bar state and municipal agencies from using their eminent domain powers to transfer property from one private owner to another or take private property for economic development purposes or. Several of the measures address the compensation that governments must pay when they take property and the procedures they must follow in taking property, e. g. , obtaining approval from the local legislative body.

Nevada law requires that a constitutional amendment be passed in two consecutive general elections before it becomes effective. Therefore, having passed in the November 2006 election, it will appear on the ballot again for approval in November 2008 before it can take effect.

The measure adopted in Arizona and those rejected in Idaho, Oregon, and Washington also addressed “regulatory takings. ” They would have required government agencies to compensate property owners when they adopt or enforce land use controls, such as zoning ordinances, that reduce the property's value. The Nevada Supreme Court removed portions of original initiative dealing with regulatory takings from the ballot question, because the constitution limits initiatives to a single issue.

REFERENDA AND INITIATIVES THAT PASSED

Arizona

Proposition 207 amends the Arizona statutes to limit the use of eminent domain to situations where condemnation is authorized by the state and the property taken is put to a public use. The proposition defines "public use" to include:

1. the use of land by the general public or by public agencies,

2. the use of land for utilities,

3. the acquisition of property to eliminate a direct threat to the public health or safety caused by the property's current condition, or

4. the acquisition of abandoned property.

The proposition bars the use of eminent domain for the purpose of economic development.

The proposition requires that if a government takes a person's primary residence, it must provide him with a comparable replacement dwelling that is decent, safe and sanitary. The property owner may choose to receive money compensation instead of the replacement dwelling.

The proposition also provides that a property owner is entitled to just compensation if the value of his property is reduced by the enactment of a land use law. These are laws that regulate the use or division of land, such as municipal zoning laws, or regulates accepted farming or forestry practices. The proposition sets out seven types of land use laws that are exempt from the compensation requirement.

Under the proposition, if a property owner is successful in an eminent domain law suit, the government must pay his attorney fees and costs. If a property owner demonstrates that a land use law reduces his property's value, the court may award attorney fees and costs.

Florida

Amendment 8 to the state constitution prohibits the transfer of private property taken by eminent domain to a natural person or private entity unless the legislature passes a general law by a three-fifths vote of the membership of each house to permit exceptions allowing the transfer of such property. The prohibition applies to transfers of private property taken by eminent domain when the petition of taking that initiated the condemnation proceeding was filed on or after January 2, 2007.

Georgia

Constitutional Amendment 1 provides that each taking of private property for redevelopment purposes must (1) be approved by vote of the appropriate elected city or county governing authority and (2) be for a public use as defined by state law. The proposal provides that the exercise of eminent domain by cities and counties can be restricted by general state law.

Louisiana

Amendment 5 to the state constitution bars the use of eminent domain for the predominant use by a private person or entity or for the transfer of ownership to any private person or entity. These restrictions do not apply if the property is taken for purposes of industrial development, establishing and furnishing industrial plants, operation of public ports, or providing property for pollution control facilities.

The constitution permits the use of eminent domain for “public purposes. ” The amendment limits "public purpose" to the following:

1. a general public right to a definite use of the property; or

2. continuous public ownership for specified uses such as public buildings, roads, parks, public utilities or to remove a threat to public health or safety caused by the existing use or disuse of the property.

Under the amendment, economic development, enhancement of tax revenue, or any incidental benefit to the public cannot be considered in determining whether the taking or damaging of property is for a public purpose.

The constitution already entitled the affected property owner to a jury trial to determine compensation and entitled his to compensation to the full extent of his loss. The amendment specifies that full compensation must at least include the appraised value of the property and all costs of relocation, inconvenience, and any other damages actually incurred by the owner because of the taking, except as otherwise provided in the constitution.

Michigan

Proposal 06-4 amends the state constitution to:

1. prohibit government agencies from taking private property for transfer to another private individual or business or for purposes of economic development or increasing tax revenue;

2. require agencies that takes a private property to demonstrate that the taking is for a public use;

3. require an agency to meet a higher standard of proof in demonstrating that it is taking property for a public use when does so to combat blight; and

4. provide that when an individual's principal residence is taken by government for public use, he must be paid at least 125% of property's fair market value;

The proposal also provides that any existing right, grant, or benefit afforded to property owners as of November 1, 2005, whether provided by the constitution, statute, or otherwise, will not be abrogated or impaired by the constitutional amendment.

The implementation of two bills passed during the 2006 session was contingent on the passage of the proposal. These bills amend the statute that regulates the acquisition of property by state agencies and public corporations, by adding provisions similar to those in the proposal. Additionally, under the bills, the taking of private property for public use would not include a taking that was a pretext to confer a private benefit on a private entity. House Bill 5060 also describes criteria that property would have to meet in order to be declared “blighted”.

Nevada

Ballot Question 2 would amend the state constitution to provide that the transfer of property taken in an eminent domain action from one private party to another private party would not be considered taken for a public use. It would also bar the state or its political subdivisions or agencies to occupy property taken in an eminent domain action until the government provides a property owner with all government property appraisals. The government would have the burden to prove that any property taken was taken for a public use.

If property is taken for a public use, it would have to be valued at its highest and best use. In an eminent domain action, just compensation would be considered a sum of money that puts a property owner in the same position as if the property had not been taken, and includes compounded interest and reasonable costs and expenses. Fair market value, for eminent domain purposes, would be defined as the highest price the property would bring on the open market. If the property was not used for the purpose the property was taken for within five years, the original property owner would be able to reclaim the property upon repayment of the original purchase price.

New Hampshire

In passing Question 1, the voters amended the state constitution to prohibit the use of eminent domain if the property is taken for the purpose of private development or other private use of the property and the property is transferred, directly or indirectly, to a person or entity other than the taking agency.

North Dakota

Initiated Constitutional Measure 2 provides that the taking of private property for a public use or purpose does not include public economic development benefits and that private property may not be taken for private benefit unless it is needed to conduct a common carrier (e. g. , trucking) or utility business.

Oregon

Measure 39 amends Oregon's eminent domain statutes by limiting the authority of the government to take residences, business establishments, and farms or forest operations. It bars taking such property and transferring it to another private owner. But it does allow the taking and transfer of:

1. real property, for specified reasons, that is a danger to health or safety for specified reasons;

2. timber, crops, topsoil, gravel or fixtures that can be removed from real property that is being condemned (as distinct from the land or buildings themselves);

3. real property to be used for transportation or utility-related projects; and

4. real property acquired by a new owner after the government publishes a notice that it intends to consider condemning the real property.

In addition to these four exceptions, Measure 39 authorizes the government to use the condemned real property to secure financing for its acquisition and to lease portions of the property for retail uses that serve patrons of the public facility.

If a property owner believes the government's condemnation of the property violates Measure 39 he may object to the condemnation. The court must determine on its own, without deferring to the decision of the local government, whether the government's condemnation violates the new provisions of Measure 39. If the court determines the government's condemnation does not satisfy the new requirements of Measure 39, then the property owner is entitled to recover reasonable attorney's fees, costs, expenses, and other disbursements.

Measure 39 also modifies condemnation procedures contained in Oregon law. Currently, when the government decides to condemn private real property, the government must provide the property owner with an initial offer for purchasing the private real property. If the property owner rejects the government's initial offer additional offers may be made. If agreement is not reached the case proceeds to trial. If the property owner receives a verdict above the highest offer made by the government at least 30 days prior to the beginning of trial, the property owner is entitled to recover attorney fees, costs, and other disbursements.

Measure 39 further modifies the condemnation process by allowing an owner of private real property to recover attorney fees costs and other disbursements if the judgment awarded at trial exceeds the initial offer of compensation offered by the government, even if the government subsequently made a higher offer.

South Carolina

Constitutional Amendment 5 prohibits state and local governments from condemning private property for any purpose except for a public use and specifies that that economic development in itself is not a public use. It allows the General Assembly to pass a law that allows condemnation for a private use only if the property is blighted and is dangerous to the community's safety and health and if fair compensation is paid. It also repeals certain provisions regarding condemnation of blighted areas by specific local governments.

REFERENDA AND INITIATIVES THAT FAILED

California

Proposition 90 would have amended the state constitution to bar state and local governments from condemning or damaging private property to promote economic development or other private uses. It would have required the government to demonstrate that a proposed taking was for a public rather than private use. However, governments could still have taken property to combat blight and other nuisances.

The proposition would have amended the way that compensation for condemned property is calculated by requiring that the property be valued at its highest and best use without considering any future dedication requirements imposed by the government (e. g. , open space requirements for subdivisions). If private property was to be taken for a governmental purpose, the proposition would have required it to be valued based on the government's intended use, if this would result in a higher value for the land taken. In all cases, the owner would have to receive enough compensation to place him in the same position monetarily, without any governmental offsets, as if the property had never been taken.

It would have required the government to occupy the properties it takes by eminent domain or lease the property for public use. If the government abandoned its objectives, it would have been required to offer the property back to the prior owner or his heirs at current fair market value. The proposition would have voided unpublished eminent domain court decisions.

The proposition also would have limited government's authority to adopt certain land use, housing, consumer, environmental and workplace laws and regulations, except when necessary to preserve public health or safety. It would do so by treating such regulations as damages to the property, for which the government would be required to pay compensation.

Idaho

Proposition 2 would have amended the eminent domain law to bar the taking of private property (1) if when the condemnation takes place, the public body condemning the property intends to convey the property or an interest in it to another private party; or (2) for the purpose of economic development. The amendment would have specified that the courts could freely review the rationale for condemnation in the course of judicial proceedings involving eminent domain.

The proposition would not have affected the ability of governments to use eminent domain for:

1. the specific public and private uses expressly set forth in the state constitution;

2. granting non-possessory interests in the property to be taken for the purpose of financing acquisition of the property (e. g. , mortgages); and

3. certain purposes specified in statute.

But in the case of condemnations by housing authorities or to remove blight, private property cannot be taken by eminent domain unless the specific property to be condemned is proven by clear and convincing evidence to meet all of the following requirements:

1. the property, because of its general dilapidated condition, compromised structural integrity, or failed mechanical systems, endangers life or endangers property by fire or other perils that pose an actual identifiable threat to building occupants;

2. contains specifically identifiable conditions that pose an actual risk to human health, transmission of disease, juvenile delinquency, or criminal content; and

3. the property presents an actual risk of harm to the public health, safety, morals, or general welfare.

These provisions would not have affected takings of a leasehold on property owned by a governmental entity.

The proposition would have also entitled a property owner to compensation if his ability to use, possess, sell, or divide property is limited or prohibited by the enactment or enforcement of any land use law in a way that reduces the property's fair market value. The owner would not have been required to submit a land use application to remove, modify, vary, or otherwise alter the application of the land use law as a prerequisite to demanding or receiving compensation.

This provision would not have applied to land use laws that:

1. limit or prohibit a use or division of property to protect public health and safety, such as fire and building codes;

2. limit or prohibit a use or division of real property recognized as a public nuisance under common law;

3. are required by federal law;

4. limit or prohibit the use or division of a property for the purpose of selling pornography or performing nude dancing;

5. were enacted before the amendment's effective date; or

6. do not directly regulate an owner's land.

Washington

Initiative 933 would have required a government to consider and document certain factors prior to enacting laws regulating private property. The measure would also have required a government to pay compensation to private property owners to enforce restrictions "damaging the use or value" of private property, which would require compensation in circumstances in addition to those where the state or federal constitutions would require compensation. Development regulations could not prohibit legal uses existing on a parcel of property.

The initiative would have required state and local government agencies to consider and document certain matters before enacting an ordinance, regulation, or rule that may damage the use or value of private property. Private property includes all real and personal property interests protected by the state and federal constitutions, including land, buildings, crops, livestock, mineral and water rights. Governments would have been required to consider and document several factors, including: (1) identifying the private property to be affected by a proposed action; (2) the purposes to be served by the action and the connection between the action and its purposes; (3) the extent to which the action deprives property owners of uses of property, or interferes with a property owner's right to exclude others, to possess property, to enjoy property, or to dispose of property; (4) estimated compensation that would be required under the initiative for damaging the use or value of property; and (5) alternative and less restrictive means of accomplishing the governmental purposes, including voluntary cooperation.

The initiative defined "damaging the use or value of property" as meaning "to prohibit or restrict the use of private property to obtain benefit to the public the cost of which in all fairness and justice should be borne by the public as a whole. " It includes examples of restrictions that would and would not trigger the compensation requirement. Examples of actions requiring compensation would include enforcement of any ordinance, regulation, or rule to private property that (1) prohibits or restricts the use or size, scope, or intensity of any use legally existing or permitted as of January 1, 1996; (2) requires that part of the property to be left in a natural state or with no beneficial use to the owner, unless necessary to prevent immediate harm to human health and safety; or (3) prohibits maintenance or removal of trees or vegetation. On the other hand, compensation would not be required for laws that (1) restrict the use of property to prevent immediate threat to human health or safety; (2) require compliance with structural standards like building or fire codes to prevent harm from natural disasters; (3) limiting the location of sex offender housing or adult entertainment; (4) require compliance with federal laws restricting chemical uses, with worker health and safety laws, and with worker wage and hour laws; (5) requiring compliance with setbacks limits from neighboring property lines if the setbacks were set before January 1, 1996.

Under the initiative, if an agency decided to enforce or apply an ordinance, regulation, or rule damaging the use or value of property, it would have first had to pay the property owner compensation. The compensation would have been the amount by which the fair market value of the affected property was decreased by applying or enforcing the ordinance, regulation, or rule, and the fair market value of any portion of the property required to be left in a natural state or without beneficial use. Compensation also would have included the owner's reasonable attorney fees.

The initiative would not have limited existing state or local government authority to waive or vary the requirements of existing laws. But it would have prohibited an agency from charging a fee to consider whether to waive or vary a law to avoid paying the required compensation.

The initiative would have amended current law to provide that development regulations such zoning and subdivision ordinances could not prohibit uses legally existing on any parcel prior to their adoption.

Attachment 1: Property Rights Measures on the 2006 Ballot

Key: I=initiative, L=legislation, CA=constitutional amendment, S=statutory change

Source: National Conference of State Legislatures

KM: ro