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S1245.............................................................by BRANDT EMINENT DOMAIN - Amends existing law to provide an alternate method for establishing the minimum amount for damages when ascertaining the value of the property. 01/11 Senate intro - 1st rdg - to printing 01/12 Rpt prt - to St Aff
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature Second Regular Session - 2006IN THE SENATE SENATE BILL NO. 1245 BY BRANDT 1 AN ACT 2 RELATING TO EMINENT DOMAIN; AMENDING SECTION 7-711, IDAHO CODE, TO PROVIDE AN 3 ALTERNATE METHOD FOR ESTABLISHING THE MINIMUM AMOUNT FOR DAMAGES WHEN 4 ASCERTAINING THE VALUE OF THE PROPERTY. 5 Be It Enacted by the Legislature of the State of Idaho: 6 SECTION 1. That Section 7-711, Idaho Code, be, and the same is hereby 7 amended to read as follows: 8 7-711. ASSESSMENT OF DAMAGES. The court, jury or referee must hear such 9 legal testimony as may be offered by any of the parties to the proceedings, 10 and thereupon must ascertain and assess: 11 1. The value of the property sought to be condemned, and all improvements 12 thereon pertaining to the realty, and of each and every separate estate or 13 interest therein; if it consists of different parcels, the value of each par- 14 cel and each estate or interest therein shall be separately assessed. For pur- 15 poses of ascertaining the value of the property, the minimum amount for dam- 16 ages shall be the greater of the assessed value for property tax purposes 17shall be used as the minimum amount for damagesunless the court, jury or ref- 18 eree finds the property has been altered substantially, or the plaintiff's 19 highest prelitigation offer. 20 2. If the property sought to be condemned constitutes only a part of a 21 larger parcel: (a) the damages which will accrue to the portion not sought to 22 be condemned, by reason of its severance from the portion sought to be con- 23 demned, and the construction of the improvement in the manner proposed by the 24 plaintiff; and (b) the damages to any business qualifying under this subsec- 25 tion having more than five (5) years' standing which the taking of a portion 26 of the property and the construction of the improvement in the manner proposed 27 by the plaintiff may reasonably cause. The business must be owned by the party 28 whose lands are being condemned or be located upon adjoining lands owned or 29 held by such party. Business damages under this subsection shall not be 30 awarded if the loss can reasonably be prevented by a relocation of the busi- 31 ness or by taking steps that a reasonably prudent person would take, or for 32 damages caused by temporary business interruption due to construction; and 33 provided further that compensation for business damages shall not be dupli- 34 cated in the compensation otherwise awarded to the property owner for damages 35 pursuant to subsections (1) and (2) (a) of section 7-711, Idaho Code. 36 (i) If the business owner intends to claim business damages under this 37 subsection, the owner, as defendant, must submit a written business damage 38 claim to the plaintiff within ninety (90) days after service of the sum- 39 mons and complaint for condemnation. The plaintiff's initial offer letter 40 or accompanying information must expressly inform the defendant of its 41 rights under this subsection, and must further inform the defendant of its 42 right to consult with an attorney. 43 (ii) The defendant's written claim must be sent to the plaintiff by cer- 2 1 tified mail, return receipt requested. Absent a showing of a good faith 2 justification for the failure to submit a business damage claim within 3 ninety (90) days, or an agreed extension by the parties, the court shall 4 strike the defendant's claim for business damages in any condemnation pro- 5 ceeding. 6 (iii) The business damage claim must include an explanation of the nature, 7 extent, and monetary amount of such claimed damages and must be prepared 8 by the owner, a certified public accountant, or a business damage expert 9 familiar with the nature of the operations of the defendant's business. 10 The defendant shall also provide the plaintiff with copies of the 11 defendant's business records that substantiate the good faith offer to 12 settle the business damage claim. The business damage claim must be 13 clearly segregated from the claim for property damages pursuant to subsec- 14 tions (1) and (2)(a) of section 7-711, Idaho Code. 15 (iv) As used in this subsection, the term "business records" includes, 16 but is not limited to, copies of federal and state income tax returns, 17 state sales tax returns, balance sheets, and profit and loss statements 18 for the five (5) years preceding which are attributable to the business 19 operation on the property to be acquired, and other records relied upon by 20 the business owner that substantiate the business damage claim. 21 (v) The plaintiff's good faith in failing to offer compensation for 22 business damages shall not be contested at a possession hearing held pur- 23 suant to section 7-721, Idaho Code, if the defendant has not given notice 24 of its intent to claim business damages prior to the date of filing of the 25 motion that initiates the proceeding under that section. 26 3. Separately, how much the portion not sought to be condemned, and each 27 estate or interest therein, will be specially and directly benefited, if at 28 all, by the construction of the improvement proposed by the plaintiff; and if 29 the benefit shall be equal to the damages assessed, under subsection 2. of 30 this section, the owner of the parcel shall be allowed no compensation except 31 the value of the portion taken; but if the benefit shall be less than the dam- 32 ages so assessed, the former shall be deducted from the latter, and the 33 remainder shall be the only damages allowed in addition to the value. 34 4. If the property sought to be condemned be for a railroad, the cost of 35 good and sufficient fences along the line of such railroad, and the cost of 36 cattle guards where fences may cross the line of such railroad. 37 5. As far as practicable, compensation must be assessed for each source 38 of damages separately. 39 6. If the property sought to be condemned is private real property activ- 40 ely devoted to agriculture, the damages which will accrue because of the 41 costs, if any, of farming around electrical transmission line structure(s) for 42 a transmission line with a capacity in excess of two hundred thirty (230) KV 43 (kilovolts). If the property sought to be condemned has been the subject of a 44 previous condemnation proceeding or proceedings for electrical transmission 45 line structure(s) and at the time of condemnation the field holds other elec- 46 trical transmission line structure(s), such evidence of costs referred to 47 above may also include the cumulative effects, if any, of conducting farming 48 operations around other electrical transmission line structure(s) in the same 49 field, whether such structure(s) are of the condemner or not.
STATEMENT OF PURPOSE RS 15560 Kelo highlighted the need to ensure there is a balance between condemners and property owners, and the importance that government act in good faith when acquiring property. Existing law requires condemners to attempt to purchase property via good faith negotiations prior to filing suit for condemnation. The condemner's last offer before litigation should therefore be a good faith offer. However, currently just compensation can be reduced once suit is filed, resulting in condemners asserting that just compensation owed is lower once litigation is filed than they asserted pre-litigation. This penalizes property owners who do not settle out of court and allows condemners to ignore their constitutional obligation assess just compensation in good faith. As a practical matter, there is no remedy for abuses of this type currently. This modification to existing code would require the condemner to stand by its last pre-litigation offer and set that amount as a floor for just compensation; if the condemner asserted the amount was just compensation prior to filing suit, it cannot assert less than that amount for just compensation after suit is filed. This would ensure that good faith and the spirit of the Constitution are complied with, as condemners are charged with the constitutional obligation to assess and pay just compensation, not the lowest price they can convince a judge or jury to award. FISCAL NOTE This may result in cost savings to condemners if they are required to stand by their appraisals rather than incur additional costs for new appraisals once litigation commences. It should not result in additional costs to condemners, as it merely requires that they pay no less as just compensation in litigation than they were willing to pay pre-litigation. If the pre-litigation appraisals are fair and the condemners are negotiating in good faith based thereon, no costs will increase. If condemners are currently paying less than just compensation in litigation, costs could increase, but only because constitutional requirements are being complied with. Contact: Name: Senator Skip Brandt Representative Mike Moyle Phone: 332- 1326 332-1000 STATEMENT OF PURPOSE/FISCAL NOTE S 1245