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H0538......................................................by STATE AFFAIRS REAL PROPERTY VALUE - Adds to existing law to provide a claims and arbitration process when local government actions affect the value of real property in certain instances. 01/28 House intro - 1st rdg - to printing 01/29 Rpt prt - to St Aff
H0538|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 538 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO ACTIONS REGARDING REAL PROPERTY; PROVIDING LEGISLATIVE INTENT; 3 AMENDING TITLE 67, IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 84, TITLE 4 67, IDAHO CODE, TO PROVIDE A CLAIMS AND ARBITRATION PROCESS, TO DEFINE 5 TERMS, TO PROVIDE FOR INITIATING A PROCEEDING, TO PROVIDE MEDIATION PROCE- 6 DURES, TO PROVIDE SPECIAL MASTER PROCEEDINGS, TO PROVIDE SPECIAL MASTER 7 HEARING, TO PROVIDE SPECIAL MASTER RECOMMENDATION, TO PROVIDE 8 POSTRECOMMENDATION PROCEDURES AND TO PROVIDE FOR COST-SHARING IMPLEMENTA- 9 TION AND RECORDS, TO PROVIDE CLAIMS AND JUDICIAL CONSIDERATION, TO PROVIDE 10 APPLICATION, TO DEFINE TERMS, TO PROVIDE FOR INITIATING A PROCEEDING, TO 11 PROVIDE FOR AN OFFER TO SETTLE, TO PROVIDE FOR JUDICIAL CONSIDERATION AND 12 COMPENSATION, TO PROVIDE FOR RECOVERY OF JUDICIAL CONSIDERATION COSTS AND 13 TO PROVIDE CONCLUDING ACTIONS AND RESTRICTIVE PROVISIONS. 14 Be It Enacted by the Legislature of the State of Idaho: 15 SECTION 1. The legislature recognizes that contrary to originating 16 intent, some laws, rules and ordinances of the state and political subdivi- 17 sions of the state, as applied in practice may inordinately, unreasonably or 18 unfairly burden, restrict or limit private property rights without necessarily 19 having had judicial consideration of a taking under the Constitution of the 20 State of Idaho or the Constitution of the United States. In such instances the 21 legislature determines that the owner of private property is entitled to seek 22 relief, which may include compensation for the actual loss to the fair market 23 value of the real property, through a process of arbitration or judicial con- 24 sideration. The legislature further determines that a process of arbitration 25 or judicial consideration, as established by this act, is not intended to 26 intrude on the legitimate needs of local government to regulate private prop- 27 erty on behalf of the health, safety and general welfare of its citizens. In 28 this regard, legislative intent is to restrain use of police powers in regu- 29 lating real property where a regulating governmental entity cannot demonstrate 30 essential nexus between private property regulation for health, safety and the 31 general welfare and the degree to which individual owners of private property 32 are forced to bear permanent financial loss for benefit of the public. It is 33 also legislative intent that reports filed under this chapter serve as an In- 34 ternet reference repository for the public, the legislature and all levels of 35 government. 36 SECTION 2. That Title 67, Idaho Code, be, and the same is hereby amended 37 by the addition thereto of a NEW CHAPTER , to be known and desig- 38 nated as Chapter 84, Title 67, Idaho Code, and to read as follows: 39 CHAPTER 84 40 PROTECTION OF REAL PROPERTY RIGHTS 41 67-8401. CLAIMS AND ARBITRATION PROCESS. (1) Application. 2 1 (a) This section shall not be applicable to law or regulation of the fed- 2 eral government or any of its various agencies or any state agency or 3 political subdivision of the state when exercising federal primacy author- 4 ity or acting in compliance with regulatory directive based on federal 5 primacy authority. Federal primacy authority means a federally authorized 6 regulatory authority which is granted to the state or political subdivi- 7 sion of the state for an express purpose. Lacking federal primacy author- 8 ity for that federal purpose, federal law, regulations and noncompliance 9 penalty standards would be in full force and effect. Further, this section 10 shall not be applicable to eminent domain proceedings pursuant to chapter 11 7, title 7, Idaho Code, Idaho water law, transportation planning and 12 transportation precondemnation actions or local government planning pre- 13 liminary to issuance of a regulating action. 14 (b) This section shall not supplant local land use planning provisions of 15 chapter 65, title 67, Idaho Code. 16 (2) Definitions. As used in this act: 17 (a) "Development order" means any order which grants, grants with condi- 18 tions, or denies an application for a development permit. Rezoning of a 19 specific parcel of land is expressly included; however, actions by state 20 agencies and local governments relating to comprehensive local planning 21 act amendments are excluded. Denial of a request to rezone is also 22 excluded. 23 (b) "Development permit" means any building permit, zoning permit, subdi- 24 vision approval, disapproval, certification, or other action of local gov- 25 ernment, which authorizes the development of real property. 26 (c) "Development of the material resources of the state" means land use 27 regulating action involving a single unit of real property, or contiguous 28 real properties, where such properties are characterized by open space 29 and/or are a location of naturally occurring material resources and upon 30 which real property the owner is denied development opportunities for a 31 purpose, explicitly stated or not, of economic or scenic benefit to the 32 general public. Such action by a governmental entity redefines planned use 33 of open space or naturally occurring material resources on private prop- 34 erty and by so doing constitutes alternative governmental development of 35 the same open space or naturally occurring material resources. For the 36 purpose of this section, "development of the material resources of the 37 state" is deemed a public use eligible for consideration of unreasonable 38 or unfair burden. Such consideration does not preclude recommendation by 39 the special master that lacking resolution by arbitration, a claim appear- 40 ing to involve "development of the material resources of the state" be 41 submitted to district court for judicial determination of possible emi- 42 nent domain applicability under section 67-6521(2), Idaho Code, or inordi- 43 nate burden judicial consideration under section 67-8402, Idaho Code. 44 (d) "Essential nexus" is the standard by which the authority of a govern- 45 mental entity to regulate on behalf of the health, safety and general wel- 46 fare of the public is comparatively connected with the public purpose 47 sought and the degree to which an individual property owner is forced to 48 permanently bear financial loss for benefit of the public. Essential nexus 49 shall be established to the extent that a governmental regulating action 50 which permanently reduces property value: 51 (i) Is essential to the public purpose sought; 52 (ii) Has undergone the "taking" review process required by chapter 53 80, title 67, Idaho Code, and it has been determined that a "taking" 54 has not occurred and the findings of such review are available for 55 public inspection; and 3 1 (iii) Is confined to regulatory actions considerate of legislative 2 concern that there be minimum practicable loss of private property 3 value for benefit of the public. 4 (e) "Governmental entity" means a state agency or political subdivision 5 of the state created by the constitution of the state of Idaho or by state 6 statute which exercises governmental authority and which is solely respon- 7 sible for the issuance of a restricting development order or regulating 8 action. 9 (f) "Highest and best use" represents the premise upon which a value 10 estimate of real property is based. A precise description and standard 11 for highest and best use will be determined by the licensed real estate 12 appraiser as the appraisal is conducted under this act. 13 (g) "Land or real property" means real estate and any appurtenances and 14 improvements to the real estate, including any other adjacent real estate 15 in which the owner has a legal interest. 16 (h) "Material resources" means land in the state of Idaho or land in the 17 state of Idaho together with any naturally occurring combination of vege- 18 tative cover, geological formation or soil structure which is privately 19 owned and subject to regulating action under this section. 20 (i) "Owner" means a person with an interest in real property who filed an 21 application for a development permit and received a development order, or 22 who holds legal title to real property that is subject to an enforcement 23 action of a governmental entity. A "person" may include, for example, a 24 natural person, firm, association, joint venture, partnership, estate, 25 trust, business trust, syndicate, fiduciary, corporation, limited liabil- 26 ity company or other group or combination. 27 (j) "Regulating action" means a development order or other land use 28 directive by which a governmental entity exercises police power authority 29 over private property development or utilization. 30 (k) "Special master" means a person jointly selected by the governmental 31 entity and the owner to perform the duties prescribed in this chapter. The 32 special master must be a resident of the state and possess qualifications 33 satisfactory to the governmental entity and the owner in the areas of 34 mediation, land use permitting, land planning, land economics, local and 35 state government organization and powers, and law governing the same. The 36 special master need not be an attorney. 37 (l) "Unreasonable or unfair burden" (also "unreasonable or unfairly bur- 38 dens") is a determination of the special master. Factors involved in the 39 determination shall include the history of development and use of the 40 property, history of land use and environmental controls on the property, 41 present nature and extent of the property, public purpose served by the 42 development order or regulating action at issue, uses authorized for and 43 restrictions imposed on similar property, the extent to which the owner 44 bears permanently a disproportionate share of the burden imposed for bene- 45 fit of the public and relevant information cataloged in the state private 46 property rights repository. 47 (3) Initiating a proceeding. 48 (a) An owner who can demonstrate through an appraisal conducted by a 49 licensed appraiser that a developmental order or regulating action of a 50 governmental entity, has permanently reduced the fair market value of the 51 real property taken as a whole, and further believes such order or regu- 52 lating action unreasonably or unfairly burdens the use of his real prop- 53 erty for benefit of the public may apply for relief under this section 54 within ninety (90) calendar days after receipt of the order or notice of 55 the governmental action. 4 1 (b) To initiate a proceeding under this section, an owner must file a 2 request for relief with the elected or appointed head of the governmental 3 entity that issued the development order or that initiated the regulating 4 action. For counties and cities, filing shall be with the county or city 5 clerk. The fee for such filing shall be five hundred dollars ($500) pay- 6 able to the office to which the request for relief is filed and the date 7 of payment, as received by the governmental entity, shall be the date of 8 the request for relief. 9 (c) The request for relief must contain: 10 (i) A brief summary of the owner's intended use of the property. 11 (ii) A summary of the development order or description of the regu- 12 lating action to include documentation of the development order or 13 regulating action. 14 (iii) A brief description of how, in the owner's eyes, the public 15 purpose sought by the governmental entity that issued the development 16 order or regulating action fails to meet essential nexus for the rea- 17 sonable exercise of the governmental land use authority that has 18 reduced the property value. 19 (iv) A copy of the appraisal by a licensed appraiser and brief 20 statement of the impact of the development order or regulating action 21 on the ability of the owner to achieve the intended use of the prop- 22 erty. 23 (d) No later than thirty (30) calendar days following receipt of the 24 request for relief, the governmental entity with whom the request for 25 relief is filed shall provide a copy of the request by United States mail 26 to owners of real property adjoining the owner's property, and to pur- 27 chasers of record within three hundred (300) feet of the external bound- 28 aries of the owner's property as may separately apply, and to any addi- 29 tional owners of property as determined appropriate by the governmental 30 entity. Notice of the request for relief shall be published as a legal 31 notice by the governmental entity in the same time frame and notice of 32 meetings to address the request for relief shall be in accordance with 33 section 67-2343, Idaho Code, or section 67-6509, Idaho Code, as applica- 34 ble. 35 (e) Persons wishing to express support or opposition to the request for 36 relief may request to participate in the proceeding and shall be allowed 37 to participate at the discretion of, and under procedures established by, 38 the governmental entity conducting the meeting. 39 (f) By requesting relief under this section, the owner consents to grant 40 all parties involved reasonable access to the real property involved con- 41 tingent on advance notice and at a time and in a manner acceptable to the 42 owner of the real property. 43 (g) Election by the owner to file for judicial consideration of a devel- 44 opment order or regulating action prior to initiating a proceeding under 45 this section waives any right to relief under this section. 46 (4) Mediation procedures. 47 (a) Before initiating a special master hearing to review a development 48 order or regulating action, the owner must participate in mediation reme- 49 dies provided the remedies take no longer than four (4) months. During 50 this mediation period, dispute resolution considerations between the owner 51 and the governmental entity shall include alternatives listed under sub- 52 section (7)(c) of this section. 53 (b) Exhaustion of mediation remedies under this section is not applicable 54 to judicial review sought by the owner under the provisions of the local 55 planning act, section 67-6521, Idaho Code, or the administrative procedure 5 1 act, section 67-5273(3), Idaho Code. 2 (c) If there is satisfactory resolution of the request for relief during 3 the four (4) month mediation process, the governmental entity shall, 4 within thirty (30) calendar days of resolution, file the request for 5 relief and the conditions of resolution on the governmental entity's in- 6 ternet site and provide the state private property rights repository with 7 a one (1) paragraph summary of the completed action, the date of resolu- 8 tion, and internet address. The internet format for filing the one (1) 9 paragraph summary shall be defined by the information technology resource 10 council, office of policy, standards, guidelines and conventions. Govern- 11 mental entities without an internet address shall locally file hard copies 12 of the resolution and file a one (1) paragraph summary with the state pri- 13 vate property rights repository as described above using any available 14 state or local government internet site; except that a mailing address 15 will be provided by the governmental entity in place of an internet 16 address. 17 (d) Once mediation remedies are exhausted, or at the end of four (4) 18 months after the request for relief filing date or at the end of a speci- 19 fied period beyond the four (4) month time period as requested by the 20 owner, the owner shall have thirty (30) calendar days to submit a formal 21 letter of intent to proceed with a special master hearing. The letter of 22 intent shall be submitted by certified or registered mail and within 23 thirty (30) calendar days of the date of receipt of the certified or reg- 24 istered letter by the governmental entity, the owner and governmental 25 entity shall reach mutual agreement on the special master who will conduct 26 the hearing and make recommendations. 27 (e) The date of the request for relief pursuant to this section tolls the 28 time for the owner to seek judicial consideration under section 67-8402, 29 Idaho Code, from the date of request for relief to a date sixty (60) days 30 after signature on the special master's final report; or if there is not 31 mutual agreement on a special master, six (6) calendar months following 32 the request for relief date, or such other time as the special master may 33 determine the owner has failed to comply with instructions and dismisses 34 proceedings with prejudice. 35 (f) Not later than thirty (30) calendar days following the selection of a 36 special master, the governmental entity that issued the development order, 37 or is taking the regulating action, shall file a response to the request 38 for relief with the special master and the owner. The response shall set 39 forth in reasonable detail the following: 40 (i) The public purpose sought by the development order or regulat- 41 ing action; 42 (ii) The basis of each "takings" conclusion that the development 43 order or regulating action has not imposed a taking on the owner's 44 property; 45 (iii) A listing of any mitigating alternatives offered to the owner, 46 including alternatives itemized in subsection (7)(c) of this section, 47 which were deemed responsive to the owner's request for relief; and 48 (iv) The position of the government regarding the owner's request 49 for relief. 50 (g) If mutual agreement on a special master is not possible, the owner 51 may file for judicial consideration under section 67-8402, Idaho Code, 52 subject only to the requirement that the owner be a property owner as 53 defined in section 67-8402(2), Idaho Code. In this instance, the five hun- 54 dred dollar ($500) request for relief filing fee shall become the judicial 55 cause of action filing fee, the judicial consideration appraisal shall be 6 1 waived and the judicial cause of action filing date shall be six (6) cal- 2 endar months following the request for relief filing date. 3 (5) Special master procedures. 4 (a) The special master may conduct a hearing on whether the request for 5 relief shall be dismissed for failing to include the information required 6 by subsection (3) of this section. If the special master dismisses the 7 case, the special master shall allow the owner to amend the request and 8 refile. Failure to refile an adequate amended request within a time speci- 9 fied by the special master shall result in a dismissal with prejudice as 10 to this proceeding. Dismissal of a proceeding with prejudice shall consti- 11 tute the special master's final report. Distribution of the dismissal with 12 prejudice decision shall be the same as provided in subsection (8)(e) of 13 this section. 14 (b) The special master may request other information from appropriate 15 parties in the interest of gaining a complete understanding of the request 16 for relief. 17 (c) The initial party to the proceeding is the governmental entity that 18 issues the development order to the owner or that is taking the regulating 19 action. In those instances when complete resolution of all relevant issues 20 would require the active participation of more than one (1) governmental 21 entity, the special master may, upon application of a party, request par- 22 ticipation by those governmental entities as parties to the proceeding if 23 it will assist in effecting the purpose of this section. The governmental 24 entities so requested are encouraged to actively participate in this pro- 25 cedure. 26 (d) Any governmental entity that is added by the special master as a 27 party must file a response to the request for relief prior to the hearing 28 but not later than twenty (20) calendar days following notification of 29 "party" status. A party may incorporate in the response to a request to be 30 dropped from the proceeding. The request to be dropped must set forth 31 facts and circumstances to aid the special master in ruling on the 32 request. All requests to be dropped must be disposed of prior to a hearing 33 on the merits of the request for relief itself. 34 (e) Each party shall make efforts to assure that those persons qualified 35 by training or experience necessary to address issues raised by the 36 request or by the special master and further qualified to address alterna- 37 tives, variances and other types of modifications to the development order 38 or regulating action are present at the hearing. 39 (f) The special master shall hold a hearing within forty-five (45) calen- 40 dar days of his selection as the mutually agreed person to review the 41 request for relief unless a different date outside forty-five (45) calen- 42 dar days is agreed to by all parties. The hearing must be held in the 43 county in which the governmental entity issued the development order or 44 regulating action, or in the county where the property is primarily 45 located as impacted by the applicable development order or regulating 46 actions. 47 (g) The special master must provide notice of the place, date and time of 48 the hearing to all parties at least thirty (30) calendar days prior to the 49 hearing. The governmental entity shall publish the legal notice of the 50 place, date and time of the hearing in accordance with the provisions of 51 section 67-2343, Idaho Code, or section 67-6509, Idaho Code, as applica- 52 ble. 53 (h) Persons wishing to express support or opposition to the request for 54 relief may request to participate in the special master hearing and shall 55 be allowed to participate at the discretion of, and under procedures 7 1 established by, the special master. 2 (6) Special master hearing. 3 (a) The hearing shall be informal and open to the public and does not 4 require the use of an attorney. The hearing must operate at the direction 5 and under the supervision of the special master. The object of the hearing 6 is to focus attention on the impact of the governmental action giving rise 7 to the request for relief and to explore alternatives to the development 8 order or regulating action in order to recommend relief, when appropriate, 9 to the owner. 10 (b) The first responsibility of the special master is to facilitate a 11 resolution of the conflict between the owner and the governmental entity 12 to the end that some modification of the owner's existing or proposed use 13 of the property may be possible, or that adjustment in the development 14 order or regulating action may be achieved, or that regulatory efforts by 15 one (1) or more of the governmental parties may be instrumental in achiev- 16 ing a solution. Accordingly, the special master shall act as the 17 facilitator or moderator between the parties in an effort to effect a 18 mutually acceptable solution. 19 (c) In conducting the hearing, the special master shall hear from all 20 parties and witnesses that are necessary to an understanding of the mat- 21 ter. 22 (d) The special master shall weigh all information offered at the hear- 23 ing. The circumstances to be examined in determining whether the develop- 24 ment order or regulating action is unreasonable or unfairly burdens use of 25 the property may include, but are not limited to: 26 (i) The history of the real property, including when it was pur- 27 chased, how much was purchased, where it is located, the nature of 28 the title, the composition of the property and how it was initially 29 used. 30 (ii) The history or development and use of the real property, 31 including what was developed on the property and by whom, if it was 32 subdivided and how and to whom it was sold, whether plats were filed 33 or recorded, and whether infrastructure and other public services or 34 improvements may have been dedicated to the public. 35 (iii) The history of environmental protection and land use controls 36 and other rules, including how and when the land was classified, how 37 use was proscribed and what changes in the classification occurred. 38 (iv) The present nature and extent of the real property, including 39 its natural and altered characteristics. 40 (v) The appraisal estimate of highest and best use immediately 41 before and after the regulating action and the decrease in fair mar- 42 ket value over the same period. 43 (vi) The public purpose sought to be achieved by the development 44 order or regulating action, including the nature and magnitude of the 45 problem addressed by the underlying rules or regulations on which the 46 development order or regulating action is based, whether the develop- 47 ment order or regulating action is necessary to the achievement of 48 the public purpose and whether there is an alternative development 49 order or regulating action that would achieve the public purpose and 50 allow for reduced restrictions on the use of the property. 51 (vii) Uses authorized for and restrictions placed on similar prop- 52 erty. 53 (viii) Any other information determined relevant by the special mas- 54 ter. 55 (7) Special master recommendation. 8 1 (a) Within sixty (60) calendar days after the conclusion of the hearing, 2 the special master shall prepare and file with all parties a written rec- 3 ommendation. In each recommendation, a specific determination shall be 4 established as to whether the issue before the special master may involve 5 development of the material resources of the state. 6 (b) If the special master finds that the development order at issue or 7 the development order or regulating action in combination with the actions 8 or rules or regulations of other governmental entities is not unreasonable 9 or does not unfairly burden the use of the owner's property, the special 10 master must recommend that the development order or regulating action 11 remain undisturbed and the proceeding shall end, subject to the owner's 12 retention of all other available remedies. 13 (c) If the special master finds that the development order is unreason- 14 able or unfairly burdens the use of the owner's property, the special mas- 15 ter may recommend one (1) or more alternatives that protect the public 16 interest served by the development order or regulating action at issue but 17 allow for reduced restraints on the use of the owner's real property 18 including, but not limited to: 19 (i) Adjustment of land development or permit standards or other 20 provisions controlling the development or use of land; 21 (ii) Increases or modification in the density, intensity or use of 22 areas of development; 23 (iii) Transfer of development rights when authorized by law; 24 (iv) Land swaps or exchanges; 25 (v) Mitigation, including payments in lieu of on-site mitigation; 26 (vi) Location on the least sensitive portion of the property; 27 (vii) Conditioning the amount of development or use permitted; 28 (viii) Requiring issues be addressed on a more comprehensive basis 29 than a single proposed use or development; 30 (ix) Issuance of the development order with variance authorized, 31 special exception or other extraordinary relief, including withdrawal 32 of the enforcement action; 33 (x) Purchase of the real property, or interest therein, by an 34 appropriate governmental entity. 35 (d) The special master's recommendation and the governmental entity's 36 written response to the request for relief are a matter of public record 37 and are admissible in judicial proceedings under section 67-8402, Idaho 38 Code, at the discretion of the court. Other actions or statements of par- 39 ticipants in the special master's proceedings are evidence of an offer to 40 compromise and are inadmissible in any proceeding, judicial or administra- 41 tive. 42 (e) This subsection does not prohibit the owner and the governmental 43 entity from entering into an agreement as to the permissible use of the 44 property prior to the special master entering a recommendation. However, 45 an agreement for a permissible use must be incorporated in the special 46 master's final report. 47 (8) Postrecommendation procedures. 48 (a) Within sixty (60) calendar days after receipt of the special master's 49 recommendation, the governmental entity responsible for the development 50 order or regulating action shall: 51 (i) Accept the recommendation of the special master and proceed to 52 implement the agreement on the recommendation under provisions 53 allowed by the local planning act contained in chapter 65, title 67, 54 Idaho Code; 55 (ii) Modify the recommendation of the special master and, subject 9 1 to owner acceptance, proceed to implement the agreement on the modi- 2 fied recommendation under the provisions allowed by the local plan- 3 ning act, chapter 65, title 67, Idaho Code; 4 (iii) Reject the recommendation of the special master. Failure to act 5 within sixty (60) calendar days is a rejection unless the period is 6 extended by agreement of the owner and issuer of the development 7 order or regulating action. 8 (iv) Based on (i), (ii), or (iii) of this paragraph, establish a 9 written decision which describes as specifically as possible the use 10 or uses available to the subject real property. Copies of the written 11 decision will be immediately provided to the special master and the 12 owner seeking relief. 13 (b) If a governmental entity modifies the special master's recommendation 14 and the owner rejects the modification, or if the governmental entity 15 rejects the recommendation, the owner may initiate a judicial cause of 16 action claim under section 67-8402, Idaho Code, subject only to the 17 requirement that the owner be a property owner as defined in section 18 67-8402(2), Idaho Code. The five hundred dollar ($500) request for relief 19 filing fee shall become the judicial cause of action filing fee, the judi- 20 cial cause of action appraisal shall be waived and the judicial cause of 21 action filing date shall be ninety (90) days following the date of the 22 special master's recommendation. 23 (c) The governmental entity shall file the special master's recommenda- 24 tion and the governmental written decision on the internet in accordance 25 with procedures established in subsection (4)(c) of this section. 26 (d) The procedure established by this section may not continue longer 27 than twelve (12) calendar months unless the period, or any part of the 28 period, is extended by agreement of the parties. 29 (e) The special master's recommendation and the governmental entities 30 written decision is a matter of public record and is admissible in judi- 31 cial proceedings under section 67-8402, Idaho Code, at the discretion of 32 the court. 33 (9) Cost-sharing -- Implementation and records. 34 (a) Each governmental entity may establish procedural guidelines to gov- 35 ern the conduct of proceedings authorized by this section. Costs of pro- 36 viding notice and effecting service of the request for relief under this 37 section shall be borne by the owner in an amount not to exceed two thou- 38 sand five hundred dollars ($2,500). The five hundred dollar ($500) filing 39 fee paid by the owner shall not be credited as part of the owner's payment 40 for governmental entity expenses. 41 (b) The special master is solely responsible for contracting, billing and 42 collecting his or her negotiated fee and expenses; the sum of which shall 43 be borne equally by the governmental entity and the owner or on an equal 44 percentage basis if more than one (1) owner has filed a request for relief 45 on the same regulating action and for the same reasons. 46 (c) Governmental entities shall direct all available resources and 47 authorities to effect fully the obvious purposes and intent of this sec- 48 tion in resolving disputes. 49 (d) Procedures, statements and actions of this section may be used to 50 resolve disputes in pending judicial proceedings with the agreement of the 51 parties to the judicial proceedings and subject to approval of the court 52 in which the judicial proceedings are pending. 53 (e) The provisions of this section do not supplant other methods agreed 54 to by the parties that are lawfully available for arbitration, mediation 55 or other forms of alternative dispute resolution. 10 1 (f) Records provided to the state private property rights repository 2 shall be a matter of public record for the benefit of the public, the leg- 3 islature and all levels of government involved in land use regulatory 4 decisions, especially those levels of local government with inexperienced 5 or reduced staff. 6 (g) As to the application of a regulating action; except for a develop- 7 ment order, no cause of action exists under this section for any regulat- 8 ing action issued, modified or amended before July 1, 1998. A development 9 order issued in response to a property owner's application for a develop- 10 ment permit is not so restricted and the cause of action claim may proceed 11 if filed within the ninety (90) day filing period. Amendment or modifica- 12 tion of a regulating action other than a development order applies to a 13 request for relief only to the extent that application of the amendment or 14 modification may unreasonably or unfairly burden an owner apart from the 15 regulating action being amended or modified. 16 (h) The procedures created by this section are not of themselves a judi- 17 cial cause of action. 18 67-8402. CLAIMS AND JUDICIAL CONSIDERATION. (1) Application. 19 (a) This section establishes a cause of action for judicial consideration 20 of regulation actions by a governmental entity that may not rise to the 21 level of a taking under the constitution of the state of Idaho or the con- 22 stitution of the United States but do create an inordinate burden for a 23 property owner such that the property owner bears permanently a dispropor- 24 tionate share of a burden imposed for benefit of the public which in 25 fairness should be borne by the public at large. 26 (b) "Judicial consideration" as used in this section, is a judicial 27 action separate and distinct from "judicial review" in the local planning 28 act, chapter 65, title 67, Idaho Code, or the Idaho administrative proce- 29 dure act, chapter 52, title 67, Idaho Code, in that judicial consider- 30 ation, as opposed to judicial review, is not predicated on exhaustion of 31 administrative remedies; nor is the court restricted by section 67-5279, 32 Idaho Code, in exercising judicial authority in considering inordinate 33 burden as defined in this section and impaneling a jury to award possible 34 compensation, nor is the time limit for a property owner to file against a 35 governmental entity regulating action restricted to twenty-eight (28) cal- 36 endar days. Other statutory provisions of the local planning act and the 37 Idaho administrative procedure act remain applicable unless specifically 38 exempted. 39 (c) This section does not supplant methods agreed to by parties and law- 40 fully available for arbitration, mediation or other forms of alternative 41 dispute resolution. Governmental entities are encouraged to utilize such 42 methods to augment or facilitate the processes and actions contemplated by 43 this section. A private property owner who elects to use the judicial pro- 44 vision of this section in preference to the arbitration provisions of sec- 45 tion 67-8401, Idaho Code, shall be precluded from subsequent filing under 46 section 67-8401, Idaho Code. 47 (d) This section shall not be applicable to law, rule or regulation of 48 the federal government or any of its various agencies or any state agency 49 or political subdivision of the state when exercising federal primacy 50 authority or acting in compliance with regulatory directives based on fed- 51 eral primacy authority. Federal primacy authority means a federally autho- 52 rized regulatory authority which is granted to the state or political sub- 53 division of the state for an express purpose. Lacking federal primacy 54 authority for that federal purpose, federal law, regulations and noncom- 11 1 pliance penalty standards would be in full force and effect. Further, this 2 section shall not be applicable to eminent domain proceedings pursuant to 3 chapter 7, title 7, Idaho Code, Idaho water law, transportation planning 4 and transportation precondemnation actions, or local government planning 5 preliminary to issuance of a regulating action. 6 (2) Definitions. As used in this section: 7 (a) "Action of a governmental entity" means a specific regulatory action 8 of a governmental entity which affects real property, including action on 9 an application or permit. 10 (b) "Development of the material resources of the state" means land use 11 regulation involving a single unit of real property, or contiguous real 12 properties, where such properties are characterized by open space and/or 13 are a location of naturally occurring material resources and upon which 14 real property the owner is denied reasonable development opportunities for 15 a purpose, explicitly stated or not, of economic or scenic benefit to the 16 general public. Such action by a governmental entity redefines planned use 17 of open space or naturally occurring material resources on private prop- 18 erty and by so doing constitutes alternative governmental development of 19 the same open space or naturally occurring material resources. For the 20 purposes of this section, "development of the material resources of the 21 state" is deemed a public use eligible for consideration of inordinate 22 burden. 23 (c) "Development order" means any order which grants, grants with condi- 24 tions, or denies an application for a development permit. Rezoning of a 25 specific parcel of land is expressly included; however, actions by state 26 agencies and local governments relating to comprehensive land use plan 27 amendments are excluded. Denial of a request to rezone is also excluded. 28 (d) "Development permit" means any building permit, zoning permit, subdi- 29 vision approval, disapproval, certification, or other action of local 30 government, which authorizes the development of real property. 31 (e) "Essential nexus" is the standard by which the authority of a govern- 32 mental entity to regulate on behalf of the health, safety and general wel- 33 fare of the public is comparatively connected with the public purpose 34 sought and the degree to which an individual property owner is forced to 35 permanently bear financial loss for the benefit of the public. Essential 36 nexus shall be established when a governmental regulating action which 37 permanently reduces property value: 38 (i) Is essential to the public purpose sought; 39 (ii) Has undergone the "taking" review process required by chapter 40 80, title 67, Idaho Code, and it has been determined that a "taking" 41 has not occurred and the findings of such review are available for 42 public inspection; and 43 (iii) Is confined to regulatory actions considerate of legislative 44 concern that there be minimum practicable loss of private property 45 value for benefit of the public. 46 (f) "Fair market value" means an appraised value of real property as 47 determined by an analysis of "highest and best use" for the development 48 opportunity or permit sought, or application of a "vested right" to the 49 use of real property or application of any other recognized appraisal pro- 50 cedure appropriate to the objectives of subsections (3)(a) and (5)(d) of 51 this section. 52 (g) "Governmental entity" means a state agency or political subdivision 53 of the state created by the state constitution or general or special act 54 which exercises governmental authority and which is most directly involved 55 in the issuance of a development order or regulating action. 12 1 (h) "Highest and best use" represents a premise upon which a value esti- 2 mate of real property is based. A description of highest and best use as 3 related to fair market value will be presented by the appraiser in the 4 appraisal report. 5 (i) "Inordinate burden or inordinately burdened" means that an action of 6 one (1) or more governmental entities taken for benefit of the public has 7 restricted or limited the use of real property such that the property 8 owner is permanently unable to attain or maintain fair market value for 9 the subject real property taken as a whole and further bears a dispropor- 10 tionate share of a financial burden which, in fairness, should be borne by 11 the public at large. "Inordinate burden" or "inordinately burdened" does 12 not include temporary impacts to real property, or permanent impacts to 13 real property occasioned by governmental abatement, prohibition or preven- 14 tion of a public nuisance at common law or noxious use of private prop- 15 erty, or permanent impacts to real property occasioned by governmental 16 regulation on behalf of the health, safety and general welfare of the pub- 17 lic where essential nexus is demonstrated between the regulatory action 18 and the degree to which the private property owner is forced to bear 19 financial loss for the benefit of the public. 20 (j) "Material resources" means land in the state of Idaho or land in 21 Idaho together with any naturally occurring combination of vegetative 22 cover, geological formation or soil structure which is privately owned and 23 subject to regulating action under this section. 24 (k) "Property owner" means the person who holds legal title to the prop- 25 erty at issue. 26 (l) "Real property" means real estate and includes any appurtenances and 27 improvements to the land, including other adjacent property in which the 28 property owner has a relevant interest. 29 (m) "Regulating action" means a development order or other land use 30 directive by which a governmental entity exercises police power authority 31 over private property development or utilization. 32 (n) "Ripeness decision" means a written decision by a governmental entity 33 which establishes a final definition of available uses to which real prop- 34 erty may be put when a regulation action by that governmental entity has 35 reduced the real property fair market value and the owner, seeking relief, 36 has filed a claim under this section, which has not been settled during 37 the one hundred eighty (180) calendar day notice period. This written 38 decision constitutes the last prerequisite to judicial consideration, not- 39 withstanding the availability of other administrative remedies, and the 40 manner shall be deemed final, or ripe for the purpose of commencing a 41 judicial proceeding. 42 (o) "Vested right" is to be determined by applying the principles of 43 equitable estoppel or other appropriate statutory law of the state. 44 (3) Initiating a proceeding. 45 (a) A cause of action may be commenced by a property owner under this 46 section if a written claim is filed with the head of the appropriate gov- 47 ernmental entity within ninety (90) calendar days after a development 48 order or regulating action is first applied by the governmental entity to 49 the property at issue and the property owner submits with the claim an 50 independent appraisal by a licensed appraiser that supports the claim and 51 demonstrates a minimal loss in fair market value to the real property 52 taken as a whole of twenty percent (20%), or twenty thousand dollars 53 ($20,000), whichever is less. 54 (b) The cause of action claim shall be filed with the head of the appro- 55 priate governmental entity not less than one hundred eighty (180) calendar 13 1 days prior to initiating a separate filing for judicial consideration. 2 (c) If the action of government is the culmination of a process that 3 involves more than one (1) governmental entity, or if a complete resolu- 4 tion of all relevant issues in the view of the property owner or in the 5 view of a governmental entity to whom a claim is presented requires the 6 active participation of one (1) or more governmental entities, the prop- 7 erty owner shall present the claim as provided in this section to each of 8 the governmental entities. 9 (d) The cause of action filing fee shall be five hundred dollars ($500) 10 and receipt of the fee by the governmental entity having administrative 11 responsibility shall establish the reference date for purposes of the one 12 hundred eighty (180) calendar day notice period preliminary to filing for 13 judicial consideration. 14 (e) No later than thirty (30) calendar days following receipt of the 15 filed claim, the governmental entity with whom the request for relief is 16 filed shall provide a copy of the claim by United States mail to owners of 17 real property adjoining the owner's property, and to purchasers of record 18 within three hundred (300) feet of the external boundaries of the property 19 owner's land as may separately apply, and to any additional owners of 20 property as determined appropriate by the governmental entity. Notice of 21 the request for relief shall be published as a legal notice by the govern- 22 mental entity in the same time frame and notice of meetings to address the 23 claim shall be in accordance with section 67-2343, Idaho Code. 24 (f) Persons wishing to express support or opposition to the filed claim 25 may request to participate in the proceeding and shall be allowed to par- 26 ticipate at the discretion of, and under procedures established by, the 27 governmental entity conducting the meetings. 28 (4) Offer to settle -- One hundred eighty day notice period. 29 (a) During the one hundred eighty (180) calendar day notice period, 30 unless extended by agreement of the parties, the governmental entity shall 31 make a written settlement offer to effectuate under provisions allowed by 32 the local planning act, chapter 65, title 67, Idaho Code: 33 (i) An adjustment of land development or permit standards or other 34 provisions controlling the development; 35 (ii) Increases or modification in the density, intensity or use of 36 areas of development; 37 (iii) Land swaps or exchanges; 38 (iv) Mitigation, including payments in lieu of on-site mitigation; 39 (v) Location on the least sensitive portion of the property; 40 (vi) Conditioning the amount of development or use permitted; 41 (vii) A requirement that issues be addressed on a more comprehensive 42 basis than a single posed use or development; 43 (viii) Issuance with the development order of a variance, special 44 exception or other extraordinary relief; 45 (ix) Purchase of the real property, or an interest therein, by an 46 appropriate governmental entity; 47 (x) Other land use proposals legitimate to the interests of the 48 property owner, the public and the governmental entity, or 49 alternatively, reject settlement and all settlement options in pref- 50 erence of issuing the ripeness decision of subsection (4)(c) of this 51 section with prejudice toward listing any mitigating alternatives 52 regarding the property owner's cause of action claim. 53 (b) If the property owner accepts the settlement offer, the governmental 54 entity will implement the settlement offer through appropriate hearings 55 and/or development agreement or regulating action to include issuance of a 14 1 variance, special exception or other extraordinary relief. Within thirty 2 (30) calendar days of settlement, the governmental entity shall file the 3 terms of settlement in accordance with the provisions established in sec- 4 tion 67-8401(4)(c), Idaho Code. 5 (c) During the one hundred eighty (180) calendar day notice period, 6 unless a settlement offer is accepted by the property owner, each of the 7 governmental entities provided notice pursuant to subsection (3)(c) of 8 this section shall issue a written ripeness decision which: 9 (i) Establishes the public purpose for the regulatory action taken; 10 (ii) Addresses essential nexus for the regulatory action taken; 11 (iii) Identifies allowable uses to which the subject property may be 12 put; and 13 (iv) Lists mitigating alternatives offered to the property owner, 14 including alternatives itemized in subsection (4)(a) of this section, 15 which were deemed responsive to the property owner's cause of action 16 claim. 17 Failure of the governmental entity to issue a written ripeness decision 18 during the one hundred eighty (180) calendar day notice period shall be 19 deemed an action which ripens the regulating action of the governmental 20 entity such that the regulating action shall operate as a ripeness deci- 21 sion that has been rejected by the property owner. 22 (d) The ripeness decision, as a matter of law, constitutes the last pre- 23 requisite to judicial consideration and the matter shall be deemed ripe or 24 final for the purpose of the judicial proceeding created by this section, 25 notwithstanding the availability of other administrative remedies or the 26 fact that judicial review as a separate judicial procedure under the local 27 planning act pursuant to section 67-6521, Idaho Code, requires the 28 exhaustion of all nonjudicial remedies. 29 (5) Judicial consideration and compensation. 30 (a) If the property owner rejects the ripeness decision of the governmen- 31 tal entity or entities, or terms of the settlement offer under subsection 32 (4)(b) of this section are not met within ninety (90) calendar days, the 33 property owner may file a claim for compensation in district court within 34 the judicial district where the affected property is located. A copy of 35 filing shall be served contemporaneously on the head of each of the gov- 36 ernmental entities that issued a ripeness decision which was rejected by 37 the property owner. 38 (b) In acting on the filed claim, the district court shall determine 39 whether, considering the ripeness decision of subsection (4)(c) of this 40 section, and the financial impact demonstrated by the property owner, suf- 41 ficient evidence exists to believe the governmental entity, or entities, 42 has inordinately burdened the real property owner such that jury delibera- 43 tion is appropriate for possible compensation under subsection (5)(d) of 44 this section. The property owner shall not prevail in an action filed 45 under this section if the court finds insufficient evidence to impanel a 46 jury. 47 (c) A governmental entity may take an interlocutory appeal of the judi- 48 cial determination that action of the governmental entity merits impanel- 49 ing of a jury to consider possible compensation. An interlocutory appeal 50 does not automatically stay the proceedings; however the court may stay 51 the proceedings during pendency of the appeal. If the governmental entity 52 does not prevail in the interlocutory appeal, the court shall award to the 53 prevailing property owner the costs and a reasonable attorney's fee incur- 54 red by the property owner in the interlocutory appeal. 55 (d) Following court determination that sufficient evidence exists to war- 15 1 rant jury deliberation of possible compensation and following resolution 2 of any interlocutory appeal, the court shall impanel a twelve (12) member 3 civil jury to determine any compensation due the property owner. In con- 4 sidering compensation, the jury shall weigh the fair market value of the 5 real property as it existed at the time of the governmental action at 6 issue and the fair market value of the real property following the govern- 7 mental action at issue, taking into consideration any governmental conces- 8 sion in the ripeness decision and the extent to which the property owner 9 bears permanently a disproportionate share of a burden imposed for public 10 benefit which, in fairness, should be borne by the public at large. Not- 11 withstanding the provisions of section 67-5279, Idaho Code, an award of 12 compensation by the jury constitutes determination of inordinate burden 13 and is the only basis for the property owner to prevail in an action filed 14 pursuant to this section. 15 (e) If the actions of more than one (1) governmental entity are responsi- 16 ble for the action that imposed the inordinate burden on the real property 17 owner, the jury shall determine the percentage of responsibility each such 18 governmental entity bears with respect to the inordinate burden as a whole 19 and establish compensation accordingly. 20 (f) The district court may enter any orders necessary to effectuate the 21 purposes of this section and to make final determinations to effectuate 22 relief available under this section. 23 (g) An award or payment of compensation pursuant to this section shall 24 operate to grant to and vest in any governmental entity by whom compensa- 25 tion is paid the right, title and interest in rights of use for which the 26 compensation has been paid. The court shall determine the form and the 27 recipient of the right, title and interest as well as the terms of acqui- 28 sition of real property. 29 (6) Recovery of judicial consideration costs. 30 (a) If the property owner prevails in the action filed pursuant to this 31 section, the property owner is entitled to recover reasonable costs and 32 attorney's fees incurred by the property owner from the entity or entities 33 according to the court-determined proportionate share from the date of 34 filing of the district court action through termination of court proceed- 35 ings. The property owner is not entitled to recovery of the five hundred 36 dollar ($500) cause of action filing fee. 37 (b) If the governmental entity or entities prevail in the action filed 38 pursuant to this section, each shall be entitled to recover reasonable 39 costs and attorney's fees according to their court-determined proportion- 40 ate share from the date of filing of the district court action through 41 termination of court proceedings. 42 (c) The determination of total reasonable costs and attorney's fees pur- 43 suant to this section shall be made by the court and not the jury. 44 (7) Concluding actions and restrictive provisions. 45 (a) Upon payment of court-determined costs and attorney's fees, the prop- 46 erty owner, having failed to prevail in a court determination of inordi- 47 nate burden, shall have a final concluding prerogative to accept the pro- 48 visions of any ripeness decision previously rejected in favor of judicial 49 consideration. The governmental entity or entities who developed the writ- 50 ten ripeness decision shall direct all available resources and authorities 51 necessary to effect fully the purposes and intent of the decision. 52 (b) Within thirty (30) calendar days after the execution of any settle- 53 ment pursuant to this section, or the issuance of any judgment pursuant to 54 this section, or the exercise of final concluding prerogative of the prop- 55 erty owner to accept a ripeness decision previously rejected in favor of 16 1 judicial consideration, the governmental entity having administrative 2 responsibility shall file a copy of the request for relief and the settle- 3 ment or judgment in accordance with the filing provisions in section 4 67-8401(4)(c), Idaho Code, but adding the case title of the judgment. 5 (c) A cause of action may not be commenced under this section if the 6 claim is presented more than ninety (90) calendar days after a development 7 order or regulation is first applied by the governmental entity to the 8 property at issue. If an owner seeks relief from the governmental action 9 through lawfully available administrative proceedings, including relief 10 actions under section 67-8401, Idaho Code, the time for bringing an action 11 under this section is tolled until conclusion of such proceedings. 12 (d) As to the application of a regulating action; except for a develop- 13 ment order, no cause of action exists under this section for any regulat- 14 ing action, issued, modified or amended before July 1, 1998. A develop- 15 ment order issued in response to a property owner's application for a 16 development permit is not so restricted and the cause of action claim may 17 proceed if filed within the ninety (90) calendar day filing period. 18 (e) Notwithstanding the provisions of chapter 9, title 6, Idaho Code, and 19 specifically, the provisions of section 6-904B, Idaho Code, the provisions 20 of this chapter shall govern the determination of an inordinate burden and 21 the award or payment of compensation. 22 (f) Nothing contained in this act is intended to imply or infer that the 23 court system of this state can be accessed twice on the same claim regard- 24 ing the diminution of value of property.
STATEMENT OF PURPOSE
RS 07745 C1
This proposed legislation provides private property owners with a progressive system for seeking
resolution of land use regulatory disputes which may not have "takings" standing under the Idaho
Constitution or the Constitution of the United States. The range of alternative dispute resolution
extends from mediation and arbitration to judicial consideration of inordinate burden as a cause of
action separate and distinct from "takings".
The legislation is based on the premise that exhaustion of administrative remedies to achieve
judicial review of "takings" claims and the complexity of "takings" law itself are now combined in
a synergistic effect which precludes most private property owners from any realistic opportunity
to seek relief from unreasonable or inordinately burdensome land use regulatory actions.
In restoring balance to the interface between government and private property owners, the
legislation does not intrude on the legitimate needs of government to regulate private property on
behalf of the health, safety and general welfare of its citizens. The legislation does establish the
obligation of government to demonstrate essential nexus between the public purpose sought in
land use regulation and the degree to which individual owners of private property are forced to
bear permanent financial loss for benefit of the public. Final resolution is left in the hands of
elected government or a jury of the people.
FISCAL NOTE
The legislation provides for $500 filing fees, collection of arbitration administrative costs to
$2,500, and award of court costs and attorney fees where a governmental entity prevails in an
inordinate burden claim. The cost of a "special master" in the arbitration process is divided
between the governmental entity and the property owner.
Much of the alternative dispute resolution in this legislation parallels exhaustion of administrative
remedies under existing law. Time, and therefore cost, for alternative dispute resolution and
reaching "ripeness" for purposes of judicial consideration will generally be shorter than for
exhaustion of administrative remedies. Some increased cost to local or state government may
originate through additional claim filings. The case load factor has yet to be demonstrated and
associated costs cannot be analytically evaluated at this time. Mandatory acquisition of regulated
private property is not a primary objective.
CONTACT:
Rep. Jim Kempton
332-1146
STATEMENT OF PURPOSE/ FISCAL NOTE
H 538