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H0487......................................................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. 01/21 House intro - 1st rdg - to printing 01/22 Rpt prt - to St Aff
H0487|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 487 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, the "taking" review conclusions for the regulating action proposed 48 and the degree to which an individual property owner is forced to perma- 49 nently bear financial loss for benefit of the public. Essential nexus 50 shall be established to the extent that a governmental regulating action 51 which permanently reduces property value: 52 (i) Is essential to the public purpose sought; 53 (ii) Has undergone the "taking" review process required by chapter 54 80, title 67, Idaho Code, and it has been determined that a "taking" 55 has not occurred and the findings of such review are available for 3 1 public inspection; and 2 (iii) Is confined to regulatory actions considerate of legislative 3 concern that there be minimum practicable loss of private property 4 value for benefit of the public. 5 (e) "Governmental entity" means a state agency or political subdivision 6 of the state created by the constitution of the state of Idaho or by state 7 statute which exercises governmental authority and which is solely respon- 8 sible for the issuance of a restricting development order or regulating 9 action. 10 (f) "Highest and best use" represents the premise upon which a value 11 estimate of real property is based. A precise description and standard 12 for highest and best use will be determined by the licensed real estate 13 appraiser as the appraisal is conducted under this act. 14 (g) "Land or real property" means real estate and any appurtenances and 15 improvements to the real estate, including any other adjacent real estate 16 in which the owner has a legal interest. 17 (h) "Material resources" means land in the state of Idaho or land in the 18 state of Idaho together with any naturally occurring combination of vege- 19 tative cover, geological formation or soil structure which is privately 20 owned and subject to regulating action under this section. 21 (i) "Owner" means a person with an interest in real property who filed an 22 application for a development permit and received a development order, or 23 who holds legal title to real property that is subject to an enforcement 24 action of a governmental entity. A "person" may include, for example, a 25 natural person, firm, association, joint venture, partnership, estate, 26 trust, business trust, syndicate, fiduciary, corporation, limited liabil- 27 ity company or other group or combination. 28 (j) "Regulating action" means a development order or other land use 29 directive by which a governmental entity exercises police power authority 30 over private property development or utilization. 31 (k) "Special master" means a person jointly selected by the governmental 32 entity and the owner to perform the duties prescribed in this chapter. The 33 special master must be a resident of the state and possess qualifications 34 satisfactory to the governmental entity and the owner in the areas of 35 mediation, land use permitting, land planning, land economics, local and 36 state government organization and powers, and law governing the same. The 37 special master need not be an attorney. 38 (l) "Unreasonable or unfair burden" (also "unreasonable or unfairly bur- 39 dens") is a determination of the special master. Factors involved in the 40 determination shall include the history of development and use of the 41 property, history of land use and environmental controls on the property, 42 present nature and extent of the property, public purpose served by the 43 development order or regulating action at issue, uses authorized for and 44 restrictions imposed on similar property, the extent to which the owner 45 bears permanently a disproportionate share of the burden imposed for bene- 46 fit of the public and relevant information cataloged in the state private 47 property rights repository. 48 (3) Initiating a proceeding. 49 (a) An owner who can demonstrate through an appraisal conducted by a 50 licensed appraiser that a developmental order or regulating action of a 51 governmental entity, has permanently reduced the fair market value of the 52 real property taken as a whole, and further believes such order or regu- 53 lating action unreasonably or unfairly burdens the use of his real prop- 54 erty for benefit of the public may apply for relief under this section 55 within ninety (90) calendar days after receipt of the order or notice of 4 1 the governmental action. 2 (b) To initiate a proceeding under this section, an owner must file a 3 request for relief with the elected or appointed head of the governmental 4 entity that issued the development order or that initiated the regulating 5 action. For counties and cities, filing shall be with the county or city 6 clerk. The fee for such filing shall be five hundred dollars ($500) pay- 7 able to the office to which the request for relief is filed and the date 8 of payment, as received by the governmental entity, shall be the date of 9 the request for relief. 10 (c) The request for relief must contain: 11 (i) A brief summary of the owner's intended use of the property. 12 (ii) A summary of the development order or description of the regu- 13 lating action to include documentation of the development order or 14 regulating action. 15 (iii) A brief description of how, in the owner's eyes, the public 16 purpose sought by the governmental entity that issued the development 17 order or regulating action fails to meet essential nexus for the rea- 18 sonable exercise of the governmental land use authority that has 19 reduced the property value. 20 (iv) A copy of the appraisal by a licensed appraiser and brief 21 statement of the impact of the development order or regulating action 22 on the ability of the owner to achieve the intended use of the prop- 23 erty. 24 (d) No later than thirty (30) calendar days following receipt of the 25 request for relief, the governmental entity with whom the request for 26 relief is filed shall provide a copy of the request by United States mail 27 to owners of real property adjoining the owner's property, and to pur- 28 chasers of record within three hundred (300) feet of the external bound- 29 aries of the owner's property as may separately apply, and to any addi- 30 tional owners of property as determined appropriate by the governmental 31 entity. Notice of the request for relief shall be published as a legal 32 notice by the governmental entity in the same time frame and notice of 33 meetings to address the request for relief shall be in accordance with 34 section 67-2343, Idaho Code, or section 67-6509, Idaho Code, as applica- 35 ble. 36 (e) Persons wishing to express support or opposition to the request for 37 relief may request to participate in the proceeding and shall be allowed 38 to participate at the discretion of, and under procedures established by, 39 the governmental entity conducting the meeting. 40 (f) By requesting relief under this section, the owner consents to grant 41 all parties involved reasonable access to the real property involved con- 42 tingent on advance notice and at a time and in a manner acceptable to the 43 owner of the real property. 44 (g) Election by the owner to file for judicial consideration of a devel- 45 opment order or regulating action prior to initiating a proceeding under 46 this section waives any right to relief under this section. 47 (4) Mediation procedures. 48 (a) Before initiating a special master hearing to review a development 49 order or regulating action, the owner must participate in mediation reme- 50 dies provided the remedies take no longer than four (4) months. During 51 this mediation period, dispute resolution considerations between the owner 52 and the governmental entity shall include alternatives listed under sub- 53 section (7)(c) of this section. 54 (b) Exhaustion of mediation remedies under this section is not applicable 55 to judicial review sought by the owner under the provisions of the local 5 1 planning act, section 67-6521, Idaho Code, or the administrative procedure 2 act, section 67-5273(3), Idaho Code. 3 (c) If there is satisfactory resolution of the request for relief during 4 the four (4) month mediation process, the governmental entity shall, 5 within thirty (30) calendar days of resolution, file the request for 6 relief and the conditions of resolution on the governmental entity's in- 7 ternet site and provide the state private property rights repository with 8 a one (1) paragraph summary of the completed action, the date of resolu- 9 tion, and internet address. The internet format for filing the one (1) 10 paragraph summary shall be defined by the information technology resource 11 council, office of policy, standards, guidelines and conventions. Govern- 12 mental entities without an internet address shall locally file hard copies 13 of the resolution and file a one (1) paragraph summary with the state pri- 14 vate property rights repository as described above using any available 15 state or local government internet site; except that a mailing address 16 will be provided by the governmental entity in place of an internet 17 address. 18 (d) Once mediation remedies are exhausted, or at the end of four (4) 19 months after the request for relief filing date or at the end of a speci- 20 fied period beyond the four (4) month time period as requested by the 21 owner, the owner shall have thirty (30) calendar days to submit a formal 22 letter of intent to proceed with a special master hearing. The letter of 23 intent shall be submitted by certified or registered mail and within 24 thirty (30) calendar days of the date of receipt of the certified or reg- 25 istered letter by the governmental entity, the owner and governmental 26 entity shall reach mutual agreement on the special master who will conduct 27 the hearing and make recommendations. 28 (e) The date of the request for relief pursuant to this section tolls the 29 time for the owner to seek judicial consideration under section 67-8402, 30 Idaho Code, from the date of request for relief to a date sixty (60) days 31 after signature on the special master's final report; or if there is not 32 mutual agreement on a special master, six (6) calendar months following 33 the request for relief date, or such other time as the special master may 34 determine the owner has failed to comply with instructions and dismisses 35 proceedings with prejudice. 36 (f) Not later than thirty (30) calendar days following the selection of a 37 special master, the governmental entity that issued the development order, 38 or is taking the regulating action, shall file a response to the request 39 for relief with the special master and the owner. The response shall set 40 forth in reasonable detail the following: 41 (i) The public purpose sought by the development order or regulat- 42 ing action; 43 (ii) The basis of each "takings" conclusion that the development 44 order or regulating action has not imposed a taking on the owner's 45 property; 46 (iii) A listing of any mitigating alternatives offered to the owner, 47 including alternatives itemized in subsection (7)(c) of this section, 48 which were deemed responsive to the owner's request for relief; and 49 (iv) The position of the government regarding the owner's request 50 for relief. 51 (g) If mutual agreement on a special master is not possible, the owner 52 may file for judicial consideration under section 67-8402, Idaho Code, 53 subject only to the requirement that the owner be a property owner as 54 defined in section 67-8402(2), Idaho Code. In this instance, the five hun- 55 dred dollar ($500) request for relief filing fee shall become the judicial 6 1 cause of action filing fee, the judicial consideration appraisal shall be 2 waived and the judicial cause of action filing date shall be six (6) cal- 3 endar months following the request for relief filing date. 4 (5) Special master procedures. 5 (a) The special master may conduct a hearing on whether the request for 6 relief shall be dismissed for failing to include the information required 7 by subsection (3) of this section. If the special master dismisses the 8 case, the special master shall allow the owner to amend the request and 9 refile. Failure to refile an adequate amended request within a time speci- 10 fied by the special master shall result in a dismissal with prejudice as 11 to this proceeding. Dismissal of a proceeding with prejudice shall consti- 12 tute the special master's final report. Distribution of the dismissal with 13 prejudice decision shall be the same as provided in subsection (8)(e) of 14 this section. 15 (b) The special master may request other information from appropriate 16 parties in the interest of gaining a complete understanding of the request 17 for relief. 18 (c) The initial party to the proceeding is the governmental entity that 19 issues the development order to the owner or that is taking the regulating 20 action. In those instances when complete resolution of all relevant issues 21 would require the active participation of more than one (1) governmental 22 entity, the special master may, upon application of a party, request par- 23 ticipation by those governmental entities as parties to the proceeding if 24 it will assist in effecting the purpose of this section. The governmental 25 entities so requested are encouraged to actively participate in this pro- 26 cedure. 27 (d) Any governmental entity that is added by the special master as a 28 party must file a response to the request for relief prior to the hearing 29 but not later than twenty (20) calendar days following notification of 30 "party" status. A party may incorporate in the response to a request to be 31 dropped from the proceeding. The request to be dropped must set forth 32 facts and circumstances to aid the special master in ruling on the 33 request. All requests to be dropped must be disposed of prior to a hearing 34 on the merits of the request for relief itself. 35 (e) Each party shall make efforts to assure that those persons qualified 36 by training or experience necessary to address issues raised by the 37 request or by the special master and further qualified to address alterna- 38 tives, variances and other types of modifications to the development order 39 or regulating action are present at the hearing. 40 (f) The special master shall hold a hearing within forty-five (45) calen- 41 dar days of his selection as the mutually agreed person to review the 42 request for relief unless a different date outside forty-five (45) calen- 43 dar days is agreed to by all parties. The hearing must be held in the 44 county in which the governmental entity issued the development order or 45 regulating action, or in the county where the property is primarily 46 located as impacted by the applicable development order or regulating 47 actions. 48 (g) The special master must provide notice of the place, date and time of 49 the hearing to all parties at least thirty (30) calendar days prior to the 50 hearing. The governmental entity shall publish the legal notice of the 51 place, date and time of the hearing in accordance with the provisions of 52 section 67-2343, Idaho Code, or section 67-6509, Idaho Code, as applica- 53 ble. 54 (h) Persons wishing to express support or opposition to the request for 55 relief may request to participate in the special master hearing and shall 7 1 be allowed to participate at the discretion of, and under procedures 2 established by, the special master. 3 (6) Special master hearing. 4 (a) The hearing shall be informal and open to the public and does not 5 require the use of an attorney. The hearing must operate at the direction 6 and under the supervision of the special master. The object of the hearing 7 is to focus attention on the impact of the governmental action giving rise 8 to the request for relief and to explore alternatives to the development 9 order or regulating action in order to recommend relief, when appropriate, 10 to the owner. 11 (b) The first responsibility of the special master is to facilitate a 12 resolution of the conflict between the owner and the governmental entity 13 to the end that some modification of the owner's existing or proposed use 14 of the property may be possible, or that adjustment in the development 15 order or regulating action may be achieved, or that regulatory efforts by 16 one (1) or more of the governmental parties may be instrumental in achiev- 17 ing a solution. Accordingly, the special master shall act as the 18 facilitator or moderator between the parties in an effort to effect a 19 mutually acceptable solution. 20 (c) In conducting the hearing, the special master shall hear from all 21 parties and witnesses that are necessary to an understanding of the mat- 22 ter. 23 (d) The special master shall weigh all information offered at the hear- 24 ing. The circumstances to be examined in determining whether the develop- 25 ment order or regulating action is unreasonable or unfairly burdens use of 26 the property may include, but are not limited to: 27 (i) The history of the real property, including when it was pur- 28 chased, how much was purchased, where it is located, the nature of 29 the title, the composition of the property and how it was initially 30 used. 31 (ii) The history or development and use of the real property, 32 including what was developed on the property and by whom, if it was 33 subdivided and how and to whom it was sold, whether plats were filed 34 or recorded, and whether infrastructure and other public services or 35 improvements may have been dedicated to the public. 36 (iii) The history of environmental protection and land use controls 37 and other rules, including how and when the land was classified, how 38 use was proscribed and what changes in the classification occurred. 39 (iv) The present nature and extent of the real property, including 40 its natural and altered characteristics. 41 (v) The appraisal estimate of highest and best use immediately 42 before and after the regulating action and the decrease in fair mar- 43 ket value over the same period. 44 (vi) The public purpose sought to be achieved by the development 45 order or regulating action, including the nature and magnitude of the 46 problem addressed by the underlying rules or regulations on which the 47 development order or regulating action is based, whether the develop- 48 ment order or regulating action is necessary to the achievement of 49 the public purpose and whether there is an alternative development 50 order or regulating action that would achieve the public purpose and 51 allow for reduced restrictions on the use of the property. 52 (vii) Uses authorized for and restrictions placed on similar prop- 53 erty. 54 (viii) Any other information determined relevant by the special mas- 55 ter. 8 1 (7) Special master recommendation. 2 (a) Within sixty (60) calendar days after the conclusion of the hearing, 3 the special master shall prepare and file with all parties a written rec- 4 ommendation. In each recommendation, a specific determination shall be 5 established as to whether the issue before the special master may involve 6 development of the material resources of the state. 7 (b) If the special master finds that the development order at issue or 8 the development order or regulating action in combination with the actions or 9 rules or regulations of other governmental entities is not unreasonable or 10 does not unfairly burden the use of the owner's property, the special master 11 must recommend that the development order or regulating action remain 12 undisturbed and the proceeding shall end, subject to the owners retention of 13 all other available remedies. 14 (c) If the special master finds that the development order is unreason- 15 able or unfairly burdens the use of the owner's property, the special mas- 16 ter may recommend one (1) or more alternatives that protect the public 17 interest served by the development order or regulating action at issue but 18 allow for reduced restraints on the use of the owner's real property 19 including, but not limited to: 20 (i) Adjustment of land development or permit standards or other 21 provisions controlling the development or use of land; 22 (ii) Increases or modification in the density, intensity or use of 23 areas of development; 24 (iii) Transfer of development rights when authorized by law; 25 (iv) Land swaps or exchanges; 26 (v) Mitigation, including payments in lieu of on-site mitigation; 27 (vi) Location on the least sensitive portion of the property; 28 (vii) Conditioning the amount of development or use permitted; 29 (viii) Requiring issues be addressed on a more comprehensive basis 30 than a single proposed use or development; 31 (ix) Issuance of the development order with variance authorized, 32 special exception or other extraordinary relief, including withdrawal 33 of the enforcement action; 34 (x) Purchase of the real property, or interest therein, by an 35 appropriate governmental entity. 36 (d) The special master's recommendation and the governmental entity's 37 written response to the request for relief are a matter of public record 38 and are admissible in judicial proceedings under section 67-8402, Idaho 39 Code, at the discretion of the court. Other actions or statements of par- 40 ticipants in the special master's proceedings are evidence of an offer to 41 compromise and are inadmissible in any proceeding, judicial or administra- 42 tive. 43 (e) This subsection does not prohibit the owner and the governmental 44 entity from entering into an agreement as to the permissible use of the 45 property prior to the special master entering a recommendation. However, 46 an agreement for a permissible use must be incorporated in the special 47 master's final report. 48 (8) Postrecommendation procedures. 49 (a) Within sixty (60) calendar days after receipt of the special master's 50 recommendation, the governmental entity responsible for the development 51 order or regulating action shall: 52 (i) Accept the recommendation of the special master and proceed to 53 implement the agreement on the recommendation under provisions 54 allowed by the local planning act contained in chapter 65, title 67, 55 Idaho Code; 9 1 (ii) Modify the recommendation of the special master and, subject 2 to owner acceptance, proceed to implement the agreement on the modi- 3 fied recommendation under the provisions allowed by the local plan- 4 ning act, chapter 65, title 67, Idaho Code; 5 (iii) Reject the recommendation of the special master. Failure to act 6 within sixty (60) calendar days is a rejection unless the period is 7 extended by agreement of the owner and issuer of the development 8 order or regulating action. 9 (iv) Based on (i), (ii), or (iii) of this paragraph, establish a 10 written decision which describes as specifically as possible the use 11 or uses available to the subject real property. Copies of the written 12 decision will be immediately provided to the special master and the 13 owner seeking relief. 14 (b) If a governmental entity modifies the special master's recommendation 15 and the owner rejects the modification, or if the governmental entity 16 rejects the recommendation, the owner may initiate a judicial cause of 17 action claim under section 67-8402, Idaho Code, subject only to the 18 requirement that the owner be a property owner as defined in section 19 67-8402(2), Idaho Code. The five hundred dollar ($500) request for relief 20 filing fee shall become the judicial cause of action filing fee, the judi- 21 cial cause of action appraisal shall be waived and the judicial cause of 22 action filing date shall be ninety (90) days following the date of the 23 special master's recommendation. 24 (c) The governmental entity shall file the special master's recommenda- 25 tion and the governmental written decision on the internet in accordance 26 with procedures established in subsection (4)(c) of this section. 27 (d) The procedure established by this section may not continue longer 28 than twelve (12) calendar months unless the period, or any part of the 29 period, is extended by agreement of the parties. 30 (e) The special master's recommendation and the governmental entities 31 written decision is a matter of public record and is admissible in judi- 32 cial proceedings under section 67-8402, Idaho Code, at the discretion of 33 the court. 34 (9) Cost-sharing -- Implementation and records. 35 (a) Each governmental entity may establish procedural guidelines to gov- 36 ern the conduct of proceedings authorized by this section. Costs of pro- 37 viding notice and effecting service of the request for relief under this 38 section shall be borne by the owner in an amount not to exceed two thou- 39 sand five hundred dollars ($2,500). The five hundred dollar ($500) filing 40 fee paid by the owner shall not be credited as part of the owner's payment 41 for governmental entity expenses. 42 (b) The special master is solely responsible for contracting, billing and 43 collecting his or her negotiated fee and expenses; the sum of which shall 44 be borne equally by the governmental entity and the owner or on an equal 45 percentage basis if more than one (1) owner has filed a request for relief 46 on the same regulating action and for the same reasons. 47 (c) Governmental entities shall direct all available resources and 48 authorities to effect fully the obvious purposes and intent of this sec- 49 tion in resolving disputes. 50 (d) Procedures, statements and actions of this section may be used to 51 resolve disputes in pending judicial proceedings with the agreement of the 52 parties to the judicial proceedings and subject to approval of the court 53 in which the judicial proceedings are pending. 54 (e) The provisions of this section do not supplant other methods agreed 55 to by the parties that are lawfully available for arbitration, mediation 10 1 or other forms of alternative dispute resolution. 2 (f) Records provided to the state private property rights repository 3 shall be a matter of public record for the benefit of the public, the leg- 4 islature and all levels of government involved in land use regulatory 5 decisions, especially those levels of local government with inexperienced 6 or reduced staff. 7 (g) As to the application of a regulating action; except for a develop- 8 ment order, no cause of action exists under this section for any regulat- 9 ing action issued, modified or amended before July 1, 1998. A development 10 order issued in response to a property owner's application for a develop- 11 ment permit is not so restricted and the cause of action claim may proceed 12 if filed within the one (1) year filing period. Amendment or modification 13 of a regulating action other than a development order applies to a request 14 for relief only to the extent that application of the amendment or modifi- 15 cation may unreasonably or unfairly burden an owner apart from the regu- 16 lating action being amended or modified. 17 (h) The procedures created by this section are not of themselves a judi- 18 cial cause of action. 19 67-8402. CLAIMS AND JUDICIAL CONSIDERATION. (1) Application. 20 (a) This section establishes a cause of action for judicial consideration 21 of regulation actions by a governmental entity that may not rise to the 22 level of a taking under the constitution of the state of Idaho or the con- 23 stitution of the United States but do create an inordinate burden for a 24 property owner such that the property owner bears permanently a dispropor- 25 tionate share of a burden imposed for benefit of the public which in 26 fairness should be borne by the public at large. 27 (b) "Judicial consideration" as used in this section, is a judicial 28 action separate and distinct from "judicial review" in the local planning 29 act, chapter 65, title 67, Idaho Code, or the Idaho administrative proce- 30 dure act, chapter 52, title 67, Idaho Code, in that judicial consider- 31 ation, as opposed to judicial review, is not predicated on exhaustion of 32 administrative remedies; nor is the court restricted in exercising judi- 33 cial authority in considering inordinate burden as defined in this section 34 and impaneling a jury to award possible compensation, nor is the time 35 limit for a property owner to file against a governmental entity regulat- 36 ing action restricted to twenty-eight (28) calendar days. Other statutory 37 provisions of the local planning act and the Idaho administrative proce- 38 dure act remain applicable unless specifically 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, the "takings" review conclusion for the regulating action proposed 35 and the degree to which an individual property owner is forced to perma- 36 nently bear financial loss for the benefit of the public. Essential nexus 37 shall be established when a governmental regulating action which perma- 38 nently reduces property value: 39 (i) Is essential to the public purpose sought; 40 (ii) Has undergone the "takings" review process required by chapter 41 80, title 67, Idaho Code, such that a description of nonapplicability 42 of attorney general regulatory "takings" act checklist criteria is 43 available for public review; and 44 (iii) Is confined to regulatory actions considerate of legislative 45 concern that there be minimum practicable loss of private property 46 value for benefit of the public. 47 (f) "Fair market value" means an appraised value of real property as 48 determined by an analysis of "highest and best use" for the development 49 opportunity or permit sought, or application of a "vested right" to the 50 use of real property or application of any other recognized appraisal pro- 51 cedure appropriate to the objectives of subsections (3)(a) and (5)(e) of 52 this section. 53 (g) "Governmental entity" means a state agency or political subdivision 54 of the state created by the state constitution or general or special act 55 which exercises governmental authority and which is most directly involved 12 1 in the issuance of a development order or regulating action. 2 (h) "Highest and best use" represents a premise upon which a value esti- 3 mate of real property is based. A description of highest and best use as 4 related to fair market value will be presented by the appraiser in the 5 appraisal report. 6 (i) "Inordinate burden or inordinately burdened" means that an action of 7 one (1) or more governmental entities taken for benefit of the public has 8 restricted or limited the use of real property such that the property 9 owner is permanently unable to attain or maintain fair market value for 10 the subject real property taken as a whole and further bears a dispropor- 11 tionate share of a financial burden which, in fairness, should be borne by 12 the public at large. "Inordinate burden" or "inordinately burdened" does 13 not include temporary impacts to real property, or permanent impacts to 14 real property occasioned by governmental abatement, prohibition or preven- 15 tion of a public nuisance at common law or noxious use of private prop- 16 erty, or permanent impacts to real property occasioned by governmental 17 regulation on behalf of the health, safety and general welfare of the pub- 18 lic where essential nexus is demonstrated between the regulatory action 19 and the degree to which the private property owner is forced to bear 20 financial loss for the benefit of the public. 21 (j) "Material resources" means land in the state of Idaho or land in 22 Idaho together with any naturally occurring combination of vegetative 23 cover, geological formation or soil structure which is privately owned and 24 subject to regulating action under this section. 25 (k) "Property owner" means the person who holds legal title to the prop- 26 erty at issue. 27 (l) "Real property" means real estate and includes any appurtenances and 28 improvements to the land, including other adjacent property which the 29 property owner has a relevant interest. 30 (m) "Regulating action" means a development order or other land use 31 directive by which a governmental entity exercises police power authority 32 over private property development or utilization. 33 (n) "Ripeness decision" means a written decision by a governmental entity 34 which establishes a final definition of available uses to which real prop- 35 erty may be put when a regulation action by that governmental entity has 36 reduced the real property fair market value and the owner, seeking relief, 37 has filed a claim under this section, which has not been settled during 38 the one hundred eighty (180) calendar day notice period. This written 39 decision constitutes the last prerequisite to judicial consideration, not- 40 withstanding the availability of other administrative remedies, and the 41 manner shall be deemed final, or ripe for the purpose of commencing a 42 judicial proceeding. 43 (o) "Vested right" is to be determined by applying the principles of 44 equitable estoppel or other appropriate statutory law of the state. 45 (3) Initiating a proceeding. 46 (a) A cause of action may be commenced by a property owner under this 47 section if a written claim is filed with the head of the appropriate gov- 48 ernmental entity within ninety (90) calendar days after a development 49 order or regulating action is first applied by the governmental entity to 50 the property at issue and the property owner submits with the claim an 51 independent appraisal by a licensed appraiser that supports the claim and 52 demonstrates a minimal loss in fair market value to the real property 53 taken as a whole of twenty percent (20%), or twenty thousand dollars 54 ($20,000), whichever is less. 55 (b) The cause of action claim shall be filed with the head of the appro- 13 1 priate governmental entity not less than one hundred eighty (180) calendar 2 days prior to initiating a separate filing for judicial consideration. 3 (c) If the action of government is the culmination of a process that 4 involves more than one (1) governmental entity, or if a complete resolu- 5 tion of all relevant issues in the view of the property owner or in the 6 view of a governmental entity to whom a claim is presented requires the 7 active participation of one (1) or more governmental entities, the prop- 8 erty owner shall present the claim as provided in this section to each of 9 the governmental entities. 10 (d) The cause of action filing fee shall be five hundred dollars ($500) 11 and receipt of the fee by the governmental entity having administrative 12 responsibility shall establish the reference date for purposes of the one 13 hundred eighty (180) calendar day notice period preliminary to filing for 14 judicial consideration. 15 (e) No later than thirty (30) calendar days following receipt of the 16 filed claim, the governmental entity with whom the request for relief is 17 filed shall provide a copy of the claim by United States mail to owners of 18 real property adjoining the owner's property, and to purchasers of record 19 within three hundred (300) feet of the external boundaries of the property 20 owner's land as may separately apply, and to any additional owners of 21 property as determined appropriate by the governmental entity. Notice of 22 the request for relief shall be published as a legal notice by the govern- 23 mental entity in the same time frame and notice of meetings to address the 24 claim shall be in accordance with section 67-2343, Idaho Code. 25 (f) Persons wishing to express support or opposition to the filed claim 26 may request to participate in the proceeding and shall be allowed to par- 27 ticipate at the discretion of, and under procedures established by, the 28 governmental entity conducting the meetings. 29 (4) Offer to settle -- One hundred eighty day notice period. 30 (a) During the one hundred eighty (180) calendar day notice period, 31 unless extended by agreement of the parties, the governmental entity shall 32 make a written settlement offer to effectuate under provisions allowed by 33 the local planning act, chapter 65, title 67, Idaho Code: 34 (i) An adjustment of land development or permit standards or other 35 provisions controlling the development; 36 (ii) Increases or modification in the density, intensity or use of 37 areas of development; 38 (iii) Land swaps or exchanges; 39 (iv) Mitigation, including payments in lieu of on-site mitigation; 40 (v) Location on the least sensitive portion of the property; 41 (vi) Conditioning the amount of development or use permitted; 42 (vii) A requirement that issues be addressed on a more comprehensive 43 basis than a single posed use or development; 44 (viii) Issuance with the development order of a variance, special 45 exception or other extraordinary relief; 46 (ix) Purchase of the real property, or an interest therein, by an 47 appropriate governmental entity; 48 (x) Other land use proposals legitimate to the interests of the 49 property owner, the public and the governmental entity, or 50 alternatively, reject settlement and all settlement options in pref- 51 erence of issuing the ripeness decision of subsection (4)(c) of this 52 section with prejudice toward listing any mitigating alternatives 53 regarding the property owner's cause of action claim. 54 (b) If the property owner accepts the settlement offer, the governmental 55 entity will implement the settlement offer through appropriate hearings 14 1 and/or development agreement or regulating action to include issuance of a 2 variance, special exception or other extraordinary relief. Within thirty 3 (30) calendar days of settlement, the governmental entity shall file the 4 terms of settlement in accordance with the provisions established in sec- 5 tion 67-8401(4)(c), Idaho Code. 6 (c) During the one hundred eighty (180) calendar day notice period, 7 unless a settlement offer is accepted by the property owner, each of the 8 governmental entities provided notice pursuant to subsection (3)(c) of 9 this section shall issue a written ripeness decision which: 10 (i) Establishes the public purpose for the regulatory action taken; 11 (ii) Addresses essential nexus for the regulatory action taken; 12 (iii) Identifies allowable uses to which the subject property may be 13 put; and 14 (iv) Lists mitigating alternatives offered to the property owner, 15 including alternatives itemized in subsection (4)(a) of this section, 16 which were deemed responsive to the property owner's cause of action 17 claim. 18 Failure of the governmental entity to issue a written ripeness decision 19 during the one hundred eighty (180) calendar day notice period shall be 20 deemed an action which ripens the regulating action of the governmental 21 entity such that the regulating action shall operate as a ripeness deci- 22 sion that has been rejected by the property owner. 23 (d) The ripeness decision, as a matter of law, constitutes the last pre- 24 requisite to judicial consideration and the matter shall be deemed ripe or 25 final for the purpose of the judicial proceeding created by this section, 26 notwithstanding the availability of other administrative remedies or the 27 fact that judicial review as a separate judicial procedure under the local 28 planning act pursuant to section 67-6521, Idaho Code, requires the 29 exhaustion of all nonjudicial remedies. 30 (5) Judicial consideration and compensation. 31 (a) If the property owner rejects the ripeness decision of the governmen- 32 tal entity or entities, or terms of the settlement offer under subsection 33 (4)(b) of this section are not met within ninety (90) calendar days, the 34 property owner may file a claim for compensation in district court within 35 the judicial district where the affected property is located. A copy of 36 filing shall be served contemporaneously on the head of each of the gov- 37 ernmental entities that issued a ripeness decision which was rejected by 38 the property owner. 39 (b) In acting on the filed claim, the district court shall determine 40 whether, considering the ripeness decision of subsection (4)(c) of this 41 section, or failure to meet terms of the settlement offer of subsection 42 (4)(b) of this section, sufficient evidence exists to believe the govern- 43 mental entity, or entities, has inordinately burdened the real property 44 owner such that jury deliberation is appropriate for possible compensation 45 under subsection (5)(e) of this section. The property owner shall not pre- 46 vail in an action filed under this section if the court finds insufficient 47 evidence to impanel a jury. 48 (c) If the actions of more than one (1) governmental entity, considering 49 any settlement offers and ripeness decisions, are responsible for the 50 action that imposed the inordinate burden on the real property of the 51 property owner, the court shall determine the percentage of responsibility 52 each such governmental entity bears with respect to the inordinate burden. 53 (d) A governmental entity may take an interlocutory appeal of the court's 54 determination that the action of the governmental entity has resulted in 55 an inordinate burden. An interlocutory appeal does not automatically stay 15 1 the proceedings; however the court may stay the proceedings during pen- 2 dency of the appeal. If the governmental entity does not prevail in the 3 interlocutory appeal, the court shall award to the prevailing property 4 owner the costs and a reasonable attorney's fee incurred by the property 5 owner in the interlocutory appeal. 6 (e) Following court determination that sufficient evidence exists to war- 7 rant jury deliberation of possible compensation and following resolution 8 of any interlocutory appeal, the court shall impanel a twelve (12) member 9 civil jury to determine any compensation due the property owner. In con- 10 sidering compensation, the jury shall weigh the fair market value of the 11 real property as it existed at the time of the governmental action at 12 issue and the fair market value of the real property following the govern- 13 mental action at issue, taking into consideration any governmental conces- 14 sion in the ripeness decision and the extent to which the property owner 15 bears permanently a disproportionate share of a burden imposed for public 16 benefit which, in fairness, should be borne by the public at large. An 17 award of compensation by the jury constitutes the only basis for the prop- 18 erty owner to prevail in an action filed pursuant to this section. 19 (f) The district court may enter any orders necessary to effectuate the 20 purposes of this section and to make final determinations to effectuate 21 relief available under this section. 22 (g) An award or payment of compensation pursuant to this section shall 23 operate to grant to and vest in any governmental entity by whom compensa- 24 tion is paid the right, title and interest in rights of use for which the 25 compensation has been paid. The court shall determine the form and the 26 recipient of the right, title and interest as well as the terms of acqui- 27 sition of real property. 28 (6) Recovery of judicial consideration costs. 29 (a) If the property owner prevails in the action filed pursuant to this 30 section, the property owner is entitled to recover reasonable costs and 31 attorney's fees incurred by the property owner from the entity or entities 32 according to the court-determined proportionate share from the date of 33 filing of the district court action through termination of court proceed- 34 ings. The property owner is not entitled to recovery of the five hundred 35 dollar ($500) cause of action filing fee. 36 (b) If the governmental entity or entities prevail in the action filed 37 pursuant to this section, each shall be entitled to recover reasonable 38 costs and attorney's fees according to their court-determined proportion- 39 ate share from the date of filing of the district court action through 40 termination of court proceedings. 41 (c) The determination of total reasonable costs and attorney's fees pur- 42 suant to this section shall be made by the court and not the jury. 43 (7) Concluding actions and restrictive provisions. 44 (a) Upon payment of court-determined costs and attorney's fees, the prop- 45 erty owner, having failed to prevail in a court determination of inordi- 46 nate burden, shall have a final concluding prerogative to accept the pro- 47 visions of any ripeness decision previously rejected in favor of judicial 48 consideration. The governmental entity or entities who developed the writ- 49 ten ripeness decision shall direct all available resources and authorities 50 necessary to effect fully the purposes and intent of the decision. 51 (b) Within thirty (30) calendar days after the execution of any settle- 52 ment pursuant to this section, or the issuance of any judgment pursuant to 53 this section, or the exercise of final concluding prerogative of the prop- 54 erty owner to accept a ripeness decision previously rejected in favor of 55 judicial consideration, the governmental entity having administrative 16 1 responsibility shall file a copy of the request for relief and the settle- 2 ment or judgment in accordance with the filing provisions in section 3 67-8401(4)(c), Idaho Code, but adding the case title of the judgment. 4 (c) A cause of action may not be commenced under this section if the 5 claim is presented more than ninety (90) calendar days after a development 6 order or regulation is first applied by the governmental entity to the 7 property at issue. If an owner seeks relief from the governmental action 8 through lawfully available administrative proceedings, including relief 9 actions under section 67-8401, Idaho Code, the time for bringing an action 10 under this section is tolled until conclusion of such proceedings. 11 (d) As to the application of a regulating action; except for a develop- 12 ment order, no cause of action exists under this section for any regulat- 13 ing action, issued, modified or amended before July 1, 1998. A develop- 14 ment order issued in response to a property owner's application for a 15 development permit is not so restricted and the cause of action claim may 16 proceed if filed within the ninety (90) calendar day filing period. 17 Amendment or modification of a regulating action other than a development 18 order gives rise to a cause of action only to the extent that application 19 of the amendment or modification imposes an inordinate burden apart from 20 the regulation action being amended or modified. 21 (e) Notwithstanding the provisions of chapter 9, title 6, Idaho Code, and 22 specifically, the provisions of section 6-904B, Idaho Code, the provisions 23 of this chapter shall govern the determination of an inordinate burden and 24 the award or payment of compensation. 25 (f) Nothing contained in this act is intended to imply or infer that the 26 court system of this state can be accessed twice on the same claim regard- 27 ing the diminution of value of property.
STATEMENT OF PURPOSE
RS 07582C1
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
332-1 146
STATEMENT OF PURPOSE/ FISCAL NOTE
H 487