Print Friendly HOUSE BILL NO. 538 – Real property value/arbitratn/when
HOUSE BILL NO. 538
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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
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fourth Legislature Second Regular Session - 1998
IN 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
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.
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
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
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
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.
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-
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-
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
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
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
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
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-
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
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-
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
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-
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
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-
53 (viii) Any other information determined relevant by the special mas-
55 (7) Special master recommendation.
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-
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
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.
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
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-
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
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.
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
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
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
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
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-
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
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.
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.
Rep. Jim Kempton
STATEMENT OF PURPOSE/ FISCAL NOTE