2001 Legislation
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HOUSE BILL NO. 197 – Eminent domain/business ownr/damage

HOUSE BILL NO. 197

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H0197...................................................by LOCAL GOVERNMENT
EMINENT DOMAIN - Amends existing law relating to eminent domain to require
business owners claiming business damages to submit a written business
damage claim to the condemning authority within ninety days after the
condemning authority's initial offer letter; to provide that the condemning
authority's initial offer letter shall include certain information; to
provide that the business owner's claim must be sent by certified mail; to
provide the court shall strike the business owner's claim for business
damages in subsequent condemnation proceedings under certain conditions; to
require that the business damage claim be prepared by an individual
familiar with the operations of the business owner's business; to provide
that the business owner shall provide the condemning authority with certain
business records; and to provide that the condemning authority's good faith
in failing to offer compensation shall not be contested at a possession
hearing if the business owner has not given notice of its intent to claim
business damages within a certain time period.
                                                                        
02/09    House intro - 1st rdg - to printing
02/12    Rpt prt - to Loc Gov

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 197
                                                                        
                               BY LOCAL GOVERNMENT COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO EMINENT DOMAIN PROCEEDINGS; AMENDING SECTION 7-711, IDAHO CODE, TO
  3        REQUIRE BUSINESS OWNERS CLAIMING BUSINESS  DAMAGES  TO  SUBMIT  A  WRITTEN
  4        BUSINESS DAMAGE CLAIM TO THE CONDEMNING AUTHORITY WITHIN NINETY DAYS AFTER
  5        THE  CONDEMNING AUTHORITY'S INITIAL OFFER LETTER, TO PROVIDE THAT THE CON-
  6        DEMNING AUTHORITY'S INITIAL OFFER LETTER OR ACCOMPANYING INFORMATION SHALL
  7        INCLUDE CERTAIN INFORMATION, TO PROVIDE THAT THE  BUSINESS  OWNER'S  CLAIM
  8        MUST  BE  SENT  TO  THE CONDEMNING AUTHORITY BY CERTIFIED MAIL, TO PROVIDE
  9        THAT THE COURT SHALL STRIKE THE BUSINESS OWNER'S CLAIM FOR  BUSINESS  DAM-
 10        AGES  IN  SUBSEQUENT CONDEMNATION PROCEEDINGS UNDER CERTAIN CONDITIONS, TO
 11        REQUIRE THAT THE BUSINESS DAMAGE CLAIM BE PREPARED BY AN INDIVIDUAL FAMIL-
 12        IAR WITH THE OPERATIONS OF THE BUSINESS OWNER'S BUSINESS, TO PROVIDE  THAT
 13        THE  BUSINESS  OWNER  SHALL  PROVIDE THE CONDEMNING AUTHORITY WITH CERTAIN
 14        BUSINESS RECORDS, TO PROVIDE THAT THE CONDEMNING AUTHORITY'S GOOD FAITH IN
 15        FAILING TO OFFER COMPENSATION SHALL NOT BE CONTESTED AT A POSSESSION HEAR-
 16        ING IF THE BUSINESS OWNER HAS NOT GIVEN NOTICE  OF  ITS  INTENT  TO  CLAIM
 17        BUSINESS  DAMAGES  WITHIN A CERTAIN TIME PERIOD AND TO MAKE TECHNICAL COR-
 18        RECTIONS.
                                                                        
 19    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 20        SECTION 1.  That Section 7-711, Idaho Code, be, and  the  same  is  hereby
 21    amended to read as follows:
                                                                        
 22        7-711.  ASSESSMENT  OF  DAMAGES. The court, jury or referee must hear such
 23    legal testimony as may be offered by any of the parties  to  the  proceedings,
 24    and thereupon must ascertain and assess:
 25        1.  The value of the property sought to be condemned, and all improvements
 26    thereon  pertaining  to  the  realty, and of each and every separate estate or
 27    interest therein; if it consists of different parcels, the value of each  par-
 28    cel and each estate or interest therein shall be separately assessed. For pur-
 29    poses  of ascertaining the value of the property, the assessed value for prop-
 30    erty tax purposes shall be used as the minimum amount for damages  unless  the
 31    court, jury or referee finds the property has been altered substantially.
 32        2.  If  the  property  sought to be condemned constitutes only a part of a
 33    larger parcel: (a) the damages which will accrue to the portion not sought  to
 34    be  condemned,  by  reason of its severance from the portion sought to be con-
 35    demned, and the construction of the improvement in the manner proposed by  the
 36    plaintiff;  and  (b) the damages to any business qualifying under this subsec-
 37    tion having more than five (5) years' standing which the taking of  a  portion
 38    of the property and the construction of the improvement in the manner proposed
 39    by the plaintiff may reasonably cause. The business must be owned by the party
 40    whose  lands  are  being condemned or be located upon adjoining lands owned or
 41    held by such party. Business  damages  under  this  subsection  shall  not  be
 42    awarded  if  the loss can reasonably be prevented by a relocation of the busi-
 43    ness or by taking steps that a reasonably prudent person would  take,  or  for
                                                                        
                                           2
                                                                        
  1    damages  caused  by  temporary  business interruption due to construction; and
  2    provided further that compensation for business damages shall  not  be  dupli-
  3    cated  in the compensation otherwise awarded to the property owner for damages
  4    pursuant to subsections (1). and (2). (a) of this section. 7-711, Idaho Code.
  5        (i)   If the business owner intends to claim business damages  under  this
  6        subsection, the owner, as defendant, must submit a written business damage
  7        claim  to the plaintiff condemning authority within ninety (90) days after
  8        service  of  the  summons  and  complaint  for   condemnation   condemning
  9        authority's  initial  offer letter. The plaintiff's condemning authority's
 10        initial offer letter or accompanying information must expressly inform the
 11        defendant business owner of its rights under  this  subsection,  and  must
 12        further  inform  the defendant business owner of its right to consult with
 13        an attorney.
 14        (ii)  The defendant's business owner's written claim must be sent  to  the
 15        plaintiff   condemning   authority   by  certified  mail,  return  receipt
 16        requested. Absent a showing of a good faith justification for the  failure
 17        to  submit  a  business damage claim within ninety (90) days, or an agreed
 18        extension by the parties, the court shall strike the defendant's  business
 19        owner's claim for business damages in any subsequent condemnation proceed-
 20        ing.
 21        (iii) The business damage claim must include an explanation of the nature,
 22        extent,  and  monetary amount of such claimed damages and must be prepared
 23        by the owner, a certified public accountant, or a business  damage  expert
 24        familiar  with  the  nature  of the operations of the defendant's business
 25        owner's business. The defendant business  owner  shall  also  provide  the
 26        plaintiff  condemning  authority  with  copies of the defendant's business
 27        owner's business records that substantiate the good faith offer to  settle
 28        the  business damage claim. The business damage claim must be clearly seg-
 29        regated from the claim for property damages pursuant to  subsections  (1).
 30        and (2).(a) of this section. 7-711, Idaho Code.
 31        (iv)  As  used  in  this subsection, the term "business records" includes,
 32        but is not limited to, copies of federal and  state  income  tax  returns,
 33        state  sales  tax  returns, balance sheets, and profit and loss statements
 34        for the five (5) years preceding which are attributable  to  the  business
 35        operation on the property to be acquired, and other records relied upon by
 36        the business owner that substantiate the business damage claim.
 37        (v)   The  plaintiff's  condemning  authority's  good  faith in failing to
 38        offer compensation for business damages shall not be contested at  a  pos-
 39        session hearing held pursuant to section 7-721, Idaho Code, if the defend-
 40        ant  business  owner  has not given notice of its intent to claim business
 41        damages prior to the date of filing of the motion that initiates the  pro-
 42        ceeding under that section.
 43        3.  Separately,  how much the portion not sought to be condemned, and each
 44    estate or interest therein, will be specially and directly  benefited,  if  at
 45    all,  by the construction of the improvement proposed by the plaintiff; and if
 46    the benefit shall be equal to the damages assessed,  under  subsection  2.  of
 47    this  section, the owner of the parcel shall be allowed no compensation except
 48    the value of the portion taken; but if the benefit shall be less than the dam-
 49    ages so assessed, the former shall  be  deducted  from  the  latter,  and  the
 50    remainder shall be the only damages allowed in addition to the value.
 51        4.  If  the property sought to be condemned be for a railroad, the cost of
 52    good and sufficient fences along the line of such railroad, and  the  cost  of
 53    cattle guards where fences may cross the line of such railroad.
 54        5.  As  far  as practicable, compensation must be assessed for each source
 55    of damages separately.
                                                                        
                                           3
                                                                        
  1        6.  If the property sought to be condemned is private real property activ-
  2    ely devoted to agriculture, the damages  which  will  accrue  because  of  the
  3    costs, if any, of farming around electrical transmission line structure(s) for
  4    a  transmission line with a capacity  in excess of two hundred thirty (230) KV
  5    (kilovolts). If the property sought to be condemned has been the subject of  a
  6    previous  condemnation  proceeding  or proceedings for electrical transmission
  7    line structure(s) and at the time of condemnation the field holds other  elec-
  8    trical  transmission  line  structure(s),  such  evidence of costs referred to
  9    above may also include the cumulative effects, if any, of  conducting  farming
 10    operations  around other electrical transmission line structure(s) in the same
 11    field, whether such structure(s) are of the condemner or not.

Statement of Purpose / Fiscal Impact


                      STATEMENT OF PURPOSE
                            RS 10904
                                
The purpose of this amendment is to motivate both the condemning
authority and the property owner to enter into good faith
negotiations to establish any business damages that may result from
a taking before an eminent domain proceeding has been initiated. 
Many times a condemning authority reaches a voluntary settlement
with the property owner without having to resort to litigation.  At
present, the statute does not allow the condemning authority to
obtain the business records and other information necessary for it
to make a good faith settlement offer of business damages until
after the condemnation action is filed.  Amending this section to
require the condemning authority to notify the property
owner/business owner of this possible right to claim business
damages at the time of the initial offer letter, and allowing the
business owner the next ninety (90) days to make and support a
claim for business damages, will cover all situations not just
those requiring litigation.
                          FISCAL IMPACT
                                
There is no fiscal impact to the general fund.  There should be a
savings to the general public and the public condemning authority,
reflecting a reduction in the costs of acquiring right-of-way and
other property needed for a public use as a result of an expected
decrease in the number of condemnation suits where business damages
are involved.
Contact
Name: Stuart O. Davis, Executive Director 
      Idaho Assoc of Highway Districts, Inc.
Phone: 859-9378


STATEMENT OF PURPOSE/FISCAL NOTE                   H 197