2006 Legislation
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SENATE BILL NO. 1245 – Eminent domain, damages, amount

SENATE BILL NO. 1245

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S1245.............................................................by BRANDT
EMINENT DOMAIN - Amends existing law to provide an alternate method for
establishing the minimum amount for damages when ascertaining the value of
the property.
                                                                        
01/11    Senate intro - 1st rdg - to printing
01/12    Rpt prt - to St Aff

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1245
                                                                        
                                         BY BRANDT
                                                                        
  1                                        AN ACT
  2    RELATING TO EMINENT DOMAIN; AMENDING SECTION 7-711, IDAHO CODE, TO PROVIDE  AN
  3        ALTERNATE  METHOD  FOR  ESTABLISHING  THE  MINIMUM AMOUNT FOR DAMAGES WHEN
  4        ASCERTAINING THE VALUE OF THE PROPERTY.
                                                                        
  5    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  6        SECTION 1.  That Section 7-711, Idaho Code, be, and  the  same  is  hereby
  7    amended to read as follows:
                                                                        
  8        7-711.  ASSESSMENT  OF  DAMAGES. The court, jury or referee must hear such
  9    legal testimony as may be offered by any of the parties  to  the  proceedings,
 10    and thereupon must ascertain and assess:
 11        1.  The value of the property sought to be condemned, and all improvements
 12    thereon  pertaining  to  the  realty, and of each and every separate estate or
 13    interest therein; if it consists of different parcels, the value of each  par-
 14    cel and each estate or interest therein shall be separately assessed. For pur-
 15    poses  of  ascertaining the value of the property, the minimum amount for dam-
 16    ages shall be the greater of the assessed  value  for  property  tax  purposes
 17    shall be used as the minimum amount for damages unless the court, jury or ref-
 18    eree  finds  the  property  has been altered substantially, or the plaintiff's
 19    highest prelitigation offer.
 20        2.  If the property sought to be condemned constitutes only a  part  of  a
 21    larger  parcel: (a) the damages which will accrue to the portion not sought to
 22    be condemned, by reason of its severance from the portion sought  to  be  con-
 23    demned,  and the construction of the improvement in the manner proposed by the
 24    plaintiff; and (b) the damages to any business qualifying under  this  subsec-
 25    tion  having  more than five (5) years' standing which the taking of a portion
 26    of the property and the construction of the improvement in the manner proposed
 27    by the plaintiff may reasonably cause. The business must be owned by the party
 28    whose lands are being condemned or be located upon adjoining  lands  owned  or
 29    held  by  such  party.  Business  damages  under  this subsection shall not be
 30    awarded if the loss can reasonably be prevented by a relocation of  the  busi-
 31    ness  or  by  taking steps that a reasonably prudent person would take, or for
 32    damages caused by temporary business interruption  due  to  construction;  and
 33    provided  further  that  compensation for business damages shall not be dupli-
 34    cated in the compensation otherwise awarded to the property owner for  damages
 35    pursuant to subsections (1) and (2) (a) of section 7-711, Idaho Code.
 36        (i)   If  the  business owner intends to claim business damages under this
 37        subsection, the owner, as defendant, must submit a written business damage
 38        claim to the plaintiff within ninety (90) days after service of  the  sum-
 39        mons  and complaint for condemnation. The plaintiff's initial offer letter
 40        or accompanying information must expressly inform  the  defendant  of  its
 41        rights under this subsection, and must further inform the defendant of its
 42        right to consult with an attorney.
 43        (ii)  The  defendant's written claim must be sent to the plaintiff by cer-
                                                                        
                                           2
                                                                        
  1        tified mail, return receipt requested. Absent a showing of  a  good  faith
  2        justification  for  the  failure  to submit a business damage claim within
  3        ninety (90) days, or an agreed extension by the parties, the  court  shall
  4        strike the defendant's claim for business damages in any condemnation pro-
  5        ceeding.
  6        (iii) The business damage claim must include an explanation of the nature,
  7        extent,  and  monetary amount of such claimed damages and must be prepared
  8        by the owner, a certified public accountant, or a business  damage  expert
  9        familiar  with  the  nature of the operations of the defendant's business.
 10        The defendant  shall  also  provide  the  plaintiff  with  copies  of  the
 11        defendant's  business  records  that  substantiate the good faith offer to
 12        settle the business damage  claim.  The  business  damage  claim  must  be
 13        clearly segregated from the claim for property damages pursuant to subsec-
 14        tions (1) and (2)(a) of section 7-711, Idaho Code.
 15        (iv)  As  used  in  this subsection, the term "business records" includes,
 16        but is not limited to, copies of federal and  state  income  tax  returns,
 17        state  sales  tax  returns, balance sheets, and profit and loss statements
 18        for the five (5) years preceding which are attributable  to  the  business
 19        operation on the property to be acquired, and other records relied upon by
 20        the business owner that substantiate the business damage claim.
 21        (v)   The  plaintiff's  good  faith  in  failing to offer compensation for
 22        business damages shall not be contested at a possession hearing held  pur-
 23        suant  to section 7-721, Idaho Code, if the defendant has not given notice
 24        of its intent to claim business damages prior to the date of filing of the
 25        motion that initiates the proceeding under that section.
 26        3.  Separately, how much the portion not sought to be condemned, and  each
 27    estate  or  interest  therein, will be specially and directly benefited, if at
 28    all, by the construction of the improvement proposed by the plaintiff; and  if
 29    the  benefit  shall  be  equal to the damages assessed, under subsection 2. of
 30    this section, the owner of the parcel shall be allowed no compensation  except
 31    the value of the portion taken; but if the benefit shall be less than the dam-
 32    ages  so  assessed,  the  former  shall  be  deducted from the latter, and the
 33    remainder shall be the only damages allowed in addition to the value.
 34        4.  If the property sought to be condemned be for a railroad, the cost  of
 35    good  and  sufficient  fences along the line of such railroad, and the cost of
 36    cattle guards where fences may cross the line of such railroad.
 37        5.  As far as practicable, compensation must be assessed for  each  source
 38    of damages separately.
 39        6.  If the property sought to be condemned is private real property activ-
 40    ely  devoted  to  agriculture,  the  damages  which will accrue because of the
 41    costs, if any, of farming around electrical transmission line structure(s) for
 42    a transmission line with a capacity in excess of two hundred thirty  (230)  KV
 43    (kilovolts).  If the property sought to be condemned has been the subject of a
 44    previous condemnation proceeding or proceedings  for  electrical  transmission
 45    line  structure(s) and at the time of condemnation the field holds other elec-
 46    trical transmission line structure(s), such  evidence  of  costs  referred  to
 47    above  may  also include the cumulative effects, if any, of conducting farming
 48    operations around other electrical transmission line structure(s) in the  same
 49    field, whether such structure(s) are of the condemner or not.

Statement of Purpose / Fiscal Impact


                    STATEMENT OF PURPOSE

                          RS 15560

Kelo highlighted the need to ensure there is a balance between
condemners and property owners, and the importance that
government act in good faith when acquiring property.  Existing
law requires condemners to attempt to purchase property via good
faith negotiations prior to filing suit for condemnation. The
condemner's last offer before litigation should therefore be a
good faith offer.  However, currently just compensation can be
reduced once suit is filed, resulting in condemners asserting
that just compensation owed is lower once litigation is filed
than they asserted pre-litigation.  This penalizes property
owners who do not settle out of court and allows condemners to
ignore their constitutional obligation assess just compensation
in good faith.  As a practical matter, there is no remedy for
abuses of this type currently.  This modification to existing
code would require the condemner to stand by its last
pre-litigation offer and set that amount as a floor for just
compensation; if the condemner asserted the amount was just
compensation prior to filing suit, it cannot assert less than
that amount for just compensation after suit is filed.  This
would ensure that good faith and the spirit of the Constitution
are complied with, as condemners are charged with the
constitutional obligation to assess and pay just compensation,
not the lowest price they can convince a judge or jury to award. 


                         FISCAL NOTE

This may result in cost savings to condemners if they are
required to stand by their appraisals rather than incur
additional costs for new appraisals once litigation commences. 
It should not result in additional costs to condemners, as it
merely requires that they pay no less as just compensation in
litigation than they were willing to pay pre-litigation.  If the
pre-litigation appraisals are fair and the condemners are
negotiating in good faith based thereon, no costs will increase. 
If condemners are currently paying less than just compensation in
litigation, costs could increase, but only because constitutional
requirements are being complied with.
     

Contact:

Name: Senator Skip Brandt          Representative Mike Moyle 
Phone: 332- 1326                   332-1000



STATEMENT OF PURPOSE/FISCAL NOTE                        S 1245