A LAW PROPOSED BY INITIATIVE PETITION
Current law allows state and local governments to take or damage private property for public use, on payment of just compensation. First, this initiative requires governments to waive any new regulation that reduces property values, unless they compensate owners for the reduced value. This requirement does not apply to public health and safety.
Second, this initiative prohibits governments from taking private property if they intend to transfer an interest in the taken property to another private party. This prohibition does not apply to private utility, water, transportation, and mining projects currently defined as public uses.
This initiative requires significant state and local government expenditures to respond to additional property owner claims. Further expenditures to pay property owner claims will depend on future policy choices, and whether state and local governments decide to waive regulations instead of paying claims.
[ ] FOR requiring governments to waive regulations that reduce property values unless they compensate owners, and prohibiting takings intended to transfer property to private parties.
[ ] AGAINST requiring governments to waive regulations that reduce property values unless they compensate owners, and prohibiting takings intended to transfer property to private parties.
THE COMPLETE TEXT OF INITIATIVE NO. 154
WHEREAS, Article II, section 29, of theConstitution of the State of Montana declares in no uncertain terms thatprivate property shall not be taken or damaged for public use without justcompensation to the full extent of the loss; and
WHEREAS, Article II, section 3,provides, within its provisions, the inalienable rights of all Montana citizensthe right to pursue life’s basic necessities including defending liberties,acquiring, possessing and protecting property; and
WHEREAS, Article II, section 17,provides that no person shall be deprived of life, liberty, or property withoutdue process of law; and
WHEREAS, despite these Constitutionalprotections, in government actions, the rights of private property owners areoften ignored and the compensation provided is not just compensation in thatproperty owners do not appear to be compensated for property taken or damagedfor public use to the full extent of the loss.
NOW THEREFORE, as these rights clearlyexist and with an intent to protect private propertyfrom the state to the full extent of a loss due to state action resulting inprivate property being taken or damaged.
BE IT ENACTED BY THEPEOPLE OF THE STATE OF MONTANA:
Section 1.Section 70-30-101, MCA, is amended to read:
Eminent domaindefined. (1) Eminent domain is the right of the state to takeprivate property for public use. This right may be exercised in the mannerprovided in this chapter.
(2) (a) Damages to property occur when government regulationsenacted after acquisition of an ownership interest in real property result indiminished value or economic loss to the private property subject to thegovernment regulation.
(b) Damagesdo not occur when government regulations, including court orders, are enactedfor protection of public health and safety including fire and building codes, healthand sanitary regulation, solid or hazardous waste regulations, housing ofdangerous felons or sexual offenders, commonly and historically recognizednuisances under common law prohibiting or eradicating blight, obscenity, nudedancing, junk or abandoned vehicles or any property used in connection with anycriminal activity.
(3) Justcompensation is:
(a) inthe case of the taking of property the current fair market value for theproperty and improvement sought to be taken plus costs, interest and attorneyfees as well as diminished value resulting from costs or losses incurred withrespect to relocation or closing of a business;
(b) if the property taken is an individual’s principal residencejust compensation is 125% of the fair market value, plus costs, interest, andattorney fees; or
(c) inthe case of damages to property that is damaged, the depreciation in thecurrent fair market value, plus costs, interest and attorney fees as well asdiminished value resulting from costs or losses incurred with respect torelocation or closing of a business.
Section 2.70-30-301, MCA, is amended to read:
“70-30-301. Hearing — judge to preside — determinations by condemnationcommissioners. (1) The condemnation commissioners shall meet at thetime and place stated in the order appointing them. The meeting time may not bemore than 10 days after the order of appointment. The commissioners shallexamine the
lands property sought to be taken. At a timeappointed by the judge and within the 10-day period, the commissioners shallhear the allegations and evidence of all persons interested in each parcelof land the property sought to be taken.
(2) The hearing must be attended by and presidedover by the presiding judge, who shall make all necessary rulings uponprocedure and the admissibility of evidence.
(3) (a) At the conclusion of the hearing, thejudge shall instruct the commissioners as to the law applicable to theirdeliberations and shall instruct them that their duty is to determine, basedsolely upon their examination of
lands property, the evidenceproduced at the hearing or hearings, and the instructions of the court, theappropriate findings provided for in subsections (3)(b)through (3)(d).
(b) The commissioners shall determine the currentfair market value of the real property sought to be taken and all improvementspertaining to the real property and of each separate estate and interest in thereal property and improvements. If the real property consists of differentparcels, the current fair market value of each parcel and each estate orinterest in the real property must be separately assessed.
(c) (i) If the propertysought to be taken constitutes only a part of a larger parcel, thecommissioners shall determine the depreciation in current fair market valuethat will accrue to the remaining parcel by reason of the condemnation and anyimprovements made to the affected property
and the construction of theimprovements in the manner proposed by the condemnor..
(ii) The commissioners shall also determine howmuch the remaining parcel and each estate or interest in the remaining parcelwill be benefited, if at all, by the construction of the improvements proposedby the condemnor. If the benefit is equal to theamount assessed under subsection (3)(c)(i), the compensation to the condemneeis limited to the value of the portion taken. However, if the benefit is lessthan the amount assessed under subsection (3)(c)(i), the benefit to the condemneemust be deducted from the amount assessed under subsection (3)(c)(i) and the remainder is the only amount allowed in addition to the current fair market value
(d) If the property sought to betaken is for a railroad, the commissioners shall also determine the cost ofgood and sufficient fences along the line of the railroad and the cost ofcattle guards where fences may cross the line of the railroad.
(e) Through examination of the property, thecommissioners shall determine the appropriate payment for damages to theproperty taken, as well as to any remaining parcel of property that may beadversely impacted by the project, to assist the court in making a finaldetermination pursuant to 70-30-309.
(4) When there are two or more estates or dividedinterests in property sought to be taken, the condemnoris entitled to have the amount of the award for the property first determinedas between the condemnor and all condemneesclaiming any interest in the property. In the same proceeding, the respectiverights of each of the condemnees in and to the totalaward must be determined by the commissioners, under supervision and instruction of the court, and the award must be apportioned accordingly.”
Section 3.70-30-304, MCA, is amended to read:
“70-30-304. Appeal to district court from assessment ofcondemnation commissioners. (1) Any party may appeal from anyassessment made by the condemnation commissioners in the court in which the reportof the commissioners is filed. The appeal must be taken within 30 days afterthe service upon the parties of the notice of the filing of the award. Theappealing party shall serve notice of the appeal upon the opposing party or theopposing party’s attorney and shall file the notice of appeal in the districtcourt in which the action is pending. The appeal must be tried upon the samenotice and in the same manner as other civil actions. Unless a jury is waivedby the consent of all parties to the appeal, the appeal must be tried by ajury. The amount to which the condemnee may beentitled, by reason of the taking of the condemnee’sproperty, must be reassessed as prescribed in this part for the assessment ofthat amount by the commissioners.
(2) Upon any verdict orassessment by the commissioners becoming final, judgment must be entereddeclaring that upon payment of the amount of the verdict or assessment,together with the interests and costs allowed by law, if any, the condemnor has the right to construct and maintain thepublic use project and to take the property described in the verdict orassessment for the use and purposes for which the property has been taken. Therights granted in the verdict or assessment remain inthe condemnor and the condemnor’sheirs, successors, or assigns forever.
(3) If the party appealingfrom the award of the commissioners does not succeed in changing to theappellant’s advantage the amount finally awarded in the proceeding, theappellant may not recover the costs of the appeal
, but all the costs of the appellee in the appeal must be taxed against and recoveredfrom the appellant. However, upon the trial of the appeal, the appellantmay contest the right of any party to any of the property mentioned and setforth or involved in the appeal that was located after the preliminary surveyof any highway or railroad, seeking to condemn a right-of-way pursuant to theprovisions of this chapter if the condemnation proceedings are begun within 1 year after the preliminary survey.”
Section 4.70-30-322, MCA, is amended to read:
“70-30-322. Option of original owner or successor in interest topurchase at sale price. (1) Except as provided in subsections (2)and (3), the owner from whom the real property interest was originally acquiredby eminent domain or otherwise or the owner’s successor in interest, if thereis a successor in interest, must be notified by the seller by certified mailand has a 30-day option from the date of a sale provided for in 70-30-321 topurchase the interest by offering an amount of money equal to the highest bidreceived for the interest at the sale.
If more than one person claims anequal entitlement, the option may not be exercised.
(2) Inany case where the seller is a government entity or the intended use by apurchaser, other than the optionholder, is differentfrom the purpose for which the property was condemned, the optionholdermay purchase the interest by offering an amount equal to the lesser of :
(a) the highest bid received; or
(b) the price paid to the original owner at the time ofcondemnation excluding costs and fees.
(3) Exceptas provided in subsection (4), if bids are not received by the seller andthe optionholder indicates in writing to the sellerthat the optionholder wishes to exercise the option,the seller shall have the real property interest appraised and sell theinterest at that price to the optionholder.
(4) Ifbids are not received and the seller is a government entity the optionholder may purchase the interest by offering anamount equal to the lesser of:
(a) the appraised value; or
(b) the price paid to the original owner at the time ofcondemnation excluding costs and fees.
(5)When an interest, other than a fee simple interest, in property that has beenacquired for a public purpose by right of eminent domain, or otherwise, isabandoned or when the purpose for which it was acquired is terminated, theproperty reverts to the original owner or the original owner’s successor ininterest.
(6) The rights of the optionholder with respect to subsections (2)(b) and (4)(b) of [this section] to purchasing the interestin the condemned property at the original price paid expire 15 years after thedate of the condemnation.”
NEW SECTION. Section 5. Limitation on public use. (1) Notwithstanding 70-30-102,MCA, government entities may not exercise the power of eminent domain with anintention to directly or indirectly transfer a possessoryinterest in the property taken to another private party, except where:
(a) the purpose ofthe condemnation relates to improved or unimproved property that constitutes adanger to the safety and health of the community by reason of dilapidation,lack of ventilation, light and sanitary facilities, deleterious land use or anycombination of these factors as determined by:
(i) clear and convincing evidence;and
(ii) in amanner that separately accounts for each parcel or property interest sought tobe taken;
(b) the property isnecessary for transportation or utility facilities or transmission or pipelinesystems or as enumerated as a public use in 70-30-102, MCA; or
(c) the condemnationinvolves the conveyances of interests lesser than fee title to a privatelyowned business to provide incidental retail services in a public facilitydesigned primarily to serve the patrons of the facility.
(2) For thepurposes of [this section], granting a mortgage or other security interests inthe property to be taken for the purpose of financing the project for which thecondemned property is to be used does not constitute an intention to directlyor indirectly transfer a possessory interest in theproperty to another private party.
NEW SECTION. Section 6. Just Compensation for damaged property. (1) The currentowner of private real property is entitled to just compensation when propertyis damaged by the enactment or enforcement of government regulations.
(2) If theright to use, divide, possess, sell or improve real property is directlyimpaired by a government regulation after the effective date of [this Act] theowner of the property shall be entitled to just compensation. Prior to filing aclaim for just compensation under [this section], a property owner shall not berequired to pursue or exhaust administrative remedies but must make a writtendemand to the government body that enacts or enforces the damagingregulation. Such demand may be submittedat any time from the enactment, up through a two year period from the initialenforcement of a damaging regulation, seeking just compensation, a permanentwaiver from the regulation or a retraction of the regulation by the governmentbody that enacted the regulation.
(3) Agovernment body receiving a written demand pursuant to [subsection (2)] must,within a 90 day period following the date of receipt of the written demand andwithout requiring that the property owner participate in any administrativeproceedings, take final action to permanently waive the regulation as appliedto the affected parcel, retract the regulation or pay just compensation. If thegovernment body does not satisfy the written demand by providing the amountdemanded for just compensation or permanently removing the effect of theregulation within the 90 days from the filing of the demand, a prevailing ownershall have a cause of action for just compensation and shall be entitled toattorney fees, costs, and expenses incurred in pursuing the action. Thegovernment may, at any time prior to final proceedings on the disposition ofthe property owner’s claim, take final action to permanently waive theregulation as applied to the affected parcel, retract the regulation or payjust compensation in satisfaction of the claim, but the government shall alsopay actual attorney fees, costs, and expenses incurred in pursuing theaction.
(4) Anowner of real property affected by enforcement of a government regulation mayapply to use or develop the affected property in a manner consistent with thepermissible uses of the property in existence after the effective date of [thisAct] or the date upon which the owner acquired recordtitle in the property, whichever is later. If a permissibleuse under [thissection] is not granted by the governing body within 120 days following theapplication for permit, the owner shall have a claim for just compensation andshall, if the owner prevails, be entitled to attorney fees, costs, and expensesincurred in pursuing the action.
(5) Forpurposes of [this section] the date upon which the owner acquires record titlein the property, in the case of property held by lineal descendents of aproperty owner and acquired by such descendents through devise or gift shall bethe date their predecessor in interest acquired title to the property. Thissubsection [subsection 5] applies to all interests acquired in the transfer oflegal title and not just instances where the interest acquired is the same.
(6) Thissection [section 6] shall not apply to government regulations enforced pursuantto [section 1, subsection (2)(b)] of [this Act].
NEW SECTION. Section 7. Codification instruction. [Sections 5 and 6] areintended to be codified as an integral part of Title 70, chapter 30, part 2,and the provisions of Title 70, chapter 30, part 2 apply to [sections 5 and 6].
NEW SECTION. Section 8. Severability. If part of [this Act] is invalid all validparts remain in effect. If part of this act is invalid in one or more of itsapplications, the part remains in effect in all valid applications that areseverable from the invalid applications.
NEW SECTION. Section 9. Saving clause.[This Act] does not affect rights and duties that matured, penalties that wereincurred, or proceedings that were begun before the effective date of [thisAct].
NEW SECTION. Section 10. Applicability. [This Act] applies to government actions,condemnations, and the sale of previously condemned property, occurring afterthe effective date of [this Act].
NEW SECTION. Section 11. Effective date. [This Act] is effective upon approval bythe electorate.