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House of Representatives DFL Caucus Research Department Room 248-E State Office Building 651/296-5319 Memo June 15, 2006 To: Rep. Mindy Greiling From: Brad Kelly, Research Consultant, House DFL Caucus Research, 651/296-5319 Subject: Eminent Domain Reform Law Here is a summary of the new eminent domain reform law - 2006 Minnesota Session Laws Chapter 214 (SF 2750 conference report.) FISCAL IMPACT: A fiscal note on an earlier version of the bill estimates $7 million annual cost to the Trunk Highway Fund due to highway related projects by Mn DOT. However, MnDOT said this is a conservative estimate and if that more land needed for right-of-way goes through the condemnation process, an additional $6 to $10 million impact could be felt. Also, per a Local Impact Note, the Department of Finance concludes that the bill could result in increased acquisition costs or litigation expenses to cities and counties. It is unclear to how the costs have changed as a result of the conference committee's actions. Some changes (or items of note) in the bill. as compared with the bill was passed by the House . Evidentiary standard - The conference committee adopted the "preponderance of evidence" standard, which was the Senate position. The House bill had a stricter "clear and convincing" standard." This standard is one level below "beyond a reasonable doubt," which is the standard in criminal cases. The typical civil case standard is a "preponderance of evidence. HI Attorney fees - the conference committee created a two-tier mechanism. lfthe final judgment or award for damages is more than 40% greater than the last written offer - the court shall award attorney fees. If the final award is between 20- 40% greater- the court may award attorney fees. lfthe final judgment or award of damages is under $25,000, then no attorney fees may be awarded. (Section 4) TIP/effective date - A Rep. Abrams amendment was adopted on this issue. (See Section 22.) Blighted standard - The Senate position was adopted (section 1, subd. 6). Removal of a non-conforming land use a.k.a. "regulatorv takings" -- This item is in the final conference report. The provision requires that when a local unit of government or local zoning authority requires the removal of a nonconforming use as a condition or prerequisite for the issuance of a permit or license for any "use, structure, development, or activity" - this constitutes a taking and is prohibited without payment of just compensation.' (Section 10) . . . . 1 '''Preponderance of evidence' is the burden of proof in a civil trial, in which the jury is instructed to find for the party, that on the whole, has the stronger evidence, however, slight the edge may be." (Black's Law Dictionary, ill Edition) 2 Here is the explanation from Deb Dyson (House Research counsel): The property has to be a nonconforming use first ~ a use that was proper under the zoning code when begun or built, but the zoning code for the area has changed and the use is grandfathered in as "nonconforming" (e.g., concrete mixing plant in an area that was zoned industrial when the plant started but is now zoned for residential and commercial uses). Peter Coyle (lobbyist who drafted it) may have meant to include permits and licenses for something like liquor. In the past, he has focused on permits that are approvals for land uses and development. The amendment is meant to require compensation if a permit or approval for a land use is canting,ent on removing a nonconforming land use. (Consider the billboard controversies in 81. Paul that Rep. Paymar has brought up each year for a few years. If billboards are nonconforming uses in 81. Paul, then if the owner of the building on which the billboard is perched applies for a permit to expand, does the city require the owner to get rid of the billboard as a condition of approval? If so, the amendment would require compensation for the billboard.) I believe the amendment adopted would apply to permits or approvals sought on or after the effective date but would affect existing nonconforming land uses. Per the city of 81. Paul, if a city requires removal of a non~conforming land use, such as a septic tank located too close to a water source, or a grandfathered feedlot waste pool, the city may have to pay for the removal as if it were a condemnation taking. If towns and cities are unable to afford such payments non~conforming uses will not be removed and land improvements may slow down.