1.1                          A bill for an act
  1.2             relating to real property; creating the Private 
  1.3             Property Rights Protection Act; providing legislative 
  1.4             intent; providing remedies for real property owners 
  1.5             whose property has been inordinately burdened by 
  1.6             governmental action; providing requirements for a 
  1.7             property owner who seeks compensation; requiring the 
  1.8             governmental entity to provide notice of the claim; 
  1.9             authorizing certain settlement offers; requiring that 
  1.10            the governmental entity and property owner file a 
  1.11            court action if a settlement agreement contravenes the 
  1.12            application of state law; providing for judicial 
  1.13            review, notwithstanding the availability of 
  1.14            administrative remedies; authorizing the property 
  1.15            owner to file a claim of compensation upon rejection 
  1.16            of a settlement offer; requiring the court to 
  1.17            determine the percentage of responsibility for an 
  1.18            inordinate burden imposed by multiple governmental 
  1.19            entities; providing for a jury to determine the amount 
  1.20            of compensation to the property owner; providing for 
  1.21            costs and attorney fees; providing that the right for 
  1.22            which compensation is paid is a transferable 
  1.23            development right; proposing coding for new law as 
  1.24            Minnesota Statutes, chapter 500A. 
  1.25  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.26     Section 1.  [500A.01] [CITE, INTENT, DEFINITIONS.] 
  1.27     (a) This act may be cited as the "Private Property Rights 
  1.28  Protection Act."  The legislature recognizes that some laws, 
  1.29  regulations, and ordinances of the state and political entities 
  1.30  in the state, as applied, may inordinately burden, restrict, or 
  1.31  limit private property rights without amounting to a taking 
  1.32  under the Minnesota Constitution or the United States 
  1.33  Constitution.  The legislature determines that there is an 
  1.34  important state interest in protecting the interests of private 
  1.35  property owners from such inordinate burdens.  Therefore, it is 
  2.1   the intent of the legislature that, as a separate and distinct 
  2.2   cause of action from the law of takings, the legislature herein 
  2.3   provides for relief, or payment of compensation, when a new law, 
  2.4   rule, regulation, land use plan or ordinance of the state or a 
  2.5   political entity in the state, as applied, unfairly affects real 
  2.6   property. 
  2.7      (b) When a specific action of a governmental entity has 
  2.8   inordinately burdened an existing use of real property or a 
  2.9   vested right to a specific use of real property, the property 
  2.10  owner of that real property is entitled to relief, which may 
  2.11  include compensation for the actual loss to the fair market 
  2.12  value of the real property caused by the action of government, 
  2.13  as provided in this section. 
  2.14     (c) For purposes of this section: 
  2.15     (1) "Vested right" means a right to be determined by 
  2.16  applying the principles of equitable estoppel or substantive due 
  2.17  process under the common law or by applying the statutory law of 
  2.18  this state. 
  2.19     (2) "Existing use" means an actual, present use or activity 
  2.20  on the real property, including periods of inactivity which are 
  2.21  normally associated with, or are incidental to, the nature or 
  2.22  type of use or activity or such reasonably foreseeable, 
  2.23  nonspeculative land uses which are suitable for the subject real 
  2.24  property and compatible with adjacent land uses and which have 
  2.25  created an existing fair market value in the property greater 
  2.26  than the fair market value of the actual, present use or 
  2.27  activity on the real property. 
  2.28     (3) "Governmental entity" includes an agency of the state, 
  2.29  a regional or a local government created by the Minnesota 
  2.30  Constitution or by general or special act, any county or 
  2.31  municipality, or any other entity that independently exercises 
  2.32  governmental authority. 
  2.33     (4) "Action of a governmental entity" means a specific 
  2.34  action of a governmental entity which affects real property, 
  2.35  including action on an application or permit. 
  2.36     (5) "Inordinate burden" or "inordinately burdened" means 
  3.1   that an action of one or more governmental entities has directly 
  3.2   restricted or limited the use of real property such that the 
  3.3   property owner is permanently unable to attain the reasonable, 
  3.4   investment-backed expectation for the existing use of the real 
  3.5   property or a vested right to a specific use of the real 
  3.6   property with respect to the real property as a whole, or that 
  3.7   the property owner is left with existing or vested uses that are 
  3.8   unreasonable such that the property owner bears permanently a 
  3.9   disproportionate share of a burden imposed for the good of the 
  3.10  public, which in fairness should be borne by the public at 
  3.11  large.  The terms inordinate burden or inordinately burdened do 
  3.12  not include temporary impacts to real property; impacts to real 
  3.13  property occasioned by governmental abatement, prohibition, 
  3.14  prevention, or remediation of a public nuisance at common law or 
  3.15  a noxious use of private property; or impacts to real property 
  3.16  caused by an action of a governmental entity taken to grant 
  3.17  relief to a property owner under this section. 
  3.18     (6) "Property owner" means the person who holds legal title 
  3.19  to the real property at issue.  The term does not include a 
  3.20  governmental entity. 
  3.21     (7) "Real property" means land and includes any 
  3.22  appurtenances and improvements to the land, including any other 
  3.23  relevant real property in which the property owner had a 
  3.24  relevant interest. 
  3.25     Sec. 2.  [500A.02] [PROCEDURE.] 
  3.26     Subdivision 1.  [PROPERTY OWNER SUBMISSION OF CLAIM.] Not 
  3.27  less than 180 days prior to filing an action under this section 
  3.28  against a governmental entity, a property owner who seeks 
  3.29  compensation under this section must present the claim in 
  3.30  writing to the county attorney.  The property owner must submit, 
  3.31  along with the claim, a bona fide, valid appraisal that supports 
  3.32  the claim and demonstrates the loss in fair market value to the 
  3.33  real property.  If the action of government is the culmination 
  3.34  of a process that involves more than one governmental entity, or 
  3.35  if a complete resolution of all relevant issues, in the view of 
  3.36  the property owner or in the view of the county attorney, 
  4.1   requires the active participation of more than one governmental 
  4.2   entity, the county attorney shall determine which governmental 
  4.3   entities are involved in the action and shall designate a single 
  4.4   governmental entity to act as the responsible agency.  In 
  4.5   situations involving state agencies, the attorney general shall 
  4.6   determine which agency will act as the responsible agency.  
  4.7   After the responsible agency has been determined, the county 
  4.8   attorney shall notify the property owner, who shall present the 
  4.9   claim as provided in this section to each of the governmental 
  4.10  entities involved in the action. 
  4.11     Subd. 2.  [GOVERNMENTAL REQUIRED RESPONSE.] The 
  4.12  governmental entity or the responsible agency shall provide 
  4.13  written notice of the claim to all parties to any administrative 
  4.14  action that gave rise to the claim, and to owners of real 
  4.15  property contiguous to the owner's property at the addresses 
  4.16  listed on the most recent county tax rolls.  Within 15 days 
  4.17  after the claim being presented, if no state agencies are 
  4.18  involved in the action, the governmental entity shall report the 
  4.19  claim in writing to the attorney general, and shall provide the 
  4.20  attorney general with the name, address, and telephone number of 
  4.21  the employee of the governmental entity from whom additional 
  4.22  information may be obtained about the claim during the pendency 
  4.23  of the claim and any subsequent judicial action. 
  4.24     Subd. 3.  [SETTLEMENT PROVISIONS ALLOWED.] During the 
  4.25  180-day-notice period, unless extended by agreement of the 
  4.26  responsible agency and the property owner, the governmental 
  4.27  entity shall make a written settlement offer based upon one or 
  4.28  more of the following: 
  4.29     (1) relaxation of the governmental action as it affects the 
  4.30  plaintiff's land and all similarly situated land in the 
  4.31  jurisdiction in which the regulatory program is in effect to the 
  4.32  level of regulation in place as of the time the owner acquired 
  4.33  title; 
  4.34     (2) purchase of an easement subject to the conditions of 
  4.35  this act and agreed to by the governmental entity and the 
  4.36  property owner; 
  5.1      (3) modifications in the density of areas of development; 
  5.2      (4) exchanges of land subject to the conditions of this 
  5.3   act; 
  5.4      (5) transfers of development rights; 
  5.5      (6) measures to mitigate the adverse effects of the 
  5.6   governmental action on real property, including payments to the 
  5.7   property owner in lieu of mitigation; 
  5.8      (7) relocation of an easement to the least sensitive 
  5.9   portion of the property; 
  5.10     (8) purchase of the real property, or an interest therein, 
  5.11  by an appropriate governmental entity; and 
  5.12     (9) no changes to the action of the governmental entity. 
  5.13     Subd. 4.  [SETTLEMENT ACCEPTED, JUDICIAL REVIEW.] (a) If 
  5.14  the property owner accepts the settlement offer, the 
  5.15  governmental entity may implement the settlement offer by 
  5.16  appropriate development agreement; by issuing a variance, 
  5.17  special exception, or other extraordinary relief; or by other 
  5.18  appropriate method, subject to paragraph (b). 
  5.19     (b) Whenever a governmental entity enters into a settlement 
  5.20  agreement under this section which would have the effect of a 
  5.21  modification, variance, or a special exception to the 
  5.22  application of a rule, regulation, land use plan or ordinance as 
  5.23  it would otherwise apply to the subject real property, the 
  5.24  relief granted shall be the appropriate relief necessary to 
  5.25  prevent the governmental regulatory effort from inordinately 
  5.26  burdening the real property and shall not result in a public 
  5.27  nuisance at common law or a noxious use of private property.  A 
  5.28  settlement agreement under this section is subject to review in 
  5.29  the district court where the real property is located to ensure 
  5.30  that the agreement does not result in a public nuisance at 
  5.31  common law, or a noxious use of private property. 
  5.32     Subd. 5.  [SETTLEMENT REFUSED, RIPENESS DECISION.] (a) 
  5.33  During the 180-day-notice period, unless a settlement offer is 
  5.34  accepted by the property owner, each of the governmental 
  5.35  entities provided notice pursuant to subdivision 1, shall issue 
  5.36  a written ripeness decision which shall identify the allowable 
  6.1   uses to which the subject property may be put.  The failure of 
  6.2   the governmental entity to issue a written ripeness decision 
  6.3   during the 180-day-notice period shall be deemed to ripen the 
  6.4   prior action of the governmental entity, and shall operate as a 
  6.5   ripeness decision that has been rejected by the property owner.  
  6.6   The ripeness decision, as a matter of law, constitutes the last 
  6.7   prerequisite to judicial review, and the matter shall be deemed 
  6.8   ripe or final for the purposes of the judicial proceeding 
  6.9   created by this section, notwithstanding the availability of 
  6.10  other administrative remedies. 
  6.11     (b) If the property owner rejects the settlement offer and 
  6.12  the ripeness decision of the governmental entity or entities, 
  6.13  the property owner may file a claim for compensation in the 
  6.14  district court, a copy of which shall be served 
  6.15  contemporaneously on the head of each of the governmental 
  6.16  entities that made a settlement offer and a ripeness decision 
  6.17  that was rejected by the property owner.  Actions under this 
  6.18  section shall be brought only in the county where the real 
  6.19  property is located. 
  6.20     (c) The district court shall determine whether an existing 
  6.21  use of the real property or a vested right to a specific use of 
  6.22  the real property existed and, if so, whether, considering the 
  6.23  settlement offer and ripeness decision, the governmental entity 
  6.24  or entities have inordinately burdened the real property.  If 
  6.25  the actions of more than one governmental entity, considering 
  6.26  any settlement offers and ripeness decisions, are responsible 
  6.27  for the action that imposed the inordinate burden on the real 
  6.28  property of the property owner, the court shall determine the 
  6.29  percentage of responsibility each of the governmental entities 
  6.30  bears with respect to the inordinate burden.  A governmental 
  6.31  entity may take an interlocutory appeal of the court's 
  6.32  determination that the action of the governmental entity has 
  6.33  resulted in an inordinate burden.  An interlocutory appeal does 
  6.34  not stay the proceedings.  If the governmental entity does not 
  6.35  prevail in the interlocutory appeal, the court shall award to 
  6.36  the prevailing property owner the costs and a reasonable 
  7.1   attorney fee incurred by the property owner in the interlocutory 
  7.2   appeal. 
  7.3      Subd. 6.  [DAMAGES PHASE.] (a) Following its determination 
  7.4   of the percentage of responsibility of each governmental entity, 
  7.5   the court shall impanel a jury to determine the total amount of 
  7.6   compensation to the property owner for the loss in value due to 
  7.7   the inordinate burden to the real property.  The award of 
  7.8   compensation shall be determined by calculating the difference 
  7.9   in the fair market value of the real property, as it existed at 
  7.10  the time of the governmental action at issue, as though the 
  7.11  owner had the ability to attain the reasonable investment-backed 
  7.12  expectation or was not left with uses that are unreasonable, 
  7.13  whichever the case may be, and the fair market value of the real 
  7.14  property, as it existed at the time of the governmental action 
  7.15  at issue, as inordinately burdened, considering the settlement 
  7.16  offer together with the ripeness decision, of the governmental 
  7.17  entity or entities.  The market value shall be established by 
  7.18  fully accredited commercial appraisers.  The award of 
  7.19  compensation shall include a reasonable award of prejudgment 
  7.20  interest from the date the claim was presented to the 
  7.21  governmental entity or entities as provided in this section. 
  7.22     (b) In any action filed pursuant to this section, the 
  7.23  property owner is entitled to recover reasonable costs and 
  7.24  attorney fees incurred by the property owner, from the 
  7.25  governmental entity or entities, according to their 
  7.26  proportionate share as determined by the court, from the date of 
  7.27  the filing of the district court action, if the property owner 
  7.28  prevails in the action and the court determines that the 
  7.29  settlement offer, including the ripeness decision, of the 
  7.30  governmental entity or entities did not constitute a bona fide 
  7.31  offer to the property owner which reasonably would have resolved 
  7.32  the claim, based upon the knowledge available to the 
  7.33  governmental entity or entities and the property owner during 
  7.34  the 180-day-notice period. 
  7.35     (c) The determination of total reasonable costs and 
  7.36  attorney fees pursuant to this paragraph shall be made by the 
  8.1   court and not by the jury.  Any proposed settlement offer or any 
  8.2   proposed ripeness decision, except for the final written 
  8.3   settlement offer or the final written ripeness decision, and any 
  8.4   negotiations or rejections in regard to the formulation either 
  8.5   of the settlement offer or the ripeness decision, are 
  8.6   inadmissible in the subsequent proceeding established by this 
  8.7   section except for the purposes of the determination pursuant to 
  8.8   this paragraph. 
  8.9      (d) Within 15 days after the execution of any settlement 
  8.10  pursuant to this section, or the issuance of any judgment 
  8.11  pursuant to this section, the governmental entity shall provide 
  8.12  a copy of the settlement or judgment to the attorney general. 
  8.13     (e) The district court may enter any orders necessary to 
  8.14  effectuate the purposes of this section and to make final 
  8.15  determinations to effectuate relief available under this section.
  8.16     Sec. 3.  [500A.03] [CONDITIONS UPON ACQUISITION OF 
  8.17  EASEMENTS.] 
  8.18     When governmental entities acquire easements over private 
  8.19  property as a result of this act, they must definitely and 
  8.20  specifically describe the easement being acquired, and may not 
  8.21  acquire an easement greater than the minimum necessary to 
  8.22  satisfy the public purpose for which the easement was obtained.  
  8.23  For the purposes of this section, a governmental entity may meet 
  8.24  the requirement of a definite and specific description of an 
  8.25  easement by: 
  8.26     (1) including in the recorded description of the easement 
  8.27  the specific legal reference points as to the location of the 
  8.28  easement in relation to the corners of the specific property 
  8.29  involved at the points the easement enters and departs from the 
  8.30  property; or 
  8.31     (2) appending to the recorded description of the easement a 
  8.32  drawing that identifies by means of a scale or specific 
  8.33  measurements the location of the easement in relation to the 
  8.34  corners of the specific property involved at the points the 
  8.35  easement enters and departs from the property. 
  8.36     Easements obtained under this act shall continue so long as 
  9.1   the land which is subject thereto shall be occupied by the 
  9.2   governmental entity acting in the interests of the public.  If 
  9.3   such easements cease to be used by the governmental entity for 
  9.4   public purposes, the interest of the governmental entity also 
  9.5   shall terminate and revert to the property owner, without the 
  9.6   doing of any act by the property owner. 
  9.7      No instrument conveying such easements shall be executed 
  9.8   until the compensation pursuant to this act has been paid to the 
  9.9   property owner.  The fair market value shall be determined by 
  9.10  fully accredited commercial appraisers and shall be subject to 
  9.11  approval by the property owner and the governmental entity. 
  9.12     Sec. 4.  [500A.04] [GOVERNMENTAL RIGHTS OF USE.] 
  9.13     An award or payment of compensation pursuant to this 
  9.14  section other than an easement, shall operate to grant to and 
  9.15  vest in any governmental entity by whom compensation is paid the 
  9.16  right, title, and interest in rights of use for which the 
  9.17  compensation has been paid, which rights may become transferable 
  9.18  development rights to be held, sold, or otherwise disposed of by 
  9.19  the governmental entity.  When there is an award of 
  9.20  compensation, the court shall determine the form and the 
  9.21  recipient of the right, title, and interest, as well as the 
  9.22  terms of their acquisition. 
  9.23     Sec. 5.  [500A.05] [DISPUTE RESOLUTION ENCOURAGED.] 
  9.24     This section does not supplant methods agreed to by the 
  9.25  parties and lawfully available for arbitration, mediation, or 
  9.26  other forms of alternative dispute resolution, and governmental 
  9.27  entities are encouraged to utilize such methods to augment or 
  9.28  facilitate the processes and actions contemplated by this 
  9.29  section. 
  9.30     Sec. 6.  [500A.06] [GOVERNMENT LIABILITY LIMITED.] 
  9.31     This section provides a cause of action for governmental 
  9.32  actions that may not rise to the level of a taking under the 
  9.33  Minnesota Constitution or the United States Constitution.  This 
  9.34  section may not necessarily be construed under the case law 
  9.35  regarding takings if the governmental action does not rise to 
  9.36  the level of a taking.  The provisions of this section are 
 10.1   cumulative, and do not abrogate any other remedy lawfully 
 10.2   available, including any remedy lawfully available for 
 10.3   governmental actions that rise to the level of a taking.  
 10.4   However, a governmental entity shall not be liable for 
 10.5   compensation for an action of a governmental entity applicable 
 10.6   to, or for the loss in value to, a subject real property more 
 10.7   than once. 
 10.8      Sec. 7.  [500A.07] [LIMITATIONS.] 
 10.9      Actions must be brought within six years from the time (1) 
 10.10  the owner discovers that the application of a law or regulation 
 10.11  affects the property, or (2) the state seeks to enforce 
 10.12  application of the law or regulation to the property by formal 
 10.13  written notice.  If an owner seeks relief from the governmental 
 10.14  action through lawfully available administrative or judicial 
 10.15  proceedings, the time for bringing an action under this section 
 10.16  is tolled until the conclusion of such proceedings. 
 10.17     Sec. 8.  [500A.08] [EXISTING REGULATORY PROGRAMS.] 
 10.18     This chapter applies not only to new regulatory programs 
 10.19  but also to existing regulatory programs first applied to the 
 10.20  owner's property after the effective date of this act. 
 10.21     Sec. 9.  [500A.09] [TAX ADJUSTMENT.] 
 10.22     Whenever, after July 1, 1998, the state or any of its 
 10.23  political subdivisions imposes, changes, or implements any land 
 10.24  use planning, zoning, or other regulatory program in such a way 
 10.25  es to reduce the previous fair market value of a taxpayer's 
 10.26  property, the county auditor shall, on or before the next April 
 10.27  1, adjust the taxpayer's valuation downward by an amount equal 
 10.28  to the difference between the fair market value of the property 
 10.29  under the new regulatory program and the previous fair market 
 10.30  value. 
 10.31     Sec. 10.  [500A.10] [TOLLING OF TAX PAYMENTS.] 
 10.32     For actions under this act, taxes shall be tolled during 
 10.33  the period dating from the ripeness decision to the final 
 10.34  settlement if the property owner is unable to pay taxes due to 
 10.35  the application of a regulatory program that is deemed to have 
 10.36  resulted in an inordinate burden. 
 11.1      Sec. 11.  [500A.11] [CONDITIONAL WAIVERS PROHIBITED.] 
 11.2      (a) Governmental entities subject to this act can not make 
 11.3   waiver of the provisions of this act a condition for approval of 
 11.4   the use of real property or the issuance of any permit or other 
 11.5   entitlement. 
 11.6      (b) Plaintiffs may accept an approval of use, permit, or 
 11.7   other entitlement granted by the governmental unit without 
 11.8   compromising their rights under this act if a written 
 11.9   reservation of rights is made at the time of acceptance of the 
 11.10  authorization, permit, or other entitlement. 
 11.11     Sec. 12.  [500A.12] [SOVEREIGN IMMUNITY.] 
 11.12     This act does not affect the sovereign immunity of 
 11.13  government.