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HOUSE BILL NO. 559
INTRODUCED BY A. CURTISS
A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING COMPENSATION FOR THE OWNER OF A PARCEL OF REAL PROPERTY, THE FAIR MARKET VALUE OF WHICH IS SUBSTANTIALLY AND DISPROPORTIONATELY REDUCED BY THE ACTION OF A STATE GOVERNMENT AGENCY; PROVIDING FOR AN EXEMPTION FROM APPLICATION OF THE STATE AGENCY ACTION; AND AMENDING SECTION 2-10-103, MCA."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Short title. [Sections 1 through 7] may be cited as the "Fairness to Property Owners Act".
NEW SECTION. Section 2. Legislative findings and declarations. The legislature finds and declares that:
(1) it is the policy of the state that a person may not be deprived of the use of real property without due process of law and that real property may not be taken or damaged by a state agency without prior just compensation to the owner;
(2) state administrative rules, policies, and permit conditions or denials pertaining to land or water management or to other environmental matters sometimes have the effect of reducing the market value of real property;
(3) it is unfair and unjust for the cost of agency actions designed to benefit society at large to be substantially and disproportionately borne by individual citizens;
(4) it is fair and just that individual real property owners willfully, wantonly, or negligently contributing to a public nuisance, as defined by prevailing community standards, should bear the cost of abating the nuisance; and
(5) [sections 1 through 7] establish a fair and equitable compensation system to address the findings and declarations in this section.
NEW SECTION. Section 3. Definitions. As used in [sections 1 through 7], the following definitions apply:
(1) "Agency action" means a state agency administrative rule, policy, or permit condition or denial pertaining to land or water management or to some other environmental matter. It does not include:
(a) eminent domain proceedings in which compensation is given under other provisions of law;
(b) a seizure of real property by law enforcement officials as evidence or under a state forfeiture statute;
(c) a forfeiture of real property during or as a result of criminal proceedings;
(d) repeal of a rule, discontinuance of a government program, or other agency action that has the effect of reducing the regulation of real property;
(e) an agency action that abates a public nuisance or prevents a prospective public nuisance when the owner of the real property claiming compensation is willfully, wantonly, or negligently contributing to or threatening to contribute to the public nuisance;
(f) issuance of a use permit;
(g) an agency action necessary to implement a federal statute or regulation or a federal or state court order; or
(h) the taking of real property for nonpayment of taxes.
(2) "Parcel of real property" means a unit of real property with boundaries established before the agency action at issue.
(3) "Reduction in the fair market value" means a reduction in the fair market value of a parcel of real property for uses that were legal immediately before an agency action. A reduction in fair market value is substantial if it is a reduction of more than 20%. A reduction is disproportionate to a parcel if the reduction is significantly greater than any prevailing level of reduction in the fair market value of real property in the state as a result of an agency action.
(4) "State agency" means an officer, board, commission, department, or other entity within the executive branch of state government.
NEW SECTION. Section 4. Taking of property -- reduction in fair market value -- compensation. (1) If an agency action causes a substantial and disproportionate reduction in the fair market value of a parcel of real property, the real property has been taken or damaged for public use and the owner or possessor may require just compensation from the state agency or state agencies that implemented the agency action. The owner or possessor may choose a trial by judge or by jury or may choose to proceed by binding arbitration using the procedure provided in Title 27, chapter 5, to the extent it is applicable.
(2) The determination of whether, and if so how much, compensation is due must be made by the trier of fact. The amount of compensation due is the dollar amount of the reduction in what was the fair market value of the parcel of real property immediately before the agency action, minus any reduction in fair market value due to anticipation of the agency action and also minus any increase in the fair market value of other parcels of real property owned by the compensated landowner due to the agency action. If more than one state agency implemented the agency action, the trier of fact shall apportion the compensation due among the agencies.
(3) Upon an award of compensation under this section, the parcel of real property must be reassessed for property tax purposes by reducing its assessed value by the same percent
that the compensation bears to the fair market value of the parcel of real property prior to the agency action.
(4) The trier of fact may award the prevailing party costs and reasonable attorney fees.
NEW SECTION. Section 5. Time for bringing proceeding. A proceeding under [section 4] must be brought within 2 years after the date of the implementation of the agency action at issue.
NEW SECTION. Section 6. Compensation waivers prohibited. A state agency may not make a waiver of one or more provisions of [sections 1 through 7], a condition for approval of a use of a parcel of real property, the issuance of a permit, or any other entitlement.
NEW SECTION. Section 7. Exemptions. A state agency that is unwilling or unable to pay compensation under [section 4] may instead exempt the owners of the parcels of real property affected by the agency action from application of the agency action. A public hearing is not necessary on the grant of an exemption. A state agency granting an exemption shall reimburse the owners of the parcels of real property for the owners' costs and attorney fees for a proceeding under [section 4].
Section 8. Section 2-10-103, MCA, is amended to read:
"2-10-103. Definitions. As used in this part, the following definitions apply:
(1) "Action with taking or damaging implications" means a proposed state agency administrative rule, policy, or permit condition or denial pertaining to land or water management or to some other environmental matter that if adopted and enforced would constitute a deprivation of private property in violation of the United States or Montana constitution. It does not include:
(a) proposed eminent domain proceedings;
(b) a proposed seizure of property by law enforcement officials as evidence or under a state forfeiture statute;
(c) a proposed forfeiture of property during or as a result of criminal proceedings; or
(d) a proposal to repeal a rule, discontinue a government program, or implement a proposed change that has the effect of reducing regulation of private property.
(2) "Private property" means all real property, including but not limited to water rights.
(3) "State agency" means an officer, board, commission, department, or other entity within the executive branch of state government.
(4) "Taking or damaging" means depriving a property owner of private property or causing a substantial and disproportionate reduction in the fair market value of a parcel of real property, as defined in [section 3], in a manner requiring compensation under the 5th and 14th amendments to the constitution of the United States or Article II, section 29, of the Montana constitution."
NEW SECTION. Section 9. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
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Latest Version of HB 559 (HB0559.01)
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