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Eminent Domain Reform Has Arrived In California

By: Bradford B. Kuhn
10/04/06

Governor Arnold Schwarzenegger and our California Legislature have boarded the eminent domain reform bus.  Last Friday, September 29, the Governor signed no fewer than five eminent domain reform bills.  These new laws will impact all condemnation cases – not just those involving redevelopment.  Regardless of how Proposition 90 (The Anderson Initiative) fares this November, eminent domain reform has arrived.

 

Some Highlights:  Upon these bills' effective date, agencies must now (a) pay up to $5,000 for owners to get independent appraisals; (b) undergo hearings on applications for orders of immediate possession; and (c) include a statement of the specific anticipated public use in all resolutions of necessity.


More detail:

 

Senate Bill 1650: 

         Changing Public Use Limited:  Traditionally under California eminent domain law, a governing agency is required to adopt a resolution of necessity before acquiring property through eminent domain.  The resolution must provide a statement of the public use for which the property is taken.  This new legislation prohibits the public entity from using the property for a public use other than the public use stated in the resolution, unless a new resolution is passed.

 

         Re-Selling to Original Owner Required After 10 Years of No Public Use:  A public entity is now required to sell property back to the original owner if, within ten years after adoption of the resolution, the property is not used for its stated public use and a new resolution is not passed.

 

         Lease-Back Requirements Added:  Unless an agency states that use of the property is scheduled to begin within two years of its acquisition, an agency is now required to offer the owner of the property a one-year leaseback agreement at fair market rent for the owner's continued use. 

 

Senate Bill 1210: 

         Appraisal Fees Required to be Offered to Owners:  Historically, a condemning government agency is required to have property appraised by an expert before depositing with the State Treasury the amount of probable compensation.  This new legislation requires the agency to offer to pay an owner the reasonable costs (not to exceed $5,000) of an independent appraisal of property to be purchased under threat of eminent domain.

 

         Pre-judgment Possession Limited:  A public entity was previously allowed to make an ex-parte application to take possession of property prior to judgment and was only denied pre-judgment possession if the harm to the land owner was substantial.  This new legislation permits an agency to obtain pre-judgment possession of property only after the owner has been given notice and an opportunity for a hearing to oppose the taking, even if the hardship is not substantial.  If the land owner opposes the government's pre-judgment possession of the property, the government is not entitled to pre-judgment possession unless it shows: (a) there is an overriding need for possession which will cause substantial hardship to the government if pre-judgment possession is denied, and (b) such hardship outweighs any hardship on the land owner that would be caused by granting pre-judgment possession.

 

Senate Bill 1206:

         "Blight" Definition Narrowed:  Under conventional California redevelopment law, local officials may only condemn land for economic development purposes in "blighted areas."  This new legislation narrows the definition by characterizing blighted areas as those that constitute a "serious physical and economic burden on the community that cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment."  The legislation also prohibits the inclusion of non-blighted parcels in a redevelopment project area for the purpose of obtaining property tax revenue from the area without substantial justification for their inclusion.  Further, redevelopment plans are required to become more detailed, providing specific, quantifiable evidence that documents the physical and economic conditions in the project area and how the redevelopment plan will improve the conditions.

 

         Increased State Oversight of Redevelopment:  Historically under California redevelopment law, public officials are required to prepare a report that contains valuation of property within a redevelopment project.  This new legislation increases the duties of public officials - they are now required to provide these reports to the Department of Finance and the reports must include projections of tax revenues.  Further, redevelopment agencies must notify the Department of Finance and the Department of Housing and Community Development of any redevelopment hearings and provide them with a report on the plan approval or amendment.

 

         Challenging Redevelopment Decisions Made Easier:  A civil action is generally permitted to determine the validity of legislative redevelopment agency actions.  This legislation allows the civil action to be commenced within 90 days from the date of the decision by the redevelopment agency

 

Senate Bill 53:

         Extending Time to Commence Condemnation Proceedings Limited for Redevelopment:  Redevelopment agencies were previously permitted to extend the time limitation for commencement of eminent domain proceedings to acquire property within the project area by amending the redevelopment plan.  This new legislation requires the agency to find, based on substantial evidence, that significant blight remains in the project area and cannot be eliminated without the use of eminent domain before amending a redevelopment plan to extend the time limitation.

 

Senate Bill 1809: 

         Redevelopment Recording Time Limits Tightened:  Traditionally, after a redevelopment plan is adopted or amended, a redevelopment agency is required to file with the county recorder a description of any land within the redevelopment project area.  This new legislation requires the filing to occur within 60 days of the adoption or amendment (as opposed to the previous requirement of "as promptly as practicable").  It also prohibits an agency from commencing an eminent domain action under a redevelopment plan until the filing is recorded.

 

Bradford B. Kuhn is an associate in the Eminent Domain Practice group and can be reached at bkuhn@nossaman.com.

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