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Section
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Preemption; public use.
Subd. 1. Preemption.
Provides that Minnesota Statutes, chapter 117, preempts all other laws,
including special laws, home rule charters, and other statutes, that provide
for eminent domain procedures, definitions, remedies, or limitations. Allows
additional procedures, remedies, and limitations if they do not diminish or
deny substantive and procedural rights and protections of owners under chapter
117.
Subd. 2. Requirement of public
use or public purpose. Requires eminent
domain to be used only for public use or public purpose.
Subd. 3. Exceptions. Maintains the existing exemptions for town roads,
watershed districts, and drainage authorities and allows them to follow
procedures in other laws. |
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Definitions.
Subd. 1. Words, terms, and phrases (definitions).
Provides that the definitions in Minnesota Statutes, section 117.025 (the
definition section for the chapter of statutes governing eminent domain
procedures) apply to any general or special law authorizing the exercise of
the power of eminent domain.
Subd. 3. Owner.
Technical, clarification.
Subd. 4. Condemning authority.
Defined as any person or entity with the power of eminent domain.
Subd. 5. Abandoned property.
Defined as property not legally
occupied or used for any commercial or residential purpose for at least one
year, that has not been maintained, and for which taxes have not been paid for
at least two years.
Subd. 6. Blighted area. Defined as an area that is in urban use and where more than 50 percent
of the buildings are structurally substandard (defined below).
Subd. 7. Structurally
substandard. Defined to be a building that
was inspected and cited for code violations that have not been fixed after two
notices and for which it would cost more than 50 percent of the taxable market
value of the building to fix. Permits a local government to get an
administrative warrant to do an interior inspection.
Subd. 8. Environmentally
contaminated area. Defined as an area where
more than 50 percent of the parcels contain contamination and for which the
estimated costs of investigation, monitoring, testing, and clean-up are more
than the estimated market value of the parcel, or where a court has issued a
clean up order and the owner has not complied within a reasonable time.
Subd. 9. Public nuisance.
Applies Minnesota Statutes, section
609.74, as the definition of public nuisance for eminent domain purposes.
Section 609.74 provides:
“Whoever by an act or failure to perform a
legal duty intentionally does any of the following is guilty of maintaining a
public nuisance, which is a misdemeanor:
(1) maintains or permits a condition which
unreasonably annoys, injures or endangers the safety, health, morals, comfort,
or repose of any considerable number of members of the public; or
(2) interferes with, obstructs, or renders
dangerous for passage, any public highway or right of way, or waters used by
the public; or
(3) is guilty of any other act or omission
declared by law to be a public nuisance and for which no sentence is
specifically provided.”
Subd. 10. Public service
corporation. Defined as a public utility,
gas, electric, telephone, or cable communications company, and other listed
utilities, and also as a municipality or public corporation when operating an
airport, a common carrier, a watershed district, or a drainage authority, and
an entity operating a regional distribution center within an international
economic development zone.
Subd. 11. Public use, public
purpose. Defines these terms to mean
ownership and use of the land by the public or public agencies, creation or
functioning of public service corporations, or to mitigate blighted areas,
remediate environmentally contaminated areas, reduce abandoned property, or
remove a public nuisance.
Provides that the public benefits of economic development alone do not
constitute a public use. |
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3
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Condemnation for blight mitigation,
contamination remediation.
Subd.
1. Buildings that are not
structurally substandard in areas of blight mitigation; feasible
alternatives. Prohibits taking buildings that are not
structurally substandard unless there is no feasible alternative and all
possible steps are taken to minimize taking buildings that are not
structurally substandard.
Subd. 2. Uncontaminated
property in environmental contamination remediation areas; feasible
alternatives. Prohibits
taking uncontaminated property unless there is no feasible alternative and
all possible steps are taken to minimize taking noncontaminated parcels.
Subd. 3. Contribution to
condition by developer disallowed. Prohibits considering blight or
environmental contamination caused by a developer involved in the
redevelopment of a blighted or contaminated area in determining whether an
area is blighted or contaminated.
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4
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Attorney fees. Requires
the court to award an owner attorneys fees and other costs of litigation if
the final compensation award is 40 percent or more than the last written
offer made before the condemnation petition was filed or if the court
determines that the taking is not for a public use or is unlawful. Permits the court to award attorneys fees
and other fees and costs if the final award is at least 20 percent, but not
more than 40 percent, greater than the last written offer. Prohibits an award of attorney fees if the
judgment or award is not more than $25,000.
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5
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Appraisal and negotiation requirements. Expands
the statute relating to exchange of appraisal information in
transportation-related takings to include all eminent domain
proceedings. Defines "owner" to
mean a fee owner, contract purchaser, or business lessee. Requires the acquiring authority to
provide the owner appraisal information at least 60 days before filing the
petition, up from 20 days. Makes the
prior $1,500 cap on reimbursements to an owner for owner appraisals
applicable to single-family and two-family residential property, and minimum
damage acquisitions (under $10,000).
Increases the cap to $5,000 for other types of property. Prohibits use of an appraisal or appraiser
testimony in a condemnation commissioners' hearing unless a copy of the
appraiser's written report was provided to the opposing party at least five
days before the hearing. Prohibits
use of documentation of loss of a going concern unless the documentation was
provided to the opposing party at least 14 days before the hearing. Requires reimbursement to the owner within
30 days of getting a copy of the appraisal and reimbursement information.
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6
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Local government public hearing
requirements. Requires a public hearing after notice by a
local government if a taking is for blight mitigation, environmental
contamination remediation, abandoned property reduction, or public nuisance
removal. Requires the hearing to be
held before the petition is filed.
Requires a vote on the question of using eminent domain by the elected
governing body at the next regular meeting after the hearing that is at least
30 days later. Requires a resolution
authorizing use of eminent domain to identify costs and benefits and
interests served.
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7
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Petition and notice. Provides
that a party wishing to challenge the public use, necessity or authority for
a taking must appear at the court hearing and state the objection or appeal
within 60 days of a court order.
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8
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Hearing on taking; evidentiary standard. Requires
a condemning authority at the hearing in district court on the petition for
condemnation for mitigation of a blighted area, remediation of a contaminated
area, reducing abandoned property, or removing a public nuisance to show by a
preponderance of the evidence that the taking is necessary and for the stated
public use. Provides that the court
order is final unless appealed within 60 days.
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9
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Commissioners, powers, duties.
Conforming amendment related to appraisal fees.
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10
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Compensation for removal of legal nonconforming
use. Requires a local government to compensate
the owner of a nonconforming use if the local government requires its removal
as a condition of granting a permit, license, or other approval for a use,
structure, development or activity.
This section does not apply if the permit, license or approval is for
construction that cannot be done unless the nonconforming use is
removed. Applies to actions on or
after the effective date to require removal of the nonconforming use as a
condition or prerequisite.
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11
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Compensation for loss of going concern. Provides
the owner of a business or trade compensation for loss of going concern
related to taking of real property.
Provides that the claim can be avoid by the condemning authority upon
a showing by a preponderance of the evidence that the loss is not due to the
taking, the loss could have been avoid with reasonable measures, or that the
going concern compensation would duplicate compensation otherwise being
awarded. Requires the owner to give
the condemning authority notice of intent to seek compensation for loss of
going concern within 60 days of the first court hearing on whether the
proposed taking is for a public use and necessary.
Provides for compensation to a business owner for
a permanent loss of a majority of the businesses driveway access that results
in revenue losses. Provides for how
revenue losses are to be calculated.
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12
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Minimum compensation. Requires
compensation to allow the owner to purchase a comparable property in the
community and not less than the quick take payment or deposit, as long as it
does not duplicate compensation otherwise awarded.
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13
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Limitations. Prohibits a condemning
authority from requiring an owner to accept as compensation a substitute
property or return of property taken.
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14
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Public service corporation exceptions. Provides
that the provisions for attorneys' fees (section 4), appraisals (section 5), requirements to challenge
the public use, necessity or authority for a taking (section 7), compensation
for loss of going concern (section 11), minimum compensation (section 12), limitations (section 13), and reestablishment and relocation benefits
(sections 18 and 19) do not apply to public service corporations. Caps appraisal fee reimbursement at $500.
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15
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First right of refusal. Requires property acquired by condemnation
that was not used and is no longer needed to be offered back to the person
from whom it was acquired, if the person can be located, at the lower of the
original price or the current fair market value. Applies to property acquired in an eminent domain action
commenced on or after May 20, 2006 (see section 22). Exempts various transportation-related
statutes from this section.
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16
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Cooperation with federal authorities. Strikes
authority to provide up to $50,000 to reimburse a business for
reestablishment expenses for federally funded projects. This limits reimbursement to $10,000, as
provided in federal law.
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17
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Lack of federal funding.
Technical.
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18
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Reestablishment costs limits. Requires
the acquiring authority to reimburse a displaced business for expenses
actually incurred in reestablishing the business, up to a maximum of $50,000
(prior law permitted but did not require this).
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19
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Relocation assistance amount determined by
administrative law judge. Requires relocation assistance to be
determined by an administrative law judge under a contested case proceeding
if the displaced person does not accept the condemning authority's
offer. Requires the acquiring
authority to pay costs of the proceedings (does not include attorney fees).
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20
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Revisor's instruction. Directs
the Revisor to change "right of eminent domain" to "power of eminent domain"
in statutes and rules.
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21
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Repealer. Repeals statute that is
replaced by section 1.
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22
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Effective date. In general, effective May 20, 2006, and
applies to eminent domain proceedings commenced on or after that date. Right of first refusal applies to
disposition of property acquired by eminent domain on or after May 20,
2006. Exceptions:
(1) Certain acquisitions
in tax increment financing or abatement areas as described below;
(2) A highway project
selected for federal funding by an area transportation partnership or
metropolitan planning organization if the taking is begun on or before
January 15, 2007; and
(3) A planned shelter
for homeless persons in Minneapolis, if the taking is begun by May 20, 2008.
TIF and abatement
area effective dates:
For qualifying
condemnation actions (described below), the effective date phases-in the new
eminent domain rules as follows:
}
Takings begun
by February 1, 2008, are exempt from all of the new rules.
}
Takings begun
after February 1, 2008, are exempt from the new restrictions on public use,
but are subject to the other changes in the act (e.g., the potential to pay
compensation for going concern value, attorneys fees, etc.).
TIF projects. To
be grandfathered in, a TIF plan must be approved by the city by February 1,
2008 and must identify the property as intended to be acquired. (Under Minnesota Statutes, section
469.175, subdivision 1, clause (2), a TIF plan must list the properties that
development authority intends to acquire.)
In addition, one of three conditions must be satisfied:
- The developer acquired property by May 1, 2006 in reliance on a
contract with the condemning authority to condemn other property for the
project. Note: There is no specific time limit on
when these actions must be brought, aside from those listed above.
- The condemning authority issued bonds (or entered a contract to
issue bonds) to finance the project and begins the condemnation action
within 2 years after issuing the bonds.
- The TIF district was certified by February 1, 2006 and the
condemnation action is begun within 5 years after certification of the
TIF district. Certification
occurs after the TIF approval process by filing a request for
certification with the county auditor.
It can occur as soon as a few months after plan approval or a
year or more later, depending upon when the authority requested
certification and how quickly the county processed the request. This 5-year period corresponds to the
rule under the TIF Act that allows the same period for completing
in-district expenditures. Minn.
Stat. § 469.1763, subd. 3.
TIF
districts authorized by special laws (paragraph (b), clause (3)). A
special law authorizing creation of a TIF district must have received local
approval or become effective before February 1, 2006. The condemning authority must start the
eminent domain action by the time period permitted under the 5-year rule, but
not to exceed 10 years if the special law allows a longer period.
Economic development
abatement projects (paragraph (b), clause (4)). Similar to the TIF exemption under clause
(3), the condemnation action must be started by February 1, 2011 and at least
one of the political subdivisions must adopt the abatement resolution before
February 1, 2006.
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