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HomeMy WebLinkAboutSB 1210 Torlakson - Eminent Domain00Q CITY OF PALM DESERT Community Services Division Staff Report REQUEST: CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE ACTION ON SS 1210 (TORLAKSON) AT ITS MEETING OF FEBRUARY 28, 2006 SUBMITTED BY: Patricia Scully, CFEE, Senior Management Analyst DATE: March 23, 2006 CONTENTS: SB 1210 Language RECOMMENDATION: By Minute Motion, concur with the action taken by the Legislative Review Committee at its Meeting of February 28, 2006, and direct staff to prepare a letter of opposition for the Mayor's signature with regard to SB 1210 (Torlakson) relative to eminent domain. EXECUTIVE SUMMARY: Passage of SB 1210 would provide that public use does not include the taking of property in order to transfer it to a non -governmental entity for purposes of economic development or increasing tax revenue except as specifically provided under the Community Development law as it pertains to eminent domain. BACKGROUND: The California Constitution authorizes the taking or damaging of private property for public use only when just compensation has first been paid to, or into the court for, the owner. SB 1210 would provide that public use does not include the taking of property in order to transfer it to a non -governmental entity for the purposes of economic development or increasing tax revenue. Passage of SB 1210 would require a public entity that exercises the power of eminent domain to offer to pay the reasonable costs of an independent appraisal ordered by the owner of the property and would require a court to award a property owner his or her litigation expenses at twice the difference between the final offer submitted by the public enfity and the amount of compensation determined by the court if the court finds that the market value of the property is greater than the final offer submitted by the public entity. CITY COUNCIL STAFF REPORT RE: SB 1210 (TORLAKSON) MARCH 23, 2006 Passage of this bill would mean that local agencies taking property through the eminent domain process would be required to pay twice for properties that are litigated, thus defeating the purpose of the assessment and making fair market value offers to property owners prior to litigation. Therefore, the Legislative Review Committee recommends that the City Council oppose SB 1210 and direct staff to prepare a letter stating that position to appropriate legislators for the Mayor's signature. PATRICIA SCULLY, CF UNIOR MA,NAGEMEN ANALYST SHEILA R.-GdLLIG/ ACM/COMMUNITY PS:mpg CARLOS L. ftEGA CITY MANAGER 61 SB 1210 Senate Bill -INTRODUCED Page 1 of 6 SILL NUMBER: SB 1210 INTRODUCED BILL TEXT INTRODUCED BY Senator Torlakson JANUARY 26, 2006 An act to amend Sections 1240.010, 1255.430, 1263.310, and 1268.620 of, and to add Section 1263.025 to, the Code of Civil Procedure, to add Section 1091.6 to, and to repeal Section. 7274 of, the Government Code, and to amend Section 33333.2 of the Health and Safety Code, relating to eminent domain. LEGISLATIVE COUNSEL'S DIGEST SB 1210, as introduced, Torlaksor. Eminent domain. (1) The California Constitution authorizes the taking or damaging of private property for a public use only when just compensation has first been paid to, or into the court for, the owner. This bill would provide that public use does not include the taking of property in order to transfer it to a nongovernmental entity for purposes of economic development or increasing tax revenues, except as specifically provided ender the Community Redevelopment Law. (2) The Eminent Domain Law requires the court in a condemnation action to make an order authoriz_ng the condemnor to take possession of the property -f the condemnor is entitled to take tl-e property by eminent domain and has deposited into the court the amount of probable compensation. Existing law requires the court to stay that order until the court rules on the property owner's motion objecting to tle condemnor's right to take the Property if the court finds there _s a reasonable probability the property owner will prevail. This pill would delete the reauirement that the court find there is a reasonable probability the property owner will prevail in order to stay the order for possession. 3) The Eminent Domain: Law requires a condemnor to -:ave the property appraised by an expert before depositing with the State Treasury the probable amount of compensation that will be awarded in a condemnation proceeding. This bill would require a public entity that exercises the power of eminent domain to offer to pay the reasonable costs of an independent appraisal ordered by the owner of the property. This appraisal would be reauired to be conducted by an appraiser licensed by the Department of Real Estate Appraisers. (4) The imminent Domain Law requires that compensation be awarded for the property taken and that the measure of the compensation �s the fair market value of the property taker.. This bill would require a court also to award the property owner his or her litigation expenses and twice the difference between the final_ offer submitted by the public entity and the amount of compensation determined by the court if the court determines that the market value of the property is greater than the final offer submitted by the public entity. (5) The Eminent Domain Law requires a court to deliver possession of the property to the persons entitled to it and to make such Provision as shall be just for the payment of all damages proximately http://info.sen.ca.gov/pub/bill/sen/sb_1201-1250/sb_l210_bill_20060126 introduced.html 3/2/2006 SB 1210 Senate Bill - INTRODUCED Page 2 of 6 caused by the eminent domain proceeding and its dismissal as to that property if the proceeding is dismissed for any reason or there is a final judgment that the plaintiff cannot acquire the property after the defendant has moved from the property in compliance with an order or agreement for possession or in reasonable contemplation of its taking by the plaintiff. This bill would, under those circumstances, require the court also to award the defendant costs, his or her litigation expenses, and 3 times the amount off damages proximately caused by the oroceeding, _ncluding the court's dismissal of: the proceeding. (6) Existing law prohibits public officers and employees from being financially interested in any contract made by them in their official capacity or by any body or board of which they are members. This bill would prohibit a member of a governing board of a public entity from (a) voting on any matter affecting an organization that has an interest in, or to which the public entity may transfer an interest in, property taken through eminent domain proceedings by that public entry and on whose board of directors the member sits, (b) accepting a campaign contribution from any person that has received property acquired by the public entity through eminent domain proceedings wi hin the previous 3 years, and (c) voting on any matter affecting an eminent domain proceeding in which a person who has contributed a campaign contribution to the officer within the previous 3 years has an interest in the outcome of the eminent domain proceeding. (7) Existing law establishes a uniform policy for the equitable treatment of persons displaced as a direct result of programs or projects tha require the acquisition of property. That policy requires, among other things, the public entity to make every reasonable of -fort to acquire the property by negotiation, to appraise the property before negotiations begin, to provide the owner with a written statement of, and summary of the basis for the amcun: it established as just compensation, and to provide 90 days notice before requiring a person to move from a dwelling or move his business or farm operation. That policy also prohibits a public entity from intentionally making it necessary for an owner to institute legal proceeding to prove the fact of the taking of his real property, from taking an action that is coercive in nature in order to compel an agreement on the price to be paid for the property, and from charging rent that exceeds the fair rental value of the property if the public entity allows the owner or tenant to occupy the real property acquired on a rental basis for a short term. Existing law declares that these provisions create no rights or liabilities and prohibits them from affecting the validity of a property acquisition by purchase or condemnation. This bill would delete the declaration negating the creation of rights and liability and the prohibition against affecting the validity of the property acquisition. (8) The Corcaunity Redevelopment Law establishes a time limit, not to exceed 12 years from the adoption of the redevelopment plan, for commencement of eminent domain proceedings to acquire property within the project area. That law provides that this time limitation may be extended only by amendment of the redevelopment plan. This bill would provide that this time limitation may be extended only if the redevelopment agency in a new resolution of necessity finds, based on substantial evidence in the record, that substantial blight still exists in the area and the acquisition of the parcel is necessary and will directly and substantially assist in eradicating the remaining blight. http://info.sen.ca.gov/pub/bill/sen/sb_1201-1250/sb_1210 bill_20060126_introduced.html 3/2/2006 SB 1210 Senate Bill -INTRODUCED Page 3 of 6 Vote: majority. Appropriation: no. Fiscal committee: yes. State -mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECT=ON 1. Section 1240.010 of the Code of Civil Procedure is amended to read: 1240.010. The power of eminent domain may be exercised to acquire property only for a public use. If the Legislature provides by statute that a use, purpose, cbjecL, or function is one for which the power of eminent domain: may be exercised, ___^ that action is deemed to be a declaration by the Legislature that the use, purpose, object, or function is a public use. Public use does not include the taking of property in order to transfer it to a nongovernmental entity for purposes of economic development or increasing tax revenues, except as specifically provided under the Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the Yealth and Safety Code). SEC. 2. Section 1255.430 of the Code of Civil Procedure is amended to read: 1255.430. If the plaintiff has been authorized Lo take possession of property under Section 1255.410 and the defendant has objected to the :'_,i. __ff'n plaintiff's right to Lake the property by eminent domain, the court t- 1 :;CBi�raiiw shall stay the order for possession until it has ruled on the defendant's objections. SAC. 3. Section 1263.023 is added to the Code of Civil Procedure, to read: 1263.025. A public entity that exercises the power of eminent domain shall offer to pay the reasonable costs of an independent appraisal ordered by the owner of the property. The independent appraisal shall be conducted by an appraiser licensed by the Department of Real Estate Appraisers. SEC. 4. Section 1263.310 of the Code of Civil Procedure is amended to read: 1263.310. Compensation shall be awarded for the property taken. The measure of this compensation is the fair market value of the property taken. If the court determines that the market value of the property is greater than the final offer submitted by the public entity pursuant to Section 1250.410, the court shall also award the property owner his or her litigation, expenses and trice the difference between the final offer and the market value as determined by the court. SEC. 5. Section 1268.620 of the Code of Civil Procedure is amended to read: 1_268.620. (a) If, after the defendant moves from property in compliance with an order or agreement for possession or in reasonable contemplation of its taking by the plaintiff, the proceeding is dismissed with regard to that property for any reasons or there is a final judgment that the plaintiff cannot acquire that property, the court shall do both of the following (1) Order the plaintiff to deliver http://info.sen.ca.gov/pub/bill/senlsb_1201-1250/sb_1210 bill_20060126_introduced.html 3/2/2006 SB 1210 Senate Bill - INTRODUCED Page 4 of 6 possession of the property to the persons entitled to it �h) (2) Make provision as steal-, be just for the payment of all damages proximately caused by t.".e proceeding— , including, but not limited to, its dismissal as to that property , and award the defendant costs, his or her litigation expenses, and three times the amount of all damages proximately caused by the proceeding SEC. 6. Section 1091.6 is added to the Government Code, to read: 1091.6. A member of the governing board of a public entity shall not do any of the following: (a) Vote on any matter affecting an organization that has an interest in, or to which the public entity may transfer an interest in, property taken through eminent domain proceedings by that public entity and on whose board of directors the member sits. (b) Accent a campaign contribution from any person who has received property acquired by the public entity through an eminent domain proceeding within the previous three years. (c) Vote on any matter affecting an eminent domain proceeding in which a person who has contributed a campaign contribution to the officer within the previous three years has an interest in the outcome of the proceeding. SAC. 7. Section 7274 of the Government Code is repealed. SEC. 8. Section 33333.2 of the Health and Safety Code is amended to read: 33333.2. (a) A redevelopment plan containing the provisions set forth in Section 33670 shall contain all of the following limitations. A redevelopment plan that does not contain the provisions set forth in Section 33670 shall contain the limitations in paragraph (4): (_) ;A) A time limit on the establishing of 'loans, advances, and indebtedness to be paid with the proceeds of property taxes received pursuant to Section 33670 to finance in whole or in part the redevelopment project, wh`_ch may not exceed 20 years from the adoption of the redevelopment plan, except by amendment of the redevelopment plan as authorized by subparagraph (B). This limit, however, shall not prevent agencies from incurring debt to be paid from the mow and Moderate Income Housing Fund or establishing more debt in order to fulfill the agency's housing obligations under subdivision (a) of Section 33333.8. The loans, advances, or indebtedness may be repaid over a period of time longer than this time limit as provided in this section. No loans, advances, or indebtedness to be repaid from the allocation of taxes shall be established or incurred by the agency beyond this time limitation. This limit shall not prevent agencies from refinancing, refunding, or restructuring indebtedness after the time limit if the indebtedness is not increased and the time during which the indebtedness is to be repaid is not extended beyond the time limit to repay indebtedness required by this section. (B) The time limitation established by subparagraph (A) may be extended only by amendment of the redevelopment plan after the agency finds, based on substantial evidence, that (i) significant blight remains within the project area; and (ii) this blight cannot be eliminated without the establishment of additional debt. However, http://info.sen.ca.gov/pub/bill/senlsb_1201-1250/sb_1210 bill_20060126_introduced.html 3/2/2006 SB 1210 Senate Bill -INTRODUCED Page 5 of 6 t!:is amended time limitation may not exceed 30 years from the effective date of the ordinance adopting the redevelopment plan, except as necessary to comply with subdivision (a) of Section 33333.8. (2) A time 'limit, not to exceed 30 years from the adoption of the redevelopment plan, on the effectiveness of the redevelopment plan. After the time limit on the effectiveness of the redevelopment plan, the agency shall have no authority to act pursuant to the redevelopment plan except to pay previously incurred indebtedness and to enforce existing covenants or contracts, unless the agency has not compieted its housing obligations pursuant to subdivision (a) of Section 33333.8, in which case the agency shall retain its authority to implement requirements under subdivision (a) of Section 33333.8, including its ability to incur and pay indebtedness for this purpose, and shall use this authority to complete these housing obligations as soon, as is reasonably possible. (3) A time limit, not to exceed 45 years from the adoption of the redevelopment plan, to repay indebtedness with the proceeds of property taxes received pursuant to Section 33670. After the time limit established pursuant to this paragraph, an agency may not receive property taxes pursuant to Section 33670, except as necessary to comply with subdivision (a) of Section 33333.8. (4) A time limit, not to exceed 12 years from the adoption of the redevelopment plan, for commencement of eminent domain proceedings to acquire property within the project area. This time limitation may be extended only by amendment of the redevelopment plan. If the plan is extended for the purpose of exercising the power of eminent domain, and the agency seeks to exercise its eminent domain authority, the agency shall adopt a resolution of necessity pursuant to Article 2 (commencing with Section, 1245.210) of Chapter 4 of the Code of Civil Procedure that makes both of the following findings, based on substantial evidence in, the record: (A) Substantial blight still exists within the project area. (B) The acquisition of the parcel is necessary for and will directly and substantially assist in eradicating the remaining blight. (b) If a redevelopment plan is amended to add territory, the amendment shall contain the time limits required by this section. (c) When an agency is required to make a payment pursuant to Section 33681.9, the legislative body may amend the redevelopment plan to extend the time limits required pursuant to paragraphs (2) and (3) of subdivision (a) by one year by adoption of an ordinance. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans. (d) When an agency is required pursuant to Section 33681.12 to make a payment to the county auditor for deposit in the county's Educational Revenue Augmentation Fund created pursuant to Article 3 (commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code, the legislative body may amend the redevelopment plan to extend the time limits required pursuant to paragraphs (2) and (3) of subdivision (a) by the following: (1) One year for each year in which a payment is made, if the titre limit for the effectiveness of the redevelopment plan established pursuant to paragraph (2) of subdivision (a) is 10 years or less from the last day of the fiscal year in which such a payment is made. (2) One year for each year in which a payment is made, if both of http://info.sen.ca.gov/pub/bill/senlsb_1201-1250/sb_1210 bill_20060126_introduced.html 3/2/2006 SB 1210 Senate Bill -INTRODUCED Page 6 of 6 the following apply: (A) The time limit for the effectiveness of the redevelopment plan established pursuant to paragraph (2) of subdivision (a) is pore than 1-0 years but less than 20 years from the last day of the fiscal year in which a payment is made. (B) The legislative body determines in the ordinance adopting the amendment that, with respect to the project, all of the following apply: (i) The agency is in compliance with the requirements of Section 33334.2 or 33334.6, as applicable. (ii) The agency has adopted an implementation plan in accordance with the requirements of Section 33490. (iii) The agency is in compliance with subdivisions (a) and (b) of Section 33413, to the extent applicable. (iv) The agency is not subject to sanctions pursuant to subdivision (e) of Section 33334.12 for failure to expend, encumber, or disburse an excess surplus. (3) This subdivision shall not apply to any redevelopment plan if the time limits for the effectiveness of the redevelopment plan established pursuant to paragraph (2) of subdivision (a) is more than 20 years after the last day of the fiscal year in which a payment is made. (4) The legislative body by ordinance may adopt the amendments provided for under this subdivision following a public hearing. Notice of the public hearing shall be mailed to the governing body of each of the affected taxing entities at least 30 days prior to the searing. Notice shall also be published in a newspaper of general circulation in the community at least once, not less than 10 days prior to the date of the public hearing. The ordinance shall contain a finding of the legislative body that funds used to make a payment to the county's Educational Revenue Augmentation Fund pursuant to Section 33681.12 would otherwise have been used to pay the costs of projects and activities necessary to carry out the goals and objectives of the redevelopment plan. In adopting an ordinance pursuant to this subdivision, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part. (e) This section shall apply only to redevelopment projects for which a final redevelopment plan is adopted pursuant to Article 5 (commencing with Section 33360) on or after January 1, 1994, and to amendments that add territory and that are adopted on or after January 1, 1994. http://info.sen.ca. gov/pub/bill/sen/sb_l 201-1250/sb_1210_bill_20060126_introduc ed.html 3/2/2006