October 2001

By James Lawlor

Oregon: Dealing with Measure 7. In July, just before the legislature adjourned, the house Committee on Land Use and Regulatory Fairness held four hearings on a bill, H.B. 3998, that would require a vote on Measure 7, the regulatory takings initiative approved by the voters last November. Next year is an off year for the legislature, says chapter newsletter editor Karl Mawson, AICP, so the committee should have ample time to consider input from interested parties.

Measure 7, which was opposed by the chapter, requires landowners to be compensated if the value of their property is reduced by a state or local law or regulation. The measure specifically cites regulations related to protecting wildlife habitat, open space, wetlands, and historical and archeological resources, along with regulations aimed at providing low-income housing. Several cities and counties promptly challenged the constitutionality of Measure 7, and on February 22, a trial court issued an injunction barring it from going into effect. That case is currently on appeal to the Oregon Supreme Court.

H.B. 3998 would put a new initiative before voters. The substitute measure would raise the bar for compensation. A regulation would have to lessen the value of a property by at least 25 percent. Also, landowners would not be eligible for compensation for restrictions imposed before they bought the property. Compensation could be in the form of cash, income tax credits, property tax abatements, development rights transfers, land swaps, or density bonuses. The bill calls for establishment of a compensation board to rule on claims.

As of late August, the chapter had not taken a formal position on H.B. 3998. Possible positions, says Mawson, include offering conditions to be attached to implementing legislation or urging an alternative initiative that would address the economic benefits landowners derive from land-use regulation.

Montana: Exactions bill defeated. A bill that would have put onerous restrictions on local government exactions is dead, thanks to the efforts of the Montana Association of Planners. H.B. 587 would have established detailed nexus and proportionality specifications for exactions imposed in connection with subdivision approvals.

According to MAP legislative committee chair Robert Horne, AICP, the bill, which was pushed by home building and real estate interests, broadly defined "exactions" to include fees, payments, conditions, easements, and property dedications. One provision required the governing body to issue a written determination that the proposed subdivision created a specific need that would be addressed by the exaction.

Although the bill was narrowly approved by a house committee, MAP was able to persuade legislators that the measure as drafted placed an excessive burden on local government.

In other action, MAP succeeded in substantially amending a bill that would have barred local governments from citing local growth policy provisions as a reason to deny subdivision approval. The substitute language hammered out by the bill's sponsors and MAP legislative committee members requires subdivision regulations to be consistent with the local governing bodies' adopted growth policies.

South Carolina: Takings challenge ahead. Three takings bills were introduced in the first half of the two-year legislative session, and legislative committee chair Sharon Richardson says the chapter expects them to come up again next year. In June, the committee reaffirmed its support of the South Carolina APA position: "SCAPA believes that current constitutional protections of private property rights are adequate and that new standards or criteria for determination of a takings are not needed."

One of the three bills, H. 3995, would provide compensation in the event of either a "constitutional taking" or "unnecessary hardship" imposed on a landowner by government regulations. A constitutional taking is defined as government action that requires compensation under the U.S. or South Carolina constitutions.

Compensation could take the form of cash, measured by the fair market value of the property before and after the restriction, or such government actions as density increases, land swaps, or development rights transfers. The bill establishes new procedures, including a requirement that the government make a settlement offer or reach a decision setting forth the permitted uses of the property within 180 days of a claim.

A second measure, S. 528, is a companion bill to H. 3995. A third, S. 88, would require state and local agencies that administer or issue land-use regulations to assess proposed new regulations for their effect on the use and valuation of private property, consider alternatives that might lessen the impact, and estimate the compensation cost of the regulation.