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20 FHWA cautions that states must monitor supercom- pensation payments and practice because state- mandated payments exceeding traditional concepts of just compensation could âprove to be inconsistent with the stewardship of Federal-aid highway funds.â224 VII. POST-KELO REFORMSâ PROCEDURAL CHANGES AFFECTING TRANSPORTATION PROJECTS A. Introduction Some post-Kelo changes have been procedural in na- ture. According to one source, procedural protections may have been included in the belief that they would help to deter âabusive condemnationsâ or would in- crease property ownersâ âbargaining leverage.â225 How- ever, the source submits that âit is the taxpayers whoâ¦bear the costs of additional hearings, preparation of reportsâ¦, and any extra compensation paid to prop- erty ownersâ and that although such protections may âdeter relatively small-scale condemnations,â they do not deter âlarger ones.â226 The DOTs responding to the survey provided exam- ples of the post-Kelo requirements in their states and the effects thereof. Caltransâ response drew attention to three bills enacted into law in California. First, SB 1210 changed the prejudgment possession process.227 Al- though under prior law an ex parte hearing was suffi- cient, the law now requires an Order of Possession Hearing that is attended by both parties, which is when the property owner may identify a hardship that, de- pending on the evidence, could delay possession âindefi- nitely.â228 The law requires a condemning agency to pay the reasonable cost of an appraisal (up to $5,000) if the owner so chooses.229 Caltrans noted that the second bill, SB 1650, changed the prior law to require that the department offer to sell back property to the original owner if Cal- trans does not use the property within 10 years and lease it back if the department will take longer than 2 years to go to construction.230 224 Id. 225 Somin, supra note 7, at 218. 226 Somin, supra note 7, 15 S. CT. ECON. REV. at 219. 227 SB 1210, effective Jan. 1, 2007, unless otherwise noted, amended §§ 1250.410, 1255.040, 1255.410, 1255.450, and 1255.460; added § 1263.025; and repealed §§ 1255.420 and 1255.430 of the Code of Civil Procedure, as well as added § 1091.6 to the Government Code and amended §§ 33333.2 and 33333.4 of the Health and Safety Code. See eBULLETIN, Leg- islative Amendments for 2007 to California Community Rede- velopment Law, hereafter cited as âeBULLETIN,â available at http://extranet.bbklaw.com/news/IndivArticle.cfm?NEAMID=1 255, last accessed on July 5, 2011. 228 Caltransâ Survey Response, dated Mar. 18, 2011. 229 Id. 230 Id. SB 1650, effective Jan. 1, 2007, unless otherwise noted, amends § 1263.510 of, and adds §§ 1245.245 and Third, as a result of the enactment of AB 1322 an owner is entitled to receive a full copy of the depart- mentâs appraisal.231 Prior to passage, an Appraisal Summary Statement was all that was required. The department is entitled to receive a copy of any appraisal for which it pays, including those provided under SB 1210.232 Prior to the enactment of AB 1322, appraisal efficiencies existed because the department could com- bine a number of appraisals in one report that shared comparable properties.233 Caltrans advises that because of the need to craft one appraisal for each property, the combined reports are no longer as expeditious.234 In Missouri, as a result of post-Kelo reforms, there are several new eminent domain requirements: a land- owner must be given an opportunity to propose alter- nate locations; a condemnor must provide a pre- condemnation notice of the intended acquisition; a con- demnation petition may not be filed within 30 days of the written purchase offer; there must be co-signature of a certified appraisal on appraisal reports; and a con- demnor must offer the statutory homestead or heritage bonus when it applies.235 Furthermore, the depart- mentâs view is that the new law, which statutorily rede- fined the concept of fair market value, will increase a condemnorâs costs.236 Nevada stated that the stateâs recent amendment of its constitution âopen[s] the doorâ for payment of legal fees in eminent domain actions; allows for challenges to necessity; necessitates that all appraisals be provided to every property owner; mandates that interest that is paid must be compound interest; and requires that the DOT âmust use the property within 5 years of obtaining it in a condemnation action.â237 The Wyoming DOT reported that the post-Kelo re- forms have affected the âprocess used to acquire prop- erty for highway projects.â238 The changes did not affect âwhat could be acquired,â but they did affect âhow the state acquired the property.â239 Wyomingâs response, moreover, stated that the âgreatest impact was to the âgood faith negotiationâ requirements. These changes added several steps to the process [that] complicated 1263.615 to, the Code of Civil Procedure. See eBULLETIN, supra note 229. 231 See CAL. STS. & HWY. CODE § 102(b). See also Caltrans Memorandum, Office of Appraisals and Local Programs and Office of Right of Way Project Delivery, Implementation of AB 1322, dated Dec. 21, 2007, available at http://www.dot.ca.gov/ hq/row/localprog/docs/ImplementationofAB1322.pdf, last accessed on July 5, 2011. 232 Caltransâ Survey Response, dated Mar. 18, 2011. 233 Id. 234 Id. 235 MHTCâs Survey Response, dated Mar. 10, 2011. 236 Id. 237 Nevada DOTâs Survey Response, dated Mar. 14, 2011. 238 Wyoming DOTâs Survey Response, dated Mar. 22, 2011. 239 Id.
21 and added significant time to right-of-way acquisitions under the threat of eminent domain.â240 B. Attorneyâs Fees and Other Expenses If a condemnation proceeding is abandoned or if the court determines that the condemnor may not acquire the property, the owner may be entitled to recover fees and expenses for the services of an attorney, appraiser, and engineer.241 A property owner may be entitled to ârelocation damages.â242 In some states, a property owner may be able to recover reasonable attorneyâs fees and costs if a taking is found not to be for a public use.243 Oregonâs statute provides that a court, first, must âindependently determine whether a taking of property compliesâ with the lawâs requirements âwith- out deference to any determination made by the public body.â244 Second, if the court determines that the taking is not compliant with the requirements, the property owner is âentitled to reasonable attorney fees, expenses, costs and other disbursements reasonably incurred to defend against the proposed condemnation.â245 As ex- plained in Section VIII.A.1, two DOTs stated that their costs had increased because of post-Kelo provisions hav- ing to do with a property ownerâs recovery of attorneyâs fees. C. Notice Requirements Although it is beyond the scope of the digest to dis- cuss the various provisions of state codes applicable to the eminent domain process, it may be noted that sev- eral statesâ post-Kelo reforms went beyond defining public use, prohibiting or restricting the taking of prop- erty for transfer to another private person or entity, or limiting the definition of blighted property. States that appear to have significantly revised their eminent do- main procedures in the wake of the Kelo decision in- clude, for example, Georgia, Indiana, Louisiana, Minne- sota, and Tennessee.246 Whether in connection with takings by eminent domain generally or takings specifi- cally of blighted property, some post-Kelo reforms pro- 240 Id. 241 GA. CODE ANN. § 22-1-12. 242 Id. § 22-1-13(1)-(4) (stating that a condemnee may re- cover actual reasonable moving expenses, actual direct losses of tangible personal property as a result of moving or discon- tinuing a business or farm operation, other relocation expenses authorized by law, and, with the condemneeâs consent, the condemnor may provide alternative site property as full or partial compensation). 243 ARIZ. REV. STAT. § 12-1135(B); IND. CODE ANN. § 32-24- 4.5-7 (recovery if condemnor does not establish blight in accor- dance with the statutory elements); OR. REV. STAT. § 35.015(6)). 244 OR. REV. STAT. § 35.015(6). 245 Id. 246 GA. CODE ANN. § 22-1-1, et seq.; IND. CODE ANN. § 32-24- 4.5, et seq.; LA. CONST. art. 1, § 4; MINN. STAT. § 117.102, et seq.; and TENN. CODE ANN. § 29-17-101, et seq. See also Castle Report, supra note 40. vide for increased notice for property owners.247 For example, state law may require the posting of a notice near the property a specified number of days before the exercise of eminent domain.248 After the Kelo case, the Tennessee legislature, among other changes, revised its quick-take method for takings from a 5-day notice that existed prior to 2006 to a 30-day notice before public agencies may take possession of a property.249 D. Right of First Refusal If property is condemned but not used for the pur- pose for which it was taken, before the public agency may sell the property, state law may require that the property first be offered for sale to the one owning the property prior to condemnation.250 If the prior owner does not accept within a certain period the public agencyâs offer, such as the amount of the price paid for the property or the current fair market value, which- ever is less, the property may be sold to any other pri- vate party.251 The duration of the right of first refusal of the former owner, or his or her heir or successor in in- terest, varies from state to state, such as 5 years in 247 WASH. REV. CODE ANN. § 8.25.290(2)(a)(1) (providing that notice of a planned final action must be sent by certified mail at least 15 days before the final action). 248 GA. CODE ANN. § 22-1-10(a)(1) (providing that no less than 15 days before any meeting when a resolution approving the exercise of eminent domain is to be considered, a condem- nor must post a sign, if possible, in the right-of-way adjacent to each property stating the time, date, and place of the meeting). 249 TENN. CODE ANN. §§ 29-17-903(c) and (d) (stating that a notice of the filing of a petition must be given to the owner at least 30 days prior to the taking of any additional steps in the case and that after 30 days from the giving of notice, if the right to take is not questioned, the condemner shall have the right to take possession of the property). See Beau Pemberton, Reforming Eminent Domain in Tennessee after Kelo: Safe- guarding the Family Farm, 4 TENN. J. L. & POLâY 73, 93 (2008) (citing TENN. CODE ANN. § 29-17-903(c) (Supp. 2007)). 250 ALA. CODE § 11-47-170(c); see also ALA. CODE § 11-80- 1(c); FLA. STAT. ANN. § 73.013(2)(b)(2); GA. CODE ANN. § 22-1- 2(c)(1) (former owner has to apply for a reconveyance); MICH. COMP. LAWS § 117.226(a); OHIO REV. CODE ANN. § 163.211 (right of repurchase extinguished after 5 years); S.D. CODIFIED LAWS § 11-7-2.2 (applicable to any transfer of the property within 7 years of acquisition). 251 ALA. CODE § 11-47-170(c) (90 days); see ALA. CODE § 11- 80-1(c); FLA. STAT. ANN. §§ 73.013(2)(a) and (b).