House Bill 1010 on eminent domain is scheduled to be heard in the House Judiciary Comittee. The bill would, obviously, modify eminent domain procedures. Currently, a condemnor is required to make an effort to purchase the property voluntarily. The bill specifies that that effort must include “good faith negotiations,” submitting a proposed purchase price to the owner, and providing the owner with an appraisal. No deadline is apparently set for the property owner to accept or decline the offer which may become important in relation to some of the other new provisions.
If a condemnor’s acquisition offer is rejected, it must proceed with an action to condemn the property within 2 years of making the offer. If it fails to do so, it has to wait another 5 years after the expiration of the 2 year period to “initiate” a new condemnation action. I’m not sure if “initiate” means to make another offer to purchase or filing a condemnation action. The 2 year time period to begin a condemnation action is expanded to 6 years for the Indiana Dept. of Transportation if it’s to be used in a state highway or toll road project. The 6 year period also applies to a condemnor acquiring land or a property right for a feeder road to a state road project.
The bill requires an appraiser appointed for the purpose of valuing condemned land for a court to be professionally engaged as an appraiser or professionally trained as an appraiser.
The bill keeps the Governor’s highway privatization plan in mind. It has a chapter that really escalates the costs of condemnation when it will benefit a private party. (I’ll call this chapter the “windfall provision” since it results in a healthy unearned profit for the land owner.) For everybody else, the test of the chapter’s applicability is whether ownership or control of the parcel will be transferred to another private person. For the Department of Transportation only transfer of ownership will trigger the windfall provisions for the owner. If the DOT transfers control, but not actual ownership, the windfall provision does not apply. So, if the DOT takes your land and gives a private company a 100 year exclusive operating agreement for the road that goes over the land, no windfall for you.
Condemnation can only take place under the windfall provision if 1) the land contains a structure that is a public or private nuisance; 2) the parcel contains a dwelling that is unfit for human habitation; 3) the parcel contains a structure that is a fire hazard or is unfit for its intended use; 4) the parcel is in a developed neighborhood but is vacant and has become a place for the accumulation of trash or vermin; 5) the parcel is the subject of tax delinquencies exceeding the value of the parcel; 6) the parcel is the subject of code violations that haven’t been substantially corrected within 1 year of the notice of violation; 7) the parcel poses a threat to public health or safety because the parcel contains environmental contamination; or 8) the parcel has been abandoned. (I’ll call this laundry list “run down pieces of property”.) Even if the property is one of these run down parcels, the condemnor still cannot proceed unless it is not reasonably possible to acquire the property by another means within 5% of the cost of what condemnation will cost. Finally, the benefit of condemnation must be something more than increasing the property tax base of a government entity. If all of those conditions apply, the condemnor may proceed to acquire the run down property, control or ownership of which will be transferred to a private entity. If the run down piece of property is farm land, the condemnor must pay the owner 125% of what it’s worth or transfer an equal acreage to the owner. If the run down piece of property is owner-occupied, the owner is to receive 150% of what the run down property was worth. In all cases, the owner’s relocation costs must also be paid. If the owner of the run down property holds out and incurs attorney’s fees in excess of $1,000, the condemnor has to pay that as well.
Finally, the bill applies to any condemnation action filed on or after November 23, 2005. There may be some real or perceived magic to organization day which took place on November 22, 2005 that makes the General Assembly believe that it can alter the law retroactively in this fashion. I don’t know the law of ex post facto laws and whatnot to form an opinion as to whether this is legal. But it certainly seems unfair to change the rules in the middle of a process.
Update It just occurred to me that the term “private person” doesn’t seem to be defined for purposes of the windfall provision. Does this mean that a privately owned electric company or railroad can’t condemn property?