Amendment SSA1-AB675

LRBs0696/4

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2005 - 2006 LEGISLATURE

SENATE SUBSTITUTE AMENDMENT 1, TO 2005 ASSEMBLY BILL 675

May 2, 2006 - Offered by Senator Stepp.

AB675-SSA1,1,2 An Act to create 895.456 of the statutes; relating to: compensation for the reduction in the fair market value of private real property.

Analysis by the Legislative Reference Bureau

This substitute amendment allows an owner of private real property to seek compensation from the state or a political subdivision of the state if the state or a local governmental unit enacts, adopts, or promulgates a statute, rule, ordinance, or plan (land use regulation) that restricts the use of the private real property and reduces its fair value. The amount of the compensation is equal to the sum of the lost fair market value, the amount of unrefunded permit fees, the value of any improvements ordered removed, plus the cost of removing those improvements. The requirement to provide compensation does not apply if the land use regulation protects public health and safety, complies with federal law, or prohibits the sale of pornography.

Under the substitute amendment, an aggrieved private real property owner is generally entitled to compensation if the land use regulation continues to be enforced against the private real property 90 days after the owner sends a written demand for compensation to the state or governmental unit. Instead of paying the owner compensation, the state or governmental unit may modify, remove, or not apply the land use regulation to allow the owner to use the private real property in a manner that was permitted at the time the owner acquired the private real property. If the land use regulation remains in effect 180 days after a written demand for compensation, the owner may bring suit against the state or governmental unit in the county in which the private real property is located. Finally, if court-ordered compensation is not paid within two years after the order is entered or if the state or governmental unit has not modified or removed or not applied the land use regulation within two years after the owner has made a written demand for compensation, the owner may use or develop the private real property in a manner that was permitted before the land use regulation was enacted.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB675-SSA1, s. 1 Section 1. 895.456 of the statutes is created to read:

AB675-SSA1,2,2 895.456 Compensation for public use of private land. (1) In this section:

AB675-SSA1,2,6 (a) "Family member" means a person who is related to another person as a spouse, parent, child, brother, sister, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, nephew, stepparent, stepchild, grandparent, or grandchild.

AB675-SSA1,2,7 (b) "Land use regulation" means any of the following:

AB675-SSA1,2,9 1. A statute regulating farming, forest practices, or the use of private real property or of any interest in private real property.

AB675-SSA1,2,11 2. An administrative rule regulating the use of private real property or of any interest in private real property.

AB675-SSA1,2,13 3. An ordinance, including a zoning ordinance, regulating the use of private real property or of any interest in private real property.

AB675-SSA1,2,15 4. A town, county, or regional plan that regulates the use of private real property or of any interest in private real property.

AB675-SSA1,2,19 (c) "Local governmental unit" means a political subdivision of the state, a special purpose district in the state, an agency or corporation of a political subdivision or special purpose district, or a combination or subunit of any of the foregoing.

AB675-SSA1,3,4 (d) "Nuisance" means a condition that a court has found to be a nuisance under ch. 823, except that a widely accepted or utilized practice by a majority of landowners that are subject to the same ordinances is not a nuisance if that practice is not specifically prohibited by those ordinances.

AB675-SSA1,3,7 (e) "Private real property" means real property or an interest in real property that is not owned by the United States, the state, a local governmental unit, or a nonprofit organization described in section 501 (c) of the Internal Revenue Code.

AB675-SSA1,3,9 (f) "Property owner" means the present owner of private real property or of an interest in private real property.

AB675-SSA1,3,15 (2) (a) If, after the effective date of this paragraph .... [revisor inserts date], the state enacts or promulgates a land use regulation, or requires a local governmental unit to enact, adopt, or enforce a land use regulation, that reduces the fair market value of private real property below its value under the land use regulations previously in effect, the property owner shall be compensated by the state for that reduction.

AB675-SSA1,3,20 (b) If, after the effective date of this paragraph .... [revisor inserts date], a local governmental unit enacts or adopts a land use regulation that reduces the fair market value of private real property below its value under the land use regulations previously in effect, the property owner shall be compensated by the local governmental unit for that reduction.

AB675-SSA1,3,22 (c) The compensation of the property owner under par. (a) or (b) shall equal the sum of the following:

AB675-SSA1,3,24 1. The amount of the reduction in the fair market value of the private real property.

AB675-SSA1,3,25 2. The amount of permit fees paid and not refunded.

AB675-SSA1,4,3 3. The value of any improvements to the private real property that the state or government unit orders removed as part of the enforcement of the land use regulation.

AB675-SSA1,4,4 4. The reasonable costs of removing those improvements.

AB675-SSA1,4,13 (c) The property owner shall submit a written demand for compensation or waiver from regulation to the state or local governmental unit. The demand shall include identification of the private real property, a description of the land use regulation, an itemized statement of the amount of compensation requested, and documentation to support the amount of compensation requested. The written demand for compensation must be made within 2 years after the date that the state or local governmental unit enacts, adopts, or promulgates the land use regulation or within 2 years after the property owner submits a land use application that is affected by the land use regulation, whichever is later.

AB675-SSA1,4,18 (3) During the 90 days following receipt of the written demand for compensation or waiver from regulation, the state or local governmental unit may request additional information from the property owner, and may make offers to settle the claim. The compensation requested shall be due if all of the following applies:

AB675-SSA1,4,22 (a) An applicable land use regulation continues to be enforced against the private real property 90 days after the property owner has made a written demand for compensation or waiver from regulation to the state or local governmental unit that is enforcing the land use regulation.

AB675-SSA1,4,24 (b) The state or local governmental unit lacked justification to request additional information regarding the claim.

AB675-SSA1,5,8 (4) The state or local governmental unit may adopt procedures for the processing of claims for compensation under sub. (2), but those procedures may not be required as a prerequisite to the filing of a written demand for compensation under sub. (2). The failure of the state or local governmental unit to act on a previously submitted land use application to the state or local governmental unit is not grounds for dismissal or delay of a claim for compensation under sub. (2). The state or local governmental unit may not charge a fee for the submission of a claim under sub. (2).

AB675-SSA1,5,13 (5) (a) In lieu of payment of compensation as the result of a written demand under sub. (2), the state may modify, remove, or not apply all or part of the land use regulation to allow the property owner to use the private real property in a manner that was permitted immediately before the state enacted or promulgated the land use regulation.

AB675-SSA1,5,22 (b) In lieu of payment of compensation as the result of a written demand under sub. (2), the local governmental unit that enacted or adopted the land use regulation may modify, remove, or not apply all or part of the land use regulation to allow the property owner to use the private real property in a manner that was permitted immediately before the local governmental unit enacted or adopted the land use regulation. The local governmental unit shall record an approved resolution of the modification, removal, or inapplicability of land use regulation with the register of deeds, specifying the address and legal description of the property to which the modification, removal, or inapplicability applies.

AB675-SSA1,6,16 (6) A property owner may bring an action in circuit court where the private real property is located for compensation listed under sub. (2) (b) 1. to 4. resulting from any land use regulation that reduces the value of the private real property if the land use regulation continues to apply to the private real property more than 180 days after the property owner has made a written demand for compensation under sub. (2) and the property owner has not received an offer of compensation or has not accepted the compensation that is offered or has not received a written offer to modify, remove, or waive the applicable land use regulation from any person with proper authority. A property owner bringing an action under this subsection must include in his or her complaint the legal description of the private real property involved, substantiation of the damage done to the private real property, the land use regulation that resulted in the request for compensation, and the date that the land use regulation was enacted, adopted, or promulgated. The property owner may use a comparative sales analysis as a reasonably accurate method to substantiate the damage done to the private real property and the resulting reduction in the fair market value of the private real property. The court, if ordering compensation, shall also order the state or local governmental unit to pay the property owner's reasonable attorney fees, expenses, costs, and disbursements related to the circuit court action.

AB675-SSA1,6,22 (7) If the state or local governmental unit argues in an action brought under sub. (6) that the land use regulation is necessary to prevent a public nuisance, and the court finds that the private real property was not creating a public nuisance, the court shall, in addition to the other remedies in this section, order the state or local governmental unit to pay the property owner's reasonable attorney fees, expenses, costs, and disbursements related to the court action.

AB675-SSA1,7,4 (8) If compensation ordered under sub. (6) is not paid within 2 years after the court enters the order, or if the state or local governmental unit has not modified or removed or not applied all or part of the land use regulation as provided under sub. (5) within 2 years after the owner made a written demand for compensation, the private real property owner shall be allowed to use or develop the private real property in a manner that was permitted immediately before the land use regulation was enacted, adopted, or promulgated.

AB675-SSA1,7,6 (9) Subsection (2) does not apply to a land use regulation that meets any of the following criteria:

AB675-SSA1,7,9 (a) Regulates or prohibits activities for the protection of public health and safety, including fire and building codes, health and sanitation laws and rules, solid or hazardous waste laws or rules, and pollution control laws and rules.

AB675-SSA1,7,10 (b) Is required to comply with federal law.

AB675-SSA1,7,11 (c) Prohibits the possession or sale of pornography.

AB675-SSA1,7,20 (d) Was enacted, adopted, or promulgated before the date that the property owner acquired the private real property unless the regulation was enacted, adopted, or promulgated after the effective date of this paragraph .... [revisor inserts date], and after a family member of the property owner, the estate of a family member, or a legal entity owned by a family member, acquired the private real property. A person who acquires private real property from a family member shall record a statement with the register of deeds, specifying that the private real property was transferred from a family member and the address and legal description of the private real property to which the statement applies.

AB675-SSA1,7,22 (10) The provisions of ss. 16.007, 893.80, and 893.82 do not apply to claims made under this section.

AB675-SSA1,7,23 (End)