72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 1037
 
                         House Bill 2137
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Joint Interim Committee on
  Natural Resources)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Allows owner of private real property to claim compensation for
land use restriction or reinterpretation that limits or prohibits
use of property and decreases fair market value of property by
more than 10 percent. Creates exception to right to compensation
for certain land use restrictions. Authorizes owner of lawfully
created lot or parcel to build single-family dwelling or divide
lot or parcel if owner could have built dwelling or divided lot
or parcel when owner acquired lot or parcel but is prevented by
land use restriction or reinterpretation enacted, adopted or
applied before November 7, 2000.
 
                        A BILL FOR AN ACT
Relating to compensation for loss of property value resulting
  from land use regulation.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Sections 2 to 10 of this 2003 Act are added to
and made a part of ORS chapter 197. + }
  SECTION 2.  { + As used in sections 2 to 10 of this 2003 Act:
  (1) 'Government entity' means a local government, a state
agency, board or commission in the executive branch of state
government or any other political subdivision of the state.
  (2) 'Land use restriction' means:
  (a) A law, a statewide planning goal or an administrative rule
establishing standards or requirements relating to land use
planning under ORS chapter 195, 196, 197, 215, 227 or 268.
  (b) A comprehensive plan acknowledged under ORS 197.251 or a
land use regulation.
  (c) A regional framework plan or a land use ordinance adopted
by a metropolitan service district to implement a regional
framework plan.
  (3) 'Owner' means:
  (a) The record holder of fee title interest in private real
property;
  (b) The contract purchaser of private real property; or
  (c) A legal entity created in whole or in part by the preceding
owner to which the preceding owner transferred fee title interest
before, on or after the effective date of this 2003 Act.
  (4) 'Reinterpretation' means the application of a land use
restriction by a government entity in a manner that differs from
the established interpretation of the land use restriction on the
date the owner acquired the private real property. + }
  SECTION 3.  { + (1) If, on or after November 7, 2000, a
government entity enacts or adopts a land use restriction or
applies a reinterpretation and the land use restriction or the
reinterpretation reduces by more than 10 percent the fair market
value of private real property for the uses permitted on the date
the owner acquired the private real property, the owner is
entitled to compensation equal to the full amount of the decrease
in fair market value.
  (2) An owner is not entitled to compensation under subsection
(1) of this section if a government entity establishes one of the
following:
  (a) The land use restriction or reinterpretation prohibits or
regulates a use or activity that constitutes a public or private
nuisance under law or common law.
  (b) The land use restriction or reinterpretation implements a
federal law:
  (A) To enable private real property or a private property owner
to receive a federal benefit including, but not limited to, a
land use restriction or a reinterpretation that provides for the
national flood insurance program established under the National
Flood Insurance Act of 1968 (P.L. 90-448, 42 U.S.C. 4011); or
  (B) When the state is authorized by the federal government to
act in lieu of direct regulation by the federal government
including, but not limited to, assumption of a federal regulatory
program.
  (c) The land use restriction or reinterpretation prevents
nonresidential uses in areas zoned for residential use.
  (d) The land use restriction or reinterpretation provides
access to public beaches.
  (e) The land use restriction was enacted, adopted or
reinterpreted before the date the owner acquired the private real
property. + }
  SECTION 4.  { + (1) An owner who claims a right to compensation
under section 3 of this 2003 Act:
  (a) Shall provide a written notice of claim to the government
entity that enacted or adopted the land use restriction or
applied the reinterpretation at least 90 days prior to filing an
action.
  (b) Shall file the action in the circuit court for the county
in which the largest portion of the private real property is
located or the circuit court for the county in which the owner
resides.
  (c) Is entitled to a trial by jury.
  (2) If more than one government entity is responsible for the
land use restriction or reinterpretation that prohibits or limits
the use of private real property and decreases the fair market
value of the private real property, the circuit court shall
determine the proportionate responsibility of each government
entity for the land use restriction or reinterpretation and
require each government entity to contribute a proportionate
share of the award of compensation.
  (3) If a judgment is entered that awards compensation exceeding
the largest written offer tendered by the government entity
before the owner filed the action, the court shall award attorney
fees, costs and disbursements and the reasonable expenses
incurred in the preparation and prosecution of the action to the
owner.
  (4) An action for compensation under this section must be filed
within two years of the date on which the government entity
enacts or adopts a land use restriction or applies a
reinterpretation to private real property or within two years of
the effective date of this 2003 Act, whichever is later. + }
  SECTION 5.  { + (1) Nothing in section 4 of this 2003 Act
prohibits an owner and a government entity from agreeing to an
alternative method of compensation in lieu of payment, subject to
existing law.
  (2) If application of a land use restriction or a
reinterpretation to private real property deprives the owner of
reasonable use of the private real property or results in
substantial devaluation of the private real property, the
government entity may vary or modify the requirements of a land
use restriction or a reinterpretation if all of the following
conditions are met:
  (a) The variance or modification is necessary to preserve the
reasonable investment-backed expectations of the owner or
reasonable use of private real property.
  (b) The variance or modification is the minimum variance or
modification necessary to preserve the reasonable
investment-backed expectations of the owner or reasonable use of
private real property.
  (c) The variance or modification does not allow a use of the
private real property not already allowed, whether conditionally
or otherwise, under existing land use restrictions and
interpretations.
  (d) The conditions that require the variance or modification
are not self-imposed or imposed on behalf of the owner.
  (3) If application of a land use restriction or a
reinterpretation to private real property results in substantial
devaluation of the property, the government entity may:
  (a) Compensate the owner for the devaluation of the private
real property through alternative methods of compensation in lieu
of payment, including, but not limited to, property tax
abatement, reduction of system development charges, credits or
transfers of development rights; or
  (b) Condemn the private real property under ORS chapter 35.
  (4) As used in this subsection, 'reasonable use of private real
property' includes siting a single-family dwelling, subject to
reasonable siting standards for fire, health and safety, on a
lawfully created lot or parcel in a zone that allows
single-family dwellings, conditionally or otherwise. + }
  SECTION 6.  { + The governing body of a city or county or its
designee shall allow an owner of a lawfully created lot or parcel
to build a single-family dwelling on the lot or parcel if:
  (1) The owner acquired the lot or parcel before November 7,
2000;
  (2) The owner could have built a single-family dwelling on the
lot or parcel on the date the owner acquired the lot or parcel;
  (3) A land use restriction enacted, adopted or reinterpreted
after the date the owner acquired the lot or parcel and before
November 7, 2000, prevents the owner from building the
single-family dwelling; and
  (4) The owner provides proof of compliance with the land use
criteria and interpretations of those criteria in effect on the
date the owner acquired the lot or parcel. + }
  SECTION 7.  { + (1) The governing body of a city or county or
its designee shall allow the owner of a lawfully created lot or
parcel to subdivide or partition the lot or parcel under ORS
92.010 to 92.190 if:
  (a) The owner acquired the lot or parcel before November 7,
2000;
  (b) The owner could have subdivided or partitioned the lot or
parcel on the date the owner acquired the lot or parcel; and
  (c) A land use restriction enacted, adopted or reinterpreted
after the date the owner acquired the lot or parcel and before
November 7, 2000, prevents the subdivision or partition.
  (2) An owner:
  (a) May subdivide or partition one lot or parcel under this
section;
  (b) May build a single-family dwelling on each lot or parcel
created under this section; and
  (c) May not create more than six lots or three parcels from the
original lot or parcel. + }
  SECTION 8.  { + (1) A single-family dwelling authorized under
section 6 or 7 of this 2003 Act must comply with reasonable
siting standards for fire, health and safety. The governing body
of a city or county or its designee may not apply the standards
in a manner that prohibits the siting of the dwelling unless the
governing body establishes that the lot or parcel does not have
emergency access, potable water or adequate capacity to dispose
of sewage.
  (2) The governing body of a city or county or its designee may
purchase the right granted by section 6 or 7 of this 2003 Act in
lieu of authorizing the uses allowed by section 6 or 7 of this
2003 Act. + }
  SECTION 9.  { + (1) A government entity may not implement or
interpret sections 2 to 10 of this 2003 Act by enacting or
adopting an administrative rule, a statewide planning goal, a
comprehensive plan provision, a land use regulation, a regional
framework plan provision or a land use ordinance adopted to
implement a regional framework plan.
  (2) An administrative rule, a statewide planning goal, a
comprehensive plan provision, a land use regulation, a regional
framework plan provision or a land use ordinance adopted to
implement a regional framework plan that is inconsistent with
this section may not be enforced and has no legal force and
effect. + }
  SECTION 10.  { + Sections 2 to 10 of this 2003 Act are
cumulative and do not abrogate other lawful remedies available,
including any remedies available for government actions under the
Oregon Constitution or the United States Constitution. + }
  SECTION 11.  { + If a phrase, clause or part of sections 2 to
10 of this 2003 Act is found to be invalid by a court of
competent jurisdiction, the remaining phrases, clauses and parts
remain in full force and effect. + }
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