February 4, 2008
Pursuant to Elections Code Section 9005, we have
reviewed the proposed initiative (A.G. File No. 07‑0099) related to the
eminent domain process.
Background
Every year, California state and local
governments buy hundreds of millions of dollars of property from private
owners. Governments use much of this property for purposes such as
roads, schools, and public utilities, and typically own and operate
these properties. In other cases, government buys property with the
intention of transferring it to (1) new owners to develop businesses or
(2) nonprofit organizations to provide affordable housing.
Most of the time, government buys property from
willing sellers. Sometimes, however, property owners do not want to sell
their property or do not agree on the selling price. In these cases,
California law allows government to take property from a private owner
provided that government:
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Uses the property for a “public use” (a term
that has been interpreted to mean a broad public purpose).
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Pays the property owner “just compensation”
(generally, the property’s fair market value) and relocation costs
(including certain business losses).
This government power
to take property for a public use is called “eminent domain.”
Eminent Domain Challenges. Property owners are not
required to accept the amount of compensation government offers.
Instead, they may make a counteroffer or challenge the amount in court.
Under the California Constitution, property owners are entitled to have
the amount of compensation determined by a jury. Successful challenges
to government’s right to take a property, in contrast, are more
difficult. In part, this is because courts give significant weight to
government agencies’ findings and perspectives when ruling on disputes
as to whether an eminent domain action is for public use.
Proposal
The measure amends state statutes to limit
government’s authority to use eminent domain to take properties that it
plans to transfer to others. Specifically, in cases when government
plans to use eminent domain to acquire property, but does not intend to
own and use the property permanently, the measure states that:
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The property owner has the right to a jury
trial to decide whether government may acquire the property.
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The burden of proof regarding the use of
eminent domain is on the acquiring governmental agency, not the
property owner.
-
A jury may find a public use only if there is
clear and convincing evidence that: (1) a significant segment of the
public would benefit from the future use of the property, (2) the
property’s future use would not disproportionately benefit one or
more private persons or entities, (3) government is not taking more
property than is needed, and (4) government provided property owners
thorough and timely information regarding the project, just
compensation, and relocation benefits.
-
The property owner is entitled to attorney fees
if the jury finds that government does not have the right to take
the property.
Fiscal Impact
The measure’s fiscal effect would depend on
future decisions by public agencies. Because the measure constrains
government authority to use eminent domain, government might acquire
fewer properties and have lower property acquisition costs.
Alternatively, government might spend more to encourage property owners
to sell their property. The net effect of these potential changes is not
possible to determine, but is not likely to be significant on a
statewide basis.
Summary of Fiscal Effects. The
measure would have the following fiscal impact:
·
Probably no significant net fiscal impact on state and
local governments.
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