HOUSE FILE 603

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO HF 64)

A BILL FOR

An Act relating to eminent domain authority and procedures and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 6A.1, Code 2011, is amended to read as follows:
   6A.1  Exercise of power by state.
   1.  Proceedings may be instituted and maintained by the state of Iowa, or for the use and benefit thereof, for the condemnation of such private property as may be necessary for any public improvement which the general assembly has authorized to be undertaken by the state, and for which an available appropriation has been made. The executive council shall institute and maintain such proceedings in case authority to so do be not otherwise delegated.
   2.  All proceedings instituted and maintained by the state of Iowa for the condemnation of private property shall not commence without the signed authorization of the governor if the total amount of private property to be condemned exceeds five hundred acres.
   3.  Notwithstanding any provision of law to the contrary, the condemnation authority granted in this section shall not extend to the department of natural resources if the department is seeking to acquire real property for purposes of carrying out a duty related to the development or maintenance of the recreation resources of the state, including planning, acquisition, and development of recreational projects, and areas and facilities related to such projects.
   Sec. 2.  NEW SECTION.  6A.15  Property on state historic registry.
   1. Property listed on the state register of historic places maintained by the historical division of the department of cultural affairs shall not be removed from the register solely for the purpose of allowing acquisition of the property by condemnation.
   2.  Property listed on the state register of historic places maintained by the historical division of the department of cultural affairs shall not be condemned by the state or a political subdivision unless a joint resolution authorizing commencement of the condemnation proceedings is approved by a vote of at least two-thirds of the members of both chambers of the general assembly and signed by the governor.
   Sec. 3.  Section 6A.22, subsection 2, paragraph c, subparagraph (1), Code 2011, is amended to read as follows:
   (1)
  (a)  If private property is to be condemned for development or creation of a lake, only that number of acres justified as reasonable and necessary for a surface drinking water source, and not otherwise acquired, may be condemned. In addition Prior to making a determination that such lake development or creation is reasonable and necessary, the acquiring agency shall conduct a review of demonstrate by clear and convincing evidence that no other prudent and feasible alternatives to alternative for provision of a drinking water source prior to making a determination that such lake development or creation is reasonable and necessary exists. Development or creation of a lake as a surface drinking water source includes all of the following:
   (i)  Construction of the dam, including sites for suitable borrow material and the auxiliary spillway.
   (ii)  The water supply pool.
   (iii)  The sediment pool.
   (iv)  The flood control pool.
   (v)  The floodwater retarding pool.
   (vi)  The surrounding area upstream of the dam no higher in elevation than the top of the dam’s elevation.
   (vii)  The appropriate setback distance required by state or federal laws and regulations to protect drinking water supply.
   (b)  For purposes of this subparagraph (1),“number of acres justified as reasonable and necessary for a surface drinking water source” means according to guidelines of the United States natural resource conservation service and according to analyses ofsurface drinking water capacity needs conducted by one or more registered professional engineers.  The data and information used by the registered professional engineers to analyze and determine the drinking water capacity needs under this subparagraph shall first be approved by a committee appointed by the affected property owners and comprised of more than fifty percent property owners affected by the proposed condemnation action. The committee shall hold at least one public meeting relating to such data and information prior to approval and submission of the data and information to the registered professional engineers.
   (c)  A second review or analysis of the drinking water capacity needs may be requested by any landowner affected by the proposed condemnation action, and the engineer to perform the second review or analysis shall be selected by the committee established under subparagraph division (b). The acquiring agency shall be responsible for paying the fees and expenses of such an engineer.
   (d)  If private property is to be condemned for development or creation of a lake, the plans, analyses, applications, including any application for funding, and other planning activities of the acquiring agency shall not include or provide for the use of the lake for recreational purposes.
   Sec. 4.  Section 6A.22, subsection 2, Code 2011, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  Notwithstanding paragraphs “a”, “b”, and “c”, “public use”, “public purpose”, or“public improvement” does not include any project that receives a state appropriation or that receives or is awarded state funds or other funding by means of incentives, as authorized pursuant to chapter 12, 15, 15A, 15E, 15F, 15G, or 16.
   Sec. 5.  Section 6A.24, subsection 3, Code 2011, is amended to read as follows:
   3.  For any action brought under this section, the burden of proof shall be on the acquiring agency to prove by a preponderance of the clear and convincing evidence that the finding of public use, public purpose, or public improvement meets the definition of those terms. If a property owner or a contract purchaser of record or a tenant occupying the property under a recorded lease prevails in an action brought under this section, the acquiring agency shall be required to pay the costs, including reasonable attorney fees, of the adverse party.
   Sec. 6.  Section 6B.2C, Code 2011, is amended to read as follows:
   6B.2C  Approval of the public improvement.
   The authority to condemn is not conferred, and the condemnation proceedings shall not commence, unless the governing body for the acquiring agency approves, by resolution, declares that adequate funding for the public improvement has been or is reasonably certain to be secured, that the use of condemnation for the public improvement is approved, and that there is a reasonable expectation the applicant will be able to achieve its public purpose, comply with all applicable standards, and obtain the necessary permits.
   Sec. 7.  Section 6B.4, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Annually the board of supervisors of a county shall appoint not less than twenty-eight residents of the county or of contiguous counties and the names of such persons shall be placed on a list and they shall be eligible to serve as members of a compensation commission. One-fourth of the persons appointed shall be owner-operators of agricultural property, one-fourth of the persons appointed shall be owners of city property, one-fourth shall be licensed real estate salespersons or real estate brokers, and one-fourth shall be persons having knowledge of property values in the county by reason of their occupation, such as bankers, auctioneers, property managers, property appraisers, and persons responsible for making loans on property.
   Sec. 8.  Section 6B.14, subsection 2, Code 2011, is amended to read as follows:
   2.  Prior to the meeting of the commission, the commission or a commissioner shall not communicate with the applicant, property owner, or tenant, or their agents, regarding the condemnation proceedings. The commissioners shall meet in open session to view the property and to receive evidence, but may and shall deliberate and vote in closed open session.  However, if the session relates to condemnation undertaken by the department of transportation the commissioners shall meet in open session to view the property, receive evidence, and vote, but may deliberate in closed session. When deliberating in closed session, the meeting is closed to all persons who are not commissioners except for personnel from the sheriff’s office if such personnel is requested by the commission. After deliberations commence, the commission and each commissioner is prohibited from communicating with any party to the proceeding unless such communication occurs in the presence of or with the consent of the property owner and other parties who appeared before the commission or their agents. However, if the commission is deliberating in closed session for a condemnation undertaken by the department of transportation, and after deliberations commence the commission requires further information from a party or a witness, the commission shall notify the property owner and the acquiring agency that they are allowed to attend the meeting at which such additional information shall be provided but only for that period of time during which the additional information is being provided. The property owner and the acquiring agency shall be given a reasonable opportunity to attend the meeting. The commission shall keep minutes of all its meetings showing the date, time, and place, the members present, and the action taken at each meeting. The minutes shall show the results of each vote taken and information sufficient to indicate the vote of each member present.The vote of each member present shall be made public at the open session. The minutes shall be public records open to public inspection.
   Sec. 9.  Section 6B.54, subsection 10, paragraph a, Code 2011, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (3)  Reasonable attorney fees and reasonable costs not to exceed one hundred thousand dollars, attributable to a determination that the creation of a lake through condemnation includes a future recreational use or that a violation of section 6A.22, subsection 2, paragraph “c”, subparagraph (1), subparagraph division (d), has occurred, if such fees and costs are not otherwise provided under section 6B.33.
   Sec. 10.  NEW SECTION.  6B.56B  Disposition of condemned property —— two-year time period.
   1.  When two years have elapsed since property was condemned for the creation of a lake according to the requirements of section 6A.22, subsection 2, paragraph “c”, subparagraph (1), and the property has not been used for or construction has not begun for the purpose stated in the application filed pursuant to section 6B.3, and the acquiring agency has not taken action to dispose of the property pursuant to section 6B.56, the acquiring agency shall, within sixty days, adopt a resolution offering the property for sale to the prior owner at a price as provided in section 6B.56. If the resolution adopted approves an offer of sale to the prior owner, the offer shall be made in writing and mailed by certified mail to the prior owner. The prior owner has one hundred eighty days after the offer is mailed to purchase the property from the acquiring agency.
   2.  If the acquiring agency has not adopted a resolution described in subsection 1 within the sixty-day time period, the prior owner may, in writing, petition the acquiring agency to offer the property for sale to the prior owner at a price as provided in section 6B.56. Within sixty days after receipt of such a petition, the acquiring agency shall adopt a resolution described in subsection 1. If the acquiring agency does not adopt such a resolution within sixty days after receipt of the petition, the acquiring agency is deemed to have offered the property for sale to the prior owner.
   3.  The acquiring agency shall give written notice to the owner of the right to purchase the property under this section at the time damages are paid to the owner.
   Sec. 11.  Section 316.4, subsection 1, Code 2011, is amended to read as follows:
   1.  If a program or project undertaken by a displacing agency will result in the displacement of a person, the displacing agency shall make a payment to the displaced person, upon proper application as approved by the displacing agency, for actual reasonable and necessary expenses incurred in moving the person, the person’s family, business, farm operation, or other personal property subject to rules and limits established by the department. The payment may also provide for actual direct losses of tangible personal property, purchase of substitute personal property, business reestablishment expenses, storage expenses, and expenses incurred in searching for a replacement business or farm.  If relocation of a business or farm operation is not economically feasible, the displaced person may also apply for payment of the loss of existing business relationships because of the inability to relocate the business or farm operation to a location similar in economic advantage to the location from which the business or farm operation was displaced.
   Sec. 12.  Section 364.4, subsection 1, paragraph a, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Acquire, hold, and dispose of property outside the city in the same manner as within. However, the power of a city to acquire property outside the city does not include the power to acquire property outside the city by eminent domain, except if viable alternatives do not exist within the city and the acquisition of the property is necessary for the following, subject to the provisions of chapters 6A and 6B:
   Sec. 13.  Section 403.7, subsection 1, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   A municipality shall have the right to acquire by condemnation any interest in real property, including a fee simple title thereto, which it may deem necessary for or in connection with an urban renewal project under this chapter, subject to the limitations on eminent domain authority in chapter chapters 6A and 6B. However, a municipality shall not condemn agricultural land included within an economic development area for any use unless the owner of the agricultural land consents to condemnation or unless the municipality determines that the land is necessary or useful viable alternatives to the condemnation of agricultural land do not exist and the acquisition of the property is necessary for any of the following:
   Sec. 14.  NEW SECTION.  423B.11  Use of revenues —— limitation.
   The revenue raised by a local sales and services tax imposed under this chapter by a county shall not be expended for any purpose related to a project that includes the condemnation of private property for the creation of a lake according to the requirements of section 6A.22, subsection 2, paragraph “c”, subparagraph (1), if the local sales and services tax has not been approved at election in the area where the property to be condemned is located.
   Sec. 15.  Section 455A.5, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  The authority granted to the commission to acquire real property for purposes of carrying out a duty related to development or maintenance of the recreation resources of the state, including planning, acquisition, and development of recreational projects, and areas and facilities related to such projects, shall not include the authority to acquire real property by eminent domain.
   Sec. 16.  Section 456A.24, subsection 2, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Acquire by purchase, condemnation, lease, agreement, gift, and devise lands or waters suitable for the purposes hereinafter enumerated, and rights-of-way thereto, and to maintain the same for the following purposes, to wit:
   Sec. 17.  Section 456A.24, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  15.  The authority granted the department to acquire real property for any statutory purpose relating to the development or maintenance of the recreation resources of the state, including planning, acquisition, and development of recreational projects, and areas and facilities related to such projects, shall not include the authority to acquire real property by eminent domain.
   Sec. 18.  Section 461A.7, Code 2011, is amended to read as follows:
   461A.7Eminent domain Purchase of lands —— public parks.
   The commission may purchase or condemn lands from willing sellers for public parks. No A contract for the purchase of such public parks shall not be made to an amount in excess of funds appropriated therefor by the general assembly.
   Sec. 19.  Section 461A.10, Code 2011, is amended to read as follows:
   461A.10  Title to lands.
   The title to all lands purchased, condemned, or donated, hereunder, for park or highway purposes and the title to all lands purchased, condemned, or donated hereunder for highway purposes, shall be taken in the name of the state and if thereafter it shall be deemed advisable to sell any portion of the land so purchased or condemned, the proceeds of such sale shall be placed to the credit of the said public state parks fund to be used for such park purposes.
   Sec. 20.  Section 463C.8, subsection 1, paragraph k, Code 2011, is amended to read as follows:
   k.  The power to acquire, own, hold, administer, and dispose of property, except that such power is not a grant of authority to acquire property by eminent domain.
   Sec. 21.  REPEAL.  Sections 461A.9 and 461A.75, Code 2011, are repealed.
   Sec. 22.  EFFECTIVE UPON ENACTMENT AND APPLICABILITY.  This Act, being deemed of immediate importance, takes effect upon enactment and applies to projects or condemnation proceedings pending or commenced on or after that date.
EXPLANATION
   This bill makes changes relating to eminent domain authority and procedures.
   The bill provides that proceedings for the acquisition of property by eminent domain shall not be instituted by the state without the signed authorization of the governor if the total amount of private property to be condemned exceeds 500 acres. 
   The bill changes the standard of proof from a preponderance of the evidence to clear and convincing evidence for an action brought in district court challenging the exercise of eminent domain authority or contesting condemnation proceedings. The bill adds reasonable attorney fees and reasonable costs that are attributable to certain condemnation proceedings relating to the creation of a lake, up to $100,000, to the list of expenses reimbursable by an acquiring agency to a property owner.
   The bill provides that property listed on the state register of historic places shall not be removed from the register solely for the purpose of allowing the property to be acquired by condemnation. The bill also provides that property on the state register of historic places may not be condemned unless a joint resolution authorizing the condemnation is approved by a vote of at least two-thirds of each house of the general assembly and signed by the governor.
   The bill provides that the authority to condemn property is not conferred, and condemnation proceedings shall not commence, until the governing body of the acquiring agency has declared that adequate funding for the public improvement has been secured or is reasonably certain to be secured.
   Current Code section 6B.4 requires the 28 persons appointed by the board of supervisors to the list of persons eligible to serve on a compensation commission to be residents of that county. The bill allows such appointees to be residents of the county or residents of contiguous counties.
   The bill provides that the compensation commission that meets to determine damages and appraise property in a condemnation proceeding shall deliberate and vote in open session. The bill also provides that, as an exception to the general prohibition from communicating with a party to the proceeding after deliberations commence, the commission and each commissioner is permitted such communication if it occurs in the presence of or with consent of the property owner and the other parties or their agents. The bill retains the compensation commission’s ability to deliberate in closed session for condemnation proceedings undertaken by the department of transportation.
   The bill provides that, for purposes of exercising eminent domain authority, “public use”, “public purpose”, or “public improvement” does not include any project that receives state funding or assistance through specified economic development, tourism, or community betterment programs.
   The bill provides that if relocation of a business or farm operation is not economically feasible, the displaced person may apply for payment of the loss of existing business relationships because of the inability to relocate the business or farm operation to a location similar in economic advantage to the location from which the business or farm operation was moved.
   The bill adds a condition to the circumstances in which a city may condemn land outside the city limits to provide that condemnation may occur if viable alternatives do not exist within the city and the acquisition of the land is necessary for the purposes stated in current law. The bill also amends urban renewal law relating to the circumstances in which a municipality may condemn agricultural land within an economic development urban renewal area to provide that condemnation may occur if viable alternatives do not exist and the acquisition of the land is necessary for the purposes stated in current law.
   The bill provides that the department of natural resources and the natural resource commission shall not exercise eminent domain authority to acquire real property for purposes of carrying out a duty related to development or maintenance of the recreation resources of the state, including planning, acquisition, and development of recreational projects, and areas and facilities related to such projects. The bill retains the department’s authority to acquire property through condemnation for highway purposes.
   The bill makes changes relating to eminent domain authority in relation to development or creation of a lake. The bill provides that, prior to making a determination that creation or development of a lake is reasonable and necessary, an acquiring agency must demonstrate by clear and convincing evidence that no other prudent and feasible alternative for provision of a drinking water source exists. The bill requires the data and information used by the registered professional engineers to analyze and determine the drinking water capacity needs to first be approved by a committee appointed by the affected property owners and comprised of more than 50 percent property owners affected by the proposed condemnation action. The committee is required to hold at least one public meeting relating to such data and information prior to approval and submission of the data and information to the registered professional engineers. The bill provides that a landowner affected by the proposed condemnation action may request a second review or analysis, and the engineer shall be selected by the committee appointed by the property owners affected by the proposed condemnation action. The bill further provides that the acquiring agency shall pay for the services of such an engineer. The bill provides that if private property is to be condemned for development or creation of a lake, the plans, analyses, applications, including any application for funding, and other planning activities of the acquiring agency shall not include or provide for the use of the lake for recreational purposes. 
   The bill provides that when two years have elapsed since property was condemned for the creation of a lake and the property has not been used for or construction has not begun for the purpose stated in the application, and the acquiring agency has not taken action to dispose of the property pursuant to Code section 6B.56, the acquiring agency shall, within 60 days, adopt a resolution offering the property for sale to the prior owner at a price as provided in Code section 6B.56. If the acquiring agency has not adopted a resolution within the 60-day time period, the prior owner may petition the acquiring agency to offer the property for sale to the prior owner at a price as provided in Code section 6B.56. The bill requires the acquiring agency to give written notice to the owner at the time damages are paid to the owner of the right to purchase the property under such circumstances.
   The bill provides that the revenue raised by a local sales and services tax imposed under Code chapter 423B by a county shall not be expended for any purpose related to a project that includes the condemnation of private property for the creation of a lake if the local sales and services tax has not been approved at election in the area where the property to be condemned is located.
   The bill takes effect upon enactment and applies to projects or condemnation proceedings pending or commenced on or after that date.