Senator Kirk A. Cullimore proposes the following substitute bill:


1     
EMINENT DOMAIN MODIFICATIONS

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kirk A. Cullimore

5     
House Sponsor: Brady Brammer

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to eminent domain.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     modifies certain negotiation and disclosure requirements in an eminent domain
14     proceeding; and
15          ▸     modifies provisions regarding the valuation of property in certain eminent domain
16     proceedings.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          None
21     Utah Code Sections Affected:
22     AMENDS:
23          57-12-13, as enacted by Laws of Utah 1972, Chapter 24
24          78B-6-505, as last amended by Laws of Utah 2014, Chapter 59
25          78B-6-510, as renumbered and amended by Laws of Utah 2008, Chapter 3
26          78B-6-511, as last amended by Laws of Utah 2018, Chapter 371
27     

28     Be it enacted by the Legislature of the state of Utah:
29          Section 1. Section 57-12-13 is amended to read:
30          57-12-13. Procedure for acquisition of property.
31          (1) (a) As used in this section, "fee simple owner" means the owner of a fee simple
32     interest in real property.
33          (b) "Fee simple owner" does not include a tenant, lienholder, or other claimant of an
34     interest in real property.
35          (2) Any agency acquiring real property as to which it has the power to acquire under
36     the eminent domain or condemnation laws of this state shall comply with the following
37     policies:
38          [(1)] (a) Every reasonable effort shall be made to acquire expeditiously real property by
39     negotiation with the fee simple owner.
40          [(2)] (b) Real property shall be appraised before the initiation of negotiations, and the
41     fee simple owner or his designated representative shall be given an opportunity to accompany
42     the appraiser during his inspection of the property.
43          [(3)] (c) Before the initiation of negotiations for real property, an amount shall be
44     established which is reasonably believed to be just compensation therefor, measured by an
45     undivided fee simple interest in the property as a whole, and such amount shall be offered to
46     the fee simple owner for the property. In no event shall such amount be less than the lowest
47     approved appraisal of the fair market value of the property. Any decrease or increase of the fair
48     market value of real property prior to the date of valuation caused by the public improvement
49     for which such property is acquired or by the likelihood that the property would be acquired for
50     such improvement, other than that due to physical deterioration within the reasonable control
51     of the fee simple owner, will be disregarded in determining the compensation for the property.
52     The owner of the real property to be acquired shall be provided with a written statement of, and
53     summary of the basis for, the amount established as just compensation. Where appropriate the
54     just compensation for real property acquired and for damages to remaining real property shall
55     be separately stated.
56          [(4)] (d) No owner shall be required to surrender possession of real property acquired
57     through federal or federally assisted programs before the agreed purchase price is paid or there
58     is deposited with a court having jurisdiction of condemnation of such property, in accordance
59     with applicable law, for the benefit of the owner an amount not less than the lowest approved
60     appraisal of the fair market value of such property or the amount of the award of compensation
61     in the condemnation proceeding of such property.
62          [(5)] (e) The construction or development of a public improvement shall be so
63     scheduled that, to the greatest extent practicable, no person lawfully occupying real property
64     shall be required to move from a dwelling (assuming a replacement dwelling will be available)
65     or to move his business or farm operation without at least 90 days' written notice from the date
66     by which such move is required.
67          [(6)] (f) If an owner or tenant is permitted to occupy the real property acquired on a
68     rental basis for a short term or for a period subject to termination on short notice, the amount of
69     rent required shall not exceed the fair rental value of the property to a short-term occupier.
70          [(7)] (g) In no event shall the time of condemnation be advanced, on negotiations or
71     condemnation and the deposit of funds in court for the use of the owner be deferred, or any
72     other coercive action be taken to compel an agreement on the price to be paid for the property.
73          [(8)] (h) If an interest in real property is to be acquired by exercise of the power of
74     eminent domain, formal condemnation proceedings shall be instituted. The acquiring agency
75     shall not intentionally make it necessary for an owner to institute legal proceedings to prove the
76     fact of the taking of his real property.
77          [(9)] (i) If the acquisition of only part of the property would leave [its] the fee simple
78     owner with an uneconomic remnant, an offer to acquire the entire property shall be made.
79          Section 2. Section 78B-6-505 is amended to read:
80          78B-6-505. Negotiation and disclosure required before filing an eminent domain
81     action.
82          (1) As used in this section:
83          (a) (i) "Claimant" means a person who is a record interest holder of real property
84     sought to be condemned.
85          (ii) "Claimant" does not include:
86          (A) a fee simple owner; or
87          (B) a utility subject to Section 72-6-116.
88          (b) "Fee simple owner" means the same as that term is defined in Section 57-12-13.
89          [(1)] (2) A political subdivision of the state that seeks to acquire property by eminent
90     domain or that intends to use eminent domain to acquire property if the property cannot be
91     acquired in a voluntary transaction shall:
92          (a) before the governing body, as defined in Subsection 78B-6-504(2)(a), of the
93     political subdivision takes a final vote to approve the filing of an eminent domain action, make
94     a reasonable effort to negotiate with the [property] fee simple owner for the purchase of the
95     property; and
96          (b) except as provided in Subsection [(4)] (5), as early in the negotiation process
97     described in Subsection [(1)] (2)(a) as practicable, but no later than 14 days before the day on
98     which a final vote is taken to approve the filing of an eminent domain action:
99          (i) provide the [property] fee simple owner and each claimant a complete printed copy
100     of the materials provided on the Office of the Property Rights Ombudsman website in
101     accordance with Section 13-43-203 regarding the acquisition of property for a public purpose
102     and a property owner's right to just compensation; [and]
103          (ii) provide the [property] fee simple owner a written statement in substantially the
104     following form:
105          "Although this letter is provided as part of an attempt to negotiate with you for the sale
106     of your property or an interest in your property without using the power of eminent domain,
107     [name of political subdivision] may use that power if it is not able to acquire the property by
108     negotiation. Because of that potential, the person negotiating on behalf of the entity is required
109     to provide the following disclosures to you.
110          1. You are entitled to receive just compensation for your property.
111          2. You are entitled to an opportunity to negotiate with [name of political subdivision]
112     over the amount of just compensation before any legal action will be filed.
113          a. You are entitled to an explanation of how the compensation offered for your
114     property was calculated.
115          b. If an appraiser is asked to value your property, you are entitled to accompany the
116     appraiser during an inspection of the property.
117          3. You are entitled to discuss this case with the attorneys at the Office of the Property
118     Rights Ombudsman. The office may be reached at [provide the current contact information for
119     the Office of the Property Rights Ombudsman].
120          4. The Office of the Property Rights Ombudsman is a neutral state office staffed by
121     attorneys experienced in eminent domain. Their purpose is to assist citizens in understanding
122     and protecting their property rights. You are entitled to ask questions and request an
123     explanation of your legal options.
124          5. If you have a dispute with [name of political subdivision] over the amount of just
125     compensation due to you, you are entitled to request free mediation or arbitration of the dispute
126     from the Office of the Property Rights Ombudsman. As part of mediation or arbitration, you
127     are entitled to request a free independent valuation of the property.
128          6. Oral representations or promises made during the negotiation process are not
129     binding upon the entity seeking to acquire the property by eminent domain."; and
130          (iii) provide each claimant a written statement in substantially the following form:
131          "1. Your interest in property may be impacted by a public improvement project and
132     you may be entitled to receive just compensation.
133          2. You are entitled to discuss this case with the attorneys at the Office of the Property
134     Rights Ombudsman. The office may be reached at [provide the current contact information for
135     the Office of the Property Rights Ombudsman].
136          3. The Office of the Property Rights Ombudsman is a neutral state office staffed by
137     attorneys experienced in eminent domain. Their purpose is to assist citizens in understanding
138     and protecting their property rights. You are entitled to ask questions and request an
139     explanation of your legal options.
140          4. If you have a dispute with [name of entity] over the amount of just compensation
141     due to you, you are entitled to request free mediation or arbitration of the dispute from the
142     Office of the Property Rights Ombudsman. As part of mediation or arbitration, you are entitled
143     to request a free independent valuation of the property.
144          5. Oral representations or promises made during any negotiation are not binding upon
145     the entity seeking to acquire the property by eminent domain."
146          [(2)] (3) Except as provided in Subsection [(4)] (5), the entity involved in the
147     acquisition of property may not bring a legal action to acquire the property under this chapter
148     until 30 days after the day on which the disclosure and materials required in [Subsection (1)]
149     Subsections (2)(b)(ii) and (iii) are provided to the [property] fee simple owner and each
150     claimant.
151          [(3)] (4) A person, other than a political subdivision of the state, that seeks to acquire
152     property by eminent domain or that intends to use eminent domain to acquire property if the
153     property cannot be acquired in a voluntary transaction shall:
154          (a) before filing an eminent domain action, make a reasonable effort to negotiate with
155     the property owner for the purchase of the [property] fee simple; and
156          (b) except as provided in Subsection [(4)] (5), as early in the negotiation process
157     described in Subsection [(3)] (4)(a) as practicable, but no later than 30 days before the day on
158     which the person files an eminent domain action:
159          (i) provide the [property] fee simple owner and each claimant a complete printed copy
160     of the materials provided on the Office of the Property Rights Ombudsman website in
161     accordance with Section 13-43-203 regarding the acquisition of property for a public purpose
162     and a property owner's right to just compensation; [and]
163          (ii) provide the [property] fee simple owner a written statement in substantially the
164     following form:
165          "Although this letter is provided as part of an attempt to negotiate with you for the sale
166     of your property or an interest in your property without using the power of eminent domain,
167     [name of entity] may use that power if it is not able to acquire the property by negotiation.
168     Because of that potential, the person negotiating on behalf of the entity is required to provide
169     the following disclosures to you.
170          1. You are entitled to receive just compensation for your property.
171          2. You are entitled to an opportunity to negotiate with [name of entity] over the amount
172     of just compensation before any legal action will be filed.
173          a. You are entitled to an explanation of how the compensation offered for your
174     property was calculated.
175          b. If an appraiser is asked to value your property, you are entitled to accompany the
176     appraiser during an inspection of the property.
177          3. You are entitled to discuss this case with the attorneys at the Office of the Property
178     Rights Ombudsman. The office may be reached at [provide the current contact information for
179     the Office of the Property Rights Ombudsman].
180          4. The Office of the Property Rights Ombudsman is a neutral state office staffed by
181     attorneys experienced in eminent domain. Their purpose is to assist citizens in understanding
182     and protecting their property rights. You are entitled to ask questions and request an
183     explanation of your legal options.
184          5. If you have a dispute with [name of entity] over the amount of just compensation
185     due to you, you are entitled to request free mediation or arbitration of the dispute from the
186     Office of the Property Rights Ombudsman. As part of mediation or arbitration, you are entitled
187     to request a free independent valuation of the property.
188          6. Oral representations or promises made during the negotiation process are not
189     binding upon the entity seeking to acquire the property by eminent domain."; and
190          (iii) provide each claimant a written statement in substantially the following form:
191          "1. Your interest in property may be impacted by a public improvement project and
192     you may be entitled to receive just compensation.
193          2. You are entitled to discuss this case with the attorneys at the Office of the Property
194     Rights Ombudsman. The office may be reached at [provide the current contact information for
195     the Office of the Property Rights Ombudsman].
196          3. The Office of the Property Rights Ombudsman is a neutral state office staffed by
197     attorneys experienced in eminent domain. Their purpose is to assist citizens in understanding
198     and protecting their property rights. You are entitled to ask questions and request an
199     explanation of your legal options.
200          4. If you have a dispute with [name of entity] over the amount of just compensation
201     due to you, you are entitled to request free mediation or arbitration of the dispute from the
202     Office of the Property Rights Ombudsman. As part of mediation or arbitration, you are entitled
203     to request a free independent valuation of the property.
204          5. Oral representations or promises made during any negotiation are not binding upon
205     the entity seeking to acquire the property by eminent domain."
206          [(4)] (5) The court may, upon a showing of exigent circumstances and for good cause,
207     shorten the 14-day period described in Subsection [(1)] (2)(b) or the 30-day period described in
208     Subsection [(2)] (3) or [(3)] (4)(b).
209          Section 3. Section 78B-6-510 is amended to read:
210          78B-6-510. Occupancy of premises pending action -- Deposit paid into court --
211     Procedure for payment of compensation.
212          (1) (a) At any time after the commencement of suit, and after giving notice to the
213     defendant as provided in the Utah Rules of Civil Procedure, the plaintiff may file a motion with
214     the court requesting an order permitting the plaintiff to:
215          (i) occupy the premises sought to be condemned pending the action, including appeal;
216     and
217          (ii) to do whatever work on the premises that is required.
218          (b) Except as ordered by the court for good cause shown, a defendant may not be
219     required to reply to a motion for immediate occupancy before expiration of the time to answer
220     the complaint.
221          (2) The court shall:
222          (a) take proof by affidavit or otherwise of:
223          (i) the value of the premises sought to be condemned, measured by an undivided fee
224     simple interest in the premises as a whole;
225          (ii) [the] any severance damages that will accrue from the condemnation to the
226     undivided fee simple interest in the premises as a whole; and
227          (iii) the reasons for requiring a speedy occupation; and
228          (b) grant or refuse the motion according to the equity of the case and the relative
229     damages that may accrue to the parties.
230          (3) (a) If the motion is granted, the court shall enter its order requiring that the plaintiff,
231     as a condition precedent to occupancy, file with the clerk of the court a sum equal to the
232     condemning authority's appraised valuation of the property sought to be condemned as
233     described in Subsection (2)(a)(i).
234          (b) That amount shall be for the purposes of the motion only and is not admissible in
235     evidence on final hearing.
236          (4) (a) Upon the filing of the petition for immediate occupancy, the court shall fix the
237     time within which, and the terms upon which, the parties in possession are required to
238     surrender possession to the plaintiff.
239          (b) The court may issue orders governing encumbrances, liens, rents, assessments,
240     insurance, and other charges, if any, as required.
241          (5) (a) The rights of just compensation for the land taken as authorized by this section
242     or damaged as a result of that taking vests in the parties entitled to it.
243          (b) That compensation shall be ascertained and awarded as provided in Section
244     78B-6-511.
245          (c) (i) Except as provided in Subsection (5)(c)(ii), judgment shall include, as part of the
246     just compensation awarded, interest at the rate of 8% per annum on the amount finally awarded
247     as the value of the property and damages, from the date of taking actual possession of the
248     property by the plaintiff or from the date of the order of occupancy, whichever is earlier, to the
249     date of judgment.
250          (ii) The court may not award interest on the amount of the judgment that was paid into
251     court.
252          (6) (a) Upon the application of the parties in interest, the court shall order that the
253     money deposited in the court be paid before judgment as an advance on the just compensation
254     to be awarded in the proceeding.
255          (b) This advance payment to a defendant shall be considered to be an abandonment by
256     the defendant of all defenses except a claim for greater compensation.
257          (c) If the compensation finally awarded exceeds the advance, the court shall enter
258     judgment against the plaintiff for the amount of the deficiency.
259          (d) If the advance received by the defendant is greater than the amount finally awarded,
260     the court shall enter judgment against the defendant for the amount of the excess.
261          (7) Arbitration of a dispute under Section 13-43-204 or 78B-6-522 is not a bar or cause
262     to stay the action for occupancy of premises authorized by this section.
263          Section 4. Section 78B-6-511 is amended to read:
264          78B-6-511. Compensation and damages -- How assessed.
265          (1) The court, jury, or referee shall hear any legal evidence offered by any of the parties
266     to the proceedings, and determine and assess:
267          (a) (i) the value of the property sought to be condemned [and] as a whole, including all
268     improvements pertaining to the [realty] property; and
269          (ii) the value of each [and every separate estate or] separate interest in the property;
270     [and]
271          [(iii) if it consists of different parcels, the value of each parcel and of each estate or
272     interest in each shall be separately assessed;]
273          (b) if the property sought to be condemned constitutes only a part of a larger parcel, the
274     damages which will accrue to the portion not sought to be condemned by reason of its
275     severance from the portion sought to be condemned and the construction of the improvement in
276     the manner proposed by the plaintiff;
277          (c) if the property, though no part of it is taken, will be damaged by the construction of
278     the proposed improvement, and the amount of the damages;
279          (d) separately, how much the portion not sought to be condemned, and each estate or
280     interest in it, will be benefitted, if at all, by the construction of the improvement proposed by
281     the plaintiff , provided that if the benefit is equal to the damages assessed under Subsection
282     (1)(b), the owner of the parcel shall be allowed no compensation except the value of the
283     portion taken; but if the benefit is less than the damages assessed, the former shall be deducted
284     from the latter, and the remainder shall be the only damages allowed in addition to the value of
285     the portion taken;
286          (e) if the property sought to be condemned consists of water rights or part of a water
287     delivery system or both, and the taking will cause present or future damage to or impairment of
288     the water delivery system not being taken, including impairment of the system's carrying
289     capacity, an amount to compensate for the damage or impairment; and
290          (f) if land on which crops are growing at the time of service of summons is sought to
291     be condemned, the value that those crops would have had after being harvested, taking into
292     account the expenses that would have been incurred cultivating and harvesting the crops.
293          (2) In determining the market value of the property before the taking and the market
294     value of the property after the taking to assess damages in partial takings cases as described in
295     Subsection (1)(b), the court, jury, or referee:
296          (a) may consider everything a willing buyer and a willing seller would consider in
297     determining the market value of the property after the taking; and
298          (b) may not consider the assessed value on the property tax assessment for the property
299     unless the court determines that the assessed value on the property tax assessment constitutes
300     an admission by a party opponent.