1     
RIGHT-OF-WAY DISPOSAL AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Daniel McCay

5     
House Sponsor: Mike Schultz

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to the sale of real property acquired for a state
10     transportation purpose or by eminent domain.
11     Highlighted Provisions:
12          This bill:
13          ▸     modifies provisions related to the Division of Facilities Construction and
14     Management's disposal of vacant real property acquired by eminent domain under
15     certain circumstances;
16          ▸     for the sale of surplus property or an easement, requires the Department of
17     Transportation to provide the right of first refusal to the original owner or
18     subsequent bona fide purchaser of the surplus real property or easement under
19     certain circumstances;
20          ▸     for the sale of surplus property acquired by eminent domain, requires the state or
21     state subdivision to provide the right of first refusal to the original owner or
22     subsequent bona fide purchaser of the surplus real property or easement under
23     certain circumstances; and
24          ▸     makes technical and conforming changes.
25     Money Appropriated in this Bill:
26          None
27     Other Special Clauses:
28          None
29     Utah Code Sections Affected:
30     AMENDS:
31          63A-5b-909, as renumbered and amended by Laws of Utah 2020, Chapter 152
32          72-5-111, as last amended by Laws of Utah 2019, Chapter 479
33          78B-6-521, as last amended by Laws of Utah 2017, Chapter 273
34     

35     Be it enacted by the Legislature of the state of Utah:
36          Section 1. Section 63A-5b-909 is amended to read:
37          63A-5b-909. State real property subject to right of first refusal.
38          (1) (a) If Section 78B-6-520.3 applies to vacant division-owned property, the division
39     shall comply with Subsection 78B-6-520.3(3).
40          (b) If a condemnee accepts the division's offer to sell the vacant division-owned
41     property as provided in Section 78B-6-520.3, the division shall:
42          (i) comply with the requirements of Section 78B-6-520.3; and
43          (ii) terminate any process under this chapter to convey the vacant division-owned
44     property.
45          (c) A condemnee may waive rights and benefits afforded under Section 78B-6-520.3
46     and instead seek a transfer of ownership or lease of vacant division-owned property under the
47     provisions of this chapter in the same manner as any other person not entitled to the rights and
48     benefits of Section 78B-6-520.3.
49          (2) (a) If Section 78B-6-521 applies to the anticipated disposal of the vacant
50     division-owned property, the division shall comply with the limitations and requirements of
51     [Subsection] Subsections 78B-6-521(2) and (3).
52          (b) If the original grantor or a subsequent bona fide purchaser, or the original grantor's
53     or subsequent bona fide purchaser's assignee, accepts an offer for sale as provided in
54     Subsection 78B-6-521(2)(a)[(i)], the division shall:
55          (i) sell the vacant division-owned property to the original grantor or subsequent bona
56     fide purchaser, or the original grantor's or subsequent bona fide purchaser's assignee, [as
57     provided] in accordance with Section 78B-6-521; and
58          (ii) terminate any process under this chapter to convey the vacant division-owned
59     property.
60          (c) An original grantor or subsequent bona fide purchaser, or the original grantor's or
61     subsequent bona fide purchaser's assignee, may waive rights afforded under Section 78B-6-521
62     and instead seek a transfer of ownership or lease of vacant division-owned property under the
63     provisions of this chapter in the same manner as any other person seeking a transfer of
64     ownership or lease of vacant division-owned property to which Section 78B-6-521 does not
65     apply.
66          Section 2. Section 72-5-111 is amended to read:
67          72-5-111. Disposal of real property.
68          (1) (a) If the department determines that any real property or interest in real property,
69     acquired for a [highway] state transportation purpose, is no longer necessary for the purpose,
70     the department may lease, sell, exchange, or otherwise dispose of the real property or interest in
71     the real property.
72          (b) (i) Real property or an interest in real property may be sold at private or public sale.
73          (ii) Except as provided in Subsection (1)(c) related to exchanges and Subsection (1)(d)
74     related to the proceeds of any sale of real property from a maintenance facility, proceeds of any
75     sale shall be deposited with the state treasurer and credited to the Transportation Fund.
76          (c) (i) Except as provided in Subsection (1)(c)(ii), if approved by the commission, real
77     property or an interest in real property may be exchanged by the department for other real
78     property or interest in real property, including improvements, for [highway purposes] a state
79     transportation purpose.
80          (ii) The department may exchange an interest in real property for another interest in
81     real property for a project that is part of a statewide transportation improvement program
82     approved by the commission.
83          (d) Proceeds from the sale of real property or an interest in real property from a
84     maintenance facility may be used by the department for the purchase or improvement of
85     another maintenance facility, including real property.
86          [(2) (a) In the disposition of real property at any private sale, first consideration shall be
87     given to the original grantor.]
88          [(b) Notwithstanding the provisions of Section 78B-6-521, if no portion of a parcel of
89     real property acquired by the department is used for transportation purposes, then the original
90     grantor shall be given the opportunity to repurchase the parcel of real property at the
91     department's original purchase price from the grantor.]
92          (2) (a) In disposing of real property or an interest in real property described in
93     Subsection (1), the department shall give the right of first refusal for the highest offer, as
94     defined in Section 78B-6-521, to:
95          (i) for real property, the original grantor if, since the date of the original transfer to the
96     department, the original grantor has owned real property adjacent to the transferred real
97     property; or
98          (ii) for an interest in real property that is an easement:
99          (A) if the original grantor owns the servient estate subject to the easement, the original
100     grantor; or
101          (B) if a subsequent bona fide purchaser owns the servient estate subject to the
102     easement, the subsequent bona fide purchaser.
103          (b) Notwithstanding Subsection (2)(a) and Section 78B-6-521, if the department
104     acquires real property or an easement and does not use any portion of the real property or
105     easement for a state transportation purpose, the department shall give the original grantor the
106     opportunity to purchase the real property or easement at the original purchase price if, since the
107     date of the original transfer to the department, the original grantor has owned real property
108     adjacent to the transferred real property or the servient estate subject to the easement.
109          (c) In accordance with Section 72-5-404, this Subsection (2) does not apply to property
110     rights acquired in proposed transportation corridors using funds from the Marda Dillree
111     Corridor Preservation Fund created in Section 72-2-117.
112          (d) (i) The right of first [consideration] refusal described in this Subsection (2)[(a)] is
113     subject to the same terms and may be assigned by the original grantor or subsequent bona fide
114     purchaser in the manner described in Subsection 78B-6-521[(2)](3).
115          (ii) The original grantor [or the assignee] or subsequent bona fide purchaser, or the
116     original grantor's or subsequent bona fide purchaser's assignee, shall notify the department of
117     an assignment by certified mail to the current office address of the executive director of the
118     department.
119          (iii) An exchange of real property as provided in Subsection (1)(c) or Section 72-5-113
120     does not entitle the original grantor or subsequent bona fide purchaser to exercise the right of
121     first [consideration] refusal described in this Subsection (2)[(a)].
122          (iv) The right of first [consideration] refusal described in this Subsection (2)[(a)]
123     terminates upon an exchange of the acquired real property as provided in Subsection (1)(c) or
124     Section 72-5-113.
125          (3) (a) Any sale, exchange, or disposal of real property or interest in real property made
126     by the department under this section, is exempt from the mineral reservation provisions of Title
127     65A, Chapter 6, Mineral Leases.
128          (b) Any deed made and delivered by the department under this section without specific
129     reservations in the deed is a conveyance of all the state's right, title, and interest in the real
130     property or interest in the real property.
131          Section 3. Section 78B-6-521 is amended to read:
132          78B-6-521. Sale of property acquired by eminent domain.
133          (1) As used in this section:
134          (a) "Condemnation" or "threat of condemnation" means:
135          (i) acquisition through an eminent domain proceeding; or
136          (ii) an official body of the state or a subdivision of the state, having the power of
137     eminent domain, has specifically authorized the use of eminent domain to acquire the real
138     property.
139          (b) (i) "Highest offer" means all material terms of the best bona fide offer received by
140     the state or one of the state's subdivisions, including:
141          (A) purchase price;
142          (B) conditions; and
143          (C) terms of performance.
144          (ii) "Highest offer" does not mean the terms and conditions of an agreement to
145     exchange real property or an interest in real property for other real property or an interest in real
146     property.
147          (2) [(a)] If the state or one of the state's subdivisions, at the state's or the [state's] state
148     subdivision's sole discretion, declares real property [that is acquired] or an easement the state or
149     state subdivision acquires through condemnation or threat of condemnation to be surplus real
150     property, [it] the state or state subdivision may not sell the real property [on the open market]
151     or easement at a private or public sale unless:
152          [(i) the real property has been offered for sale to the original grantor, at the highest
153     offer made to the state or one of its subdivisions with first right of refusal being given to the
154     original grantor;]
155          (a) (i) for real property, the state or state subdivision gives the right of first refusal to
156     the original grantor for the highest offer if, since the date of the original transfer to the state or
157     state subdivision, the original grantor has owned real property adjacent to the transferred real
158     property; or
159          (ii) for an easement, the state or state subdivision gives the right of first refusal to:
160          (A) if the original grantor owns the servient estate subject to the easement, the original
161     grantor for the highest offer; or
162          (B) if a subsequent bona fide purchaser owns the servient estate subject to the
163     easement, the subsequent bona fide purchaser for the highest offer;
164          [(ii)] (b) the original grantor or subsequent bona fide purchaser described in Subsection
165     (2)(a):
166          (i) expressly [waived] waives in writing the [first] right of first refusal on the offer; or
167          (ii) [failed] fails to accept the offer within 90 days after the day on which the original
168     grantor or subsequent bona fide purchaser receives notification by registered mail to the
169     original grantor's or subsequent bona fide purchaser's last-known address; and
170          [(iii)] (c) neither the state nor the state subdivision [of the state] selling the property is
171     involved in the rezoning of the property or the acquisition of additional property to enhance the
172     value of the real property to be sold.
173          [(b) An original grantor may assign the first right of refusal within 90 days after an
174     offer has been made under Subsection (2)(a)(i) if the right has not been waived pursuant to
175     Subsection (2)(a)(ii).]
176          (3) (a) If the original grantor or subsequent bona fide purchaser has not waived the
177     right of first refusal as described in Subsection (2)(b), an original grantor or subsequent bona
178     fide purchaser may assign the right of first refusal.
179          [(c)] (b) The assignment of a right of first refusal [pursuant to] in accordance with
180     Subsection [(2)(b)] (3)(a) does not extend the time for acceptance of an offer as described in
181     Subsection [(2)(a)(ii)] (2)(b).
182          [(3)] (4) (a) Real property acquired through condemnation or the threat of
183     condemnation is not considered surplus if the real property is approved for use in an exchange
184     for other real property.
185          (b) An exchange of real property for other real property is not a private or public sale
186     [on the open market].
187          (c) The [first] right of first refusal described in Subsection (2)(a)[(i)] shall terminate
188     upon an exchange of the acquired real property.
189          [(4)] (5) This section shall only apply to property acquired after July 1, 1983.