II. Legislative Responses

To redress the lack of judicial protection against the expansion of governmental power, a surge of property rights bills have emerged in state legislatures throughout the country in recent years. Fueled by grass-roots property rights organizations,[66] 21 states have enacted some form of enhanced property rights protective legislation, and hundreds of such bills have been introduced [See Table 1]. Michigan, lately a leader in state reform, is oddly one of the last states to begin addressing the need for greater property rights protections, and its initiatives to date have been incomplete.

It must be noted that non judicial remedies should not be necessary. Illegitimate takings should be barred through a correct interpretation of state constitutions and the United States Constitution in the judicial review power of the courts. The text of the Michigan Constitution’s takings clause and its intent, correctly interpreted, incorporates all of the protections that could be repeated through non judicial remedies. Inappropriate interpretations, however, have forced legislatures to begin to clarify and underscore the limitations inherent in the takings clause.

Legislation, though, runs the risk of indicating that the protections afforded by the original clause are not as broad as they truly were intended to be. Constitutional protections are difficult to alter and stand as supreme statements of law. Ensuring that protections are understood to lie in the constitution, as opposed to statutes, prevents such protections from existing only at the mercy of the legislative mood. Judicial interpretations, however, cannot be mandated and the only means for correcting judicial errors lies in our ability to choose judges in the future who respect the constitutional intent.

Though statutory clarifications can be altered more easily, they do provide an important remedy for property owners who now find their rights unprotected in the courts. The lack of respect for the original constitutional takings protections necessitates a turn to non-judicial solutions.

The types of initiatives being pursued in the states range in their nature and level of protection. Several categories can be isolated to organize these efforts; but only an approach which incorporates each of these categories of protection will provide a comprehensive defense against governmental infringements on the property rights of citizens.

Some efforts deal with special problems such as rights to forest or farm, mineral or water rights, landfills, submerged land, coastal property, rent control, or attempt to limit the application of specific statutes. Often these specialized efforts are more politically feasible than a comprehensive property rights bill. Most of the concerns addressed in such legislation, however, can be swept up in a more general and comprehensive policy dealing with the taking of property. To reach a more complete understanding of takings implications from actions by the government, some states have chosen to provide mechanisms studying the takings issue and measures for addressing governmental encroachments on private property.

Some states have also attempted to codify recent United States Supreme Court decisions such as Dolan v. City of Tigard [67] and Nollan v. California Coastal Commission[68] in their legislation. Each of these recent cases has limited the state’s power to condition the issuance of use permits on the exaction or designation of private property rights. Legislation targeted specifically at permit issuance procedures has passed in Arizona and Utah,[69] while many of the compensation bills also encompass the issue of takings in permitting.

One common effort at more broad-based reform has been to institute a planning procedure in relation to private property. Often referred to as “look before you leap” legislation, these efforts generally require government officials to assess and analyze the impact that a law or regulation is likely to have on private property within their jurisdiction, or to mandate specific procedures to be followed when condemning property under the power of eminent domain. It is believed that forcing officials to recognize the intrusiveness of their actions, by weighing a value formerly ignored in their determinations on the appropriateness of a law or regulation, may cause them to think twice about the need for the policy.

Planning controls also require officials to narrowly tailor their actions in relation to private property such that the least intrusive means for achieving the government’s goal are employed. When effective alternatives are present that have less of an impact on property rights, planning laws command those alternative actions to be implemented in place of the originally proposed action.

Planning requirements create a more stringent system of accountability. Most require notice be given to property owners likely to be affected by a governmental action. Moreover, the public can access the findings of a takings impact assessment and judge the legitimacy of their governmental representative’s policies. Ignoring the effects on property can no longer be a shield against public criticism when strong planning laws are in place.

Planning bills have formed the core of most property rights reform efforts.[70] In fact, the Michigan legislature’s only concentrated effort to date for reforming takings law, House Bill 4433, falls into this category. Many states have implemented targeted planning efforts which affect only certain regulations, such as those affecting wetlands. Similarly, Michigan’s bill requires only that assessments be done within the Department of Natural Resources and the Department of Environmental Quality. The most intrusive measures on private property are doubtlessly those resulting from environmental regulations. Regulations from other agencies, legislative enactments, and actions of municipalities, however, also have a tendency to result in takings. These governmental entities should be required to assess their actions in relation to property rights.

Furthermore, most state legislatures that have addressed the takings assessment issue have included standards for analysis within their bills. The Michigan legislature, on the other hand, requires the attorney general to formulate such standards himself. Specific requirements are more preferable, for they do not depend on the dispositions of the attorney general and cannot change as easily when a new attorney general is elected.

Another shortcoming of many planning efforts, Michigan’s included, is their reliance on the definitions afforded “takings” by the Michigan Supreme Court and the United States Supreme Court. Remedies which afford no greater protection than the courts are not much remedy at all. Though they do ease the process of filing suit to gain compensation for governmental actions that are currently considered “takings,” planning measures often are merely restatements of the existing law.

To address this concern, another category of property rights legislation involves reforming the definitional scope of a compensable taking.[71] These efforts address the judicial void in relation to permit conditions, partial takings, temporary takings, and/or other actions which result in a restriction on the use of property. By expanding the definition of a “taking,” these laws provide property owners with a cause of action against governmental actions which render portions of property useless or reduce the value of their property. This cause of action kicks in at a certain “trigger point,” a threshold percentage of reduced property value. Obviously, those acts with the lowest “trigger points” are the most protective.

Two states, Florida and North Carolina, have passed compensation bills with no trigger point.[72] Any “non negligible” reduction in value of property caused by a governmental action shall be compensated at the fair market value of the loss. Inherent in this is a redefinition of taking to mean any non negligible reduction in a property’s value, and thereby, it allows for compensation for regulatory takings, or inverse condemnation.

Texas has passed a planning and compensation law which entitles owners to compensation when a governmental action “is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property.”[73] Mississippi’s law compensates owners when the market value of their property is reduced by 40 percent or more[74], and Louisiana compensates for agricultural land decreased in value by 20 percent or more and also requires planning to occur in relation to impacts on agricultural lands.[75]

Many states have been successful at combining several different categories of reform to increase the amount of protection afforded private property owners within their state. The Michigan legislature can learn from these examples of legislation with varying degrees of protection when defining its goals for reform. It is increasingly clear that states have a responsibility to respond to the failures of their judiciaries and to stabilize the rights of private property owners within their jurisdiction. Given the impetus for takings reform, additional layers of protection are sure to be added in the years to come.