Appendix B: Model Property Rights Protection Bill

             BILL No.               

The People of the State of Michigan Enact:

SECTION 1.   This Act shall be known and may be cited as the "property rights restoration act."

SECTION 2.   Purpose.

(a) It is the policy of this state that private property shall not be taken for public use by governmental action without payment of just compensation;

(b) This act is intended to provide remedies to property owners in addition to any constitutional rights under the Michigan and/or federal constitutions and it is not intended to restrict or replace any constitutional rights;

(c) The provisions of this act are not exclusive. The remedies provided by this act are in addition to other procedures or remedies provided by law. A person may not recover under this act and also recover under another law or in an action at common law for the same economic loss.

SECTION 3.   Definitions.


As used in this act:

(a) “Governmental entity” means this state and any officer, agency, board, commission, department, council, or other agency or similar body funded fully or partially by the state or any county, city, municipality, or other political subdivision of the state.

(b) “Governmental action” means any of the following actions by a governmental entity:

(1) the enforcement of a statute or rule, including the issuance of an order;

(2) rules, regulations, or laws that if promulgated or enforced may limit the use of private property; or

(3) regulations, proposed regulations, proposed legislation, comments on proposed legislation, or other governmental policy statements that, if implemented or enacted, could limit the use of private property, such as rules and regulations that propose or implement licensing, permitting or other condition requirements or limitations on private property use, or that require dedications or exactions from owners of private property.

(c) “Governmental action” does not include forfeiture or seizure of property by law enforcement agencies as evidence of a crime or for violations of criminal laws; actions taken exclusively with respect to property held in title by the state of Michigan; or to the discontinuance of a government program or regulation.

(d) “Fair market value” means the most probable price at which real property would be sold, in a competitive and open market under all conditions requisite to a fair sale, between a willing buyer and a willing seller, neither of whom is under any compulsion to buy or sell and both having reasonable knowledge of relevant facts, and immediately prior to the state’s initiation of its action against such property. Investment-backed expectations for proposed or intended uses that could be fulfilled absent the governmental action may create an existing fair market value in the property greater than the fair market value of the actual, present use or activity on the real property.


SECTION 4.   Determination of compensable takings.


A taking shall be deemed to occur when:

(a) A governmental action affects private real property, in whole or in part, temporarily or permanently, in a manner that requires the governmental entity to compensate the private property owner as provided by Article X, Section 2, of the Constitution of the State of Michigan of 1963 or the Fifth and Fourteenth Amendments to the United States Constitution in accordance with the meaning ascribed to these sections by the Supreme Court of the State of Michigan and the United States Supreme Court; or

(b) A governmental action results in a physical invasion or occupancy or condemnation of property that non negligibly affects its value or use; or

(c) A governmental action deprives a property owner of a use of property, in whole or in part, temporarily or permanently, affecting any separate or distinct interests, in a manner that non negligibly restricts or limits the owner’s right to the property that would otherwise exist in the absence of the governmental action; or

(d) A governmental action is the producing cause of a non negligible reduction in the market value of the affected private property, determined by comparing the market value of the property as if the governmental action is not in effect and the market value of the property determined as if the governmental action is in effect.

SECTION 5.   Public use.


(a) In actions challenging a governmental action that results in a taking, determination of public use shall be made by the judiciary as a matter of law. Legislative declarations of public use will not constitute conclusive evidence of a public use.

(b) No property may be taken for non-public uses.

(1) A use shall be determined public when the property taken or regulated remains under the exclusive control of the government.

(2) Any exercise of the eminent domain power which ultimately results in a conveyance to a private use shall be justified only if there exists public necessity of the extreme sort, continuing accountability to the public for that use, and selection of the land to be conveyed is determined by the government and chosen for independent public significance. A use is private so long as the land is to remain under private ownership and control, and no right to its use, or to direct its management, is conferred upon the public.

SECTION 6.   Determination of compensation.


When a governmental action constitutes a taking under the provisions of Section 4 of this act, the owner will be entitled, at his option, to either:

(a) Compensation equalling the diminution in fair market value resulting from the state action, and remain title thereto; or

(b) Compensation equalling the entire fair market value of the real property prior to the diminution when more than a fifty percent diminution of value occurs, and transfer title to the state upon payment of such fair market value.

(c) Compensation to the property owner is also fair and appropriate in cases involving regulatory programs which abate a public nuisance when the property owner neither contributed to the public nuisance nor acquired the property knowing of the public nuisance nor acquired the property in circumstances where the property owner should have known about the nuisance based upon prevailing community standards.

SECTION 7.   Waiver of governmental immunity; permission to sue.

Sovereign immunity to suit and liability is waived and abolished to the extent of liability created by this act.

SECTION 8.   Attorney fees and costs.

The court shall award reasonable attorney fees and costs of litigation to any prevailing property owner.

SECTION 9.   Source of compensation.

Any award made to an owner of private property from a government agency for a taking, including any award of attorney fees and costs, must come from the agency’s existing budget unless the agency has previously disclosed an estimate of the costs to the appropriate fiscal management authority and other funds were budgeted for that purpose.

SECTION 10.   Valuation of property.

If a state agency undertakes a governmental action that is a taking pursuant to Section 4 of this act, any real property that is affected by the governmental action shall be assessed in an amount that reflects the limitation in use of that real property.

SECTION 11.   Takings impact assessment.


All governmental entities shall prepare a written takings impact assessment before undertaking any action that may result in a regulation of private property use.

(a) The takings assessment must:

(1) Clearly and specifically identify the state interest and purpose of the governmental action; and

(2) Establish that such proposed action is necessary substantially to advance the identified purpose; and

(3) Assess the likelihood that the governmental action will result in a taking; and

(4) Estimate the potential cost to the government if the action is deemed a compensable taking pursuant to the meaning ascribed to those terms in this act; and

(5) Establish that the restriction on the private property use is necessary and the least intrusive means for substantially furthering the identified public purpose and why no alternative action is available that would achieve the entity’s goals while reducing the impact on the property owner; and

(6) Establish, to the extent possible, that the restrictions imposed on the private property are not disproportionate to the extent to which the use contributes to the overall risk to be abated or to the purpose to be furthered; and

(7) Certify that the benefits of the governmental action exceed the estimated compensation costs.

(b) All bills introduced in either house of the Michigan legislature must be accompanied by a takings impact assessment pursuant to the meaning attributed to the taking of private property in Section 4 of this act.

(c) Before undertaking any action or proposing any action which may regulate private property use, the executive department or agency or the municipality or other governmental entity involved shall conduct a takings impact assessment to be included in internal deliberative documents and published in the Michigan register.

(d) A regulation or restraint of a private property use by a governmental entity is prohib-ited unless a takings impact assessment is prepared.

(e) If there is an immediate threat to public health or safety that constitutes an emergency and requires an immediate response, the review of the takings assessment guidelines required under this act may be made when the response is completed.

SECTION 12.   Public Notice.

Public notice shall be given at least sixty days prior to taking any governmental action or promulgation of any proposed rule that may result in a taking. Notice shall include a copy of the takings impact assessment. All identifiable property owners whose property is likely to be affected by the governmental action shall be notified individually.

SECTION 13.   Minimum Necessary Regulation.

Should the governmental entity choose to adopt a proposed regulation or restraint on the use of private property, the governmental entity shall adopt the regulation or restraint that has the least possible impact on private property and still accomplishes the necessary public purpose.

SECTION 14.   Regulatory rollback.

(a) Any private property owner who is or may be affected by a governmental action or proposed action that limits the use of the owner’s real property may request in writing that the governmental actor reconsider the application or need for the action. Within sixty days of receiving the request, the agency shall consider the request and shall in writing inform the landowner whether the agency intends to keep the rule, regulation, or law in place, modify application of it, or repeal it.

(b) If the governmental entity from which compensation is successfully required under this act is unwilling or unable to pay the costs awarded, it may instead roll back the land-use planning, zoning, or other regulatory program as it affects the plaintiff’s land to the previous level of regulation. In that event the governmental unit shall be liable to the plaintiff property owner for the reasonable and necessary costs, plus any actual and demonstrable economic losses caused the plaintiff by the regulation during the period in which it was in effect.