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Measure 39

Proposed by initiative petition to be voted on at the General Election, November 7, 2006.

Ballot Title

PROHIBITS PUBLIC BODY FROM CONDEMNING PRIVATE REAL PROPERTY IF INTENDS TO CONVEY TO PRIVATE PARTY

RESULT OF "YES" VOTE: "Yes" vote prohibits public body from condemning certain private real property if it intends to convey all or part to a private party, with exceptions.

RESULT OF "NO" VOTE: "No" vote retains current law, allowing government to acquire private real property required for an authorized public purpose that involves transferring property to private party.

SUMMARY: The Oregon Constitution allows public bodies to condemn real property required for a public purpose, requires compensation to property owner. Statutes permit owner to challenge amount of compensation in court. Measure prohibits public bodies from condemning private residence, business establishment, farm, or forest operation if government intends to convey all or part of the property to another private party. Measure excludes property condemned as dangerous to health or safety, or for transportation or utility services; allows government to lease condemned property for accessory retail uses. Requires court to decide whether public body unlawfully intended to convey the property to another private person. Expands rights to attorney fees and costs if court prohibits condemnation or if compensation awarded is more than government's initial offer. Other provisions.

ESTIMATE OF FINANCIAL IMPACT: This measure could require annual state budget expenditures of approximately $8 million to $17 million a year.

This measure has no financial effect on state government revenue.

This measure could require local government expenditures of between $8 million to $13 million a year.

This measure has no financial effect on local government revenue.

(See Voters' Pamphlet for Explanation of this financial estimate).


Explanation of Estimate of Financial Impact

This measure could increase the state's budget expenditures for highway rights-of-way by $8 million to $17.25 million a year. County government's property costs could increase between $5 million to $10 million per year. Cities' costs could increase by up to $3 million per year.

A portion of Measure 39 changes the rules for determining when the state, a city or a county must pay attorney's fees and court costs in condemnation cases. Condemnation is an act by a government to acquire privately-owned property for a public purpose, such as highway right-of-way, city streets, public buildings and utilities or to transfer to another party.

When the state, a county or a city needs to acquire property for a public purpose, it offers to buy the property from the owner.. If the property owner is not willing to sell for the amount that is offered, the state, county or city may make one or more higher offers. If no agreement is reached, the case may go to court, where the value of the property that must be paid will be decided. Under current law, each party must pay their own attorney fees, appraiser fees and other related costs - unless the value determined by the court is more than the highest written offer that was made by the government before trial. In that case, the state, county or city must pay the property owner's costs and fees.

This measure would require the government to pay a property owner's fees and other costs if the value determined by the court is more than the first offer made by the government instead of the highest offer made before trial. The financial impact for this measure is based on two assumptions. Property owners may be less likely to accept the initial offer, and more likely to wait for a court to decide the value of their property, if the measure is approved. Also, government may spend more on appraisals before making their first offer.

The state buys about 600 pieces of property each year for highway rights-of-way. In most cases the state and the property owner agree on a sale price. The state goes through the condemnation process for about 10 percent of the properties, and most of those cases are settled without going to trial. If this measure passes, it is assumed that the number of condemnation cases that must be filed could double and that all of them would go to trial. Legal and other costs for the state would increase. It is more likely for those cases that go to trial, that the court would find that the property owner should receive more compensation for the property than the state's first offer, simply because of the amount of time that will pass between the first offer to buy and the date a condemnation case is filed in court. As a result the state would pay attorney fees, appraiser fees and other costs for the property owner.

Committee Members:
Secretary of State Bill Bradbury
State Treasurer Randall Edwards
Lindsay Ball, Director, Dept. of Administrative Services
Elizabeth Harchenko, Director, Dept. of Revenue
Debra Guzman, Local Government Representative

(The estimate of financial impact and explanation was provided by the above committee pursuant to ORS 250.127.)

 

 

Elections Division, Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722