The News

Property Rights and the Economy - Implications for Oregon Property Owners

Written by Rachel Barnes
Thursday, 06 May 2010 12:18
Stanford University's Hoover Institution recently published an interesting article entitled "Property Rights and African Poverty." The article, written by James Robinson, professor of government at Harvard University, traces the abject poverty in most of today's Africa to the failure of the African people to secure a stable system of property rights. As Professor Robinson notes, without the means to own, secure, and use real property, societies will not prosper economically, and poverty follows. Control of property by government, in its many forms, serves as a barrier to a prosperous nation. This is not to say that property regulation by government is not necessary - regulations that define property rights and create systems for recording ownership, resolving disputes over ownership, and protecting property owners from trespass, waste, and nuisance are critical for a system of property ownership. In addition, regulations that provide modest limits on property uses are sometimes useful tools for ensuring that competing uses are balanced. Ultimately, however, a society that promotes private property rights will prosper over one that does not. Oregon has a history of aggressive regulation of private property, starting in 1973 with the passage of Senate Bill 100 by the Oregon legislature. Our land use system was unique when it was created, and remains unique today - no other state has copied our zoning model. As Bill Moshofsky notes in his book Regulatory Overkill, Oregon's land use planning system has gone too far, and now serves as a barrier to property rights and economic production. Concentrating power in the hands of the Land Conservation and Development Commission (LCDC), a single state agency composed of seven commissioners who are appointed by the governor, not elected, and who cannot be removed by the legislature or the people, is dangerous. It is more akin to the systems discussed by Professor Robinson than those in countries that have a rich tradition of honoring property rights. This is why Oregon must do a better job of respecting property rights, and take steps toward bringing our land use planning laws in line with those in the other 49 states by allowing local governments to have final authority over land use and planning decisions in their communities. This would make the decision makers accountable to the public. Professor Robinson's article can be on the Hoover Institution's website. Here is the link: http://www.hoover.org/publications/definingideas/87703842.html For copies of Bill Moshofsky book on Oregon's land use planning laws, please visit our website or contact us by telephone (503) 620-0258.
Last Updated on Friday, 07 May 2010 07:35

FINAL LEGISLATIVE UPDATE – 2010 SPECIAL SESSION

Oregonians In Action (OIA) had another successful legislative session in 2010, as the Oregon legislature met for nearly the entire month of February in special session. OIA worked closely with legislators to stop two disastrous bills for rural property owners, and passed a land use bill that provided relief for three groups of rural property owners who had been left out of Measure 49.

Given the dominance of urban Portland legislators in leadership positions in Salem, rural property owners should consider this special session a success. Sometimes success at the legislature is marked by what didn’t pass, as opposed to what new laws were approved.

Here is a rundown on the primary bills affecting rural property owners from the special session:

House Bill 3661:

This bill was by far the most dangerous land use bill introduced this session, precisely because it wasn’t dressed up as a land use bill. In fact, this bill (like others that have preceded it in previous sessions) appeared to be a water bill.

But as OIA has discussed many times in the past, today’s land use battles are now being fought through water bills, and this bill was no exception.

HB 3661, if passed, would have changed the list of exempt groundwater uses allowed in rural areas. An exempt water use is one in which the water user does not need to obtain a water right permit from the Oregon Water Resources Commission (OWRC). Included in the list of exempt uses are domestic wells using up to 15,000 gallons of groundwater a day. Another exemption allows for watering lawns and gardens with no limitation on water use.

HB 3661 would have changed the amount of ground water used by domestic wells, including water used for watering lawns and gardens, to 5,000 gallons per day. But the most dangerous aspect of HB 3661 was that it would have authorized the OWRC to eliminate entirely the exemption for domestic wells, as it applied to any domestic well drilled after the bill passed.

Despite efforts over the years to limit groundwater for domestic wells, neither the legislature nor the OWRC have ever imposed limitations on domestic wells, even in areas labeled as “groundwater limited” or “groundwater critical” by the OWRC. The reason for this is because in every circumstance, the scientific evidence demonstrates that domestic wells use a tiny fraction (less than 5%) of the groundwater in an aquifer.

Conversely, the vast majority of water used in an aquifer is used by farmers for irrigation, or by municipalities (cities) who drill wells to serve residents within cities. In other words, rural property owners with domestic wells are not and have never been the source of the problem when water levels drop in an aquifer.

But facts have never gotten in the way of the proponents of HB 3661. In fact, the motivation behind HB 3661 has nothing to do with declining water levels in aquifers, and is really aimed at prohibiting the drilling of new domestic wells in rural areas. In other words, HB 3661 is designed to stop the construction of new homes in rural areas.

If that’s the motivation behind the bill, then why don’t the proponents simply draft a bill that prohibits rural property owners from building a home on their land? The answer is simple – because that bill wouldn’t pass. In fact, as a result of Ballot Measure 49, if the legislature tried to pass a bill that prohibited rural property owners from building a home on their property, the bill would trigger Measure 49 claims with damages in the hundreds of millions of dollars. No legislature would approve a bill that would trigger such enormous liability to the state.

Moreover, when the legislature referred Measure 49 to the Oregon voters in 2007, they provided relief to thousands of rural property owners who had lost the right to divide their property. In good faith and acting in accordance with Measure 49, these property owners have filed Measure 49 claims, and many have received approval to use their property. If HB 3661 became the law, however, these property owners would now have to obtain a water right permit from the OWRC before they could drill a new domestic well to carry out their Measure 49 approval.

Which leads to the next question – what is so hard about getting a water right permit from the OWRC? The answer is simple – the OWRC is not required to approve a water right permit. In fact, for properties that are located within the vicinity of a water body (river, lake, stream etc.) where the water has been fully allocated to other water users, the OWRC would likely deny a water right permit, even though they have never established that the use of groundwater for domestic wells has an effect on streamflows. This makes sense, given that domestic wells are part of a closed system, where water is pumped from the ground, used, and returned to the ground either directly (e.g. when a lawn or garden is watered), or indirectly (through a septic system). The end result is that domestic wells result in insignificant groundwater use, as the water used is returned to the aquifer.

But that fact would not stop OWRC from denying a water right permit for property owners, including many who have finally obtained a modest amount of relief under Measure 49, after jumping through all the hoops and hurdles imposed by that Measure. If HB 3661 became the law, what the voters had approved would be taken away by the OWRC.

But that’s not the worst part of HB 3661. The bill also applied to property owners who currently have domestic wells on their property. That is the case with nearly all rural residents, whether they’re farmers, ranchers, woodlot owners, or just folks that live in the country.

Under HB 3661, if a domestic well used by a current rural resident ever needed to be replaced, the OWRC could require that property owner to obtain a water right permit before drilling the new well. Not only is the approval of the water right permit not a sure thing (as discussed above), but even if the permit is granted, it currently takes OWRC approximately nine months to issue a permit.

That means that if HB 3661 became law, a property owner whose domestic well dried up or became contaminated could have to apply to OWRC for a water right permit prior to drilling a new well. At a minimum the property owner would have to wait nine months before drilling a new well – where’s the family going to get water for domestic purposes for the next nine months? At worst, the OWRC would deny the permit, leaving the property owner with a rural residence with no running water. If this law passed, do you think that any lender would lend money to someone to buy a rural home? I don’t either.

In short, had HB 3661 become law, it would have had devastating impacts on property values for rural property owners.

Fortunately, OIA wasn’t alone in recognizing the dangers of HB 3661. In fact, a coalition of groups quickly formed to oppose the bill, and with the help of groups like the Oregon Groundwater Association, Water For Life, the Oregon Association of Realtors, and the Oregon Cattleman’s Association, we were able to stop HB 3661 in committee, before it ever reached the floor of the Oregon House.

A big thanks to Representatives Phil Barnhart, Cliff Bentz, Debbie Boone, Bob Jenson, and Jim Thompson for stopping this bill in committee, before it had a chance to get traction.

Senate Bill 1036:

Senate Bill 1036 removed the sunset clause on the “guest ranch” law, a law that was first enacted by the legislature in 1997.

Although the law uses the term “guest ranch,” the more common name of these facilities is a “dude ranch.” A guest ranch is a small facility (similar in size to a bed and breakfast inn) where people can go to experience life on a working ranch. Guests can ride horses, mend fences, herd cattle, and participate in the day to day ranching operations.

Although few guest ranches have been built as a result of the 1997 law, those that have been established have been remarkably successful, with guests coming from around the world to live like a cowboy for a few days.

The 1997 legislation that established guest ranches contained a sunset clause, meaning that the legislation automatically repealed at a fixed date. SB 1036 removed that sunset clause – guest ranches are now a permanent part of Oregon land use law. Although the bill effects few property owners, it is a good bill. Thanks to Senator Ted Ferrioli for this shepherding this bill through the legislature.

Senate Bill 1049:

This bill was OIA’s priority bill for the special session. SB 1049 makes changes to Measure 49 to change the outcome of several hundred Measure 49 claims. The end result is that a number of Measure 49 claimants who have received Measure 49 denials or who would receive a denial under Measure 49 will instead receive a full or partial approval. Although SB 1049 does not provide all of the relief we believe Measure 49 claimants are entitled to receive, it is nevertheless a good bill.

As many of you know, the implementation of Measure 49 has been difficult and problematic for Measure 49 claimants and for the Oregon Department of Land Conservation and Development (DLCD) and the Oregon Department of Justice (DOJ), the two agencies charged with implementing the Measure. Confusion over the language of Measure 49, and confusion over the meaning of state and local laws that were in place decades ago and that have since been changed or repealed have created difficulties for all involved. Often times, it is difficult to know whether a property owner should be entitled to relief under Measure 49.

In addition, as Measure 49 has been implemented, it has become apparent that a number of property owners with legitimate Measure 49 claims were not going to receive approvals under Measure 49, due to the particular wording of one section or another of the Measure.

In 2009, the Oregon legislature adopted HB 3225, which amended and clarified Measure 49 to provide additional relief to a number of Measure 49 claimants who would otherwise have received nothing under the Measure. SB 1049 builds on HB 3225, and provides relief for a few additional categories of claimants.

The first category of claimants who are helped by SB 1049 are those property owners who filed Measure 37 claims with the county, but who did not file a Measure 37 claim with the state. In order to obtain relief under Measure 49, a property owner was required to have filed Measure 37 claims with both the state and the county where their property was located.

Unfortunately, a few counties and a few lawyers advised Measure 37 claimants that they did not have to file a Measure 37 claim with the state in order to get relief. Property owners who relied on this advice were shut out of Measure 49, and received nothing. SB 1049 changes that.

Under SB 1049, a property owner who filed a Measure 37 claim with the county but not the state is entitled to approval for a single family dwelling if the lot or parcel that was the subject of the Measure 37 claim does not currently have a home. If the Measure 37 claim property already contains one or more dwellings and/or one or more lots or parcels, then the property owner is entitled to one new lot or parcel and one new dwelling.

Although OIA strongly advocated for property owners in this category to get the three homes and three lots or parcels that most Measure 49 claimants received, the legislature pared the relief back, due to opposition in the Oregon House and by interest groups opposed to our efforts. Nevertheless, SB 1049 will result in complete relief for some Measure 37 claimants, and partial (yet substantial) relief for others.

The second category of claimants who are helped by SB 1049 are those claimants who filed Measure 49 claims seeking relief under the “conditional path” found in Section 7 of Measure 49, but who failed to file the appraisal required by that section or who filed an appraisal that did not meet the standards set forth in Section 7. Property owners in this category will be entitled to a dwelling if their Measure 49 claim property does not contain a dwelling. If the Measure 49 claim property already has one or more dwelling, the property owner will be entitled to partition the property to create one additional parcel and one new dwelling.

The final category of claimant who is helped by SB 1049 are those claimants who filed Measure 49 claims for property which they acquired after the Land Conservation and Development Commission (LCDC) first adopted its land use goals in January, 1975, but prior to the time LCDC first approved their county’s comprehensive plan and zoning for compliance with those goals, which usually occurred in the early to mid 1980’s. Property owners who purchased rural land during this period faced significant uncertainty and confusion over what uses could be made on their property, due to the broad and vague language in the state land use goals.

DLCD has processed very few Measure 49 claims for property owners who bought in this time period, due to confusion in what standards Goal 3 required during that time. SB 1049 clarifies this issue. Under the bill, property owners who acquired property after January, 1975 but prior to the time the county’s comprehensive plan and zoning ordinance were acknowledged by LCDC can site one dwelling on their property, if their property contains less than twenty acres. For properties between twenty and forty acres, a claimant can site two dwellings and create two parcels. For properties larger than forty acres, a claimant can site three dwellings and create three parcels.

Finally, if a claimant can demonstrate that a county was approving lots or parcels smaller than that allowed by SB 1049, and that the county had considered and applied Goal 3 to those land use determinations, then the DLCD can rely on those decisions and approve partitions and dwellings on smaller parcels, although this will be rare.

Although SB 1049 does not provide as much relief to Measure 49 claimants as OIA sought, it is nevertheless an improvement over the current Measure 49, and will provide relief to Measure 49 claimants whose claims would otherwise have been denied. Thanks to Senator Floyd Prozanski for spearheading this effort.

Senate Bill 1060:

Senate Bill 1060 was the legislature’s latest attempt to resolve the conflict between recreational water users and property owners who own land along the edge of rivers, lakes, and streams. Several efforts at resolving issues concerning navigability have been made over the years, none of which has been successful, despite continued uncertainty on the part of all interested parties, and the lack of meaningful law enforcement for property owners wishing to protect their property from trespassers.

Unfortunately, SB 1060 went far beyond a reasonable compromise that would clarify rights for all parties involved. Instead, the bill granted far-reaching rights to recreational water users at the expense of property owners – rights that do not exist under the most liberal reading of current law.

Moreover, SB 1060 did not create standard, easily identifiable rules that property owners, recreationalists, and law enforcement officials could understand and apply. Instead, SB 1060 seemed to create even more rights for recreationalists, and even less clarity for property owners to rely on when trying to enforce their property rights.

For example, SB 1060 allowed a recreational water user to trespass upon upland property that was “adjacent” to the waterway (but above the high water mark) to “continue the recreational use of the waterway.” What does that mean? How far onto the upland could a recreational water user go and still be “adjacent” to the waterway? 10 feet? 50 feet? 100 feet? And while they were on this “adjacent” land, what kind of “continued recreational use” could they make? Fishing? Picnicking? Camping?

Even worse, in a subsequent amendment to SB 1060, the proponents of the bill proposed to make it a crime for the property owner to interfere with these recreational uses of the property owner’s property. In other words, the legislature wanted to make it a crime for a property owner to prevent trespassers from use of the property.

Fortunately, a coalition of groups joined together to oppose SB 1060. In the end, the bill was amended to create a work group to work on the issue during the interim, but even with those amendments, the bill died on the floor of the Oregon Senate.

The current situation for property owners along rivers, streams, and lakes is not good. Given today’s modern courts, property rights are uncertain, and law enforcement is reluctant to arrest and prosecute trespassers given the uncertainty in the law. For that reason, reaching a compromise with standards that are clear and understandable, and with agreement from law enforcement and prosecutors to enforce those standards makes sense for all parties. Unfortunately, it doesn’t appear that such an agreement will come anytime soon.

Oregon Court of Appeals Gives Dorothy English Justice at Last

October 7th, 2009

Today, the Oregon Court of Appeals entered a judgment for nearly $195,000 to the estate of Dorothy English. This judgment represents the attorney fees and costs which Dorothy incurred in fighting her case against Multnomah County at the Oregon Court of Appeals. In an earlier decision, the Oregon Court of Appeals had awarded Dorothy's estate $1,150,000 in compensation against Multnomah County, and also found that the estate was entitled to the attorney fees and costs incurred in fighting the Measure 37 claim in Multnomah County Circuit Court. These fees and costs are expected to exceed $300,000.

In sum, Multnomah County will be paying Dorothy's estate in excess of $2,000,000 as a result of their decision to make her life miserable and fight every court ruling they lost. That's what you get for being unreasonable.

Here's how the Court of Appeals summarized Dorothy's case:

"We emphasize, finally, that, although the services rendered by English's attorneys were extremely intensive - indeed, exhaustive - their efforts were necessitated by the county's obdurate refusal to satisfy the just compensation judgment that had been rendered final by the county's dismissal of its own appeal from that judgment. It is not unfair to say that this became a war of attrition that should never have had to have been fought. In sum, the county's conduct has protracted this litigation, and created additional work in a case that required prompt resolution due to English's advanced age and ultimately, after her death during the pendency of this appeal, the substitution of the personal representative of her estate as the real party in interest. In the end, English obtained a result that she accurately describes as 'ensuring recovery of $1.15 million, a complete victory." (citations to ORS provisions omitted).

Rarely does a court use words like these to describe a party's conduct in a lawsuit, but Multnomah County made it a point to fight Dorothy at every step of the way, and now the chickens are coming home to roost. This case is near its end, and Multnomah County should cut its losses, pay its debt, and apologize to Dorothy's family for the way their employees have behaved.

Property Owners Gain Ground In 2009 Legislature

by Dave Hunnicut

When the Oregon legislature adjourned on June 29, property owners across the state breathed a sigh of relief. In a session where Oregon property owners faced some remarkably bad proposals, land use bills that would have imposed new restrictions on property owners were defeated, and Oregonians In Action successfully managed to pass three bills that made improvements to Oregon’s property and land use laws.

As the session wore on, it became clear that the focus of the legislature was on taxes and the budget. This is normal, but was heightened this year, due to Oregon’s weak economy. As a result, land use issues did not play a central role at the Capitol, as they had in past sessions. The lack of focus on land use meant that far fewer land use bills were debated. Fortunately, OIA enjoyed some success, and stopped efforts to make Oregon’s broken land use system even worse.

“All in all, we had a pretty good session,” said OIA President Dave Hunnicutt. “Nearly every trade group and business association struggled this session to maintain the status quo, not even hoping that they would make progress. We were able to make some progress for property owners, which was really great, and also pretty surprising. To stop the bad bills and pass a few good ones makes for a good session.”

Hunnicutt indicated that OIA’s success was the result of a number of factors. “First, since land use wasn’t the legislature’s top priority, we were able to work primarily with the members of a single committee, the House Land Use Committee, where nearly all the land use bills originated. That meant that we could prioritize our time with a few key legislators, instead of having to work with legislators on multiple committees. Since land use is such a technical issue, having a single committee that dealt with nearly all the land use bills served both the legislature and OIA well.”

“Second, on land use issues, there was a much better effort by Democrats and Republicans to look for bipartisan solutions. With the exception of the bill designating the Metolius River as an area of critical state concern, every land use bill that passed this session did so in a bipartisan manner. Unlike 2007, when Measure 49 was passed on a straight party line vote, there seemed to be a much better working relationship between the parties on land use issues.”

“Finally, we worked closely with legislators whom we had not worked with in the past,” said Hunnicutt. “We worked closely with our traditional allies, but also had support from legislators who we had not worked closely with in the past, which was great.”

OIA had a number of successes this session. Among them were:

House Bill 3225: This bill amended Measure 49 to allow almost 500 additional Measure 37 claimants to qualify for relief under Measure 49. As a result of a combination of technical errors in the drafting of Measure 49 and mistakes made by claimants trying to complete the Measure 49 process, a number of property owners who should have been entitled to development rights under Measure 49 were excluded from coverage. House Bill 3225 addressed this issue, and restored claims for hundreds of Oregon property owners.

In addition, House Bill 3225 set a deadline for the processing of Measure 49 claims. One of the most frustrating parts of Measure 49 has been the delay it has taken for claims to be processed by the state. The supporters of Measure 49 promised that the limited benefits provided by Measure 49 would be available immediately, yet most Measure 49 claimants have yet to get a final decision from the state on their claim.

House Bill 3225 addresses that situation, and requires the state to issue final decisions in all Measure 49 cases by June 30, 2010. Although this is a far cry from what was promised during the Measure 49 campaign, it is a great acceleration from what has been occurring.

Unfortunately, there were two categories of Measure 37 claimants who will not receive immediate relief under Measure 49. The first category includes those property owners who filed Measure 37 claims with their county, but who failed to make a Measure 37 claim with the State of Oregon. There are nearly 900 property owners in this category, many of whom failed to file a Measure 37 claim with the state because they were advised by their county officials that they didn’t need to do so.

House Bill 3225 requires the Department of Land Conservation and Development (DLCD) to investigate why so many Measure 37 claimants took the time to file Measure 37 claims with the county, but failed to file a claim with the state. This investigation is in progress right now, and will be completed by the end of the year. At that point, DLCD is required to present the results of its investigation to the legislature, who are likely to address this issue when they meet in special session next February.

If you are a property owner who filed a Measure 37 claim with the county but not the state, you need to contact the DLCD immediately.

The second category of claimants who will not receive immediate relief under Measure 49 are those who filed for the Measure 49 “conditional path” (Section 7 of Measure 49), but who failed to file the required appraisal within 180 days after submitting their Measure 49 claim, and thus had their claim denied. Very few property owners who turned in Measure 49 claims chose the “conditional path,” but a number of those who did failed to file the required appraisal.

House Bill 3225 requires the DLCD to investigate the reasons why these “conditional path” claimants chose not to file the required appraisal, and report back to the legislature by the end of the year, so that the legislature can consider the issue in February.

House Bill 2229: House Bill 2229 is the bill that was based on the recommendations of the Big Look Task Force, the 10 member task force appointed by Governor Kulongoski in 2005 to make recommendations on how to fix Oregon’s broken land use laws.

After meeting for nearly three years, the Task Force, working with legislative counsel, prepared House Bill 2229, which was then introduced by the governor. Unfortunately, the Task Force’s bill was a disaster – the bill was so bad that it was opposed by every group involved in land use issues, including OIA.

Normally, when a bill has no support, it meets a quick fate in the legislature. But House Bill 2229 was revived due to a recognition by everyone, including the governor and both parties in the legislature, that Oregon’s land use system needed to be fixed.

While major disagreement continues to exist on how significantly the system needs to be changed, we have successfully changed the debate from “should the land use system be fixed?” to “how should the land use system be fixed?” This is significant.

As a result, House Bill 2229 was significantly amended – to the point that it no longer resembled the original version prepared by the Big Look Task Force. So much for the Task Force efforts, and too bad – the Task Force held so much promise, but was never willing to address the tough questions that would have likely divided the group, but which must be addressed in order to get a meaningful change.

Fortunately, the new version of House Bill 2229 was a great improvement over the original. Under the new version, a county can choose (but is not required) to take a new look at the rural zoning in their county, and make new decisions as to what land is truly farmland or forestland, and what rural land is miszoned as farm or forest land.

A county is still required to make those decisions in compliance with LCDC Goals, and the county decision must still be approved by LCDC, but counties can also take into consideration the growth that has occurred in rural areas in the county over the last 30 years or so, since each county’s first zoning ordinance was approved by LCDC.

This is a significant change, especially in those parts of the state that have experienced significant growth in the last three decades. Although most growth has naturally occurred inside cities, many rural areas of Oregon have changed significantly since the 1970’s, and land that may have once been used for agricultural or forest practices is no longer used in that manner. With House Bill 2229, counties can now take that into account when determining what is farmland and forestland and what isn’t.

Because of the economy, it may be awhile before counties decide to expend the time and effort (and money) to remap their rural lands. However, House Bill 2229 now gives them that opportunity, and could lead to a significant change in zoning patterns in individual counties.

Senate Bill 794: This bill changes the way attorney fees and costs are recovered by property owners in condemnation cases.

As most of you know, government at all levels (state, federal, local) have the power of eminent domain, which is the right to take private property from a private citizen and convert the property to public use.

That right is not unlimited, however. When government condemns private property, it is required to pay just compensation to the property owner for the fair market value of the land taken, plus any diminution in value to any remaining property that will still be in private ownership (in cases of partial takings).

Unfortunately, as anyone who has been involved in a condemnation case can attest, the amount of money a property owner pay to defend themselves in a condemnation case in order to attempt to get a fair price for their land are often times enormous. In many cases, the amount of attorney fees and costs incurred by the property owner is greater than the value of the property being taken.

For this reason, it is critical that property owners be able to recover the costs and attorney fees that they spend to defend themselves in condemnation cases. Condemnation is the most powerful tool in the government’s arsenal relating to real property – it is also the most invasive to private property ownership. Because the impact to the property owner is so tremendous, it is only fair that the government should bear the property owner’s costs and fees incurred to make sure the property owner can truly recover “just compensation.”

In 2006, OIA put Ballot Measure 39 on the ballot. The measure was then approved overwhelmingly by voters. Measure 39 changed Oregon condemnation law relating to attorney fees and costs, and allowed property owners to recover all of the attorney fees and costs they spent in defending themselves in a condemnation action, as long as the compensation award they received at trial was greater than the first offer made by the government wishing to condemn the property.

This was an important change – prior to Measure 39, governments were free to make unreasonable first offers, knowing that they could raise their offer before trial and deprive the property owner of the right to recover all of the costs and attorney fees incurred to recover the fair market value of the property being condemned. In essence, prior to Measure 39, property owners were routinely “lowballed” by condemning governments, and were forced to accept offers that did not truly reflect the fair market value of their property.

Measure 39 changed that for the better. But the measure required the property owner to take a case all the way to trial in order to recover their costs and attorney fees. In my experience as a trial lawyer, most reasonable people want to settle their case before it ever gets to trial – the risk of losing a case at trial, and the costs incurred to litigate a case are simply too high for most people.

Senate Bill 794 changes the way attorney fees and costs are recovered in condemnation cases. The law still requires the government to make you an offer for your property before they begin condemnation proceedings, and allows the government to increase its offer up to 10 days before trial. But now, if the government decides to change its offer before trial, they are required to pay all of the costs and attorney fees which the property owner has spent up to that time. In other words, like Measure 39, Senate Bill 794 stops the practice of “lowballing” by condemning governments, but also allows the property owner to recover their costs and attorney fees at any point during the condemnation proceedings, should the government wish to raise their offer.

This is an important bill for property owners, as it provides significant protections from having to accept unreasonable offers for condemned property for no other reason then the fear of having to pay a lawyer and experts to defend yourself.

In addition, OIA was successful in blocking many bad bills, or watering bills down to remove the most harmful provisions. Among these bills were:

House Bill 3099: House Bill 3099 was aimed at removing a number of land uses that are currently allowed in the exclusive farm use zone. The primary uses that would have been removed under the initial version of the bill were schools (public and private), private parks, landfills, model airplane clubs, and aggregate mines (rock pits) on high value farm soils.

The bill suffered from some obvious flaws. Since 97% of all privately owned rural land in Oregon is zoned for exclusive farm use or forest use, a bill that prohibits uses in an exclusive farm use zone will effectively eliminate the use in rural areas. For example, if you can’t put a landfill in a farm zone, where else are you going to put it – in the middle of town? How about in a rural residential area? Next to a school maybe?

For aggregate mines, the situation is even worse. Since most aggregate mines are located near rivers, and most land near rivers contains high value farm soils, the bill would have resulted in the shut down of most aggregate mines in Oregon. At the same time, the legislature was approving the largest transportation package in Oregon history. Where would the rock needed to make all the improvements come from? Would we truck it or transport it by train from Washington, Idaho, Nevada, or California? If so, how much more would it cost to do so?

And what problem was the bill trying to solve? Are we losing all 16,000,000 acres of exclusive farm use land in Oregon to model airplane clubs? Are rock pits destroying the countryside? Would a new public school on the outskirts of town be the end of the world? Apparently so.

Fortunately, House Bill 3099 was significantly amended from its original version. The version that passed eliminated the changes for aggregate mines, model airplane clubs, and landfills. The bill left the ban on schools, however, unless the school serves a predominately rural population.

While not perfect, the final version of the bill is much better than the original.

Senate Bill 788: This bill requires an applicant for a new domestic well to pay a $300 “fee” to the Water Resources Department after drilling a well.

Domestic wells are one of the many exempt uses which do not require a property owner to obtain a water right. As such, they are not subject to the permitting process. This is a good thing, since obtaining a water right certificate is virtually impossible in Oregon today.

While having to pay a $300 “fee” for the receipt of absolutely no services is a rip-off, Senate Bill 788 is much milder than its earlier versions. In the earlier versions of the bill, domestic wells were removed from the list of exempt water uses, meaning that anyone who applied for a new domestic well would have been required to obtain a water right certificate.

There is one group of property owners who will soon be applying for domestic wells – Measure 49 claimants. If the legislature would have approved the earlier version of Senate Bill 788, it would have effectively wiped out nearly every Measure 49 claim.

In past editions of Looking Forward, articles have warned that water law is the next battleground for property owners. This bill is a prime example of that.

Fortunately, OIA, working closely with Water For Life, the Oregon Ground Water Association, and the Oregon Association of Realtors, was able to delete these requirements from the bill.

House Bill 2227: This bill would have imposed nearly impossible standards for the siting of destination resorts throughout Oregon. While not a typical use for most property owners, destination resorts are popular in many parts of Oregon, and have provided jobs and property tax revenue to many Oregon communities. House Bill 2227 would have made it virtually impossible to site a new resort.

The Oregon Association of Realtors took the lead in defeating this bill, with the help of OIA and others.

Senate Bill 482: This bill would have required nearly every Oregon property owner with an existing septic system to obtain a special use permit every five years to continue to use their septic system. The bill applied only to property owners within a “safe drinking water overlay zone.”

The special use permit was processed in the same manner as a land use permit, meaning a large application fee, a public hearing, and the possibility of appeals to the Oregon appellate courts.

The problem was that the definition of this zone included all land within 200 feet of a surface water source for a municipal water system, or within 50 feet of a water source that eventually drained into a surface water source for a municipal water system. That meant, for example, that every property owner near a creek or underground aquifer that fed into the Columbia or Willamette River would be within the “safe drinking water overlay zone.”

This was an extremely dangerous bill, and was scheduled for a hearing and possible work session. Fortunately, OIA was able to stop this bill before it could gain enough momentum to pass.

All in all, this was a successful session for Oregon property owners.

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