SB 560 Modifies the laws relating to eminent domain and blighted areas
Sponsor: Gross
LR Number: 3104S.04I Fiscal Note:
Committee: Pensions, Veterans' Affairs and General Laws
Last Action: 1/9/2006 - Second Read and Referred S Pensions, Veterans' Affairs and General Laws Committee Journal Page: S57
Title: Calendar Position:
Effective Date: August 28, 2006

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Current Bill Summary


SB 560 - This act modifies the laws relating to eminent domain and "blighted areas".

SECTION 99.805 - This section modifies the definition of blight and specifically states that economic underutilization shall not be a valid factor in determining blight. In addition to the current definition of blight, this section requires that the property in question satisfy the following criteria:

1. The property is in an area of high unemployment; and

2. The property is one with low fiscal capacity; and

3. The area containing the redevelopment area is characterized by low income.

The section also makes the determinations of blight or conservation area a quasi-judicial function, attaching the rights of procedural due process to affected landowners and requiring the governing body to issue findings of fact and conclusions of law displaying clear and convincing evidence for the sufficiency of such finding of blight or conservation area. The findings of fact may be reviewed, de novo, at the request of any owner of property deemed blighted.

Economic development area has been removed from chapter 99 as an option for tax increment financing projects.

This section also removes reference to legal fees, demolition of buildings, and costs of rehabilitation, reconstruction, or repair or remodeling of existing buildings or fixtures as redevelopment project costs. Legal fees are specifically exempted from the definition of redevelopment project costs.

SECTION 99.825 - This section states that tax increment financing projects within a blighted area or a conservation area shall apply to and fund only the following infrastructure projects: highways, roads, streets, bridges, sewers, traffic control systems and devices, water distribution and supply systems, curbing, sidewalks and any other similar public improvements, but in no case shall it include buildings.

Under this section, an ordinance providing for a tax increment finance project for residential development or redevelopment shall not be approved unless unanimous consent for such project is granted by the members of the tax increment finance commission representing the interest of the school boards whose districts are included within the redevelopment plan or redevelopment area.

SECTION 523.015 - Under this section, any extension of a temporary easement, which is granted as a result of condemnation, shall not be granted automatically. Instead, the condemning entity shall only be granted an extension upon completing formal condemnation proceedings and paying the ordered amount of compensation for the extension.

SECTION 523.025 - This section prohibits any political subdivision with an elected governing body from exercising the power of eminent domain or condemnation until the elected governing body approves of the proposed condemnation by a 2/3 majority vote.

SECTION 523.035 - Under this section, after the petition has been filed to begin condemnation proceedings, the court shall, prior to appointing commissioners, determine whether or not:

(1) The condemning entity has the authority to exercise the power of eminent domain;

(2) The property sought to be condemned is subject to eminent domain;

(3) The property sought to be condemned is for a public use; and

(4) The condemning entity is properly exercising the power of eminent domain in the proceeding.

The court may also determine other issues raised by the owner which attacks the validity of the condemning entity?s right to exercise eminent domain.

If the court finds that all the requirements have been met, it shall enter an interlocutory order to such effect. An interlocutory appeal shall lie from such decision as a matter of right. However, if the court finds the requirements have not been met and the condemning entity does not have the authority to exercise the power of eminent domain, the court shall dismiss the petition with prejudice and direct the condemning entity to pay the owner's court costs and attorneys' fees.

SECTION 523.095

This section prohibits the state or any political subdivision thereof from exercising the power of eminent domain to acquire property for economic development, unless the acquisition of such property is expressly authorized by law or the following provisions are fulfilled. No private property that the state or a political subdivision thereof takes using eminent domain shall be used for economic development unless: (1) 7 years have passed since the time of the original authorized taking; and (2) the original owner is offered the right of first refusal to buy the property at the original condemnation price.

The definition of "economic development" means any activity performed to increase tax revenue, tax base, employment rates, or general economic health, when the activity does not result in:

(1) The transfer of land to public ownership;

(2) The transfer of land to a private entity that is a common carrier;

(3) The transfer of property to a private entity that will remove a blighted area; or

(4) The lease of the property to private entities that occupy an incidental area within a public project.

SECTION 523.110 - This section states that when an entity with the power to condemn negotiates with an owner to acquire property, which may eventually be acquired through formal condemnation proceedings, the entity must provide the owner with a summary of his or her rights through certified mail.

SECTION 523.115 - This section requires a condemning entity to give notice of the intent to acquire property before beginning the process of condemnation. Such general notice must include a description of the property, notice of the property owners? rights to a hearing, notice that a decision may be appealed to be heard before a jury, and notice that the condemnor will pay reasonable appraisal costs.

Property owners may employ an appraiser of their choosing, who must be a Missouri certified general appraiser bound by the uniform standards of professional appraisal practice (USPAP). The value of the land shall be equal to the market value with applicable upward adjustments.

Within 90 days of notice, the owners may submit an appraisal to the condemnor, and in return the condemnor must submit its appraisal. All the appraisals may be used to negotiate, but only the condemnor is bound by such appraisals. The condemnor must pay for the costs of the owner?s appraisal, unless several owners exist and they cannot agree on what appraisal to submit.

Under this section, a condemning entity shall not make an offer to purchase property that is less than the market value established by its appraisal, but is not required to make a higher offer in order to be negotiating in "good faith". Any condemning party must make a written offer at least 10 days before the formal filing of a petition with the court to condemn the property. This section provides the form in which such offer must be made and be a verified affidavit.

If the parties fail to reach agreement and the amount of damages awarded the condemnee by the commissioners or by the court or jury, exclusive of interest and costs, is within 20% of the original offer, the condemnee shall pay the condemning entity?s litigation expenses, including court costs and attorney?s fees, in an amount that does not exceed $2,500. If the amount of damages awarded to the condemnee, exclusive of interest and costs, exceeds the amount of the original offer by 20% or more, the condemning entity shall pay the condemnee's litigation expenses, including court costs and attorney's fees, in an amount not to exceed $2,500. If the amount of damages awarded to the condemnee, exclusive of interest and costs, exceeds the amount of the original offer by 50% or more, the condemning entity shall pay the condemnee's litigation expenses, including court costs and attorney's fees, in an amount not to exceed $2,500 and double damages on that portion of the damages that exceeds the amount of the original offer by 20%.

SECTION 523.205 - This section ensures that any political subdivision, not just those receiving federal funding for a project or those proposing a redevelopment plan, which proposes the displacement of persons through the use of eminent domain must establish, by ordinance or rule, a relocation policy that is equal or greater to the requirements of the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. sections 4601 to 4655, as amended).

SUSAN HENDERSON MOORE