H-0668

AN ACT Relating to compensation to landowners for economic loss due to shoreline management; adding a new chapter to Title 90 RCW; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Because the management of land use through zoning ordinances and other regulatory action, including the preservation of open spaces, is necessary to promote the orderly development and environmental amenities of this state, it is declared by the legislature that this regulation, conservation, and preservation constitutes a valid public purpose justifying public expenditure.

Because the regulation in present form disregards resulting economic impact upon landowners, and in some cases may be so extreme that absent some type of compensation it constitutes the equivalent of an unjust taking, it is further declared that compensation of landowners for economic loss resulting from the regulation is a valid public purpose.

The funding of such compensation is deemed to be the responsibility of the state and its political subdivisions in a case in which the regulation is of state-wide significance.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section shall apply throughout this chapter.

(1) "Regulating body" means the specific city, county, or state government or agency enacting a land use ordinance required by chapter 90.58 RCW, or an agency employing the methods of land management prescribed in this chapter, resulting in economic loss to a landowner.

(2) "Regulation" refers to a restrictive action of a regulating body acting under chapter 90.58 RCW.

NEW SECTION. Sec. 3. Whenever a regulating body imposes regulations which restrict the reasonable use of land and result in significant economic loss to an owner of affected land, the regulating body shall, on request of the landowner, mitigate the loss by offering compensation under one of the following methods established by this chapter:

(1) Acquisition of the restricted interest in the property under section 5 of this act; or

(2) Establishment of a guaranteed sale price under section 9 of this act.

NEW SECTION. Sec. 4. (1) The affected landowner may, within one year of receiving notice of the regulation, request compensation under this chapter from the regulating body. In the request the landowner may elect which of the two forms of compensation is acceptable. Within ninety days of a request for compensation the regulating body shall evaluate the economic loss and offer the landowner appropriate compensation under this chapter for a significant economic loss resulting from a restriction on the reasonable use of the affected land.

(2) If compensation is deemed unjustified by the regulating body, the request may be denied. The landowner may appeal the denial to the superior court of the county in which the property is located.

NEW SECTION. Sec. 5. (1) If compensation is found to be justified, and if the landowner elects, the regulating body shall offer to acquire the interest in the fee simple title which the regulation has unreasonably taken from the landowner. The amount to be offered by the regulating body is the difference between the fair market value of the landowner's interest in the property immediately before and after the imposition of the regulation as determined by the county assessor or other appraiser chosen by mutual agreement of the parties. In no case shall the amount offered exceed twenty percent of the fair market value of the fee simple interest in the property prior to the regulation.

(2) If the amount of compensation under this section is contested by the landowner, the dispute shall be submitted to binding arbitration under the procedures of chapter 7.04 RCW.

NEW SECTION. Sec. 6. (1) If an award for compensation is offered under section 5 of this act, the landowner may reject the offer and retain full title in the affected property. If the compensation under section 5 of the act is accepted, the landowner shall execute and deliver to the regulating body the necessary deed, covenant, servitude, or other document, to transfer to the regulating body the interest in the fee simple title which the regulation has unreasonably taken from the landowner. The document may be recorded in the office of the recording officer of the county where the property is situated and a restriction imposed shall run with the land and shall be considered by the county assessor in establishing the fair market value of the property.

(2) Payments to the landowner under section 5 of this act shall be amortized over a period of ten years at the prevailing prime rate of interest, except that in cases of undue hardship the regulating body may accelerate the payments or make one lump sum payment.

NEW SECTION. Sec. 7. If an interest is acquired in property under section 5 of this act, the regulating body acquiring the interest may not develop, use, or otherwise alter the property except for maintenance and repair or as permitted under existing land use laws at the time of the acquisition.

NEW SECTION. Sec. 8. (1) If at a time subsequent to an acquisition, under section 5 of this act, the restriction imposed by the regulation at issue is removed by repeal, amendment, or otherwise, repurchase of the acquired interest by the then current landowner is mandatory.

(2) The repurchase price is the greater of the following two sums:

(a) The amount originally paid by the regulating body plus interest at the prevailing prime rate; or

(b) That amount that bears the same proportion to the current fair market value of the property as the amount originally paid by the regulating body bore to the then current fair market value, as determined by the county assessor or other appraiser chosen by mutual agreement of the parties.

(3) if the amount of the repurchase price is contested by the landowner, the dispute shall be submitted to binding arbitration under the procedures of chapter 7.04 RCW. Until paid, the repurchase price shall constitute a lien on the property.

NEW SECTION. Sec. 9. (1) If compensation is found to be justified, and if the landowner elects, the regulating body may enter into an agreement with the landowner establishing a guaranteed sale price. By this agreement the regulating body shall guarantee the landowner that a future sale of the property will bring a specified price, to be subsequently adjusted to reflect the rate of inflation evidenced by the United States department of labor national consumer price index.

(2) The guaranteed sale price is the fair market value of the affected property prior to the imposition of the regulation as determined by the county assessor or other appraiser chosen by mutual agreement of the parties. If the amount is disputed by the landowner, it shall be settled by binding arbitration under the procedures of chapter 7.04 RCW.

(3) The owner of the property on which there has been established a guaranteed sale price under this section shall notify the regulating body of an intent to sell the affected property. On such notice the regulating body shall have the right of first refusal to purchase the property for the adjusted guaranteed sale price. If the purchase is declined by the regulating body, and the property is subsequently sold at a price less than the adjusted guaranteed sale price, the regulating body shall pay to the landowner the difference.

(4) If at a time subsequent to a guaranteed sale price agreement the restriction imposed by the regulation is removed by repeal, amendment, or otherwise, the guaranteed sale price agreement shall be null and void.

NEW SECTION. Sec. 10. By declining to request or accept compensation under this chapter, an affected landowner is deemed to have accepted the regulation as reasonable and valid and is not entitled to further appeal. Nothing in this chapter shall prevent a landowner from contesting a regulation on grounds other than that the regulation constitutes an unreasonable restriction on the use and enjoyment of the affected property.

NEW SECTION. Sec. 11. The methods of compensation and appeal, shall constitute the exclusive methods of compensation for land use regulations as defined in this chapter. Nothing in this chapter shall prevent a regulating body from acquiring interests in land or employing another land use planning device or program.

NEW SECTION. Sec. 12. There is created in the general fund the land use compensation fund under the control of the director of the department of ecology. There shall be placed in that fund any moneys as may be appropriated by the legislature or received by the state under section 8 of this act, which moneys shall be used solely for the purposes of this chapter.

NEW SECTION. Sec. 13. Sections 1 through 12 of this act shall constitute a new chapter in Title 90 RCW.

NEW SECTION. Sec. 14. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.