BP BHEAD INT S

AN ACT Relating to procedures for claims involving constitutional property rights; amending RCW 64.40.010; adding new sections to chapter 64.40 RCW; creating a new section; and repealing RCW 64.40.020 and 64.40.030.

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

NEW SECTION. Sec. 1. Recent state and federal supreme court decisions hold that state and local governments and their officials may be liable for financial compensation or other relief if landowners are deprived of constitutional rights by acts under statutes, rules, and ordinances regulating the use of land. The purpose of this act is to provide clear procedures to resolve these claims more promptly, efficiently, and fairly. This act does not address the underlying constitutional issues of whether landowners have been improperly deprived of constitutional rights.

Sec. 2. RCW 64.40.010 and 1982 c 232 s 1 are each amended to read as follows:

As used in this chapter, the terms in this section shall have the meanings indicated unless the context clearly requires otherwise.

(1) "Agency" means the state of Washington, any of its political subdivisions, including any city, town, or county, and any other public body exercising regulatory authority or control over the use of real property in the state.

(2) "Permit" means any governmental approval required by law before an owner of a property interest may improve, sell, transfer, or otherwise put real property to use.

(3) "Property interest" means any interest or right in real property in the state.

(4) "Damages" means reasonable expenses and losses, other than speculative losses or profits, incurred between the time a cause of action arises and the time a holder of an interest in real property is granted relief ((~~as provided in RCW 64.40.020~~)). Damages must be caused by an act, necessarily incurred, and actually suffered, realized, or expended, but are not based upon diminution in value of or damage to real property, or litigation expenses.

(5) "Regulation" means any ordinance, resolution, or other rule or regulation adopted pursuant to the authority provided by state law, which imposes or alters restrictions, limitations, or conditions on the use of real property.

(6) "Act" means a final decision by an agency which places requirements, limitations, or conditions upon the use of real property in excess of those allowed by state or federal constitutional law or by applicable regulations in effect on the date an application for a permit is filed. "Act" also means the failure of an agency to act within time limits established by law in response to a property owner's application for a permit: PROVIDED, That there is no "act" within the meaning of this section when the owner of a property interest agrees in writing to extensions of time, or to the conditions or limitations imposed upon an application for a permit. "Act" shall not include lawful decisions of an agency which are designed to prevent a condition which would constitute a threat to the health, safety, welfare, or morals of residents in the area.

In any action brought pursuant to this chapter, a defense is available to a political subdivision of this state that its act was mandated by a change in statute or state rule or regulation and that such a change became effective subsequent to the filing of an application for a permit.

NEW SECTION. Sec. 3. At least forty-five days before filing suit for relief from an act of an agency or its officials regulating the use of lands in which a complainant has a property interest, the complainant shall give the agency written notice of intent to sue, specifying the facts on which the claim is based and the relief sought. A subsequent suit must be limited to facts and theories disclosed in the notice or in a supplement delivered at least thirty days before suit is filed.

NEW SECTION. Sec. 4. (1) Within forty-five days after receiving a notice of intent to sue under section 3 of this act or a supplement to the notice, the agency may notify the complainant that it:

(a) Has reversed or modified the act as requested;

(b) Will consider reversing or modifying the act within fifteen days after the complainant provides specified information or an explanation of why the specified information cannot be provided at a reasonable cost; or

(2) If dissatisfied with the results of a reconsideration, settlement offer, or alternative dispute process under subsection (1) of this section, the complainant may file a supplement to the notice previously given under section 3 of this act or may file suit without further notice.

NEW SECTION. Sec. 5. (1) If a claim is filed under section 3 of this act against a named individual agency official, within forty-five days the agency in which the official was serving may notify the complainant and the official that it:

(a) Has determined that the alleged act, if true, was or would have been taken by the official in his or her official capacity in accordance with applicable statute, regulation, or policy, and therefore the agency shall defend, indemnify, and hold harmless the official from liability for the act; or

(b) Refuses to ratify the act in question, has reconsidered it, and is responding to the complainant's concerns under section 4 of this act.

(2) If a notice under subsection (1) of this section is not delivered, in a subsequent suit it shall be presumed that the agency was unable to determine whether the acts described in the complainant's original notice, if in fact taken by the named official, were taken in the official's official capacities in accordance with applicable statute, regulation, or policy, and, therefore, that there is not a presumption of validity and regularity for the act.

NEW SECTION. Sec. 6. If the agency determines that a complainant under section 3 of this act has not exhausted all available administrative remedies, within forty-five days after receiving notice of intent to sue it shall notify the complainant of the additional administrative remedies the agency believes are available. In a subsequent suit, a claim of the complainant may not be barred or impaired by failure to exhaust an administrative remedy described in a notice under this section. A complainant, believing that an administrative remedy described in a notice under this section is not available or should be waived because pursuing it would be futile under the circumstances, may notify the agency of the belief in a supplement to the notice previously given under section 3 of this act.

NEW SECTION. Sec. 7. (1) In a suit under a notice filed under section 3 of this act, the agency may elect to do one of the following:

(a) Await the court's decision. The court may declare the agency's act unlawful, issue injunctive relief, and award interim damages of up to one percent of the assessed value of the property in question for each month that the complainant was unlawfully deprived of its use, from the date notice of intent to sue was filed under section 3 of this act, plus attorneys' fees and other expenses incurred in pursuing claims described in the notice. If interim damages are awarded with respect to a permit application or other request for government action to which the landowner was entitled, interim damages begin to accrue forty-five days after the landowner filed a complete application or expiration of a shorter or longer deadline for the government to act;

(b) At any time during the proceedings the agency may elect to acquire the property by eminent domain as of the date it received notice of intent to sue under section 3 of this act. If there is a final judgment that the complainant was deprived of constitutional rights, the complainant may convey the property to the agency and recover compensation in the same manner as if the property had been taken by eminent domain on the date of the notice of intent to sue; or

(c) At any time during the proceedings the agency may elect to record a declaration of partial taking, in a form acceptable to the complainant or approved by the court, and the case shall then proceed as if the agency had acquired the rights described in the declaration by power of eminent domain on the date the declaration was recorded. If there is a final judgment that the complainant was deprived of constitutional rights and no other relief is agreed to within forty-five days, the complainant may record a declaration of partial taking, in a form acceptable to the agency or approved by the court, and the case shall then proceed as if the agency had acquired the rights described in the declaration by power of eminent domain on the date the declaration was recorded.

(2) If the agency fails to make an election under subsection (1) of this section in its answer or before its answer is filed, the court may award whatever form of relief it finds appropriate under the circumstances and may order the agency to reimburse the plaintiff for additional litigation costs reasonably attributable to uncertainty regarding the type of relief that might have been granted.

NEW SECTION. Sec. 8. If a political subdivision of the state receives a notice under section 3 of this act seeking relief from an act it took to implement state law or rule, it may notify the attorney general and the complainant that it believes the act was necessary to comply with or reasonably implement a state law or rule specified in the notice. If the state determines that the political subdivision's act was not required by and did not reasonably implement the state statute or rule cited, the state shall notify the complainant and the political subdivision of this within ninety days after receiving the notice from the political subdivision. The state shall assume full responsibility, or reimburse the political subdivision, for costs reasonably incurred to defend a regulatory action specifically required under state law or rule. The state shall reimburse the political subdivision for an equitable share of costs reasonably incurred to defend regulatory actions that reasonably implement state law or rule but is not directly required by the law or rule. Such defense costs shall be allocated in proportion to the state-wide and local benefits sought to be achieved by the regulatory program, as determined by agreement between the state and political subdivision. If the state and political subdivision are unable to agree to the allocation, it shall be presumed that fifty percent of the costs must be borne by the state and fifty percent by the political subdivision, but either the state or political subdivision may apply to the court for a different allocation to distribute the costs more equitably in the circumstances.

NEW SECTION. Sec. 9. If a complainant ultimately prevails in a case in which defense costs are being paid or shared by the state under section 8 of this act, the state and political subdivision shall equitably share all the financial liabilities to the complainant. The liabilities must be allocated in proportion to the state-wide and local benefits sought to be achieved by the regulatory program, as determined by agreement between the state and political subdivision. If the state and political subdivision are unable to agree to the proportion, it must be presumed that fifty percent of the liabilities must be borne by the state and fifty percent by the political subdivision, but either may apply to the court for a different allocation to distribute the costs more equitably in the circumstances. If at any point in the proceedings either the state or political subdivision makes a settlement offer satisfactory to the complainant that cannot be implemented because of objections by the other governmental party, the state's or political subdivision's ultimate liability must be limited to its reasonable share of the settlement offer.

NEW SECTION. Sec. 10. The following acts or parts of acts are each repealed:

(1) RCW 64.40.020 and 1982 c 232 s 2; and

(2) RCW 64.40.030 and 1982 c 232 s 3.

NEW SECTION. Sec. 11. Sections 3 through 9 of this act are each added to chapter 64.40 RCW.