BILL NUMBER: SB 1650 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 20, 2006
AMENDED IN SENATE APRIL 6, 2006
INTRODUCED BY Senators Kehoe and Dunn
FEBRUARY 24, 2006
An act to amend Section 1263.510 of, and to add Sections 1245.245
and 1263.615 to, the Code of Civil Procedure, relating to eminent
domain.
LEGISLATIVE COUNSEL'S DIGEST
SB 1650, as amended, Kehoe Eminent domain.
Existing law requires the governing body of a public entity to
adopt a resolution of necessity, as specified, and send related
notices before commencing an eminent domain proceeding. Existing law
provides that an owner of property taken by eminent domain is
entitled to compensation, including compensation for goodwill.
This bill would require the governing body of a public entity
to adopt a new resolution of necessity, as specified, and
send related notices , before the public entity
may use the property , in whole or in
part, that is subject to a resolution of necessity, as
specified, for a public use other than the public use
for which the public entity originally acquired the property
stated in the resolution to adopt a resolution
authorizing a different use of the property by a vote of at least 2/3
of all members of the governing body of the public entity or a
greater vote as required by statute, charter, or ordinance. The bill
would also require a public entity to sell property that is not used
for the public use stated in the resolution within 10 years of the
adoption of the resolution unless the governing body adopts a
resolution authorizing a different use or reauthorizing the existing
stated public use by a vote as described above . Among
other conditions, the bill would require that a new resolution be
approved by at least 2/3 of all members of the governing body of the
public entity. The bill would provide that specified
property subject to the new resolution procedure be offered back to
the original owner or owners of the property, subject to certain
requirements, if the new resolution fails passage
public entity fails to adopt a new resolution or a resolution
reauthorizing the stated public use . The bill would require
the Department of Housing and Community Development to provide
specified information to a public entity in connection with property
that is a single-family residence.
This bill would also require a public entity acquiring property
under specified circumstances to offer the owner of the property a
one-year leaseback agreement for that property owner's continued use,
subject to the property owner's payment of fair market rents and
compliance with other specified conditions, unless the public entity
states in writing that the development of the property is scheduled
to begin within two years of its acquisition. With regard to the
calculation of compensation for the property taken, the bill would
prohibit additional goodwill value from accruing during the
leaseback.
The bill would apply prospectively, as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1245.245 is added to the Code of Civil
Procedure, to read:
1245.245. (a) Before a public entity may use any property
acquired by any means set forth in subsection (b), in whole or in
part for a public use other than the public use for which the public
entity acquired the property as provided in a resolution of necessity
pursuant to this article, the governing body of the public entity
shall adopt a new resolution relating to that changed use which makes
the findings detailed in Section 1245.230. In addition to any other
notice required by law, the notice required pursuant to this section
shall comply with the requirements of Section 1245.235 and shall be
sent to each person who was given the notice required by Section
1245.235 in connection with the original acquisition of that property
by the public entity. Any judicial review of this resolution shall
be governed by Section 1245.255. The new resolution shall be adopted
by approval of at least of two-thirds of all the members of the
governing body of the public entity, unless a greater vote is
required by statute, charter, or ordinance.
(b)
1245.245. (a) Property acquired by a public
entity by any means set forth in subdivision (e) that is subject to a
resolution of necessity adopted pursuant to this article shall only
be used for the public use stated in the resolution unless the
governing body of the public entity adopts a resolution authorizing a
different use of the property by a vote of at least two-thirds of
all members of the governing body of the public entity, or a greater
vote as required by statute, charter, or ordinance. The new
resolution shall contain all of the following:
(1) A general statement of the new public use that is proposed for
the property and a reference to the statute that would have
authorized the public entity to acquire the property by eminent
domain for that use.
(2) A description of the general location and extent of the
property proposed to be used for the new use, with sufficient detail
for reasonable identification.
(3) A declaration that the governing body has found and determined
each of the following:
(A) The public interest and necessity require the proposed use.
(B) The proposed use is planned and located in the manner that
will be most compatible with the greatest public good and least
private injury.
(C) The property described in the resolution is necessary for the
proposed use.
(b) Property acquired by a public entity by any means set forth in
subdivision (e) that is subject to a resolution of necessity
pursuant to this article, and is not used for the public use stated
in the resolution of necessity within 10 years of the adoption of the
resolution of necessity, shall be sold in accordance with the terms
of subdivisions (f) to (h), inclusive, unless the governing body
adopts a resolution according to the terms of subdivision (a) or a
resolution according to the terms of this subdivision reauthorizing
the existing stated public use of the property by a vote of at least
two-thirds of all members of the governing body of the public entity
or a greater vote as required by statute, charter, or ordinance. A
reauthorization resolution under this subdivision shall contain all
of the following:
(1) A general statement of the public use that is proposed to be
authorized or reauthorized for the property and a reference to the
statute that authorized the public entity to acquire the property by
eminent domain for that use.
(2) A description of the general location and extent of the
property proposed to be used for the public use, but not yet in use
for the public use, with sufficient detail for reasonable
identification.
(3) A declaration that the governing body has found and determined
each of the following:
(A) The public interest and necessity require the proposed use.
(B) The proposed use is planned and located in the manner that
will be most compatible with the greatest public good and least
private injury.
(C) The property described in the resolution is necessary for the
proposed use.
(c) In addition to any notice required by law, the notice required
for a new or reauthorization resolution sought pursuant to
subdivision (a) or (b) shall comply with the requirements of Section
1245.235 and shall be sent to each person who was given notice
required by Section 1245.235 in connection with the original
acquisition of the property by the public entity.
(d) Any judicial review of an action pursuant to subdivision (a)
or (b) shall be governed by Section 1245.255.
(e) The following property acquisitions are
subject to the requirements of this section:
(1) Any acquisition by a public entity pursuant to eminent domain.
(2) Any acquisition by a public entity following adoption of a
resolution of necessity pursuant to this article for the property.
(3) Any acquisition by a public entity prior to the adoption of a
resolution of necessity pursuant to this article for the property,
but subsequent to a written notice that the public entity may take
the property by eminent domain.
(c) If the new resolution required by this section fails,
(f) If the public entity fails to adopt
either a new resolution pursuant to subdivision (a) or a
reauthorization resolution pursuant to subdivision (b), as required
by this section, the public entity shall offer the original
owner or owners of the property the right of first refusal to
purchase the property at the present fair market value, as determined
by independent, licensed appraisers, except as provided in
subsection (d) subdivision (g) .
(d) If the new resolution required by this section fails
(g) If the public entity fails to adopt
either a new resolution pursuant to subdivision (a) or a
reauthorization resolution pursuant to subdivision (b) for a
property that is a single-family residence, as required by this
section, the public entity shall offer the original owner or
owners of the property the right of first refusal to purchase the
property at an affordable price, which price shall not be
less than the price paid by the agency for the original acquisition,
unless the acquisition price was greater than the current fair market
value, and shall not be greater than the price paid
by the agency for the original acquisition, adjusted for inflation,
and shall not be greater than fair market value, if the
following requirements are met:
(1) The original owner or owners certify their income to the
public entity as persons or families of low or moderate income.
(2) If the single-family residence is offered at a price that is
less than fair market value, the public entity may verify such
certifications of income in accordance with procedures used for
verification of incomes of purchasers and occupants of housing
financed by the California Housing Finance Agency.
(3) If the single-family residence is offered at a price that is
less than fair market value, the public entity shall impose terms,
conditions, and restrictions to assure that the residence will remain
available to persons or families of low or moderate income and
households with incomes no greater than the incomes of the present
occupants in proportion to the area median income. The Department of
Housing and Community Development shall provide to the public entity
recommendations of standards and criteria for those prices, terms,
conditions, and restrictions.
(e)
(h) If the original owner of a property does not choose
to purchase the property as provided in subsections (c) and
(d) subdivisions (f) and (g) of this section,
the public entity shall sell the property as surplus property
pursuant to Article 8 (commencing with Section 54220) of Chapter 5 of
Division 2 of Title 5 of the Government Code.
(i) If residential property acquired by a public entity by any
means set forth in subdivision (e) is sold as surplus property
pursuant to subdivision (h), and that property was not used for the
public use stated in a resolution of necessity adopted pursuant to
this article or a resolution adopted pursuant to subdivisions (a) or
(b) between the time of its acquisition and the time of its sale as
surplus property, the public entity shall pay to the original owner
the sum of any financial gain between the original acquisition price,
adjusted for inflation, and the final sale price.
(j) Upon completion of any acquisition described in subdivision
(e) or upon the adoption of a resolution of necessity pursuant to
this section, whichever is later, the public entity shall give
written notice to the owners or formers owners of the properties
acquired as described in subdivision (e) stating that the notice,
right of first refusal, and return of financial gain rights discussed
in this section may accrue.
SEC. 2. Section 1263.510 of the Code of Civil Procedure is amended
to read:
1263.510. (a) The owner of a business conducted on the property
taken, or on the remainder if such the
property is part of a larger parcel, shall be compensated for loss of
goodwill if the owner proves all of the following:
(1) The loss is caused by the taking of the property or the injury
to the remainder.
(2) The loss cannot reasonably be prevented by a relocation of the
business or by taking steps and adopting procedures that a
reasonably prudent person would take and adopt in preserving the
goodwill.
(3) Compensation for the loss will not be included in payments
under Section 7262 of the Government Code.
(4) Compensation for the loss will not be duplicated in the
compensation otherwise awarded to the owner.
(b) Within the meaning of this article, "goodwill" consists of the
benefits that accrue to a business as a result of its location,
reputation for dependability, skill or quality, and any other
circumstances resulting in probable retention of old or acquisition
of new patronage.
(c) If the public entity and the owner enter into a leaseback
agreement pursuant to Section 1263.615, the following shall apply:
(1) No additional goodwill shall accrue during the lease.
(2) The entering of a leaseback agreement shall not be a factor in
determining goodwill. Any liability for goodwill shall be
established and paid at the time of acquisition of the property by
eminent domain or subsequent to notice that the property may be taken
by eminent domain.
SEC. 3. Section 1263.615 is added to the Code of Civil Procedure,
to read:
1263.615. (a) A public entity shall offer a one-year leaseback
agreement to the owner of a property to be acquired by any method set
forth in subsection subdivision (b)
for that property owner's continued use of the property upon
acquisition, subject to the property owner's payment of fair market
rents and compliance with other conditions set forth in subdivision
(c), unless the public entity states in writing that the development
or redevelopment of the property for its stated public use is
scheduled to begin within two years of its acquisition. This section
shall not apply if the public entity states in writing that a
leaseback of the property would create or allow the continuation of a
public nuisance to the surrounding community.
(b) The following property acquisitions are subject to the
requirements of this section:
(1) Any acquisition by a public entity pursuant to eminent domain.
(2) Any acquisition by a public entity following adoption of a
resolution of necessity pursuant to Article 2 (commencing with
Section 1245.210) of Chapter 4 for the property.
(3) Any acquisition by a public entity prior to the adoption of a
resolution of necessity pursuant to Article 2 (commencing with
Section 1245.210) of Chapter 4 for the property, but subsequent to a
written notice that the public entity may take the property by
eminent domain.
(c) The following conditions shall apply to any leaseback offered
pursuant to this section:
(1) The lessee shall be responsible for any additional waste or
nuisance on the property, and for any other liability arising from
the continued use of the property.
(2) The lessor may demand a security deposit to cover any
potential liability arising from the leaseback. The security deposit
shall be reasonable in light of the use of the leased property.
(3) The lessor shall be indemnified from any legal liability and
attorneys attorney's fees resulting
from any lawsuit against the lessee or lessor, arising from the
operation of the lessee's business or use of the property.
(4) The lessor shall require the lessee to carry adequate
insurance to cover potential liabilities arising from the lease and
use of the property, and shall require that insurance to name the
lessor as an additional insured.
(5) Additional goodwill shall not accrue during any lease.
(6) The lessee shall be subject to unlawful detainer proceedings
as provided by law.
(d) A public entity shall offer to renew a leaseback agreement for
one-year terms, subject to any rent adjustment to reflect inflation
and upon compliance with other conditions set forth in subdivision
(c), unless the public entity states in writing that the development
or redevelopment of the property for its stated public use is
scheduled to begin within two years of the termination date of the
lease. At least 60 days prior to the lease termination date, the
public entity lessor shall either offer a one-year renewal of the
lease or send a statement declaring that the lease will not be
renewed because the development or redevelopment of the property is
scheduled to begin within two years of the lease termination date.
The lessee shall either accept or reject a lease renewal offer at
least 30 days prior to the lease termination date. The lessee's
failure to accept a renewal offer in a timely manner shall constitute
a rejection of the renewal offer. A lessor's failure to offer a
renewal or give the notice as required shall extend the lease term
for 60 day increments until an offer or notice is made, and if a
notice of termination is given after the lease termination
date, the lessee shall have no less than 60 days to vacate the
property. A lessee's failure to accept within 30 days a renewal offer
made subsequent to the lease termination date shall constitute a
rejection of the offer.
(e) A party who holds over after expiration of the lease shall be
subject to unlawful detainer proceedings and shall also be subject to
the lessor for holdover damages.
(f) A leaseback entered into pursuant to this section shall not
affect the amount of compensation otherwise payable to the property
owner for the property to be acquired.
SEC. 4. This act shall apply prospectively and
shall apply to property acquired after January 1, 2007.