SB 098 - A Radical Takings Proposal

Sen. Cary Smith, (R-Billings), SD 27

Senator Cary SmithThis bill is an extreme “takings” bill that attempts to force state and local governments to pay a property owner any time a regulation decreases the value of their property regardless of the need to protect public health, safety and welfare. Similar measures have been defeated in previous legislative sessions because these takings bills try to prevent government from balancing the rights of neighbors. Instead governments would be required to favor an individual property owner regardless of the harm their actions may cause to the neighbor’s health or property values, or community.

Ten Reasons to Oppose Senate Bill 98:

Senate Bill 98 is an extreme “regulatory takings” bill that would expand requirements to compensate property owners if any government action (rules, policies, permit conditions, etc.) could be shown to reduce the market value of even a portion of their property by any amount. SB 98 constitutes a dramatic reinterpretation of the 5th Amendment to the Constitution, one that has not been adopted by any legislative branch or court in this country to date. The bill has a fiscal note of at least $600 million in the first six years to Montana state and local governments, although the true costs are unknown. Local officials unable to pay compensation or litigate claims would be forced to waive the government action in question, severely limiting the enforcement of measures intended to protect public health, safety, and welfare, which has long been recognized as one of the primary functions of government. Below are ten reasons to VOTE NO on SB 98.

1. SB 98 will have a huge impact on taxpayers! It has a fiscal note of at least $600 million in the first six years to Montana state and local government. Compensation requirements would begin at even a 1% impact on property value of even just a portion of the property.

2. Montana communities do not have the ability to take on the additional administrative resources necessary under SB 98. The huge cost to local governments ensures that SB 98 can be expected to violate the Montana Unfunded Mandate Act.

3. Proponents claim this bill only affects new regulations, but this is misleading. SB 98’s compensation requirements are triggered by new regulations and enforcement or application of existing rules and regulations, even if the regulation was passed 20 years ago.

4. SB 98 would force local communities and state agencies to decide whether to use taxpayer dollars to pay claimants for following the same rules that apply to all other property owners, or to waive those laws, even laws with widespread and bipartisan support.

5. SB 98 uses a very broad definition for “action of a governmental entity” that can constitute a taking of real property.  It includes any administrative action, regulatory action, legislative action, statute, law, rule, ordinance, resolution, guideline, policy, and citizen initiative.

6. SB 98 defines “just compensation” in such a way that literally any action taken that regulates real property will result in a taking. Simply put, just about every action taken by government would constitute a compensable taking.

7. SB 98 creates uncertainty over the government’s ability to protect public health and safety. Section 3 exempts actions “narrowly tailored” to protect public health and safety, but it is unclear which actions will be considered narrowly tailored, thus exposing local governments to further legal challenges.

8. Takings claims, exemptions, and other confusing requirements in SB 98 will undoubtedly lead to an avalanche of litigation and create widespread uncertainty in the regulatory arena.

9. SB 98 is nearly identical to Oregon’s Proposition 37. When this ballot initiative passed, Oregon agencies were flooded with almost 7,000 claims totaling $17 billion. Consequently, voters rescinded this law by ballot initiative only 3 years after it passed!

10. SB 98 threatens the ability of government to perform one of its most basic functions – to promote the health, safety, and welfare of the people, a notion that predates our Constitution. As Chief Justice Oliver Wendell Holmes, Jr. famously stated, “Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law.”

MEIC's Position: Oppose | Current bill status: Bill Missed Transmittal Deadline. Indefinitely Postponed in Senate on February 22nd. | Official legislative site

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