45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO PROPERTY; ENACTING THE PRIVATE PROPERTY PROTECTION ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--This act may be cited as the "Private Property Protection Act".

Section 2. DEFINITIONS.--As used in the Private Property Protection Act:

A. "government unit" means a political subdivision of the state, including a board, commission, council or combination thereof, or department or agency in the executive branch of government;

B. "market value" means the price a buyer would pay a seller after considering all factors in the marketplace that influence the price of private property;

C. "nonregulatory act" includes closure of a military base or government facility;

D. "owner" means a person or other legal entity holding legal or equitable title to private property for all its beneficial uses available at the time of acquisition and for the value of its future dispositions;

E. "private property" means an interest in real property as recognized by common law, including land, ground water or surface water rights of any kind that are not owned by the federal government or a government unit; and

F. "regulatory program" means an action of a government unit that affects an owner's private property in whole or in part, temporarily or permanently, in a manner that restricts or limits the owner's vested rights in property that would otherwise exist in the absence of the government action. A "regulatory program" includes a land-use planning or zoning program.

Section 3. INVERSE CONDEMNATION.--

A. Whenever implementation of a regulatory program by a government unit operates to reduce the market value of private property by twenty-five percent for the uses permitted at the time the owner acquired a title interest, or the date immediately preceding the effective date of the regulatory program, whichever is later, the property is deemed to have been taken for the use of the public.

B. The owner of private property described in Subsection A of this section may either require condemnation by and just compensation from the government unit that imposed the regulatory program resulting in decreased value, or receive compensation for the reduction in value caused by the regulatory program.

C. The compensation for private property taken shall be for the full value of the interest taken or for the full amount of the decrease in market value, and compensation shall not be limited to the amount by which the decrease in market value exceeds twenty-five percent of value as calculated pursuant to Subsection A of this section. The market value shall be established by fully accredited commercial appraisers.

D. Government units subject to the provisions of the Private Property Protection Act shall not make waiver of the provisions of that act a condition for approval of the use of private property or the issuance of a permit or other entitlement. An owner of private property may accept an approval of use, permit or other entitlement granted by a government unit without compromising rights pursuant to the Private Property Protection Act if:

(1) a written reservation of rights is made at the time of acceptance of the authorization, permit or other entitlement; or

(2) an oral statement reserving rights is made before the government unit granting the authorization, permit or other entitlement at a public meeting at which the government unit renders its decision.

E. A percent reduction in market value shall be determined by comparing the market value of the private property when the regulatory program is in effect to the market value when the program is not in effect.

Section 4. EXCEPTIONS.--No compensation is required pursuant to the Private Property Protection Act if the regulatory program:

A. is a nonregulatory act that results in a diminution of the value of the private property but does not otherwise destroy, damage, trespass upon or take the property or prohibit any rightful use of the property;

B. prohibits a use of the private property that is injurious or potentially injurious to the public health and safety or is a public nuisance, as defined by common law, statute or rule unless the use is an unproven potentially injurious use; or

C. produces benefits to the owner equivalent to or greater than any loss to the owner as determined by the market value of the property before and after the action.

Section 5. STATUTE OF LIMITATIONS.--

A. The statute of limitations for actions brought pursuant to the Private Property Protection Act is the statute of limitations for ordinary actions brought for injuries to real property, except that the time begins to run upon the final administrative decision implementing the regulatory program affecting the owner's private property.

B. A regulatory program is implemented with respect to an owner's private property when actually applied to that property unless the enactment of the program by itself operates to reduce the market value of the property, or any legally recognized interest therein, to less than seventy-five percent of its market value for the uses permitted at the time the owner acquired a title interest, in which case the date of enactment is the date of implementation.

Section 6. ENFORCEMENT--BINDING ARBITRATION.--

A. An owner may enforce the provisions of the Private Property Protection Act by filing a complaint and a written demand for binding arbitration with the government unit that implemented or mandated the regulatory program. Within thirty days after the filing of the complaint, the owner and the government unit shall each designate an arbitrator and the two arbitrators shall select a third arbitrator. The arbitrators shall be independent individuals with no vested interest in the result of the arbitration and shall be versed in property law or property values and preferably have experience in the practice of law. The arbitration panel shall conduct a hearing within sixty days of the filing of the complaint. Unless otherwise provided in this section, the procedures for the arbitration shall be governed by the Uniform Arbitration Act. The award of the arbitration panel shall be final and binding. No arbitrator shall be subject to liability for actions taken pursuant to this section.

B. The owner and the government unit shall share the cost of the arbitration panel and each party shall otherwise bear its own costs.

C. If the government unit is a political subdivision of the state and if the arbitration panel finds that the government unit implemented the regulatory program because of a mandate imposed by a federal or state agency or a federal or state law, then the owner's complaint shall be dismissed; provided that nothing in the Private Property Protection Act prohibits such an owner from filing another complaint with the appropriate state agency.

D. A government unit subject to an award of compensation under the Private Property Protection Act shall, within thirty days after the award, pay to the owner the awarded compensation.

E. Alternatively, the government unit against which inverse condemnation is successfully required under the Private Property Protection Act may, within thirty days of the decision rescind the land use planning, zoning or other regulatory program as it affects the owner's private property and all similarly situated land in the jurisdiction in which the regulatory program is in effect, without further public hearings, proceedings or environmental review. If the government unit elects to rescind the affected regulatory program, the program that was in effect previously shall automatically be in effect. In that event, the government unit shall be liable to the owner for the reasonable and necessary costs of the inverse condemnation action, plus any actual and demonstrable economic losses caused the owner by the regulatory program during the period in which that program was in effect.

F. This section does not affect any remedy that is constitutionally required.

G. Any permit, authorization or other entitlement granted under a regulatory program rolled back pursuant to this section shall, at the owner's discretion, continue to be valid, notwithstanding any provision of law in the program reinstated by the rollback.

Section 7. LEGAL CHALLENGES.--Nothing in the Private Property Protection Act precludes an owner from bringing legal challenges to a regulatory program affected by that act in instances where the regulatory-program-caused diminution in value of the private property or its use does not exceed twenty-five percent of market value for the uses permitted at the time the owner acquired title interest, and nothing in the Private Property Protection Act precludes an owner from bringing a legal challenge to a regulatory program affected by that act based on other provisions of law.

Section 8. PROPERTY TAX ADJUSTMENT.--If the arbitration panel finds that the regulatory program has reduced the market value of a taxpayer's private property, the county assessor shall adjust the value of the property for taxation purposes to reflect that decrease.

Section 9. APPLICABILITY.--No complaint shall be brought pursuant to the Private Property Protection Act for damages caused by a regulatory program in effect or proposed and pending prior to the effective date of that act.