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HB-5821, As Passed House, May 31, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 5821

A bill to amend 1980 PA 87, entitled

"The uniform condemnation procedures act,"

by amending section 5 (MCL 213.55), as amended by 1996 PA 474.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 5. (1) Before initiating negotiations for the purchase of

property, the agency shall establish an amount that it believes to

be just compensation for the property and promptly shall submit to

the owner a good faith written offer to acquire the property for

the full amount so established. At the same time, if the taking of

the property might require relocation, the agency shall provide

written notice to the occupants of the property stating that an

eminent domain proceeding has commenced and outlining the

occupants' basic legal rights in the process, including, but not

limited to, the fact that any person who has a leasehold interest

of less than 6 months is entitled to a $5,200.00 moving allowance

pursuant to section 2 of 1965 PA 40, MCL 213.352, and that an

individual who is a residential occupant may not be displaced until

that allowance is paid and the person has had a reasonable

opportunity to relocate to a comparable dwelling. If there is more

than 1 owner of a parcel, the agency may make a single, unitary

good faith written offer. The good faith offer shall state whether

the agency reserves or waives its rights to bring federal or state

cost recovery actions against the present owner of the property

arising out of a release of hazardous substances at the property

and the agency's appraisal of just compensation for the property

shall reflect such reservation or waiver. The amount shall not be

less than the agency's appraisal of just compensation for the

property. If the owner fails to provide documents or information as

required by subsection (2), the agency may base its good faith

written offer on the information otherwise known to the agency

whether or not the agency has sought a court order under subsection

(2). The agency shall provide the owner of the property and the

owner's attorney with an opportunity to review the written

appraisal, if an appraisal has been prepared, or if an appraisal

has not been prepared, the agency shall provide the owner or the

owner's attorney with a written statement and summary, showing the

basis for the amount the agency established as just compensation

for the property. If an agency is unable to agree with the owner

for the purchase of the property, after making a good faith written

offer to purchase the property, the agency may file a complaint for

the acquisition of the property in the circuit court in the county

in which the property is located. If a parcel of property is

situated in 2 or more counties and an owner resides in 1 of the

counties, the complaint shall be filed in the county in which the

owner is a resident. If a parcel of property is situated in 2 or

more counties and an owner does not reside in 1 of the counties,

the complaint may be filed in any of the counties in which the

property is situated. The complaint shall ask that the court

ascertain and determine just compensation to be made for the

acquisition of the described property. ~~If an agency made a good~~

~~faith written offer pursuant to this section before January 28,~~

~~1994 but has not filed a complaint for acquisition of the property,~~

~~the agency may withdraw the good faith written offer and resubmit a~~

~~good faith written offer that complies with this act as amended. If~~

~~a good faith offer is resubmitted pursuant to this subsection,~~

~~attorney fees under section 16 shall be based on the resubmitted~~

~~good faith offer.~~

(2) During the period in which the agency is establishing just

compensation for the owner's parcel, the agency has the right to

secure tax returns, financial statements, and other relevant

financial information for a period not to exceed 5 years before the

agency's request. The owner shall produce the information within 21

business days after receipt of a written request from the agency.

The agency shall reimburse the owner for actual, reasonable costs

incurred in reproducing any requested documents, plus other actual,

reasonable costs of not more than $1,000.00 incurred to produce the

requested information. Within 45 days after production of the

requested documents and other information, the owner shall provide

to the agency a detailed invoice for the costs of reproduction and

other costs sought. The owner is not entitled to a reimbursement of

costs under this subsection if the reimbursement would be

duplicative of any other reimbursement to the owner. If the owner

fails to provide all documents and other information requested by

the agency under this section, the agency may file a complaint and

proposed order to show cause in the circuit court in the county

specified in subsection (1). The court shall immediately hold a

hearing on the agency's proposed order to show cause. The court

shall order the owner to provide documents and other information

requested by the agency that the court finds to be relevant to a

determination of just compensation. An agency shall keep documents

and other information that an owner provides to the agency under

this section confidential. However, the agency and its experts and

representatives may utilize the documents and other information to

determine just compensation, may utilize the documents and other

information in legal proceedings under this act, and may utilize

the documents and other information as provided by court order. If

the owner unreasonably fails to timely produce the documents and

other information, the owner shall be responsible for all expenses

incurred by the agency in obtaining the documents and other

information. This section does not affect any right a party may

otherwise have to discovery or to require the production of

documents and other information upon commencement of an action

under this act. A copy of this section shall be provided to the

owner with the agency's request.

(3) If an owner believes that the good faith written offer

made under subsection (1) did not include or fully include 1 or

more ~~items of compensable property or damage~~ categories of claims

for compensation for which the owner intends to claim a right to

just compensation, the owner shall, for each ~~item~~ category, file

a written claim with the agency. The owner's written claim shall

provide sufficient information and detail to enable the agency to

evaluate the validity of the claim and to determine its value. The

owner shall file ~~all such~~ the claim or claims within 90 days

after the good faith written offer is made pursuant to section 5(1)

or 60 days after the complaint is ~~filed~~ served, whichever is

later, ~~. Within 60 days after the date the owner files a written~~

~~claim with the agency, the agency may~~ unless a different date is

set by the court in accordance with section 11(1). If the agency

believes that the information provided by the owner is not

sufficient to allow the evaluation of the claim, the agency shall

ask the court to compel the owner to provide additional information

to enable the agency to evaluate the validity of the claim and to

determine its value. ~~For good cause shown, the court shall, upon~~

~~motion filed by the owner, extend the time in which claims may be~~

~~made, if the rights of the agency are not prejudiced by the delay.~~

~~Only 1 such extension may be granted.~~ For any claim that has not

fully accrued or is continuing in nature when the claim is filed,

the owner shall reasonably provide information then available that

would enable the agency to evaluate the claim, subject to the owner

reasonably supplementing that information as it becomes available.

After receiving a written claim from an owner, the agency may

provide written notice that it contests the compensability of the

claim, establish an amount that it believes to be just compensation

for the ~~item of property or damage~~ category of claims for

compensation, or reject the claim. If the agency establishes an

amount it believes to be just compensation for the ~~item of~~

~~property or damage~~ category of claims for compensation, the agency

shall submit a good faith written offer for the ~~item of property~~

~~or damage~~ category of claims for compensation. The sum of the good

faith written offer for all such ~~items of property or damage~~

categories of claims for compensation plus the original good faith

written offer constitutes the good faith written offer for purposes

of determining the maximum reimbursable attorney fees under section

16. If an owner fails to file a timely written claim under this

subsection, the claim is barred. If the owner files a claim that is

frivolous or in bad faith, the agency is entitled to recover from

the owner its actual and reasonable expenses incurred to evaluate

the validity and to determine the value of the claim. A residential

tenant's leasehold interest of less than 6 months in the property

is not a compensable claim under this act.

(4) In addition to other allegations required or permitted by

law, the complaint shall contain or have annexed to it all of the

following:

(a) A plan showing the property to be taken.

(b) A statement of purpose for which the property is being

acquired, and a request for other relief to which the agency is

entitled by law.

(d) A statement setting forth the time within which motions

for review under section 6 shall be filed; the amount that will be

awarded and the persons to whom the amount will be paid in the

event of a default; and the deposit and escrow arrangements made

under subsection (5).

(e) A declaration signed by an authorized official of the

agency declaring that the property is being taken by the agency.

The declaration shall be recorded with the register of deeds of

each county within which the property is situated. The declaration

shall include all of the following:

(i) A description of the property to be acquired sufficient for

its identification and the name of each known owner.

(ii) A statement of the estate or interest in the property

being taken. Fluid mineral and gas rights and rights of access to

and over the highway are excluded from the rights acquired unless

the rights are specifically included.

(iii) A statement of the sum of money estimated by the agency to

be just compensation for each parcel of property being acquired.

(iv) Whether the agency reserves or waives its rights to bring

federal or state cost recovery actions against the present owner of

the property.

(5) When the complaint is filed, the agency shall deposit the

amount estimated to be just compensation with a bank, trust

company, or title company in the business of handling real estate

escrows, or with the state treasurer, municipal treasurer, or

county treasurer. The deposit shall be set aside and held for the

benefit of the owners, to be disbursed upon order of the court

under section 8.

(6) If the property is a principal residence for which an

exemption from certain local taxation is granted under section 7cc

of the general property tax act, 1893 PA 206, MCL 211.7cc, and the

amount estimated to be just compensation is greater than 300% of

the taxable value of the property, the agency is obligated to pay

an additional amount to the owner or owners, which shall be

deposited along with the amount estimated to be just compensation

as provided in subsection (5). The additional amount shall be

determined by subtracting the taxable value from the state

equalized value, multiplying that amount by the total property tax

millage rate applicable to the property, and multiplying that

result by 5. As used in this subsection, "taxable value" means that

value determined under section 27a of the general property tax act,

1893 PA 206, MCL 211.27a.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 93rd Legislature are

enacted into law:

(a) House Bill No. 5817.

(b) House Bill No. 5818.

(d) House Bill No. 5820.