HB-5821, As Passed Senate, September 19, 2006

SENATE 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 $3,500.00 moving allowance

as provided under section 2 of 1965 PA 40, MCL 213.352, and that an

individual who is a residential occupant may not be displaced until

moving expenses or a moving allowance is paid as provided under

1965 PA 40, MCL 213.351 to 213.355, and the person has had a

reasonable opportunity, not to exceed 180 days after the payment

date of moving expenses or the moving allowance as provided under

1965 PA 40, MCL 213.351 to 213.355, to relocate to a comparable

replacement 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.  As used in this subsection, "comparable

replacement dwelling" means any dwelling that is all of the

following:

     (a) Decent, safe, and sanitary.

     (b) Adequate in size to accommodate the occupants.

     (c) Within the financial means of the individual.

     (d) Functionally equivalent.

     (e) In an area not subject to unreasonable adverse

environmental conditions.

     (f) In a location generally not less desirable than the

location of the individual's dwelling with respect to public

utilities, facilities, services, and the individual's place of

employment.

     (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) In determining just compensation, all of the following

apply:

     (a) If an owner  believes  claims that the agency is taking

property other than the property described in the good faith

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

include 1 or more items of compensable property or damage for which

the owner intends to claim a right to just compensation  or claims

a right to compensation for damage caused by the taking, apart from

the value of the property taken, and not described in the good

faith written offer, the owner shall  , for each item,  file a

written claim with the agency stating the nature and substance of

that property or damage. 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 claims  the claim within 90 days after the

good faith written offer is made pursuant to section 5(1) or  60

180 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 later date is set by the

court for reasonable cause. If the appraisal or written estimate of

value is provided within the established period for filing written

claims, the owner's appraisal or written estimate of value may

serve as the written claim under this act. If the owner fails to

timely file the written claim under this subsection, the claim is

barred.

     (b) The parties shall exchange the agency's updated appraisal

reports, if any, and the owner's appraisal report within 90 days

after the expiration of the period for filing written claims,

unless a later date is set by the court in accordance with section

11(1) for reasonable cause. If the agency believes that the

information provided by the owner is not sufficient to allow the

evaluation of the claim, the agency may request additional

information from the owner and, if that information is not

provided, may 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.

If the owner fails to provide sufficient information after being

House Bill No. 5821 as amended September 14, 2006

ordered to do so by the court, the court may assess an appropriate

sanction in accordance with the Michigan court rules for failing to

comply with discovery orders, including, but not limited to,

barring the claim. In addition, the court also shall consider any

failure to provide timely information when it determines the

maximum reimbursable attorney fees under section 16.

     (c) For any claim that has not fully accrued or is continuing

in nature when the claim is filed, the owner shall provide

information then reasonably available that would enable the agency

to evaluate the claim, subject to the owner's continuing duty to

supplement that information as it becomes available. The owner

shall provide all supplementary information at least 90 days before

trial, and the court shall afford the agency a reasonable

opportunity for discovery once all supplementary information is

provided and allow that discovery to proceed until 30 days before

trial. For reasonable cause, the court may extend the time for the

owner to provide information to the agency and for the agency to

complete discovery. <<If the owner fails to provide supplementary

information as required under this subdivision, the court may assess an appropriate sanction in accordance with the Michigan court rules for failing to comply with discovery orders, including, but not limited to, barring the claim. In addition, the court also shall consider any failure to provide timely supplemental information when it determines the maximum reimbursable attorney fees under section 16.>>

     (d) 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  claim, or reject

the claim. If the agency establishes an amount it believes to be

just compensation for the  item of property or damage  claim, the

agency shall submit a good faith written offer for the  item of

property or damage  claim. The sum of the good faith written offer

for all  such  claims submitted under this subsection or otherwise

disclosed in discovery for all items of property or damage 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.

     (e) 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.

     (f) 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.

     (c) The name of each known owner of the property being taken.

     (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 being taken 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, 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

House Bill No. 5821 as amended September 14, 2006

taxable value from the state equalized value, multiplying that

amount by the total property tax millage rate applicable to the

property taken, and multiplying that result by the number of years

the owner or owners have <<owned>> the principal residence, but

not more than 5 years.

     (7) As used in this section, "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 takes effect December

23, 2006.

     Enacting section 2. This amendatory act does not take effect

unless House Bill No. 5820 of the 93rd Legislature is enacted into

law.