By State Rep. Greg Macpherson (D-Lake Oswego, SW Portland). [Editor's note: The following explanation of HB 3540 and HB 3546 is excerpted from Rep. Macpherson's floor speech and is published here by permission.]
House Bill 3540 provides a substantive fix for a range of problems with Measure 37 identified by the Fairness Committee. It refers the fix out for a vote of the people at a future special election.
House Bill 3540 provides compensation in the form of additional home sites allowed on property with a valid Measure 37 claim based on land use regulations since the owner acquired it. By limiting the number of home sites, the bill balances the rights of the claimant with the rights of nearby property owners who relied on the land use regulations in locating homes and businesses.
Like the original Measure 37, the bill limits the home sites to the number the owner could have developed when he acquired the property. But under the referral, up to three home sites are allowed without having to prove any reduction in value. This expedited approval will resolve the great majority of claims simply and promptly.
A claimant who wants more than three home sites must prove a reduction in value with an appraisal showing the value of the land before and after the regulation took effect. The amount of the reduction is increased by interest to the present day and then divided by the current value of a home site to arrive at an additional number of home sites. The result is limited to 10 home sites per property and 20 home sites per claimant statewide. These limits assure that Measure 37 primarily benefits the individual Oregonians who were the focus of the campaign to pass it.
The referral protects Oregon’s natural resource economy by allowing only the three home sites on high value farmland that is zoned for exclusive farm use and on high value forestland. It also protects existing water users by applying the same limitation in areas designated by the state as groundwater limited or critical. Furthermore, the three home sites are limited in size and must be clustered in order to preserve the productivity of the remainder of the property.
House Bill 3540 fixes other problems with Measure 37. An owner’s spouse is treated as the owner back to the date of the marriage. The rights resulting from a waiver of land use restrictions are transferable on sale of the property or on death. But those rights expire if not exercised within 10 years after transfer.
Most of House Bill 3540 deals with land use regulations adopted in the past. Measure 37 continues to apply going forward to new land use regulations with clarifications to reduce litigation. The bill defines “land use regulation” primarily as restrictions on residential uses and clarifies the scope of the “public health and safety” exception provided in the original Measure 37.
House Bill 3540 also includes a threshold requiring at least a 10% reduction in the value of property before the right to compensation or waiver is triggered. To prevent governments from avoiding the threshold with a series of new regulations, a 25% threshold applies for a series of actions within a five-year period.
A property owner who prefers the original Measure 37 can proceed under it based on rights that are vested under common law. But that owner won’t get transferability of rights, won’t get protection for widows, and won’t get the clarifications provided by the bill.
Extension of Time for Claim Processing
House Bill 3546 adds 360 days to the processing time for claims filed since November 1, 2006. Under the original Measure 37 the state and counties must act within 180 days. If a waiver of the land use regulation is not granted within that time, the claimant can file a lawsuit in Circuit Court for the compensation claimed plus attorneys' fees.
Over half of the approximately 7,000 claims filed under Measure 37 were filed in the five weeks from November 1 to December 4, 2006. A procedural deadline in the original measure that makes it more difficult to file after the latter date set off this wave of claims. On about May 11, the state will start to miss its 180-day deadline on pending claims if House Bill 3546 is not enacted. The bill includes an “emergency clause”, making it effective when the Governor signs it.
The addition of 360 days to the processing time will allow the state to handle pending claims at the rate it has managed in the past. House Bill 3546 includes protection for claimants who die during the extended processing period. Their heirs step into their shoes without any loss of rights.