Bill would allow Maine property owners to sue if regulation cuts value of property

Posted Feb. 20, 2012, at 7:37 p.m.

AUGUSTA, Maine — Should Maine give landowners more recourse when state regulations affect what they can do with their property?

Lawmakers expect many people to testify Tuesday at the State House in Augusta during a public hearing on LD 1810, “An Act To Implement Recommendations of the Committee To Review Issues Dealing with Regulatory Takings.”

Environmentalists and other opponents of the bill believe it would turn the Pine Tree State into a legal quagmire, cost taxpayers a lot of money and weaken laws passed to protect the environment.

“It will be unlike any bill adopted anywhere in the United States,” Pete Didisheim, advocacy director for the Natural Resources Council of Maine, said Monday. “These laws have been defeated in the past for a very good reason. They’re expensive. If you’re actually going to pay compensation claims, it could be millions, or tens of millions of dollars.”

But those in favor say that current laws do not compensate landowners at all when their property has been affected by regulatory actions that include environmental legislation, mandatory setbacks or other rules.

“I’m not looking to create a wave of new lawsuits from this, but I do want to put the Legislature on notice,” said Rep. Andre Cushing, R-Hampden, who is in favor of the bill. “When they enact a broad, sweeping law, they will have to consider the effect on property owners.”

As written, the bill would establish standards for relief when state regulation imposes an “inordinate burden” on a property owner, according to the legislative summary.

It would not be retroactive, but instead would apply to regulations that have yet to be enacted. Property owners who can show that the fair market value of their entire parcel of land has been diminished by at least 50 percent because of state regulations may apply to the state for relief.

They could file suit for financial compensation — and if the state does not have the money to pay the landowner his claim, officials could grant variances allowing the restricted development to occur.

Cushing, who submitted a bill in 2011 that did not pass but led to the creation of the review committee, said that the law currently does not allow for compensation if land has been affected by regulatory actions.

“The courts have established that if you can still park a trailer on the site and have a picnic there, you have not lost the value of your property to a point where you should be compensated,” he said. “People don’t advise their clients to sue, because they know they’re not going to win, based on previous cases.”

Didisheim said that similar bills have come before the Maine Legislature five times since 1995, with all being handily defeated.

“This time, there are significant outside interests who are pushing hard for it,” he said.

Among the bill’s opponents are the Maine Municipal Association, Maine Preservation, Maine Audubon, Maine Conservation Lawyers and the Maine Planning Association.

Didisheim said that establishing the 50 percent property value reduction would be a “creative heyday” for lawyers and appraisers.

“This is a lawyer’s paradise,” Didisheim said. “They’ll be duking it out in courts. One thing that has been learned — the people who benefit the most are corporations and large landowners who have the money to hire consultants, attorneys, to creatively make the case that the state owes them millions.”

Both Cushing and Didisheim alluded to an Oregon law governing regulatory takings that was passed by a citizens’ vote in 2004 and then rejected two years later.

That law was valid retroactively and more than 7,000 lawsuits were filed for claims against the state that totaled nearly $20 billion.

Didisheim called the Oregon law “somewhat similar” to the Maine bill, but Cushing said that they differ on the the most important point.

“It was, quite frankly, disastrous for Oregon, because it was retrospective,” Cushing said. “If Maine does adopt this law — it would only be for new laws passed by the Maine Legislature.”

Supporters of the bill include the Maine Realtors and Developers Association, the Maine Farm Bureau and the Maine Forest Products Council.

Jon Metrick, director of communications at the Maine Forest Products Council, said that his industry group definitely supports the bill. He hears often from people who say they have lost as much as 90 percent of the value of their land because of regulations that include wetlands setbacks.

If the bill is passed, it would be a more balanced approach, he said, and would really benefit small landowners rather than large ones.

“Because of the whole parcel rule, the whole parcel of contiguous land would be considered,” Metrick said.

The way the bill is written, landowners would have to prove a 50 percent decrease in value for their whole property — which would make it nearly impossible for large landowners to sue the state for millions of dollars, he said.

“There has been a lot of ‘The sky is falling, the sky is falling,’ but as long as the Legislature acts responsibly, there could potentially never be a legislative takings case,” he said.

State Sen. Troy Jackson, D-Allagash, said he was on the committee and supports compensating landowners for action that reduces their property value but he does not believe the solution is to grant variances to existing regulations if the state doesn’t have the money to pay the landowners.

“I’m totally against that,” he said. “I already know what’s going to happen. People who are well off will get waivers. Other people won’t. It makes no sense in my mind for the state of Maine to institute laws and then have them apply to a group of people.”

Rep. Charlie Priest, D-Brunswick, said his concern is similar to Jackson’s — that granting variances to existing regulations is the wrong way to go.

“It will lead to a patchwork system of environmental laws,” he said. “It will do away with a rational environmental policy.”

The Judiciary Committee will hold the public hearing on LD 1810 at 1 p.m. Tuesday, Feb. 21, in Room 438 of the Maine State House.

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