AUGUSTA — More than 17 years ago the Legislature resoundingly rejected a bill that would have forced the state to compensate landowners or waive regulations that diminished more than half the market value of their property.
It took several months, but after several extensive public hearings in front of a legislative-commissioned study group, the so-called regulatory takings bill was upended over widespread concerns about its impact, including a deluge of lawsuits, a freeze of land-use regulations and a payday for a handful of developers and landowners at the expense of taxpayers.
Lawmakers on Tuesday will begin reviewing a new takings bill, LD 1810. It’s different from the one the Legislature considered in 1995, yet opponents believe the results will be much the same if it’s enacted.
Meanwhile, supporters, including real estate developers, the Maine Forest Products Council and the Maine Farm Bureau, believe the proposal is in keeping with the Fifth Amendment of the U.S. Constitution that says landowners have the same constitutional protection — the right to compensation — for regulatory takings as they do in land seizures via eminent domain.
They also note that because the bill focuses only on new state regulations — not existing or municipal rules — it will avoid the disastrous impact of a 2004 takings law adopted in Oregon by citizen referendum. The Oregon law, dubbed the “Hate Your Neighbor Act” by critics, produced 7,717 claims demanding compensation worth a total of $20 billion. Towns also sued counties for approving land-use waivers. Neighbors affected by a claim or waiver sued the landowners who sought one.
The Oregon law was largely repealed in 2007.
Proponents say the new Maine bill is closely modeled after a Florida law that’s had less severe results.
Pete Didisheim, with the Natural Resources Council of Maine, said LD 1810 is a “radical bill,” a “first-in-the-nation experiment” that creates “a new entitlement for landowners” who would be able to seek payments from Maine taxpayers for asserted losses in property values.
That Didisheim works for an environmental group may lead his ideological opponents to dismiss such statements. However, lawmakers who may not agree with Didisheim on most other issues have their own concerns about LD 1810.
In fact, the bill very nearly didn’t get printed.
The legislation is the offspring of LD 1477, a bill sponsored by Rep. Andre Cushing, R-Hampden. Cushing’s bill, like another takings proposal introduced last year, couldn’t garner enough support in the Republican-controlled Legislature so it was turned into a study commission. Didisheim, who served on the panel, says it was steered by Catherine Connors, a Pierce Atwood attorney specializing in land-use law.
Critics have also pointed out that Connors and her firm could benefit from a takings law. However, thanks to a 2008 change in the state’s lobbying laws that exempts lobbyists from disclosing their activities if they serve on a study commission, Connors didn’t have to register as a lobbyist or say on whose behalf she was advocating.
State lobbying disclosure reports show two other Pierce Atwood attorneys lobbying the takings bill. In fact, committee documents show that the law firm wrote the legislation that will appear before the Judiciary Committee on Tuesday.
Connors in November told the Sun Journal that the bill would make it so landowners had a better chance of challenging regulatory takings, but not lower the bar so much it would open the floodgates of litigation. Right now, she said, the law is such that if a landowner can “put a trailer or have a picnic” on their property, they can’t claim a regulatory seizure.
The proposal would allow landowners to file a claim for compensation or a waiver if a new regulation diminished 50 percent or more of the market value of their property. Proponents like Connors say the current law is written so that landowners can only claim a taking if 100 percent of the property sees diminished value because of a regulation.
Didisheim said the bill is a “radical” solution in search of a problem. He points to a high rate of permit approvals at Department of Environmental Protection and a “few dozen” denials. He also notes that aggrieved landowners already have mechanism to resolve disputes with state regulations; the Land Use Mediation Program, the result of the failed 1995 takings bill.
The program has dealt with approximately five disputes over the last decade. It’s also slated for elimination under Gov. Paul LePage’s plan to dismantle the State Planning Office.
Didisheim and others are worried that the takings bill will replace the mediation program.
In addition to a sharp increase in lawsuits, opponents also worry that state agencies will green-light regulation waivers because the bill doesn’t create a funding source to pay off claims. A rash of waivers, Didisheim said, could create a scenario that mirrored the Oregon experience where claimants were pit against neighbors who saw their property values decline. While the bill is supposed to deal only with new regulations, Didisheim said the legislation is ambiguous when applied to modifications of existing laws.
Opponents are also concerned that the bill will effectively prevent any future land-use law because opponents can argue that new regulations must carry a fiscal note in order to pay potential claims.
“There’s a reason why these laws are not on the books across the country,” said Didisheim, adding that Maine and dozens of other states had shot down other regulatory takings bills.
Anxiety over the current proposal very nearly killed it in the Judiciary Committee. While the study commission that met last year proposed legislation, it was up to the committee to advance it to the Revisor’s Office for drafting.
The panel did so with a 7-6 vote, with Republicans holding the majority. But one Republican lawmaker, Rep. Bradley Moulton, of York, told the panel he voted to advance the proposal despite strongly opposing it.
Moulton, an attorney, said lawyers would find “creative” ways to exploit the takings proposal should it become law.
Moulton told the committee on Jan. 24 that he was “not unsympathetic to people whose property has been affected” by regulations.
“But I think that they have other ways of approaching it through the legislature and would encourage them to do so,” he said, adding that LD 1810 was a “sledgehammer approach.”
Moulton said the only reason he agreed to send the bill to public hearing was because we was “wary of what may come in its place,” a comment that shows the bill has high-level supporters.
Lobbying disclosures for December and January show the proposal has attracted the attention of powerful actors on both sides of the issue, including NRCM, the Maine Audubon Society, the National Society of Land Surveyors, the Nature Conservancy, the Maine Real Estate & Development Association and others.
Similar takings bills have been advanced by the American Legislative Exchange Council, a national group funded by corporations that drafts model legislation.
Tuesday’s public hearing in front of the Judiciary Committee is scheduled for 1 p.m.