Chapter 2.45 REAL PROPERTY COMPENSATION PROCEDURES

The purpose of this chapter is to establish a procedure for evaluation of claims for real property compensation under the terms of Ballot Measure 37, approved by the voters, November 2, 2004. A claim for just compensation may be made based upon restrictions on the use of private real property that reduce the fair market value of the property or any interest therein. The prompt and thorough processing of claims will include consideration of the applicant’s property rights, the remedies to preserve and protect limited public funds, the preservation and protection of the interests of the community by providing for public input into the process, and the establishment of an adequate record for judicial review. [Ord. 1209 § 2, 2005.]

2.45.030 Definitions.

As used in this chapter, words and phrases shall have the same meaning as those added to ORS Chapter 197 by Ballot Measure 37, passed November 2, 2004, unless differently defined herein.

“Application” means a statement in writing with the minimum required information as provided in MCC 2.45.040 and signed by the owner.

“Appraisal” means a written report by an appraiser licensed by the Appraiser Certification and Licensure Board of the State of Oregon.

“Claims consent agenda” means a list of claims on which the board may take final action without a public hearing unless one has been requested.

“Enforce” means the denial of a validly submitted land use application declaring the use proposed by the owner to be unlawful or not permitted within the existing zone, or the mandatory removal of an unlawful use within the existing zone.

“Exempt regulation” includes, but is not limited to:

1. A regulation restricting or prohibiting activities commonly and historically recognized as public nuisances under common law;

2. A regulation restricting or prohibiting activities for the protection of public health and safety, such as fire and building codes, health and sanitation regulations, solid or hazardous waste regulations, and pollution control regulations;

3. A regulation required to comply with federal law;

4. A system development charge;

5. A regulation restricting or prohibiting the use of a property for the purpose of selling pornography or performing nude dancing;

6. A regulation enacted prior to the date of acquisition of the property by the owner or a family member of the owner who owned the subject property prior to acquisition or inheritance by the owner, whichever occurred first;

7. Any regulation determined or declared by applicable judicial decision or legislative act to be exempt.

“Fair market value” means the price stated in terms of dollars that a willing buyer would pay for the real property without any obligation to buy from a willing seller without any obligation to sell.

“Just compensation” means an amount of money equal to the reduction in the fair market value of the affected property interest resulting from enactment or enforcement of a land use regulation as of the date the owner makes written demand for compensation under Measure 37.

“Nuisance” means a structure or condition on property arising from any act or omission, which unreasonably interferes with a right common to members of the general public and not necessarily related to the use and enjoyment of land by any person other than the owner of the property that is the site of the nuisance.

“Owner” means the present person with a recorded interest in private real property that is the subject of a claim for compensation or any interest therein. The owner must be a person who is the sole fee simple owner of the real property or all joint owners whose interests add up to a fee simple interest in the property.

“Person” means and includes any individual, partnership, corporation, association, firm, limited liability company, joint stock company, governmental subdivision or agency or public or private organization of any kind.

“Planning director” means the Marion County planning director or designee.

“Real property” means any lot, parcel or tract or any combination thereof, that is owned by an owner, including structures built or located on the real property, and any recordable legal, equitable, future or contingent interest in all or any portion of the property. Real property does not include public property, personal property or easements over, above or below public property. Unless the context otherwise indicates, “property” shall mean real property.

“Reduction in fair market value” means the difference in fair market value of real property, as it exists at the time a claim is made under Measure 37, with and without application or enforcement of a land use regulation.

“Waiver” means the act or decision to modify, remove, or not apply a land use regulation that restricts the use of applicant’s land, and has the result of reducing the fair market value of applicant’s land. Waiver includes any conditions attached thereto by the county. Acceptance of a waiver by an applicant precludes compensation or other demand for the Measure 37 claim for which the waiver was granted. [Ord. 1242 § 3(1), 2006; Ord. 1239 § 3(1, 2), 2006; Ord. 1209 § 3, 2005.]

2.45.040 Application.

A. An application for just compensation must be signed by the owner and submitted to the planning director. The complete application shall include:

1. Name, address and telephone number of the owner(s) filing the claim.

2. A copy of the conveyance document that shows the date of acquisition and ownership interest of applicant in the property, including a legal description and physical address of the property.

3. A copy of a document evidencing denial of a validly submitted land use application or an enforcement letter mandating removal of an unlawful use within the existing zone.

4. Evidence that establishes the current owner’s interest in the property and, if applicable, a family member’s interest in the property, the date each interest was acquired, and that there has been continuous ownership from the acquisition date(s).

5. Identification of the proposed use that currently is or has been restricted.

6. Evidence, such as a real estate professional’s opinion, comparable sales information, or an appraisal, that establishes the fair market value of the property has been reduced by the enactment or enforcement of the land use regulations at issue.

7. An application fee to be established by separate board order.

8. The planning director may elect to process a claim lacking one or more of the requirements above, or may process a claim with the understanding that missing requirements will be provided by a certain date in the future.

B. The applicant may provide the following documents or information if the applicant believes that they may be useful in evaluating the claim:

1. Copies of any reports, plans, site plans and other documents submitted to the county for any previous applications for land use, verification, or permit approval, with identification of all efforts at obtaining a variance or release undertaken by the applicant. The planning director shall make any documents submitted to the county for any previous applications available to the applicant.

2. Copies of any appraisals, market studies, economic feasibility studies, development schemes, environmental assessments or similar studies relating to the property. [Ord. 1239 § 3(3), 2006; Ord. 1229 § 3(1, 2), 2006; Ord. 1209 § 4, 2005.]

2.45.050 Commencement of 180-day period.

The 180-day period required before applicant may commence a cause of action in circuit court for compensation under Ballot Measure 37 begins on the date a written demand is submitted to the planning director in accordance with the requirements of Measure 37. [Ord. 1209 § 5, 2005.]

2.45.060 Completeness review.

A. Upon submission of an application for just compensation, the planning director will date stamp the application and verify that the appropriate application fee has been paid.

B. The planning director shall then review the application for completeness. If the application is incomplete, the planning director shall notify the applicant within 15 days of receipt of the application that the application is incomplete and what information is needed to make it complete.

C. If the applicant provides supplemental information, the planning director shall verify within 15 days from the submission of the additional information whether the application, as supplemented, is complete.

D. If the applicant does not respond to a notice of incompleteness or refuses to provide required information, the planning director shall begin processing the incomplete application no later than 60 days after the initial submission of the application. [Ord. 1209 § 6, 2005.]

2.45.070 Planning division report.

A. The planning director shall give notice of the application and opportunity to comment to affected agencies and county departments.

B. The planning director shall prepare a staff report that describes the application and the claim; summarizes all relevant county department, agency and public comments; describes all pertinent facts; and makes a recommendation on how the claim should be resolved.

C. The planning director may require that the applicant submit an appraisal of the property to:

1. Determine if the identified regulation reduced the fair market value of the property; and

2. Quantify the amount of the reduction in fair market value resulting from the application of the identified regulation to the property.

D. The planning director’s report and recommendation shall be forwarded to the board of commissioners. The planning director or the board may refer the claim for review by the hearings officer. If the claim is not referred to the hearings officer, the claim will be set for a public hearing as provided in MCC 2.45.090, based on the planning director’s report, unless the planning director determines that the claim can be approved without receiving additional evidence or analysis. If the planning director makes that determination, the claim will be placed on the claims consent agenda for final action. [Ord. 1242 § 3(2), 2006; Ord. 1226 § 3(1), 2006; Ord. 1209 § 7, 2005.]

2.45.080 Review and recommendation.

A. If a claim is referred to the Marion County hearings officer, the hearings officer shall review and analyze the planning director’s report, the information in the record and applicable laws in order to make a recommendation to the board of commissioners consistent with the criteria below:

1. The challenged regulation is not an exempt regulation as defined in this chapter;

2. The challenged regulation was enacted or enforced after the applicant or a family member, as defined in Ballot Measure 37, became the owner;

3. The challenged regulation restricts the use of the owner’s real property or any interest therein, and no other regulation authorizes an exemption, variance, waiver or other release from the regulation;

4. The restriction on use has the effect of reducing the fair market value of the subject property;

5. The application for compensation was timely filed;

6. The applicant is the current owner; and

7. The county is the entity responsible for payment, not some other agency that enacted the challenged regulation.

B. If the application fails to meet one or more of the criteria listed above, the hearings officer shall recommend denial of the claim.

C. If the application meets all of the criteria listed above, the hearings officer shall recommend approval of the claim, along with:

1. The amount of reduction in the fair market value of the property if the regulation continues to be applied, as verified by an appraisal or other information, if compensation is granted;

2. If just compensation is not granted, the specific regulations that would need to be modified, removed or not applied if a waiver is granted; and

3. The effective date of ownership for purposes of modifying, removing or not applying the applicable regulations if a waiver is granted.

D. The hearings officer shall forward the recommendation to the board of commissioners for final action.

E. The hearings officer shall send a copy of the recommendation to the applicant.

F. If directed by the board, the Marion County planning commission may review the staff report prepared by the planning director in order to make a recommendation to the board of commissioners consistent with criteria in this section. The planning commission’s recommendation shall be forwarded to the board of commissioners for final action and a copy sent to the applicant. [Ord. 1226 § 3(2, 3), 2006; Ord. 1209 § 8, 2005.]

2.45.090 Public hearing and notice.

A. The board of commissioners will conduct a public hearing before taking final action on the planning director’s recommendation, except for claims placed on the claims consent agenda for the board’s final action. If the applicant, the planning director, any board member or any member of the public requests that the board hold a hearing on a claim on the claims consent agenda, the claim will be set for a public hearing before the board takes final action on it. Requests for a public hearing may be made in writing prior to the date set for approval of the claim, or in person before the board at the time the claim is considered. Written requests for a hearing must be received by the planning division no later than 4:30 p.m. on the day before the public meeting at which the board will consider the claim on the claims consent agenda.

B. The board shall conduct a public hearing before taking final action on the hearings officer’s recommendation.

C. Notice that a claim will be considered on the claims consent agenda will be mailed to the applicant and to the owners of record of real property within 250 feet of the subject property if located in an urban growth boundary (UGB), 500 feet of the subject property if located on non-resource land outside of a UGB, and 750 feet of the subject property if located on resource land. Notice shall be mailed not less than seven days prior to the date the board will consider the claims consent agenda. A copy of the planning director’s report will be included in the notice.

D. If a hearing is required under this chapter or is requested, notice of the public hearing before the board of commissioners will be mailed to the applicant and to the owners of record of real property within 250 feet of the subject property if located in an urban growth boundary (UGB), 500 feet of the subject property if located on non-resource land outside of a UGB, and 750 feet of the subject property if located on resource land. Notice shall be mailed not less than seven days prior to the scheduled hearing. The notice will include a summary of the hearings officer’s recommendation or, if it was not included with a claims consent agenda notice, a summary of the planning director’s report. [Ord. 1242 § 3(3), 2006; Ord. 1226 § 3(4, 5), 2006; Ord. 1209 § 9, 2005.]

2.45.100 Board final decision.

A. After the public hearing, the board shall consider the recommendation and all documents and evidence in the record. The board shall enter an order denying or approving the claim.

B. The board may deny a claim based on its finding that one or more of the criteria listed in MCC 2.45.080(A) are not met.

C. If the board approves the claim it shall:

1. Pay just compensation in the amount it determines to be appropriate based upon the evidence in the record. If the board approves payment of just compensation, the county shall continue to enforce the regulation against the property. Any compensation shall be paid from funds appropriated for that purpose within two years; or

2. Remove, modify, or not apply the regulation to allow the owner to use the property for a use permitted at the time the owner acquired the property. Any waiver shall apply only to the property that was the subject of the claim. [Ord. 1209 § 10, 2005.]

2.45.110 Effect of decision.

A. No just compensation shall be due pursuant to the provisions of Ballot Measure 37 if a decision is made to modify, remove, or not apply a county regulation to an applicant’s property within 180 days of the submission of an application for compensation.

B. A land use regulation may be waived only to the extent that it restricts a use that would qualify for just compensation.

C. The ability to develop the property remains subject to the applicant complying with other current land use regulation development standards and regulations that are exempt from Measure 37, and obtaining any needed approvals or permits from either the county or other affected governmental entities.

D. Any improvement or development that the county allows based in whole or in part on the board’s decision to modify or not apply a regulation under this chapter shall be treated as a nonconforming use or structure.

E. Nothing contained herein shall be construed as allowing a use of the subject property that was prohibited or restricted by any land use regulation in effect at the time the applicant acquired the property or any regulation that is not among those regulations included in the waiver.

F. The applicant’s acceptance of the county’s payment of just compensation or waiver shall forever satisfy the claim for which the compensation or waiver was granted. Neither the owner nor any subsequent owner shall have a claim for the partial taking caused by the regulation in question and/or its present or future enforcement. [Ord. 1209 § 11, 2005.]

2.45.120 Recording of decision.

Notice of the payment of a compensation claim or the issuance of a waiver pursuant to this chapter shall be recorded in the county deed records. [Ord. 1209 § 12, 2005.]

2.45.130 Appraisal requirements.

All appraisals submitted by applicant shall comply with the following:

A. The appraisal shall be in writing and prepared by an appraiser licensed by the Appraiser Certification and Licensure Board of the State of Oregon;

B. The appraisal shall comply with Uniform Standards of Professional Appraisal Practice (USPAP);

C. The appraisal shall include:

1. The appraisal assignment, including a complete list of all regulations evaluated;

2. A description of the area and a detailed description of the subject property;

3. A statement of highest and best use of the property assuming the applicability of the regulations at issue and assuming that the regulations are not applied;

4. A statement as to what, if any, regulations the appraiser concludes would restrict the use of the property and not give rise to a claim under Measure 37, and a description of public services and other permits or approvals, if any, that would be required before the use could be developed;

5. A date of compensation valuation and how it was reached; and

6. A detailed explanation of the facts, methodology and analysis used to reach the appraiser’s opinion as to the compensable reduction in fair market value caused solely by the application of the regulation.

D. To the extent practicable, the opinion of compensable reduction in fair market value shall be apportioned among each requested use such that the county may separately consider the alleged impact on fair market value of restricting each requested use. [Ord. 1209 § 13, 2005.]

2.45.140 Fund for compensation.

The county may establish a fund for the payment of just compensation claims under Measure 37. The county treasurer and business services department shall jointly administer the fund. [Ord. 1209 § 14, 2005.]

2.45.150 Processing fee.

The applicant shall pay a processing fee to be established by separate board order. [Ord. 1209 § 15, 2005.]

Article II. Ballot Measure 49 Vested Rights

2.45.160 Title.

The ordinance codified in this article shall be known as the Measure 49 vested rights ordinance. [Ord. 1255 § 1, 2007.]

2.45.170 Purpose.

The purpose of this article is to establish a procedure for determining whether a property owner who was granted a waiver from land use regulations pursuant to ORS 197.352 before it was amended by the adoption of Ballot Measure 49, Chapter 424, Oregon Laws 2007, enacted by the voters on November 6, 2007, has a common law vested right to complete and continue the use described in the waiver. [Ord. 1255 § 2, 2007.]

2.45.180 Definitions.

A. As used in this article, words and phrases shall have the same meaning as provided in Ballot Measure 49.

B. As used in this article, “planning director” means the Marion County planning director or designee.

C. “Subsequent owner” means any owner of real property subject to a Measure 49 vested rights determination who is not the person who was granted the waiver under ORS 197.352 (Measure 37). [Ord. 1268 § 2(1), 2008; Ord. 1255 § 3, 2007.]

2.45.190 Application.

A. Any person who wishes to complete or continue any use of property allowed pursuant to a waiver shall file an application for a vested rights determination as required by Measure 49. Until the board’s determination of vested rights has been made no permits shall be issued, and, if the county has issued permits, an order stopping work under those permits will be issued.

B. An application for a vested rights determination must be submitted to the planning division in the form prescribed by the planning director and signed by the owner. The complete application shall include the following information:

1. Name, address, telephone number and signature of the owner filing the application.

2. A copy of the conveyance document that shows the applicant’s interest in the real property and includes a legal description and physical address of the property.

3. Copies of both Marion County’s and the state of Oregon’s orders approving a waiver for the property.

4. A copy of any land use approvals and construction permits issued that allow development of the property.

5. Identification of expenditures made to develop the property and the dates of those expenditures.

6. A written statement describing:

a. How the applicant’s use of the property is consistent with the waiver; and

b. How the applicant has a common law vested right to complete or continue the use described in the waiver.

7. An application fee to be established by separate order of the board of commissioners. [Ord. 1255 § 4, 2007.]

2.45.200 Planning division report.

A. The planning director will prepare a staff report that describes the vested rights application, sets forth all pertinent facts, and makes a recommendation on how the application should be resolved.

B. The planning director’s report and recommendation shall be forwarded to the Marion County hearings officer for a public hearing. [Ord. 1255 § 5, 2007.]

2.45.210 Public hearings.

A. The hearings officer shall conduct a public hearing on the application for a determination of vested rights.

B. After the public hearing, the hearings officer shall make a recommendation to the board of commissioners for final action regarding:

1. Whether the applicant’s use of the property complies with the waiver granted by the state and the county; and

2. Whether applicant had a common law vested right on December 6, 2007, to complete and continue the use described in the waiver.

C. 1. The hearings officer’s recommendation shall be based on the hearings officer’s analysis of the staff report submitted by the planning director, the evidence and testimony contained in the record and the applicable laws.

2. The hearings officer’s recommendation shall be consistent with the Oregon Supreme Court’s and Court of Appeals’ decisions addressing vested rights issues and shall be based on a multifactor test that will include consideration of the factors that the courts have identified as relevant to aid in the equitable balancing test required for a determination of vested rights:

a. The ratio of expenditures incurred to the total cost of the project;

b. The good faith of the developer;

c. Whether the developer had notice of any proposed zoning or amendatory zoning before starting the improvements;

d. The type of expenditures, i.e., whether the expenditures have any relation to the completed project or could apply to other various uses of the land;

e. The nature, location, and ultimate cost of the project;

f. Whether the actions rise beyond mere preparation; and

g. Other relevant factors.

D. A copy of the hearings officer’s recommendation shall be mailed to the planning director, the applicant, the applicant’s representative, any person who testified at the hearing and any person who submitted a written request for a copy of the recommendation. The recommendation shall be mailed not less than seven days prior to the date the board will consider the recommendation.

E. The board of commissioners may conduct a public hearing before taking final action on the hearings officer’s recommendation, if requested by any person who participated at the hearing before the hearings officer, or at the board’s discretion. [Ord. 1255 § 6, 2007.]

2.45.220 Consent agenda.

A. Notwithstanding MCC 2.45.200 and 2.45.210, if the planning director determines that an application establishes both compliance with the waiver and a vested right without the need for additional evidence or analysis, the application will be placed on the board of commissioners’ public meeting consent agenda for final action. If an applicant, any board member or any member of the public requests a hearing on the application, it will be set for a public hearing before the hearings officer pursuant to MCC 2.45.210.

B. Notice that an application will be considered on the consent agenda will be mailed to the applicant and to the owners of real property within 250 feet of the subject property if located inside an urban growth boundary (UGB); 500 feet of the subject property if located on non-resource land outside of a UGB; and 750 feet of the subject property if located on resource land.

C. Notice shall be mailed not less than seven days prior to the date the board will consider the consent agenda. [Ord. 1255 § 7, 2007.]

2.45.230 Notice of public hearings.

A. Notice of a public hearing before the hearings officer and the board of commissioners shall be mailed to the applicant and to the owners of record of real property within 250 feet of the subject property if located in a UGB; 500 feet of the subject property if located on non-resource land outside of a UGB; and 750 feet of the subject property if located on resource land. Notice shall be mailed not less than seven days prior to the scheduled hearing.

B. The notice of the public hearing before the hearings officer shall include a summary of the planning director’s report, if it was not included in a consent agenda notice.

C. The failure of any person to receive notice of a public hearing shall not affect or invalidate any proceeding under this article. [Ord. 1255 § 8, 2007.]

2.45.240 Board final decision.

A. The board of commissioners shall consider the hearings officer’s recommendation and all documents, evidence and testimony in the record. The board shall enter an order determining whether the applicant’s use of the property complies with the waiver and whether applicant had a common law vested right on December 6, 2007, to complete and continue the use described in the waiver.

B. If the board determines that the applicant has a common law vested right to complete and continue the use, the county will issue land use and development permits in accordance with state and county laws and regulations.

C. The board’s decision will be subject to review by writ of review, ORS 34.010 through 34.102. [Ord. 1255 § 9, 2007.]

2.45.250 Effect of vested rights determination on subsequent owners.

A. The board’s final decision under MCC 2.25.220 or 2.45.240 shall apply to a subsequent owner or otherwise run with the land to the fullest extent allowed by law when the board has determined:

1. The use of the property complies with the Measure 37 waiver issued by the board; and

2. The applicant has a common law vested right as of December 6, 2007, to complete and continue the use described in the waiver.

B. No building permits shall be issued to a subsequent owner unless that owner has executed an acknowledgement that any development of the property shall be exclusively at his or her own risk. [Ord. 1268 § 2(2), 2008; Ord. 1255, 2007.]