HB-5078, As Passed House, December 7, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 5078

     A bill to amend 1911 PA 149, entitled

"An act to provide for the acquisition by purchase, condemnation

and otherwise by state agencies and public corporations of private

property for the use or benefit of the public, and to define the

terms "public corporations," "state agencies" and "private

property" as used herein,"

by amending section 3 (MCL 213.23), as amended by 2006 PA 368.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 3. (1) Any public corporation or state agency is

authorized to take private property necessary for a public

improvement or for the purposes of its incorporation or for public

use and to institute and prosecute proceedings for that purpose.

When funds have been appropriated by the legislature to a state

agency, a division of a state agency, the office of the governor,

or a division of the office of the governor for the purpose of

acquiring lands or property for a designated public use, the unit

of a state agency to which the appropriation has been made is

authorized on behalf of the people of the state of Michigan to

acquire the lands or property either by purchase, condemnation, or

otherwise. For the purpose of condemnation, the unit of a state

agency may proceed under this act.

     (2) The taking of private property by a public corporation or

a state agency for transfer to a private entity is not a public use

unless the proposed use of the property is invested with public

attributes sufficient to fairly deem the entity's activity

governmental by 1 or more of the following:

     (a) A public necessity of the extreme sort exists that

requires collective action to acquire property for

instrumentalities of commerce, including a public utility or a

state or federally regulated common carrier, whose very existence

depends on the use of property that can be assembled only through

the coordination that central government alone is capable of

achieving.

     (b) The property or use of the property will remain subject to

public oversight and accountability after the transfer of the

property and will be devoted to the use of the public, independent

from the will of the private entity to which the property is

transferred.

     (c) The property is selected on facts of independent public

significance or concern, including blight, rather than the private

interests of the entity to which the property is eventually

transferred.

     (3) As used in subsection (1), "public use" does not include

the taking of private property for the purpose of transfer to a

private entity for either general economic development or the

enhancement of tax revenue.

     (4) In a condemnation action, the burden of proof is on the

condemning authority to demonstrate, by the preponderance of the

evidence, that the taking of a private property is for a public

use, unless the condemnation action involves a taking of private

property because the property is blighted, in which case the burden

of proof is on the condemning authority to demonstrate, by clear

and convincing evidence, that the taking of that property is for a

public use.

     (5) If private property consisting of an individual's

principal residence is taken for public use, the amount of

compensation made and determined for that taking shall be not less

than 125% of that property's fair market value, in addition to any

other reimbursement allowed by law. In order to be eligible for

reimbursement under this subsection, the individual's principal

residential structure must be actually taken or the amount of the

individual's private property taken leaves less property contiguous

to the individual's principal residential structure than the

minimum lot size if the local governing unit has implemented a

minimum lot size by zoning ordinance.

     (6) A taking of private property for public use, as allowed

under this section, does not include a taking for a public use that

is a pretext to confer a private benefit on a known or unknown

private entity. For purposes of this subsection, the taking of

private property for the purposes of a drain project by a drainage

district as allowed under the drain code of 1956, 1956 PA 40, MCL

280.1 to 280.630, does not constitute a pretext to confer a private

benefit on a private entity.

     (7) Any existing right, grant, or benefit afforded to property

owners as of December 22, 2006, whether provided by the state

constitution of 1963, by this section or other statute, or

otherwise, shall be preserved and shall not be abrogated or

impaired by the 2006 amendatory  act  acts that added or amended

this subsection.

     (8) As used in this section, "blighted" means property that

meets any of the following criteria:

     (a) Has been declared a public nuisance in accordance with a

local housing, building, plumbing, fire, or other related code or

ordinance.

     (b) Is an attractive nuisance because of physical condition or

use.

     (c) Is a fire hazard or is otherwise dangerous to the safety

of persons or property.

     (d) Has had the utilities, plumbing, heating, or sewerage

disconnected, destroyed, removed, or rendered ineffective for a

period of 1 year or more so that the property is unfit for its

intended use.

     (e) Is tax reverted property owned by a municipality, by a

county, or by this state. The sale, lease, or transfer of tax

reverted property by a municipality, a county, or this state shall

not result in the loss to the property of the status as blighted

for purposes of this act.

     (f) Is property owned or under the control of a land bank fast

track authority under the land bank fast track act, 2003 PA 258,

MCL 124.751 to 124.774. The sale, lease, or transfer of the

property by a land bank fast track authority shall not result in

the loss to the property of the status as blighted for purposes of

this act.

     (g) Is improved real property that has remained vacant for 5

consecutive years and that is not maintained in accordance with

applicable local housing or property maintenance codes or

ordinances.

     (h) Any property that has code violations posing a severe and

immediate health or safety threat and that has not been

substantially rehabilitated within 1 year after the receipt of

notice to rehabilitate from the appropriate code enforcement agency

or final determination of any appeal, whichever is later.