2011 Legislature and property rights

2011 Legislature and property rights
By Oregonians In Action

The 2011 session of the Oregon Legislature ended quietly on June 30, with little change being made on the land use front.  Oregonians In Action was able to pass three bills this session, marking the 11th straight legislative session in which at least one OIA bill was enacted into law. While some good legislation was passed this session, major land use bills were not approved.

“We expected that the session would be somewhat slow on land use,” commented Dave Hunnicutt, OIA President. “The Oregon House was evenly split between Republicans and Democrats, the Oregon Senate was extremely close between the two parties, and there were a number of other issues that occupied the bulk of the legislature’s time. Each of these factors meant that major land use bills faced long odds.”

One bill that would have made a big difference to Oregon rural property owners was House Bill 3615. HB 3615 allowed the County Commissioners in Jackson, Josephine, and Douglas Counties to prepare new definitions of “agricultural land” and “forestland” and present those new definitions to the Land Conservation and Development Commission (LCDC). LCDC, in turn, would amend the state definitions of “agricultural land” and “forestland” in Goals 3 and 4, to create a new definition for the Southern Oregon region.

HB 3615 contained important sideboards for both the three counties and LCDC to consider when adopting the regional definition.

For rural Oregonians, HB 3615 was a significant bill. LCDC adopted its one-size-fits-all definitions of farm and forestland in 1975, and mandated that all counties rezone rural land to fit those new definitions. The end result is that counties like Jackson, Josephine, and Douglas have thousands of acres of land that LCDC has forced into farm or forest zones, despite the land having no potential for productive farm or forest activities and no actual history of farm or forest use.

HB 3615 would have created the first ever change in LCDC’s farm and forest definitions. If successful, the bill would have demonstrated that Oregon counties are perfectly capable of planning for their rural areas, and can actually do a much better job of providing for the needs of local property owners than the state. After all, in 49 other states, planning and zoning are done by local governments, rather than through a state agency like LCDC.

Unfortunately, HB 3615 was killed in the last days of the legislative session by Senator Peter Courtney, the President of the Oregon Senate. Bowing to the extreme fringe of the environmental community, Senator Courtney refused to allow HB 3615 to receive a hearing in the Ways and Means Committee, despite the fact that the bill had been approved on a 9-1 vote in the House Judiciary Committee, and despite the fact that the bill had the support of over two-thirds of the Oregon House and Oregon Senate, and the approval of Governor Kitzhaber.

Fortunately, given the broad, bipartisan support for HB 3615, it will likely be reintroduced in the next session of the legislature, which begins in February, 2012. OIA is hopeful that it will pass at that time.

In the meantime, some important land use bills were adopted in 2011. Here’s a rundown of some of the bills:

Senate Bill 960: SB 960 allows a county to approve a limited number of commercial events on properties zoned for exclusive farm use or forest use. The bill is a response to the continued demands of rural property owners to allow for some alternative uses on their rural properties, and the demand for those types of events in rural areas. For example, in the past few years, rural Oregon property owners have begun to allow weddings, lease hunting rights on their ranches, plant pumpkin patches with family activities for people wanting to buy a pumpkin for Halloween, and have other similar type events.

These events allow rural Oregon property owners to generate some modest income from the use of their rural property, which in many cases allows the property owner to make the monthly mortgage payment on the property. SB 960 provides a new method for counties to approve these events on a limited scale.

SB 960 allows up to 18 events per year. The bill contains different, less restrictive criteria for property owners wishing to conduct only one event, and property owners wishing to conduct up to six events.

At the same time, SB 960 does not prohibit a rural property owner from obtaining approval for commercial events in another manner, such as by establishing a private park or a home occupation. Many rural property owners have already received approval to conduct these events on their property through existing land use law. SB 960 simply adds a new path to accomplish the same goal.

House Bill 3166: HB 3166 places a 10 year “statute of ultimate repose” on appeals of local land use decisions. Prior to the passage of the bill, in certain cases, there was no time limit for appeals of local land use decisions, even if those decisions had been made decades before, and even if the approved development had been fully completed. HB 3166 placed a maximum appeal period of 10 years from the date of the local decision. For most cases, the standard 21-day appeal period remains. The 10 year cap in HB 3166 will ensure that in those cases where the 21-day appeal period does not apply, a property owner won’t have to fear that the land use approval they received from the local government can always be appealed, even decades after it was made.

House Bill 3290: HB 3290 makes a modest change to LCDC’s $80,000 income requirement for the siting of a farm dwelling. Under current law, a property owner in an exclusive farm use zone has to make either $40,000 or $80,000 (depending on the quality of the soil) in annual farm income in order to build a farmhouse on their property. This ridiculous rule prevents many rural Oregonians from building a home on their property, given that the vast majority of Oregon farms generate far less than $80,000 in annual farm income.

Currently, a property owner is required by the $80,000 rule to generate farm sales exceeding $80,000 for two consecutive years, or 3 out of 5 preceding years before the home can be approved. HB 3290 allows a property owner to average the farm sales in the best 3 of the 5 preceding years in order to meet the income test. For example, if a property owner had farm sales of $100,000 in 2006 and 2010, but only $70,000 in 2007-2009, they would not be entitled to build a farmhome under the current law. HB 3290 allows the property owner to take the farm sales from the three highest grossing years of the last five, and average those sales. If the sales exceed $80,000, the farmer can build the home.

House Bill 3620: HB 3620 makes a change to Measure 49 to reverse Measure 49 denials for those claims that were denied because of a transfer of the Measure 49 property to a “straw man.”

Under Measure 49, the ability of the property owner to receive an approval of their claim was based on the date the property owner acquired the property. The law in effect on the day the property owner originally acquired the property was the law that controlled for purpose of the Measure 49 claim.

For example, if a property owner purchased a 20 acre parcel in 1960, the zoning laws in effect at that time were used to determine whether the property owner could have built the number of homes which they sought in their Measure 49 claim. If the property owner could have divided the property into three parcels and built a home on each parcel in 1960, then their Measure 49 claim to build three homes would be approved, provided they met the other criteria.

Some property owners, however, deeded their property to a “straw man” (typically their attorney) for a short amount of time – typically one day. The straw man would record the deed in the county deed records, and then immediately deed the property back to the rightful owner. These transfers were typically made for the purpose of correcting a defect in the title to a lot or parcel of property, so that the property could be transferred and title insurance could be procured by the subsequent purchaser.

Unfortunately, Measure 49 did not distinguish between straw man transfers and permanent transfers of property. Consequently, a property owner who had purchased property in 1960, and made a straw man transfer in 1995 on the advice of his attorney, was considered to have acquired the property in 1995 for purposes of Measure 49, even though the true acquisition date was 1960. As a result of having a 1995 acquisition date, the Measure 49 claim was denied.

HB 3620 provides that LCDC will not consider a straw man transfer (a transfer in which the property owner transfers the property to another person and reacquires the property within 10 days) as establishing a new acquisition date for purposes of Measure 49. Measure 49 claimants whose claims were denied based on a straw man transfer will be given a new opportunity to resubmit their Measure 49 claim.

Senate Bill 766: SB 766 authorizes the creation of between 5 and 15 regionally significant industrial areas, with extremely streamlined land use processes for each area. The goal of the bill is to allow industrial areas to be quickly established, so that Oregon has a greater supply of industrial land ready for immediate development.

Senate Bill 619: SB 619 allows a property owner whose land is condemned and taken by the government through eminent domain to repurchase the property if the government does not use the property for a public use within 10 years of the date the government approves an ordinance or resolution authorizing the condemnation.

Despite the failure of HB 3615, OIA considers the 2011 legislative session a success. “We stopped all the bad legislation, and passed some minor changes to make things a little better for Oregon property owners,” said Hunnicutt. “At the same time, a majority of both the Senate and the House, along with Governor Kitzhaber, are finally ready to allow rural Oregon counties to consider regional definitions of farm and forest land. This is a breakthrough for the Capitol.”

“There is simply no reason to treat Jackson County the same way as Clatsop County, or Hood River County the same way as Lake County – their land and economies are significantly different, and should be treated differently. I’m hopeful that we can pass HB 3615 next February.”

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