Attorney General Hardy Myers today released a formal opinion about the meaning and effect of Ballot Measure 7, the measure adopted by the voters in November 2000 that requires government to compensate landowners for the reduction in the value of private real property due to government regulations. The opinion is available online at www.doj.state.or.us.
"An Attorney General's opinion is not a ruling. It serves as legal interpretation in advance of or in lieu of a court's final judgment of the law's meaning," Myers said. "This opinion seeks to provide guidance to state agencies and other governmental entities affected by Ballot Measure 7 in implementing the law."
Myers' opinion responds to several questions posed by Governor John Kitzhaber, including:
the state's authority to adopt rules for receiving and processing claims;
what types of "government regulations" the measure applies to;
whether the measure applies to regulations already in place;
whether state agencies may forego enforcement of regulations to avoid paying compensation; and
the impact of Measure 7 on three state regulatory programs: exclusive farm use zoning, the Beach Bill, and the Bottle Bill.
"Because of the ambiguities in Measure 7, some of the conclusions are not free from doubt, and some of these questions may ultimately be resolved in the courts," Myers said.
The opinion's major conclusions are as follows:
Claims Processing: The Department of Administrative Services has exclusive authority to prescribe forms and procedures for submitting and processing Measure 7 claims against the state, including rules that specify the proper form and content of a claim.
"Regulation": Measure 7 applies to any "regulation that restricts the use of private real property" and defines such regulations to include any enforceable government enactment. A significant number of state and local laws and regulations are covered, including some criminal laws. According to the opinion, Measure 7 may require compensation for laws and regulations: that limit the exclusive right of the owner to possess or dispose of property (such as certain provisions of landlord tenant law), that dictate what activities can take place on private property (such as most traditional zoning laws), that limit the physical extent or conditions under which the property can be used (such as certain aspects of building codes, the Forest Practices Act, and food safety laws), and that limit the benefit to the owner from the property's use (such as rent control ordinances). Measure 7 does not require compensation for laws imposing taxes based on property value or general laws governing conduct that do not involve the use of real property.
Whether Measure 7 applies to regulations already in place ("retroactivity"): Measure 7 requires government to pay compensation only if government passes or enforces a regulation after Measure 7 takes effect. Thus, Measure 7 applies to a regulation adopted before Measure 7 only if government enforces that regulation after the effective date of Measure 7.
Who qualifies for compensation: Measure 7 entitles a real property owner to compensation if the regulation was enacted after the property owner acquired the property, or if the regulation was never enforced or applied as to any property until after the property owner acquired the property.
Non-Enforcement: Measure 7 itself does not authorize state agencies to stop enforcing regulations. A state agency may choose not to enforce a regulation to avoid having to pay compensation only if the law does not make enforcement mandatory. If enforcing a regulation would cause the agency to incur an obligation in excess of its budgetary allotment, appropriation or the Oregon Constitution's debt limit, an agency may not enforce the regulation.
Exceptions: Government may enact and enforce regulations without paying compensation to real property owners if the regulations limit uses that have traditionally been regulated as nuisances. Uses that have been regulated as nuisances include uses that threaten public health, safety, morals, or rights. For example, laws that prohibit using real property for prostitution, and some local health and sanitation regulations are probably included in the nuisance exception. Government may also impose regulations without paying compensation if required to do so to implement a requirement of federal law. For example, many aspects of Oregon's clean air laws are probably excepted from Measure 7's requirement to pay compensation.
Farm use zoning: Landowners who acquired their property before 1975 are likely to have a right to compensation under Measure 7 for any reduction in fair market value that results from exclusive farm use zoning.
Beach Bill: Under Oregon law a property owner's title to the dry-sand area of the beach is subject to the public right to use that part of the beach for recreational purposes. To a large degree the Beach Bill simply protects this longstanding public right. Measure 7 does not affect aspects of the Beach Bill that protect the public right to recreational use of the beach, but Measure 7 may require compensation where Beach Bill regulations are not necessary to protect the public's recreational use (for example, restrictions on buried pipelines).
Bottle Bill: Measure 7 may require compensation when dealers and distributors of carbonated beverages are required to set aside part of their private real property to make space for returnable empty containers.
Kristen Grainger, (503) 378-6002