Governor signs new eminent domain bill
Law allows rural landowners to use comparable sale to determine value
by Annie O’Brien

On Feb. 28, Governor Dave Freudenthal signed a new eminent domain bill into law. The legislation was finalized after months of debate between landowners, agricultural groups, energy industry representatives and elected officials.

The new law, which will take effect in July, holds condemnors to tougher standards, said Laurie Goodman, the director of the Landowners Association of Wyoming (LAW). Now condemnors must provide notice explaining the “particular activity” for which it is trying to seize property, and give the owner 15 days to grant written authorization.

Last fall, the state legislature abandoned its draft eminent domain bill, after oil and gas industry representatives and several agricultural groups, including the Wyoming Stockgrowers Association, the Wyoming Wool Growers Association and the Wyoming Farm Bureau Federation, drafted a separate, compromise, piece of legislation. The legislature’s desertion of its draft bill disappointed LAW members, who felt the compromise bill did “not ask for too much” from condemnors, Goodman said.

The new law adds provisions to negotiation protocols, similar to those that exist under Wyoming’s split estate laws. Previously, a condemning party would submit an offer to the property owner, and the owner would propose a counter offer. Now, Goodman noted, condemnors are required to put forth another bid after the owner makes his counter offer.

Goodman also said the new law contains “very strong language” that will force condemnors that do not negotiate in good faith to pay condemnees’ legal fees.

This language, Goodman said, gave teeth to the state’s previous eminent domain law that stated condemnation should serve “the greatest public good at the least private injury.” In what Goodman characterized as a major and hard-won victory for rural landowners, the new law allows ranchers to use “comparable sales to define the fair market value of their property.” Wyoming’s old eminent domain law only required condemnors to pay the grassland value on agricultural land, a figure that is usually determined by the tax rate, Goodman explained. Now, rural landowners may base the market value of their land on comparable easement negotiations, if the condemnation case goes to court. Urban property owners possessed comparable sale protection under Wyoming’s existing eminent domain laws, Goodman said.

The debate over using comparable sales to determine agricultural land’s fair market value was “a bloody, bloody fight to the end in the Senate,” Goodman said. Opponents of the comparable sale provision, including Senator Kit Jennings (R) and Charles Scott ®, both from Casper, said the stipulation could complicate and restrict the sale of easements on rural lands, according to a report by the Casper-Star Tribune. The new law also permits property owners to renegotiate termed rights of way.

Under the current law, when a condemning entity acquires an easement on private land – pipeline installations are common examples – they only have to negotiate with the owner one time, and then gain an easement in perpetuity. On public land, however, easement rights are renegotiated after set intervals, giving the government the opportunity to receive multiple payments for the use of its land, Goodman said.

Easements on private land will remain automatically renewable, but the owners will now be given an opportunity to renegotiate their terms.

Goodman said LAW also struggled to end “priority use” of private lands for energy and other kinds of industrial development. Companies, she said, prefer to install pipelines on private land because they do not have to wait for government environmental oversight groups to produce lengthy Environmental Impact Statements, required on public land. Several stipulations were stripped from the bill. LAW fought to include a jury trial provision in the legislation, which would entitle any private property owner facing condemnation to a trial by jury to determine if the condemning party’s project was truly in the public good. The state legislature would not accept that condition.

The law also does not include a proposed stipulation that would have allowed property owners to charge “access fees” to potential condemnors when they survey land for development. The bill passed the state Senate by a close 15-13 vote. Senator Grant Larsen of Jackson, voted in favor of the bill. Representative Monte Olsen, who lives in Daniel, voted to pass the bill in the House.

Goodman said of Wyoming’s government, “All said and done, the Legislature stood tall and proud.” Bill Valdez, a Rock Springs business owner who was forced to relocate his car repair facility after his property was condemned by WYDOT to build a bridge, was very pleased with the new law. The new law “makes it better for our children and our grandchildren,” he said.