Oregon land-use regulation and ballot measure 37: Newton's third law at work.

• Author: Hunnicutt, David J.

1. INTRODUCTION II. HISTORY OF STATEWIDE PLANNING IN OREGON A. Senate Bill 10 B. Senate Bill 100 C. The Adoption of Statewide Goals D. Implementation of the Goals E. Statutes Regulating Rural Land. III. THE IMPACT OF SENATE BILL 100 AND GOALS 3 AND 4 ON OREGON PROPERTY OWNERS IV. OREGON TAKINGS CLAUSE JURISPRUDENCE A. Oregon Constitution B. United States Constitution V. MEASURE 7 (2000)--THE VOTERS DEMAND CHANGE VI. MEASURE 37 (2004)--THE VOTERS SPEAK AGAIN A. The Campaign B. The Results C. The Measure Itself VII. THE FUTURE OF MEASURE 37 A. Legislature's Plenary Power B. Equal Privileges and Immunities C. Suspension of Laws D. Separation of Powers E. Due Process VIII. THE FUTURE OF OREGON'S LAND-USE PLANNING SYSTEM IX. CONCLUSION I. INTRODUCTION

   The passage of Ballot Measure 37 by Oregon voters in November 2004 has reignited the national debate over the line between the rights of individual property owners to use their property and the desire of government, sometimes with the support of the public, to regulate property uses through zoning or other means to provide benefits to the public.

   For the uninitiated, Measure 37 (1) requires state and local governments in Oregon to pay just compensation to a property owner when land-use laws, enacted after the current owner or a "family member" of the current owner first acquired the property, have the effect of limiting uses on that property and lowering the property's fair market value. (2) As an alternative to compensation, the government may choose to modify, remove, or not apply the land-use law to allow the property owner to use the property in the manner in which it could have been used when it was purchased. (3)

   In effect, Measure 37 is a grandfather clause, designed to secure to the owners of property in Oregon the benefit of their bargain. The measure is based on the premise that the economic costs of land-use regulations designed to benefit the public should be borne by the public as a whole, rather than an individual property owner whose land has been restricted.

   No examination of Measure 37 would be complete without a basic understanding of Oregon's unique and controversial land-use system. The inequities created by Oregon's statewide, centralized planning system fueled the campaign in support of the measure and ultimately led to its passage. Although a thorough evaluation of the scope of Oregon's land-use system is beyond the limits of this essay, this essay attempts to provide sufficient background to understand what provided much of the impetus for reform behind the measure.

2. HISTORY OF STATEWIDE PLANNING IN OREGON

   1. Senate Bill 10

      Oregon's experiment with statewide planning began in the late 1960s. Fueled by a growing awareness of environmental issues, the legislature adopted Senate Bill 10 in 1969. (4) Senate Bill 10 required Oregon's Governor to prescribe and amend comprehensive plans and zoning ordinances for lands within cities and counties that were not subject to an existing locally adopted zoning ordinance and comprehensive plan. (5)

      The Governor was further directed to consider nine broad goals in preparing and adopting comprehensive plans and zoning ordinances for unzoned lands subject to the Governor's planning control. (6) Among the goals were the preservation of air and water quality, the conservation of open space and prime farm land, and the development of timely, orderly, and efficient provision of public facilities and services. (7)

      Although Senate Bill 10 authorized direct state involvement in what had previously been within the exclusive purview of Oregon cities and counties, local jurisdictions could avoid application of the law by adopting their own comprehensive plans and zoning ordinances. A local comprehensive plan and zoning ordinance was not subject to the goals contained in Senate Bill 10, and thus could be prepared and framed in whatever manner the local government determined would best fit the needs of the local community. As a result, for those desiring statewide planning control of Oregon property, Senate Bill 10 was an ineffective tool to accomplish those ends.

   2. Senate Bill 100

      By 1973, it had become clear that Senate Bill 10 would not result in direct oversight by state government of the zoning and planning activities of Oregon local governments. As a result, the 1973 legislature adopted Senate Bill 100. (8)

      Unlike Senate Bill 10, Senate Bill 100 created a state agency, the Department of Land Conservation and Development, and mandated that every local comprehensive plan and zoning ordinance comply with statewide land-use goals established by the department through its Land Conservation and Development Commission (LCDC), a seven member agency of political appointees of the Oregon governor. (9) LCDC was given until January 1, 1975 to create statewide planning goals. (10) In the interim, city and county comprehensive plans were required to comply with the goals established by Senate Bill 10, which previously had applied only to those unzoned lands subject to the planning control of the Oregon governor. (11)

      Senate Bill 100 was revolutionary in its scope and alteration of zoning and planning authority, an area traditionally reserved for local authorities. (12) It was also a remarkable display of the delegation of authority from the state legislature to a newly created state agency--authority to create goals affecting all private land in Oregon, and the duty to require that all cities and counties comply with those goals. For all intents and purposes, Senate Bill 100 stripped local communities of final authority over planning and zoning decisions in their jurisdiction, and transferred that authority to an unelected commission of political appointees of the Oregon governor.

      To some extent, the legislature was aware of the scope and magnitude of the law it was creating, as well as the impact that the law would have on private landowners, many of whom had few, if any, limitations on the use of their property. As part of Senate Bill 100, the legislature established a Joint Legislative Committee on Land Use consisting of four members of the Oregon House of Representatives and three members of the Oregon Senate. (13) Among the tasks assigned to the committee by Senate Bill 100 was a requirement that the committee study and make a recommendation to the legislative assembly on the implementation of a program for compensation by the state to property owners for the value of any loss of use resulting from the imposition of zoning or subdivision laws created by Senate Bill 100. (14) In subsequent years, however, the committee was unable or unwilling to make a recommendation to the full legislative body on a plan for compensation of property owners impacted by land-use regulations. In 1981, the legislative assembly amended Oregon Revised Statutes section 197.135 to delete the requirement for the committee to propose a compensation fund, and the legislature subsequently forgot the issue. (15)

   3. The Adoption of Statewide Goals

      As mandated by Senate Bill 100, LCDC was formed and began its task of developing statewide planning goals. By January 25, 1975, fourteen of LCDC's nineteen land-use goals were adopted and effective. (16) Of particular importance to the controversy surrounding Measure 37 are Goals 3 (agricultural lands) and 4 (forest lands). (17)

      Goal 3 contains a broad definition of agricultural land, and mandates that land meeting the definition of agricultural land be "preserved and maintained for farm use." (18) In western Oregon, agricultural land includes land of predominantly class I-IV soils, based on the Soil Capability Classification System of the United States Natural Resource Conservation Service, which classifies soils into eight soil types, with class I soils being suitable for agriculture and class VIII soils unsuitable. (19) In eastern Oregon, agricultural land includes land of predominantly class I-VI soils. (20) In addition to land that automatically qualifies as agricultural land based on predominant soil type, land of other soil types that are suitable for farming are also included as Goal 3 agricultural land, as are lands that are necessary to permit farm practices to be undertaken on adjacent or nearby land. (21) In defining agricultural land under Goal 3, LCDC does not take into account parcel sizes, development on the land or on adjacent or nearby parcels, historic activities--or lack thereof--on the parcel or adjoining parcels, or the capability of the parcel to produce any income--much less a net income from agricultural activities.

      Goal 4 is LCDC's forest land goal. (22) Under Goal 4, forest land in Oregon is defined to include lands that are suitable for commercial forest practices, adjacent or nearby lands which are unsuitable for commercial forest practices but which are needed to permit forest operations or practices in the area, and all other forested lands that maintain soil, air, water, fish, and wildlife resources. (23) Like Goal 3, LCDC did not consider parcel size when determining whether land should be defined as forest land, nor did it take into account activities on the land or adjacent lands or the capability of the parcel to produce harvestable timber. In fact, given the broad definition of forest land contained in Goal 4, it is difficult to imagine any land with trees that would not meet the definition of forest land, which includes land within urban areas.

      There are currently nineteen statewide goals adopted by LCDC. (24) But for purposes of Measure 37, Goals 3 and 4, and their implementation by LCDC, stand out as creating the greatest number of Measure 37 claims.

   4. Implementation of the Goals

      LCDC implements the nineteen statewide planning goals through a series of administrative rules found in Chapter 660 of the Oregon Administrative Rules. Goal 3's administrative rules are found in division 33. Goal 4's rules are located in division 6.

      For agricultural lands defined by...