COLORADO FARM BUREAU. 9177 East Mineral Circle Centennial, CO 80112 loradofarmbure KTVU) September 6, 2018 ‘Mayor Adam Paul 480 S Allison Pkwy Lakewood, CO 80226-3127 Deat Mayor Paul, ‘You ate receiving this letter because you ate a leader in your community and arc doing the great work of holding office in your local government in Colorado. ‘You may have recently heard of a proposition that will be on the ballot this November, Initiative Petition 108, or Just Compensation for Reduction in Fait Market Value by Government Law or Regulation. ‘This effort recently submitted over 208,000 signatures collected from every Colorado Senate District according to rules set in place by Amendment 71 in 2016. This initiative has been certified for the ballot as Amendment 74, and has the full backing of the Colorado Farm Bureau. We would like to enlist your support in this effort to protect farmers, ranchers, businesses and property owners throughout the state. ‘You may have also heatd from some opponents of this measure, specifically the Colorado Municipal League (CML). While groups can always disagree on policy matters, we are disappointed that CML would mislead its members and the public as to the specifics of this Amendment. We are writing to you today to let you know exactly what our initiative would accomplish and to address the misconceptions that some, including CML, have been spreading. ‘What will Amendment 74 do? Let's start with the text. When dealing with such a large issue as government infringement on private property, one might expect it to be quite lengthy. The text according to the Colorado Secretary of State's office reads, Am amendment to the Colorado constitution requiring the government to award just compensation to owners of private property when a government law or regulation reduces the fair market value of the property. In essence, it would allow a property owner a more fair takings claim if their private land is devalued by an action of a government entity. Don’t property owners already have that right? Yes, they do under Article 2, Sec. 15 of the Colorado Constitution. And courts have affirmed that right. But the Colorado Supreme Court ruled in Animas Valley Sand and Gravel Inc. v. BOC of La Plata and other ‘cases, that in order to be compensated for a regulatory takings, close to 100% of a property owner’s land would have to have been taken by the government's action. Our initiative allows property owners to claim a taking on smaller percentages of property value affected by government law or regulation to receive just compensation, The burden of proof remains on the property owner, and must be proved in court.Would this force local governments and municipalities into bankruptcy? ‘That is the argument of CML, and itis flat out wrong. 1, To claim a takings would stil be, as it has always been, a long and arduous legal process, Takings litigation involves substantial fact-finding and expert witness testimony regarding devaluation of the property interest in question. A property owner can only prevail if theit case is supported by the facts and expert testimony, which often takes over a year for a court to resolve. 2. In claiming that towns, counties, municipalities, and the state would go bankrupt from the cost of justly compensating property owners, CML is admitting that it is common practice for those entities to take the property of its citizens with no reimbursement! ‘The real argument in favor of this amendment is simple. If a government regulates or enacts law that reduces the fair market value of private property, then that government should provide just compensation to the property owner, as proven by the property owner in front of the governing body or a court of law, and in a consistent way with the vatious limiting principles courts have applied to regulatory takings claims at both the state and federal level. ‘There ate a number of legal principles that limit the circumstances in which local governments will be liable for a taking, even if Amendment 74 becomes law. ‘These principles are discussed in the attached document by Mark Mathews of Brownstein Hyatt Farber Schreck, LLP, in his response to assertions made by CML. ‘We would welcome the opportunity to speak with you directly about how our initiative can help Colorado and to answer any questions you may have. Please do not hesitate to contact us. Together, we can help uphold your duties to voters as elected representatives and staff, AND protect the property rights of all Coloradans. Thank you, Kapil Ased Don Shaweroft President, Colorado Farm Bureau zy BUREAUStatements from the Colorado Municipal League- “This initiative seeks to amend the state constitution to include just compensation for any government law or regulation deemed to reduce the fait market value of private property: While the proposed constitutional ‘amendment is being supported by the Colorado Farm Burea don't be fooled. It was drafted by, and the efforts to pass it, will ‘continue to be paid for by certain sectors of the oil and gas industry.” Initiative 108 is in fact the product of the Colorado Farm Bureau which has had language that supports strengthening regulatory takings protections in its policy book for years. ‘The expansive language ofthe initiative will significantly cost local governments (as well asthe state), aud more importantly your taxpayers, when any numberof decisions are made lke: zoning; land use; liquor, marijuana, and other forms oflcensngs code enforcement; affordable housing initiatives; environmental prateton (especially when mandated by state or federal regulation); urban renewal and redevelopment; probitions of undesirable uses such as an adult entertainment business in a neighborbvood; right to farm ordinances; maratoria on certain indastrial uses.” © The language used in the Amendment is actually very closely targeted at the precedent set in Animas Valley Sand and Gravel (see below) and allows courts and the legislature the flexibility to enact policy specific to Article 2, Sec. 15 as they have done in the past. The amendment leaves in place the several other limiting principles the court has applied to this section of the Constitution. “Switching just compensation requirements from a taking which covers damages (as is currently structured in our constitution) to ‘fair market valve” (whatever this means) could spawn countess and expensive lansuits aver a myriad of basic local land-use decisions such as zoning or the siting of munitipal facilities," ¢ Amendment 74 would broaden the range of property owners who may be entitled to compensation as a result of governmental action by authorizing takings claims even where less than nearly all value is lost. However, Amendment 74 does NOT eliminate the other requirements (sce legal citations below) imposed by case law to prove a takings and the entitlement to compensation, If Amendment 74 becomes law, Colorado courts would interpret these other requirements strictly to limit the number of successful takings claims as they have done in the past. The language of Amendment 74 provides for that continued flexibility thus limiting the impact of the lawsuits CML feats. “Lhe implications of this measure are sweeping and broad. Remember words matter in the Colorado Constitution and care should always be taken when amending our state's most sacred legal document.” © In point of fact, the language in this measure is no more broad than the current language of Article 2, Sec. 15 (Private property SHALL NOT be taken or damaged for public o private use without just compensation...) It targets the extremely inequitable standard set by the court requiring almost a complete diminution of value prior to compensation being requited. But it also leaves the other limiting principles in place. The Colorado FarmBurcau is an established and respected organization and would not advocate for a policy with the potentially damaging impacts that CML maintains this measure will have. While regulatory takings claims will be “easier” under this Amendment, they will not be easy, and the language of the measure gives courts and the legislature the flexibility to continue to apply the limiting principles they have in the past. Much more restrictive and specific language could have been brought to voters, but the members of Colorado Farm Bureau agree that amending the state's Constitution should not be taken lightly, and opted for language that allows for the co-equal branches of government to set new policy consistent with both the current broad language of Sec. 15 AND the new guiding language of Amendment 74. Legal Citations Regarding Amendment 74 Amendment 74 allows property owners to assert a taking under the Colorado Constitution if governmental Jaw or regulation reduces the value of their property. Under current law, property owners may claim a taking only where governmental action has deprived them of all or nearly all of their property's value. See Animas Valley Sand & Gravel, Inc. v. Bd. of Cnty. Comm'rs, 38 P34 59, 66 (Colo. 2001). Amendment 74 would broaden the range of property owners who may be entitled to compensation as a result of governmental action by authorizing takings claims even where less than nearly all value is lost. Under 74, an owner whose property value is diminished by 50%, 20% or even 10% wouldn't be automatically precluded from seeking compensation for a taking However, Amendment 74 does NOT climinate the other requirements imposed by case law to prove a takings and the entitlement to compensation. The following is a brief discussion of several of the additional requirements that will limit the ability of property owners to successfully pursue takings claims and discourage frivolous suits 1, The Owner Must Prove Non-Speculative Damages. In secking compensation for an alleged taking of valuable property rights, an owner must still prove that it will incur damages that arc definite and not speculative. See Coastal Petroleum v. Chiles, 701 So.2d 619, 625 (Pla, Dist, Ct. App. 1997) (royalty interest in area with no history of oil and gas activity “too speculative to be protected through means of inverse condemnation.” 2, The Owner Must Show Interference With Reasonable Investment-Backed Expectations. Where government regulation results in the loss of partial value of an owner's property, courts are required to consider whether the regulation has interfered with the owner’s reasonable investment- backed expectations for the property. See Animas Valle, 38 P.3d at 67. Factors that affect whether ‘an owner has such expectations include whether the owner operated in a highly regulated industry, whether the owner was aware of the problem that spawned the regulation at the time the property was purchased, and whether the owner could have reasonably anticipated the regulation at the time of purchase. Appolo Fuel, Inc. United States, 381 F.3d 1338, 1349 (Fed, Cit. 204). Ifan owner, based on these and other factors, had no reasonable expectation that its property would be free from a challenged regulation, the owner would not be able to mect this requirement and it is unlikely the owner could prevail on a takings claim. 3, The Owner's Property Must Be the Subject of the Governmental Action. Indirect Impacts Are Insufficient.6. ‘Thete has been concern expressed that Amendment 74 would allow landowners to successfully pursue takings claims for impacts of regulation on adjacent or nearby propettics. For example, if municipality zoned neighboring property in a way that diminished the value of owner's land, could he or she bring a takings claim under 74 to recover that diminished value? ‘The answer is likely ‘no,” Under existing legal principles of eminent domain and takings law, the regulation of land owned by a thitd party ptovides no basis for a nearby or adjoining landowner to assert a claim for compensation based on the inditect impacts of the regulation on his or her property values. In fact, courts have held that there is a “necessity of a nexus between the alleged interest and the property actually taken. Absent this indispensable link, the Government is under no obligation to make just compensation.” United States 0. 677.50 Acres of Land in Marion Co, Kan., 420 F.2d 1136, 1140 (10th Cir, 1970) (finding that a pipeline company was not entitled to compensation for loss of oil caused by government’s condemnation of others’ property). See alo Campbell x. United States, 266 US. 368, 371 (1924) (government's taking and use of lands of others provided no right to compensation to adjoining landowner); E, Tenn. Nat. Gas Co. v. 2.93 Acres in Wothe Ci, No. 4:02CV00179, 2007 WI. 2688414 (W.D. Va. Sept. 13, 2007) (plaintiffs not entitled to damages as a result of condemnation of and subsequent construction of a pipeline on a neighboring property) Amendment 74 does not change this aspect of existing law, and regulation or condemnation of nearby properties will not support a takings claim under 74. Governments Retain Authority to Abate Nuisances. ‘The United States Supreme Court in the case Lucas ». South Carolina Coastal Council, 805 U.S. 1003, 1027-30 (1992) held that there can be no takings where there is even a total elimination of a property's value from a governmental prohibition of uses that have historically been considered nuisances. This was applied in the case of Rith Energy, Inc. ». United States, 270 F.3d 1347 (Fed. Cir. 2001), where the federal court rejected Rith’s takings claim on the ground that under Tennessee nuisance law, Rith had no right to mine in a way that was likely to produce acid mine drainage, and that its property right in the coal leases, therefore, did not include the right to mine the Sewanee seam in the way that it wanted to, Governmental Exercise of Police Powers Usually Does Not Support Takings Claims. Amendment 74 docs not change how courts are to evaluate the nature of governmental action in deciding takings claims, particularly with regard to the exercise of police powers to protect public health, safety and welfare. In the ppolo Fuels case, the Federal Circuit found that the prohibition of coal mining within lands determined to be unsuitable for mining did not constitute a compensation take of the plaintiffs’ coal leases. ‘The court noted that such a determination constituted the exercise of police powers to protect drinking water supplics and are “the type of governmental action that has typically been regarded as not requiring compensation for the burdens it imposes on private parties who are affected by the regulations.” 381 F.3d at 1351 (citing Rizh Enegy, 270 F.3d at 1352), Home Rule Authority Is Retained. Amendment 74 will not affect a municipality's home rule authority to enact local regulations to protect its citizens. It may in some cases warrant compensation that wouldn't be available under current law, but as discussed above, many impediments still exist to successful takings claims. Class Action Takings Claims Would Still Be Typically Unavailable. Class action cases are typically not available to pursue takings claims because each takings case requires an individualized assessment of the impact of the measure on an owner’s property rights and of whether the measure interfered with the owner’s reasonable invest ment-backed expectations. sIf there were many owners who were identically situated and whose property were impacted to the same extent by a governmental regulation, it theoretically would be possible to bring a class action for a takings, but that would be rare and Amendment 74 does not change the law on that practice Takings Claims Presume the Validity Of Regulations and Don’t Allow Challenges To Their Validity. Under current law, as well as under Amendment 74, an owner who brings a takings claim is acknowledging that the governmental regulation is lawful, as only valid governmental can result in a takings. Lingle x. Chevron, 544 U.S. 528 (2005). ‘Therefore, 74 would not allow for a challenge to the lawfulness of governmental regulation or an injunction against its enforcement,