The state might have to pay a 10 percent fine on top of the sale price of private property it condemns if a court determines landowners were given short shrift in negotiations.
An eminent domain bill passed by the House Judiciary Committee on Friday took that modified approach.
The bill, as passed 20-0 by the Senate, would have allowed a court to deny the state ownership of the property if there wasn't a "reasonable and diligent" attempt to consider landowners' concerns. The target of the bill is the state Department of Transportation, which does hundreds of land takings annually for road projects.
Under the revised bill, the state still must invite landowners to get their own appraisals and make offers based on the appraised value and the cost of the appraisal. Officials also would have to solicit alternatives to taking the land that still meet the public purpose of projects.
Judiciary Chairman Norm Rokeberg said on an average large-parcel taking of $140,000, the state would pay an extra $14,000 for not inviting the independent appraisal and suggestions for alternatives. That's "large enough to get even DOT's attention," said Rokeberg, an Anchorage Republican.
Jon Tillinghast, attorney for Juneau regional Native corporation Sealaska, said that the revision addresses DOT's concern that projects would be delayed even when the outcome wouldn't be changed.
"If we had our druthers, we'd rather have it the other way," Tillinghast said.
DOT spokesman Dennis Poshard called it "a much better bill."
A $15,000 threshold in the bill for inviting appraisals takes care of two-thirds of the department's land takings, Poshard said. Rokeberg said it might be worth considering a $20,000 threshold when the bill moves to the House Finance Committee.
Today, Poshard said DOT officials aren't sure whether they'll testify against the bill in the next committee hearing.
The problem is that the 10 percent fine would have to come out of state funds, rather than the federal highway funds that pay for most work the department does, he said. He acknowledged following the steps outlined in the bill on appraisals and alternatives would provide some protection.
"We would be silly to wind up in court over that, as clearly as it's written in the bill," Poshard said.
But the terms "reasonable" and "diligent" remain as standards in the bill for government agencies to follow, which could have unpredictable applications in litigation, he said. "We're not interested in spending more money on litigation and less on projects."
The details of Sealaska's dispute with DOT remain elusive. Rick Harris, corporate vice president, gave the committee only a general statement last week.
Poshard said there are a few cases going back as long as 20 years where there has been conflict. "We do have a lot of successful land trades and land acquisitions under our belt with them, but they definitely have not all been easy."