SB1365 - 492R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 12-1116, Arizona Revised Statutes, is amended to read:

START_STATUTE12-1116. Actions for condemnation; immediate possession; money deposit

A. All actions for condemnation shall be brought as other civil actions in the superior court in the county in which the property is located except that, at least one hundred twenty days before filing an action for condemnation of property or any interest in property, the plaintiff shall deliver to the property owner of record and as a courtesy to the sole lessee of record, if applicable, according to the records of the county recorder in the county in which the property is located:

1. A written offer to purchase the property or interest in the property and to pay just compensation for the property or interest in the property and for any compensable damages to any remaining property. The offer must constitute the plaintiff's estimate of just compensation. The offer may be made subject to any lessees of record or any lessees who may claim a compensable interest. The offer does not impose an obligation on the plaintiff to provide a written offer to purchase the lessee's interest. For the purposes of this paragraph, "just compensation" includes the cost of relocation and the costs of reestablishing lost property, business and livelihoods.

2. One or more appraisals that support the amount of the proposed compensation.

3. Full disclosure in writing regarding the final project, including the identification of all aspects of the work that must be performed to complete the project and a risk assessment that is prepared by an independent risk assessing agent. For the purposes of this paragraph, "risk" includes the replacement costs of reestablishing lost property, business and livelihoods disrupted by the condemnation.

B. Except for special taxing districts formed pursuant to title 48, chapter 17, if no lease is recorded or if more than one lease is recorded for the property with the county recorder of the county in which the property is located, at least twenty days before filing an action for condemnation of property or any interest in property, the plaintiff shall provide notice of the offer and appraisal to the party having a plain and obvious commercial ownership or operational interest in substantial improvements on the property by posting the notice in plain sight at the property that may be subject to condemnation.

C. For special taxing districts formed pursuant to title 48, chapter 17, if more than one lease is recorded for the property with the county recorder of the county in which the property is located, at least twenty days before filing an action for condemnation of property or any interest in property, the plaintiff shall provide notice of the offer and appraisal by delivering to all property interest holders of record the notice that an offer has been made and an appraisal has been conducted. The notice does not apply to lessees of record if the lease or other written agreement governing the interest holder's rights in the property provides that the property interest holder would not be entitled to condemnation proceeds.

D. If a lessee that is not noted in the record of the county recorder and has a commercial ownership or operational interest in substantial improvements on the property requests a copy of the offer and appraisal the plaintiff shall promptly comply with the request on presentation of documentation by the lessee of the lessee's interest in the property.

E. At the time of filing the complaint, or at any time after filing the complaint, the plaintiff may apply to the court for an order permitting the plaintiff to take possession of and use the property sought to be condemned for the purpose prayed for.

F. The superior court may waive the requirements of subsection A, B, C or D of this section if the court determines that the plaintiff will suffer immediate and irreparable harm that outweighs the property owner's or lessee's interest.

G. On filing the application, the court shall set a time for a hearing. Notice shall be served on the parties in interest by personal service within the state, or by publication if without the state, in any manner as the court directs.

H. On the day of the hearing, if it appears that the use for which the property is sought to be condemned is a necessary use, the court shall receive evidence as to the probable damages to each owner, possessor or person having an interest in each parcel of land sought to be condemned and of any unpaid property taxes that have been levied, including penalties and interest, on the property sought to be condemned and may direct that on a deposit of money, on direct payment to each owner, possessor or person having an interest in each parcel, or if the condemnor is the state or a county, city, town or political subdivision of this state, on posting a bond in a form to be approved by the court, the plaintiff shall be let into the possession and full use of the parcels of land, as described in the order, for the purposes specified in the order.

I. The plaintiff may deposit the money or bond with the clerk of the court or the state treasurer. The money or bond may be held for the use and benefit of each person having an interest in each parcel of land sought to be condemned, subject to final judgment after trial of the action, and may be held also as a fund to pay any further damages and costs recovered in the proceedings and any unpaid property taxes that were levied as of the date of the order for immediate possession, including penalties and interest, on the property sought to be condemned, as well as all damages sustained by the defendant if for any cause the property is not finally taken for public use. The deposit of the money or bond shall not discharge the plaintiff from liability to maintain the fund in full, but it shall remain deposited for all accidents, defalcations or other contingencies, as between the parties to the proceedings, at the risk of the plaintiff, until the compensation or damage is finally settled by judicial determination, and the court awards such part of the money or bond as shall be determined to the defendant, or until the clerk or the state treasurer is ordered by the court to disburse it. The clerk of the court or the state treasurer is liable to the plaintiff for the deposit or bond if it is lost or abstracted.

J. If the plaintiff elects to deposit the money or bond in the state treasury, the state treasurer shall receive the money or bond and return a receipt for the money or bond to the court, and the state treasurer shall safely keep the deposit in a special fund to be entered on the state treasurer's books as the condemnation fund. The state treasurer shall invest and divest monies in the condemnation fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund. The state treasurer shall disburse the money deposited and, if necessary, convert the investments to cash for the purpose of making the disbursements or forfeit the bond as the court may direct pursuant to its judgment. After satisfaction of the judgment in a condemnation action and payment of any unpaid property taxes that were levied as of the date of the order for immediate possession, including penalties and interest, on the property sought to be condemned, the excess, if any, of the deposit made regarding the action, including monies earned by the investment and reinvestment of the deposit, shall be returned by the state treasurer to the plaintiff by a warrant that the department of administration shall issue upon on direction of the state treasurer after having received a certified copy of the judgment and without regard to provisions requiring the filing of a claim against the state. Any monies remaining in the condemnation fund at the end of the fiscal year do not revert to the state general fund.

K. If the plaintiff elects to deposit the money or bond with the clerk of the court, the clerk shall receive the money or bond and return a receipt for the money or bond to the court, and the clerk is liable to the plaintiff if the money or bond is lost or abstracted. The clerk shall disburse the money or forfeit the bond as the court may direct pursuant to its judgment. Any money remaining in a deposit after the judgment of the court and all unpaid property taxes that were levied as of the date of the order for immediate possession, including penalties and interest, have been fully paid shall be returned by the clerk to the plaintiff.

L. On application by any party, the court may order that money deposited with the clerk of the court or the state treasurer be paid to any owner, possessor or person having an interest in any parcel.

M. Subject to court approval, the parties may also stipulate any of the following with any owner, occupant or possessor of any parcel:

1. To the amount of money that the plaintiff may deposit with the clerk of the court or with the state treasurer for any owner, occupant or possessor of any parcel.

2. To the amount of direct payment to any owner, occupant or possessor of any parcel.

3. To the payment of money deposited with the clerk of the court or the state treasurer to any owner, occupant or possessor of any parcel.

4. For the release of any bond on payment to any owner, occupant or possessor of any parcel.

N. A person in interest for whom a deposit has been made pursuant to stipulation for the person's withdrawal is entitled to interest on the amount that the person is allowed to withdraw from the date the order for immediate possession is signed by the court pursuant to subsection C of this section until the date of withdrawal. This person is also entitled to interest on that portion of the final judgment, exclusive of costs allowed by the court, that exceeds the amount that is deposited for the person's withdrawal from the date the order for immediate possession is signed by the court until the judgment is paid. If the amount that is withdrawn by any defendant exceeds the amount of the final judgment awarded the defendant inclusive of costs allowed by the court and any unpaid property taxes that were levied as of the date of the order for immediate possession, including penalties and interest, on the property sought to be condemned, the defendant withdrawing the funds immediately shall repay to the plaintiff the excess, with legal interest from the date of withdrawal to the date of repayment, except that the amount that is necessary to pay any unpaid property taxes that were levied as of the date of the order for immediate possession, including penalties and interest, on the property shall be paid to the county treasurer of the county in which the property sought to be condemned is located.

O. Any stipulation that is made or any evidence that is introduced pursuant to this section shall not be introduced in evidence or used to the prejudice of any party in interest on the trial of the action. END_STATUTE

Sec. 2. Section 12-1122, Arizona Revised Statutes, is amended to read:

START_STATUTE12-1122. Ascertainment and assessment of value, damages and benefits

A. The court or jury shall ascertain and assess:

1. The value of the property sought to be condemned and all improvements on the property pertaining to the realty, and of each and every separate estate or interest in the property, and if it consists of different parcels, the value of each parcel and each estate or interest in the parcel separately.

2. If the property sought to be condemned constitutes only a part of a larger parcel, the damages that will accrue to the portion not sought to be condemned by reason of its severance from the portion sought to be condemned, and the construction of the improvement in the manner proposed by the plaintiff.

3. How much the portion not sought to be condemned and each estate or interest in the portion will be benefited separately, if at all, by construction of the improvement proposed by the plaintiff. If the benefit is equal to the damages assessed under paragraph 2 of this subsection, the owner of the parcel shall be allowed no compensation except for the value of the portion taken, but if the benefit is less than the damages so assessed, the benefit shall be deducted from the damages, and the remainder shall be the only damages allowed in addition to the value.

4. 3. If the property sought to be condemned is for a railroad, the cost of good and sufficient fences along the line of the railroad, and the cost of cattle guards where fences may cross the line of the railroad.

B. As far as practicable, compensation shall be assessed for each source of damage separately.

C. Value shall be determined by ascertaining the most probable price estimated in terms of cash in United States dollars or comparable market financial arrangements that the property would bring if exposed for sale in the open market, with reasonable time allowed in which to find a purchaser, buying with knowledge of all of the uses and purposes to which it was adapted and for which it was capable.

D. For the purpose of assessing compensation and damages with respect to property sought to be condemned by this state for transportation purposes, in addition to subsections A and B of this section, the court or a jury shall assess compensation and damages pursuant to sections 28‑7091 and 28‑7097. END_STATUTE