SD16 - Revision of Title 25 of the Code of Virginia


Executive Summary:
INTRODUCTION

In June 2002, the Virginia Code Commission undertook the revision of Title 25 of the Code of Virginia. Title 25 establishes procedures for exercising the power of eminent domain.

The Code Commission has prepared the proposed Title 25.1 for introduction at the 2003 Session of the General Assembly. Title 25 has not been revised since the adoption of the Code of Virginia in 1950. During the past 52 years, many changes have been made to the procedures applicable to the condemnation of property. The primary purpose of the Title 25 revision is to reorganize the laws in a logical manner and improve their structure and clarity. Changes seek to remove or update archaic references and conform the provisions to current statutory drafting protocols. Additionally, certain substantive changes are made, many of which incorporate current practices, resolve confusion caused by conflicting provisions or conform provisions to other statutes. These changes include:

• Providing that in all cases under proposed Chapter 2's general condemnation procedure, the body determining just compensation will apply the peculiar benefits test. Section 25-46.20 currently provides that if just compensation is determined by a commission, the peculiar benefits test will be applied; if it is determined by a jury, the general enhancement in value test will be applied; and if it is determined by the court, the Code is silent;

• Providing that in all cases under proposed Chapter 3's quick take procedure, the body determining just compensation will apply the general enhancement in value test. This is not a substantive change in most instances because the quick take procedure in Title 33.1 provides for use of the general enhancement in value test. However, in quick take condemnations by sanitary districts and any other entity that is not bound by the requirements of § 33.1-130, the change replaces the peculiar benefits test with the general enhancement in value test;

• Allowing the court to select more than, but not less than, two alternate commissioners. Currently, two alternates must be selected;

• Allowing the names of more than two alternate jurors to be drawn, provided that at least half of the alternate jurors drawn (rather than one of two) are freeholders.

• Requiring the court, rather than the petitioner's attorney, to determine whether an owner who has not filed an answer to the petition is unrepresented by counsel;

• Authorizing a person who owns an outdoor advertising structure for which the Commonwealth Transportation Commissioner has issued a permit to participate in the process of selecting condemnation commissioners or jurors;

• Requiring that interest be paid in cases under the general condemnation procedure at the general account's primary liquidity portfolio rate. Currently, the interest rate is fixed at 8 percent annually;

• Permitting any condemnor who is authorized to exercise the quick take procedure, rather than only local governments, to conduct pre-condemnation inspections of property to determine its suitability for a project, subject to notifying the owner;

• Requiring that a condemnor who files a certificate of deposit with the court pursuant to the quick take procedure in proposed Chapter 3 must deposit the funds represented by the certificate within 30 days of the date the court enters an order in the case. Currently, the parallel provisions in Title 33.1 state that such payment is required to be made within 21 days;

• Requiring that interest payable under the quick take provisions of proposed Chapter 3 be determined by reference to the general account's primary liquidity portfolio rate. Currently, interest accrues under the parallel sections of Title 33.1 at the general account composite rate;

• Requiring the relocation assistance advisory program to include measures as may be necessary or appropriate to assure that a person shall not be required to move from a dwelling unless the person has had a reasonable opportunity to relocate to a comparable replacement dwelling. Currently, such measures need to assure that, within a reasonable period of time, prior to displacement a comparable replacement dwelling will be available. Implementation of this language, which conforms the section to the wording of the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act, may result in a substantive change; and

• Requiring that interest payable under the eminent domain provisions applicable to condemnations by the Commonwealth Transportation Commissioner be determined by reference to the general account's primary liquidity portfolio rate. Currently, interest accrues at the general account composite rate.

These substantive changes are explained in further detail in the chapter-by-chapter summary below.

A table listing sections of Title 25 and the corresponding numbers assigned to them in Title 25.1 or another title of the Code is included as Appendix A. A table listing all of the sections of proposed Title 25.1 and the sections in Title 25 from whence they originated is included as Appendix B.

ORGANIZATION OF TITLE 25.1

The proposed Title 25.1 is divided into four chapters. Proposed Chapter 1 contains general provisions applicable to the entire title, including title-wide definitions. Currently, Title 25 does not have a similar chapter. Aside from the authorization for state institutions to acquire property by condemnation in proposed § 25.1-101, statutory provisions authorizing the exercise of the power of eminent domain continue to be located in the areas of the Code applicable to the agency or other entity generally. Title 25.1 does not attempt to consolidate the many provisions in the Code of Virginia that authorize public or private entities to condemn property. A list of sections in other titles of the Code that authorize an entity to acquire property by condemnation is included as Appendix C. Other provisions relocated to proposed Chapter 1 include those that condition or restrict the authority to exercise the power of eminent domain.

Proposed Chapter 2 (Condemnation Procedures) sets out the general procedure by which condemnors exercise the power of eminent domain. It is based on the provisions of current Chapter 1.1, which was enacted in 1962. In an attempt to improve the chapter's accessibility, it is composed of eight articles. Separate articles are established to address the procedural requirements applicable depending on whether the issue of the just compensation is determined by a panel of commissioners or by a jury.

Proposed Chapter 3 (Transferring Defeasible Title by Certificate) represents a major organization change. It sets out a "quick take" procedure based on the provisions of §§ 33.1-119 through 33.1-132 of Title 33.1 (Highways). The quick take procedure is distinguished from the general procedure set out in current Chapter 1.1 of Title 25 (proposed Chapter 2 of Title 25.1) by the fact that a condemnor utilizing the quick take process acquires defeasible title to property upon filing a certificate and depositing funds or a certificate of deposit with the appropriate court. The General Assembly has made the quick take procedure, which was drafted specifically for use by the Commonwealth Transportation Commissioner (CTC), available for use by several other governmental bodies. Setting out the quick take procedure in a chapter in Title 25.1 is intended to eliminate confusion caused by requiring other entities to use a procedure in Title 33.1 that is tailored for use by the CTC. In addition, condemnors should be able to refer to a single title for statutes relating to condemnation procedure. The Code Commission declined to relocate the CTC's quick take procedure from Title 33.1 to Title 25.1. However, many of the clarifying and stylistic changes included in proposed Chapter. 3 of Title 25.1 are reflected in amendments to the corresponding sections in Title 33.1.

Proposed Chapter 4 (Relocation Assistance and Real Property Acquisition Policies) sets out many of the provisions in current Chapter 6 of Title 25, which is Virginia's enactment of legislation conforming to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, P. L. 91-464; 42 U.S.C. §§ 4601-4655 (the "Uniform Act"). The Uniform Act provides additional payments and imposes additional procedural requirements when a "state agency" undertakes a project with federal or state funds. Virginia's adoption of the Uniform Act has been a condition to its receipt of certain federal funds because the Uniform Act provides that federal agencies may not provide funds for state projects involving condemnation without first receiving satisfactory assurances that displaced persons will be given such relocation payments and assistance as are required to be paid by a federal agency. Subsequent to its enactment in 1972, Virginia's version of the Uniform Act has been amended to enhance the benefits afforded to affected condemnees and to expand the types of condemnors who are subject to its requirements. The federal Uniform Act has also been amended since current Chapter 4 of Title 25 was enacted in 1972, notably by Title IV of the Surface Transportation and Uniform Relocation Assistance Act of 1987 (P. L. 100-17). The proposed Chapter 4 includes numerous changes that conform Virginia's version more closely to the federal law. The Code Commission considered but declined the option of incorporating by reference the requirements of the federal Uniform Act as has been done in several other states, including the neighboring states of West Virginia and Kentucky.

Current Chapter 2, relating to the acquisition of waterworks systems, is relocated to Title 15.1 (Counties, Cities and Towns). The chapter's provisions address the issuance of public debt in connection with the acquisition of such facilities, and its provisions can be exercised only by localities and public water authorities. Consequently, the chapter is clearly more a matter pertaining to local governments than to general eminent domain procedures.

Current Chapter 5 (Miscellaneous) is not carried forward as part of Title 25.1 and will be repealed. The chapter presently has only five sections. Of these, two are repealed; one is relocated to Chapter 1; one is relocated to Chapter 2; and one (§ 25-232.01) is the basis for a new section in proposed Chapter 1 of Title 25.1 (§ 25.1-101) and two sections in Title 15.2 (§§ 15.21901.1 and 15.2-1907).

DRAFTING NOTES IN TITLE 25.1

A drafting note that describes the change made, if any, follows each section in the title revision. If a drafting note states "no change," the section contains no changes other than renumbering and updated cross-references. If a drafting note states "technical changes only," the section contains a change in the text of the section, even if it is only a change in punctuation; however, such changes are not meant to effect a substantive change in the law. If a section contains a substantive change in the law, the drafting note describes the change.

SUBSTANTIVE CHANGES AND OTHER SELECTED TOPICS IN TITLE 25.1

Chapter 1. General Provisions

Chapter 1 is a new chapter compiling general provisions relating to eminent domain procedure. Section 25.1-100 is a title-wide definition section that gathers definitions that are currently scattered throughout Title 25. New definitions include "body determining just compensation," "locality" or "local government," and "state institution."

The definition of "owner," which appears in current §§ 25-46.3, 25-238, and 33.1-89, is rewritten to relocate those portions of the definition that are applicable only in proceedings instituted by the CTC under Title 25 or Title 33.1. These portions are relocated both to proposed § 25.1-209 and to the proposed subsection C of § 33.1-98 to ensure that notices required to be given to owners are also given to persons owning structures or improvements for which an outdoor advertising permit has been issued by the CTC. Proposed subsection G of §§ 25.1-227 provides that such persons are "owners" for purposes of selecting commissioners and jurors. Other changes clarify that an owner is a person owning an interest in property that is the subject of condemnation proceedings, and attempt to clarify what "under existing law" means.

The existing definition of "person" is replaced with one that is intended to encompass all types of entities. The current definition is identical to the definition of "person" that was in § 1-13.19 as it existed prior to its amendment by Chapter 36 of the 1988 Acts of Assembly, which act redefined "person" as including "any individual, corporation, partnership, association, company, business, trust, joint venture or other legal entity." Because the definition of "person" in § 113.19 does not specifically address whether the Commonwealth, counties, and other non-corporate governmental entities are within the scope of such definition, the Code Commission decided that the appropriate action would be to specifically include such entities within the scope of the term "person" for purposes of proposed Title 25.1.

Other changes in Chapter 1 include revamping § 25-232.01, currently located in Chapter 5 of Title 25. Subsection A of this section authorizes several entities, including the Commonwealth Transportation Board, the Breaks Interstate Parks Commission, any state institution, and localities to acquire property by condemnation. The scope of proposed § 25.1-101 is limited to granting condemnation authority to state institutions because the other entities mentioned in the current version of the section, other than the Breaks Interstate Parks Commission, are granted such authority under other laws. To ensure that there is no inadvertent deletion of any authorizations in current § 25-232.01 for localities to condemn property beyond what is currently authorized by Chapter 19 (§ 15.2-1900 et seq.) of Title 15.2, its provisions are set out as proposed § 15.2-1901.1. The second paragraph of current subsection A of § 25-232.01 is not retained because there are no longer "local county road authorities" and the provision no longer reflects current road funding practice. Current subsection B, which pertains to acquiring land or rights-of-way necessary for water systems, has been relocated to proposed § 15.2-1907 in Chapter 19 of Title 15.2.

Proposed § 25.1-105 rewrites the portion of subsection (a) of § 25-46.6 that addresses the condemnation of cemeteries to provide that nothing in Title 25.1 shall be construed to authorize the condemnation of property of any cemetery or burial ground, or any part thereof, and that the authority to condemn any cemetery or burial ground shall be specifically as provided by law. This section adopts the Attorney General's interpretation of that portion of subsection (a) of § 2546.6 in a June 16, 1983, opinion (1982-83 O.A.G. 59), in which he stated that relevant language ("Nothing in this title shall be construed to authorize the condemnation of property of any cemetery or burial ground, or any part thereof') expressly establishes that the Virginia General Condemnation Act may not be considered a source of legislative authority to condemn certain cemetery lands. The language "pointedly does not go so far as to preclude other statutory sources of such condemnation authority or otherwise to limit the valid exercise of the same by any entity which possesses the power pursuant to another legislative grant." The Attorney General noted that "had the legislature in enacting § 25-46.6(a) intended to unqualifiedly limit all present and future general conferrals of the eminent domain power and thereby prohibit condemnation of lands of existing cemeteries under all circumstances, it easily could have done so by the same or similar language as that used in subsection (b) of the same statute." Proposed § 25.1-105 also deletes the provision that made this measure applicable to cemeteries established prior to the date of the charter of the petitioner on grounds that no language in Title 25 either grants or limits the authority to condemn property of any cemetery or burial ground, regardless of whether it was established prior to the date of the charter of the petitioner. Consequently, the phrase "established prior to the date of the charter of the petitioner proposing to condemn" has no substantive effect, and is deleted from this proposed section in order to avoid an implication that this section affects the authority to condemn cemetery land based on the respective ages of the cemetery and the petitioner's charter. The statement that that the authority to condemn any cemetery or burial ground shall be specifically as provided by law clarifies that the authority to condemn such properties exists as provided elsewhere in general law.

Chapter 2. Condemnation Procedures

Section 25-46.2: 1 of existing Chapter 1.1 of Title 25 is not carried forward to Title 25.1. It was added in 1972 when the former Chapter 4 of Title 25 (Public Park Condemnation) was repealed. It was intended to ensure that the repeal of such chapter was not construed as prohibiting condemnations for public park purposes when the power to condemn land for public purposes is conferred elsewhere by state law. The condemnation of lands for public park purposes is specifically authorized by § 10.1-201 (areas, properties, lands of scenic beauty, recreational utility, historical interest, biological significance or any other unusual features) and § 10.1-114 (historic, architectural and archaeological sites).

Section 25-46.3: I of existing Chapter 1.1 states that the word "company" means the Commonwealth Transportation Board or "governing body" in cases where either may exercise powers under existing § 25-232.1. This section is deleted as unnecessary because the word "company" is not used in existing Chapter 1.1. Moreover, the Commonwealth Transportation Board is not authorized to enter upon property pursuant to existing § 25-232.1. If the section was intended to apply to public service corporations, it is unnecessary because § 56-49 permits such entities to enter upon property to conduct examinations and surveys, subject to permission from, or notice to, the landowner as provided in § 25-232.1.

Section 25-232.1, currently in Chapter 5 of Title 25, authorizes a county, city or town to enter upon property for the purpose of conducting test to determines its suitability for a project, prior to instituting condemnation proceedings. Proposed § 25.1-203 makes a substantive change by extending this authority to condemnors that are authorized to exercise the quick take procedure set forth in proposed Chapter 3. This change is recommended because some of the entities that are currently authorized to exercise the quick take procedure under Title 33.1 have been granted the authority to conduct pre-condemnation entries upon property pursuant to § 33.1-94. While some entities that now have quick-take authority will gain the authorization to inspect property before filing a petition, all such pre-petition entries will be subject to the notification requirements now in § 25-232.1, which are more protective of landowners than are the terms of § 33.1-94.

Proposed § 25.1-227 makes several substantive changes to the procedure for selecting commissioners currently set out in § 25-46.20. First, the court will be allowed to select more than, but not less than, two alternates. Currently, two alternates must be selected. Second, the court will determine whether an owner who has not filed an answer to the petition is unrepresented by counsel. Currently, the judge may subpoena five persons to act as commissioners if the petitioner's attorney certifies that he believes that the owner is not represented by counsel.

Proposed § 25.1-229 makes a substantive change to the procedure for selecting jurors that is currently set out in § 25-46.20. It allows more than two names of alternate jurors to be drawn. It also provides that at least half of the alternate jurors (rather than one of two) must be freeholders. Language is included in §§ 25.1-227 and 25.1-229 that provides, for purposes of these sections, a person who owns an outdoor advertising structure for which the CTC has issued a permit is deemed an "owner." This change attempts to implement the intent of the legislation enacted in 2002 in an apparent attempt to overturn the holding of the Virginia Supreme Court in Lamar Corp. v. Commonwealth Transportation Commissioner, 262 Va. 375 (2001). In that case the Court held that a lessee who owns structures that are affixed to land is not entitled to participate in property valuation proceeding to the same extent as the owner of the land.

Section 25-46.20 currently provides that when commissioners determine just compensation, the amount of damages to residual property is offset by the peculiar benefits to such residue by reason of the condemnation. When just compensation is determined by jurors, the amount of damages to residual property is offset by the enhancement in value, if any, to such residue by reason of such taking and use by the petitioner. When the court determines just compensation, the Code is silent. A change in proposed § 25.1-230 provides that in all cases under proposed Chapter 2's general condemnation procedure, the body determining just compensation will apply the peculiar benefits test. Requiring condemnation juries, as well as commissioners, to use the "peculiar benefits" test is a substantive change. The Code Commission could discern no rational justification for applying a separate measure of damages depending on whether a panel of commissioners or a jury fixes compensation. Such change will likely have a fiscal impact because an instance where a taking produces a specific benefit to the residue of an owner's property is generally more rare than one that enhances the residues value generally.

The enhancement in value test will be applied in cases where the condemnor uses the quick take procedure in proposed Chapter 3 of Title 25.1. This outcome was adopted because the Code sections that authorize various entities to use the Commonwealth Transportation Commissioner's condemnation procedure under §§ 33.1-119 through 33.1-132 also authorize them to rely on the general enhancement in value test set out in § 33.1-130. The general enhancement in value test will continue to be applied in condemnation cases by the Commonwealth Transportation Commissioner under Title 33.1. The proposed changes regarding application of the peculiar benefits and general enhancement in value tests are set out in the chart attached as Appendix F.

A substantive change replaces the fixed eight percent interest rate with a requirement that interest be paid at the general account's primary liquidity portfolio rate. The adoption of the variable interest rate provision is made in order to make the interest rates the same regardless of whether the condemnation proceeding is brought under proposed Chapter 2 or Chapter 3 of Title 25.1.

Chapter 3. Transferring Defeasible Title by Certificate

Chapter 3 sets out a "quick take" procedure that parallels the procedure currently located in §§ 33.1-119 through 33.1-132 of the Highways title. The General Assembly has made the quick take procedure, which was drafted specifically for use by the Commonwealth Transportation Commissioner, available for use by numerous governmental bodies, including (i) Board of Conservation and Recreation (§ 10.1-114), (ii) localities (§§ 15.2-1902, 15.2-1904, and 15.21905), (iii) school boards (§ 22.1-127), (iv) Jamestown-Yorktown Foundation (§ 23-288), (v) Frontier Culture Museum of Virginia (§ 23-298), (vi) Department of Conservation and Recreation (§ 28.2-628), (vii) Virginia Fuel Commission (§ 45.1-161.320), and (viii) sanitary districts (§ 21-118).

Section 25.1-310 contains a substantive change from the corresponding provision in Title 33.1 on which it is based. Section 33.1-124 currently states that funds represented by a certificate be deposited within 21 days of the date of an order. It is increased to 30 days in order to make the provision consistent with the prompt payment law, which provides (at § 2.2-4347) that if a payment date has not been established by contract, it shall be paid 30 days after receipt of a proper invoice by the state agency.

Sections 33.1-124 and 33.1-128 require the payment of interest based on the general account composite rate. In the sections of proposed Chapter 3 that parallel these sections, the interest rate to be used is the general account's primary liquidity portfolio rate. This substantive amendment is intended to avert practical problems with use of the composite rate as an index, including the accrual of interest at a negative rate and extreme monthly fluctuations. Appendix G lists a comparison of the rates in fiscal year 2002 that would have accrued under both the primary liquidity rate and the composite index rate.

Chapter 4. Relocation Assistance and Real Property Acquisition Policies

Proposed Chapter 4 is the Commonwealth's legislation conforming to the federal Uniform Act. As such, it establishes certain benefits that exceed what would otherwise be required under Virginia's Constitution and statutory law, in order to qualify for federal funding of certain projects. The chapter is problematic for several reasons. Several of its provisions are not binding on the condemnor. For example, current § 25-248 states that property acquisitions shall be conducted, to the greatest extent practicable, in accordance with certain rules of conduct. Moreover, § 25-235.1 (a) provides that the provisions of § 25-248 creates no rights or liabilities.

The current Chapter 6 of Title 25 does not conform to the federal Uniform Act because (i) amendments to the federal law have not been incorporated into Virginia's version of the Act, (ii) the General Assembly has added certain protections for property owners not included in the Uniform Act, such as the requirement that the owner be given a copy of the condemnor's appraisal, and (iii) the General Assembly has required virtually all condemnors to comply with its requirements, regardless of whether federal funding is involved. The discrepancies between Virginia's current Chapter 6 and the federal Uniform Act have not been so substantive to induce the Federal Highway Administration to reject Virginia's program.

The existing statement of purpose and declaration of policy in current § 25-237 are deleted on grounds that their retention is not consistent with the Code Commission's directive to eliminate references to policy and purpose.

Section 25.1-411 includes an amendment that conforms language in existing § 25-242 to the language of § 4625 of the federal act. The initial phrase in subdivision C 3 requires the relocation assistance advisory program to include measures as may be necessary or appropriate to "[a]ssure that, within a reasonable period of time, prior to displacement there will be available a comparable replacement dwelling." The language in proposed § 25.1-411 and the Uniform Act requires measures to "[a]ssure that a person shall not be required to move from a dwelling unless the person has had a reasonable opportunity to relocate to a comparable replacement dwelling." Though the change is intended to rephrase the existing language in order to comport with the comparable provision of the federal act, implementation of the Uniform Act's language may result in a substantive change.

Sections Relocated from Title 25

Existing Chapter 2 of Title 25 (Acquisition of Waterworks Systems) is relocated to Title 15.2, where it is set out, with technical amendments, as Chapter 19.1. The chapter primarily addresses the issuance of public debt in connection with the acquisition of such facilities. Only localities and public water authorities can exercise its provisions. Consequently, the chapter is clearly more a matter pertaining to local governments than to general eminent domain procedures.

As previously noted, the portion of existing § 25-232.01 that authorizes localities to condemn property is set out as proposed § 15.2-1901.1 in Chapter 19 of Title 15.2. Current subsection B, which pertains to acquiring land or rights-of-way necessary for water systems, has been relocated to proposed § 15.2-1907 in Chapter 19 of Title 15.2.

Sections in Chapter 5 Deleted from Title 25

Section 25-232.2 is deleted on grounds that it is obsolete. This provision was enacted as a part of the package of legislation enacted in the first 1991 Special Session to provide incentives for the establishment of a United Airways facility in Loudoun County. The facility was never constructed, and the provision has never been used.

Section 25-234 in current Chapter 5 is deleted on the basis that it is anachronistic. It establishes an expedited quick take procedure under which a political subdivision or state agency that is authorized to enter upon and take possession of property prior to or after the institution of condemnation proceedings shall deposit with the court the fair value of the land to be taken and any damages before entering upon such land. Any person entitled thereto may be paid his share of 90 percent of the fund deposited. The procedure conflicts with certain provisions of the quick take procedure in Title 33.1 (and in proposed Chapter 3 of Title 25.1), and it was represented that condemnors do not avail themselves of the provisions of this section. This section was enacted in 1956, and the quick take procedure in Title 33.1, which has superseded this section in practice, was enacted in 1958.