Summary of the House-Senate Conference Committee
Report on Eminent Domain
Prepared by: Laura Harris, League of Minnesota Cities
651.281.1260, lharris@lmnc.org
Sarah Erickson, Association of Metropolitan Municipalities
651.215.4000, sarah@amm145.org
On May 10, 2006 the House-Senate Conference Committee on HF 2846/SF 2750 unanimously
adopted a conference committee report that restricts the use of eminent domain. The changes to
Minnesota’s eminent domain law approved by the committee for inclusion in the conference
report, as well as several provisions that were not adopted, are summarized below.
Eminent Domain Authority
This legislation provides that eminent domain may only be used for an authorized public use or
public purpose, as defined in the bill. It also redefines blight to emphasize significant housing,
maintenance, and building code violations, and restricts a condemning authority’s ability to
assemble property. In addition, the legislation requires a condemning authority to meet a
heightened burden of proof – preponderance of the evidence – in order to condemn property for
redevelopment purposes.
Public use. Limits the use of eminent domain for a public use, and defines “public use” as:
1. The possession, occupation, ownership, and enjoyment of the land by the general public, or
by public agencies;
2. The creation or functioning of a public service corporation; or
3. Mitigation of a blight area, remediation of an environmentally contaminated area, reduction
of abandoned property, or removal of public nuisance.
Provides that the public benefits of economic development, including an increase in tax base, tax
revenues, employment, or general economic health are not by themselves a public use.
Blighted area. Requires that the land be in urban use and that 50% of the buildings in the area
are structurally substandard. Defines “structurally substandard” as a building:
1. That has been inspected and cited for enforceable housing, maintenance, or building code
violations;
2. In which the building code violations involve specific structural aspects of the building (i.e.
roof, support walls and beams, foundation, internal utilities, etc.)

For the purposes of chapter 117, the definition of “public service corporation” is expanded to include airports, a
watershed district or drainage authority, and an entity operating a regional distribution center within an international
economic development zone.
May 11, 2006
Page 1
3. In which cited violations have not been remedied after two notices to cure noncompliance;
and
4. Where the cost to cure the violations is more than 50% of the assessor’s taxable market value
for the building.
Authorizes a local government to seek an administrative search warrant to gain access to inspect
a building upon a showing of probable cause that a specific code violation has occurred, that the
violation has not been cured, and that the owner has denied the local government access to the
property. Items of evidence that may support probable cause may include recent fire or police
inspections, housing inspections, exterior evidence of deterioration, or other similar reliable
evidence of deterioration in the building.
Environmentally contaminated area. Defines “environmentally contaminated area” as an area
where more than 50% of the parcels contain contamination and the estimated costs of
investigation, monitoring and testing, and remediation are more than the assessor’s estimated
market value of the parcel, or in which the owner has not complied with a court order requiring
cleanup or remediation within a reasonable time.
Abandoned property. Defines “abandoned property” as property that is unoccupied or unused for
1 year; not maintained; and for which taxes have not been paid for the previous 2 years.
Public nuisance. Refers to Minn. Stat. 609.74 as the definition of “public nuisance” for eminent
domain purposes.
Assemblage restrictions. Prohibits the taking of non-structurally substandard buildings and noncontaminated parcels unless there is “no feasible alternative” and all possible steps are taken to
minimize the taking of non-structurally substandard buildings or non-contaminated parcels.
Evidentiary standard. Takings to mitigate a blighted area, remediate an environmentally
contaminated area, reduce abandoned property, or remove a public nuisance require a
preponderance of evidence showing if challenged in court. Provides that a court order approving
the public purpose, necessity, and authority for a taking is final unless an appeal is brought
within 60 days.
New Procedural Provisions
Appraisal and negotiation. Extends the appraisal and negotiation requirements that currently
apply for transportation purposes to all acquisitions. Adds a definition of “owner” which includes
a fee owner, contract purchaser, or business lessee. Requires the exchange of appraisals. Retains
the current $1500 appraisal reimbursement cap for residential property and minimum damage
acquisitions, but increases the cap for other types of property to $5000. Provides that an appraisal
must not be used or considered in a condemnation commissioners' hearing unless a copy of the
appraiser's written report was provided to the opposing party at least five days before the
hearing. Documentation related to a loss of going concern claim must not be used or considered

Public service corporations are exempted from the increased appraisal reimbursement caps, the new public notice
and hearing requirements, and the use of administrative law judges for arbitrating relocation benefit disputes.
May 11, 2006
Page 2
in a condemnation commissioners’ hearing unless the documentation is provided to the opposing
party at least 14 days before the hearing.
Public notice and hearing. Establishes new public hearing requirements for takings to mitigate a
blighted area, remediate an environmentally contaminated area, reduce abandoned property, or
remove a public nuisance. Specifies certain notice requirements. Requires approval by the local
elected governing body at a subsequent meeting that is at least 30 days after the public hearing.
Requires the resolution authorizing eminent domain to identify the public costs and benefits
known or expected from the project, and address how the acquisition serves a public use and
why the property is needed.
Information on owners’ rights and procedures. Directs the attorney general to provide public
information on the legal rights and obligations of condemning authorities, owners, and tenants.
Relocation assistance determination by ALJ. Requires relocation assistance to be determined by
an administrative law judge under a contested case proceeding if the displaced person does not
accept the condemning authority’s offer.
Right of first refusal. If a condemning authority determines that property has not been used and
is no longer needed for a public use, the authority must offer to sell the property back to the
person from whom it was acquired at the original price or the current fair market value,
whichever is lower. Exempts MnDOT acquisitions from this provision.
New Compensation Provisions
Payment of attorney fees. Allows the court to award reasonable attorney fees and costs if the
final award is between 20% and 40% greater than the last written offer made by the condemning
authority before filing a condemnation petition. If the award is more than 40% greater than the
last written offer, then the court must award a property owner his or her attorney fees. Also
provides payment of attorney fees if a property owner successfully challenges public purpose.
Prohibits an award of attorney fees if the judgment or award is less than $25,000. Specifies that,
for the purposes of this section, that the final award does not include compensation for loss of
going concern unless it was included in the last written offer made by the condemning authority
before filing the petition.
Going concern compensation. Requires compensation for loss of going concern if a business is
destroyed by a taking unless the condemning authority proves by a preponderance of evidence
that the loss is not due to the taking, the loss could have been avoided with reasonable measures,
or that the going concern compensation would duplicate compensation otherwise being awarded.
Defines “owner” to include lessees who operate a business on real property that is the subject of
an eminent domain proceeding. Requires the owner to give the condemning authority notice of
intent to seek compensation for loss of going concern within 60 days of the first court hearing.
(NOTE: See appraisal and negotiation section for related requirements.)

Public service corporations are exempted from the new going concern compensation requirement, the minimum
compensation provision, the payment of attorney fees, and the higher reestablishment reimbursement cap for
displaced businesses.
May 11, 2006
Page 3
Minimum compensation. Provides that when an owner must relocate, the amount of damages
payable must be sufficient to purchase a comparable property in the community, and not less
than the condemning authority’s quick take deposit, so long as it does not duplicate
compensation otherwise being awarded.
Re-establishment reimbursement. Requires an acquiring authority to reimburse up to $50,000 in
re-establishment expenses to displaced businesses.
Compensation for removal of a nonconforming use. Requires a local government to
compensate the owner of a nonconforming use if the local government requires its removal as a
condition of granting a permit, license, or other approval for a use, structure, development or
activity.
Compensation for loss of driveway access. Requires compensation, not to exceed 3 years’
previous revenues minus costs of good sold, if a governmental entity permanently eliminates
51% or more of the driveway access to a business that results in a loss of revenues of 51% or
more. Provides that the determination of whether the revenue was reduced must be based on a
comparison of the average revenues minus the average costs of goods sold for the 3 years prior
to commencement of the project, with the revenues minus the costs of goods sold for the year
following completion of the project. Specifies that the installation of a median does not
constitute elimination of driveway access.
Effective Date
The bill is effective the day following final enactment and applies to condemnation proceedings
and eminent domain actions commenced on or after that date. Specifies that eminent domain
actions and condemnation proceedings are commenced when service of the notice of the petition
is made. Identifies the following exceptions for certain actions anticipated as part of a tax
increment financing (TIF) plan, abatement project, or a special law:
1. The municipality approved a TIF plan by February 1, 2006, and a developer has acquired
property by May 1, 2006 in reliance on the condemning authority’s contractual obligation to
condemn property, or by May 1, 2006 the condemning authority has issued, sold or entered
into a binding agreement to issue or sell bonds to finance the TIF plan and has commenced
the condemnation action within 2 years after the bonds were issued; or
2. The TIF district was certified before February 1, 2006; a TIF plan, adopted before February
1, 2006, identified the property as intended to be acquired; and the condemning authority has
commenced the condemnation action within 5 years after certification of the district; or
3. The creation of a TIF district was authorized by special law before February 1, 2006, and the
condemning authority commences action within the period permitted under special law, not
to exceed 10 years; or
4. The condemning authority commences the action before February 1, 2011 to complete land
assembly for a project, financed in whole or part with abatement, and the resolution
authorizing abatement was adopted before February 1, 2006.
May 11, 2006
Page 4
Actions commenced between February 1, 2006 and February 1, 2008 that satisfy the conditions
specified above are grandfathered in under current law. Actions commenced after February 1,
2008 (and before the deadlines provided in the language) are not subject to the new public
use/public purpose requirements, but are subject to the compensation requirements and other
procedural provisions of the new law.
The legislation also provides an exception for actions to acquire property for highway projects
that, by the day following final enactment, have been selected to receive federal funding and in
which service of the notice of the petition is made on or before January 15, 2007. In addition, the
bill includes an exception for acquisitions to provide physical or financial assistance for
emergency shelter and services for homeless persons in a first class city by a governmental unit
or nonprofit organization where service of the notice of the petition is made on or before two
years after the day following final enactment.
Provisions Not Adopted
The following provisions were part of the House version of the eminent domain bill, but were
not approved for inclusion in the final conference committee report.
Historic preservation designations. Provided that an historic preservation designation adopted
on or after August 1, 2002 that reduced a property’s fair market value or interfered with the
owner’s use and enjoyment of the property is a regulatory taking that requires payment of just
compensation.
Inverse condemnation. Allowed a person to bring an inverse condemnation action against a city
that provides municipal solid waste collection services previously provided by private persons,
or limits the number of private persons permitted to provide solid waste collection services in a
manner that prevents a company currently operating in the community from continuing to do so.
Extraterritorial use. Prohibited the use of eminent domain outside a condemning authority’s
jurisdiction unless the jurisdiction in which the property is located consents to the condemnation.
Road access to private property. Prevented a road authority from using eminent domain to
establish a local road or street for access to property of less than 5 acres that would serve
projected traffic of less than 100 average daily trips, unless it is landlocked, or the road is
necessary to cost-effectively mitigate safety concerns.
Contiguous nonconforming lots in common ownership. Prohibited a county, city or town from
refusing to issue a permit for construction of a single-family residence based on the common
ownership of a contiguous nonconforming lot or parcel, provided that contiguous nonconforming
lots or parcels in common ownership contain no more than 3 residential structures. In addition, a
local government could not prohibit the sale of a residential lot based on common ownership of a
contiguous nonconforming lot or parcel. This provision was narrowed in the committee process
to apply to shoreland lots and parcels.
May 11, 2006
Page 5