Opinion ID: 1166800
Heading Depth: 1
Heading Rank: 9

Heading: The 25% Premium

Text: Relator next contends the statutory requirement that a 25% premium be paid to homeowners whose land is condemned for the development of an auto race track facility is unconstitutional in that it violates (1) the Fifth Amendment to the United States Constitution, as applicable to the states through the Fourteenth Amendment, because the government is constitutionally required to pay only just compensation for condemned land and nothing more, and (2) §§ 1 and 2 of the Kansas Constitution Bill of Rights as well as the Equal Protection Clause of the United States Constitution by creating a distinction between landowners who receive a 25% premium when their land is condemned for development of an auto race track facility and all other landowners whose land may later be condemned for other purposes. L. 1998, ch. 17, § 5(a) provides in part: In addition to the compensation or damage amount finally awarded thereunder with respect to any property subject to proceedings thereunder as a result of the construction of an auto race track facility, such city shall provide for the payment of an amount equal to 25% of such compensation or damage amount. Relator first argues that only just compensation and nothing more may be paid for private property taken for public use and that any required payment greater than what is just compensation, in this case the 25% premium, is unconstitutional. Relator also argues the required premium is unconstitutional because it imposes upon other Kansas citizens an increased obligation above and beyond what is required and directly increases the cost to users of the race track facility and to Kansas citizens who are not within the race track redevelopment area. Relator then asserts that although the Fifth Amendment to the United States Constitution is generally thought of as protection for property owners whose land is being taken for a public purpose, it also provides protection to other citizens whose land is not condemned by preventing the government from overpaying for condemned property. The applicable law in Kansas provides that a condemning authority must pay just compensation for the taking of private property. We know of no provision that prohibits the legislature from requiring a condemning authority to make additional payments beyond just compensation. The Fifth Amendment to the United States Constitution requires only that just compensation be paid for the taking of private property. It does not prohibit a condemning authority from paying more than what is determined to be just compensation. Kansas law provides for the payment of additional compensation in some other circumstances. For example, L. 1998, ch. 17, § 6 requires relocation assistance payments as a part of redevelopment projects. Spackman v. Spackman, 3 Kan. App.2d 400, 595 P.2d 748 (1979), upholds the requirement of federally authorized housing relocation assistance payments and notes that the purpose of such payments is to supplement traditional eminent domain compensation, not to create an additional element of full compensation. The 25% premium, by comparison, is also in addition to and independent of the damages finally determined to be just compensation for the taking. Requiring the premium calculation to be based on the amount of damages finally awarded in a condemnation proceeding does not change the character of the 25% premium from additional compensation to a part of what is just compensation. Amicus curiae, who also contends the amendments to the TIF statutes are unconstitutional, argues that if we nevertheless find the amendments constitutional, we should also find the 25% premium constitutional. The amicus curiae brief cites five cases to support this argument. We believe three of the cases lend support to the argument in favor of the 25% premium. In Electric Company v. Dow, 166 U.S. 489, 41 L. Ed. 1088, 17 S. Ct. 645 (1897), the United States Supreme Court first approved a provision mandating that an owner was to be paid additional damages in the amount of 50% of the taking value. Dow was not a condemnation case, however, and it was dismissed for lack of jurisdiction. In the opinion, the Supreme Court stated: We agree with the Supreme Court of New Hampshire in thinking that the plaintiff in error, by availing itself of the power conferred by the statute, and joining in a trial for the assessment of the damages, is precluded from denying the validity of that provision which prescribes that fifty per cent shall be added to the amount of the verdict. The act confers a privilege, which the plaintiff in error was at liberty to exercise or not as it thought fit. 166 U.S. at 490. While this statement may be viewed as dicta in light of the dismissal for lack of jurisdiction, we believe the Unified Government, by availing itself to L. 1998, ch. 17, should be precluded from denying the validity of the provision which prescribes that 25% shall be added to what is determined to be just compensation. Mitchell v. United States, 267 U.S. 341, 69 L. Ed. 644, 45 S. Ct. 293 (1925), and Joslin Co. v. Providence, 262 U.S. 668, 67 L. Ed. 1167, 43 S. Ct. 684 (1923), both stand for the proposition that the legislature has the power to compensate losses and damages beyond those traditionally included in the interpretation of just compensation. Mitchell involved a request for consequential damages for losses to a business when land was taken through eminent domain proceedings for the Aberdeen Proving Ground in Maryland. In the opinion in that case, the Supreme Court stated: [I]t does not follow that, in the absence of an agreement, the plaintiffs can compel payment for such losses. To recover, they must show some statutory right conferred. States have not infrequently directed the payment of compensation in similar situations. The constitutions of some require that compensation be made for consequential damages to private property resulting from public improvements. [Citations omitted.] Others have, in authorizing specific public improvements, conferred the right to such compensation. [Citations omitted.] Congress had, of course, the power to make like provision here. 267 U.S. at 345-46. Joslin Co. involved the condemnation of land for the acquisition of a municipal water supply. There, the Supreme Court stated: In respect to the contention that the statute extends the right to recover compensation so as to include these and other forms of consequential damages and thus deprives plaintiffs in error, as taxpayers of the city, of their property without due process of law, we need say no more than that, while the legislature was powerless to diminish the constitutional measure of just compensation, we are aware of no rule which stands in the way of an extension of it within the limits of equity and justice, so as to include rights otherwise excluded. As stated by the Supreme Court of Massachusetts in Earle v. Commonwealth, 180 Mass. 579, 583, speaking through Mr. Justice Holmes, who was then a member of that court: `Very likely the... rights were of a kind that might have been damaged if not destroyed without the constitutional necessity of compensation. But some latitude is allowed to the Legislature. It is not forbidden to be just in some cases where it is not required to be by the letter of paramount law.' 262 U.S. at 676-77. [T]he constitutionally required just compensation `is a minimum, not a maximum entitlement. The legislature cannot require an owner to accept less, although it is free ... to provide for more.' State Roads Comm'n v. 370 Limited Partnership, 325 Md. 96, 112, 599 A.2d 449 (1991) (quoting State Roads Comm'n v. Cornell Co., 85 Md. App. 765, 784, 584 A.2d 1331 [1991]). We conclude the legislature can authorize a premium if it so desires, and such premium is not otherwise barred by issues not before us.