The 1st meeting of the Interim Joint Committee on Judiciary was held on Thursday, April 14, 2005, at<MeetTime> 10:00 AM, in Room 149 of the Capitol Annex. Representative Gross C. Lindsay, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Representative Gross C. Lindsay, Co-Chair; Senators Carroll Gibson, Ray S. Jones II, Gerald A. Neal, Richard "Dick" Roeding, Ernesto Scorsone, Dan Seum, Katie Stine, and Jack Westwood; Representatives Perry B. Clark, Jesse Crenshaw, Joseph M. Fischer, Jeff Hoover, Stan Lee, Darryl T. Owens, Steven Rudy, Arnold Simpson, Kathy W. Stein, John Vincent, and Rob Wilkey.
Guests: Norman Davis, President, Take Back Kentucky; Ed Parker, Chairman, Kentucky Constitution Party; Brett Gaspard, President, League of Kentucky Property Owners; Tim Nolan, former District Judge and former City Attorney from Campbell County; Lloyd Rogers, League of Kentucky Property Owners and former County Judge Executive from Campbell County; Anna Mojsejenko, David Kaelin, and Teena Halbig, Floyd's Fork Environmental Association; Dr. Brian Strow, Professor at Western Kentucky University and Bowling Green City Commissioner; Austin McCay, Odd Fellows Lodge in Bowling Green; George Sowards, Premier Payphone Service of Bowling Green; Frank Miller, Jr., Executive Director, Office of Legal Services for the Transportation Cabinet; Owen Serey, Assistant General Counsel, District 6 of the Transportation Cabinet; Neil Hackworth, Deputy Executive Director, Kentucky League of Cities; Bill Thielen, General Counsel, Kentucky League of Cities; Robert W. McGinnis, Chairman of the Child Support Guidelines Commission and Chief Regional Circuit Judge for the 18th Circuit; and Steve George, Chief Family Court Judge in Jefferson County.
LRC Staff: Norman Lawson, CSA; Jon Grate, Joanna Decker, and Lisa Fenner.
Chairman Lindsay called the meeting to order, the roll was called, and a quorum was present. Chairman Lindsay informed the committee that the first order of business would be the issue of governmental takings of private property which arose from a study resolution proposed by Representative Perry Clark who had agreed to permit the Judiciary Committee to look at the issue directly. Representative Clark indicated a need for constitutional protections for a person's property rights, that the issue of governmental takings of private property was a continuing one, and an issue that won't go away.
The first speaker was Mr. Norman Davis of Take Back Kentucky. Mr. Davis urged the committee to return to the principle of taking a person's private property only for public use and public benefit. Mr. Davis further indicated that the courts should protect private property rights during governmental takings.
The second speaker was Mr. Ed Parker, Chairman of the Kentucky Constitution Party, and he alleged that regulations by Kentucky government agencies favor their friends in private business and that there is no longer due process of law in all takings. Mr. Parker indicated that governments control 40 percent of the land and that most of it should be sold back to the citizens. Mr. Parker also indicated that Jefferson County took 3,000 private homes for the expansion of the airport and then, instead of expanding the airport, sold the land or leased the land back to private business at a profit and that he felt that this was an improper use of eminent domain.
Chairman Lindsay asked Mr. Parker what he felt was a legitimate government purpose to which Mr. Parker replied "roads, sewers, and highways." Mr. Parker described non-legitimate purpose as the taking of private land for "economic development" projects such as the building of a Wal-Mart store. Norman Davis interjected that if Wal-Mart wishes to build a store then it should negotiate with the private land owners and compensate them adequately.
Senator Seum indicated that the community of Highland Park was taken for airport expansion and then used for industry to move in. He stated that the airport was "fined" in federal court. Senator Seum also indicated that it was a situation where the citizens paid for the taking of the land, then the land was sold for profit, and the citizens had to pay for the lawsuit and for the "fine". Senator Seum further indicated that no one pays for the citizen to defend his property rights, and generally the citizen does not have the money to hire an attorney for an effective defense in a condemnation case.
The next speakers were Mr. Brett Gaspard, President of the League of Kentucky Property Owners, former District Judge Tim Nolan from Campbell County, and former County Judge Executive Lloyd Rogers from Campbell County. Judge Nolan indicated that a major governmental takings case, City of New London v. Kilo, was presently before the Supreme Court of the United States. Judge Nolan indicated that eminent domain has been described as the "despotic power" and is used for the purpose of corporate welfare, casinos, and businesses with over 10,000 condemnations for private use in one jurisdiction alone. The true number of takings is unknown because there is no requirement to centrally report them. Judge Nolan indicated that government uses KRS 99.370, which relates to development and redevelopment plans, improperly to benefit business at the expense of homeowners. Senator Roeding asked about the establishment of guidelines for takings as expressed in the resolution.
Judge Rogers spoke of the controversy in Newport, Kentucky, about the Cote Brilliante project where an entire neighborhood in Newport with 89 upper middle class homes and a good view of the river front was declared to be blighted for the purpose of taking the homes in order to sell the property to Neyer Properties for a development project. According to Judge Rogers, the city first tried to purchase the homes. The residents did not want to sell, so the city declared the area blighted and did not even hold a hearing on the matter until after the development contract had been signed with the developer. In Dayton, Kentucky, a house was declared blighted 20 years ago, the owner was forced out, and the city did nothing with the house for that entire time. Judge Rogers indicated that it should be unconstitutional to use the public power of eminent domain to take private property for private use. Representative Simpson described to the committee the right that a property owner has in contesting the condemnation of his or her property. Judge Rogers indicated that this was true, but even if the homeowner prevails, the homeowner cannot recover his legal fees from the government. He further indicated that the intent of government is sometimes to replace an area which has lower taxes with an area that pays higher taxes.
Judge Nolan indicated that in another Dayton case, the property of a private citizen was taken and then sold to a county commissioner, who also happened to be a printer, so that the commissioner could build a printing plant on the property. Judge Nolan indicated that not only do the persons whose property is taken not get compensated for attorney fees, they also do not get compensated for witness fees or other expenses. If the property is ultimately taken, the amount paid for the property does not cover any of these fees, so the property owner ends up losing either way.
Representative Wilkey suggested that the government have to pay the amount offered for the property into the court in the same manner as is now used for offers of judgment.
Senator Roeding then suggested that the General Assembly could put a time limit on property takings for blight under which if the property was not used during the designated time, the property owner could repurchase the property at the amount paid to the property owner.
The next speakers were Anna Mojsejenko, David Kaelin, and Teena Halbig of the Floyd's Fork Environmental Association. They spoke of problems with the Floyd's Fork watershed relating to pollution from various local sewer plants, over development of the property beyond the capacity of the sewer systems, and a program where the Metropolitan Sewer District hands over sewer line condemnation powers to private developers. Anna Mojsejenko described similar problems with regard to the Oldham County portion of the watershed, and that the condemnation power applies to the entire "service area" of the sewer district. Mr. Kaelin indicated that even when the state fines the sewer districts for violations that the taxpayer also ends up paying the fines through sewer rates.
The next speaker was Dr. Brian Strow, a professor at Western Kentucky University and a Bowling Green city commissioner, who described the city of Bowling Green's misuse of KRS Chapter 99's development authority to take large portions of downtown Bowling Green to sell the property to developers for a hotel and other facilities. In one case, a clinic which had paid $40,000 for a parking lot was offered $17,000 by the city. Dr. Strow described a situation where private developers tried to purchase property in the area but could not, so the private developers got the city to declare the area blighted and then used the power of eminent domain to acquire the property for later sale to the private developers at lower prices than the city paid. In addition, Dr. Strow asserted that property owners in the area were told not to maintain or fix up their property because it would be taken by the city and improvements would not be paid for, even though the property might not be taken or developed for a period of 20 years.
The next speaker was Mr. Austin McCay, of the Odd Fellows Lodge in Bowling Green, who described a situation where the organization wanted better quarters so they purchased a used car lot building and adjacent parking. They brought the building up to standards and were planning further improvements for their members. Three years ago, they were told by the city not to make further improvements and that they couldn't sell the property. They were then told by the city to "do what you need" and that the property wouldn't be touched for 20 years. The city then listed the property as blighted and property to be taken for the redevelopment project. The city then refused to talk with the organization further. The city finally made an offer for the property at half of what the organization felt was needed to purchase new property and relocate. The property was to be used for a hotel.
Senator Stine summarized the situation as the threat of eminent domain, coupled with directions not to fix or improve the property, leads to blight, causes more problems, and then leads to lower property values.
Representative Owens suggested that a five year time limit be placed on the development of the land or the property be returned to the owner at the price paid for it. Mr. George Sowards of Bowling Green observed that this only provided a partial solution, because the city immediately demolished the buildings on the sites so that there was nothing the property owners could come back to and occupy without constructing an entire new building.
The next speaker was Mr. Frank Miller, Jr., Executive Director, Office of Legal Services for the Transportation Cabinet, who described general activities of the cabinet in the acquisition of property for roads, bridges, and other projects. Mr. Miller was accompanied by Mr. Owen Serey, Assistant General Counsel for District 6. Chairman Lindsay asked if appraisers were paid by the day and Mr. Miller replied that they were. Chairman Lindsay described a situation where, if the appraiser makes an inadequate appraisal, the appraiser must return for another day for another fee. In one instance, a person owned a liquor store and was offered one half of what the property was purchased for 20 years earlier. The response was that the standard for such takings is the fair market value at the time of the offer or the fair market value at the time of the taking.
Representative Hoover suggested that the "offer of judgment" procedure might be useful in eliminating numerous appraisals. Senator Roeding observed that it can sometimes be two years before the first offer and the final payment of the money, and that the home owner needs the money earlier in order to purchase new property.
Mr. Serey indicated that the Transportation Cabinet normally pays for the property three to four weeks after the agreement, and that during a court proceeding, the Circuit Judge selects three persons to assess the value of the property. He stated that the purchase money is deposited with the Circuit Clerk subject to repayment or increase, plus six percent interest depending on the outcome of the case. Mr. Serey further indicated that the initial offer for the property is based on the value set by a department appraiser.
Representative Stein commented on Bowling Green's need to take 12 city blocks for a baseball stadium and condominiums, and the length of time necessary to accomplish the project.
Senator Gibson commented on problems with the Transportation Cabinet's taking of property for a bypass in Litchfield, and a denial by the court to place money in escrow even though KRS 416.610 was allegedly violated by the denial. Mr. Serey commented that he did not know about that specific situation because he is located in Northern Kentucky, but that in his experience the situation would be highly unusual unless a construction right of entry was not required for some time.
The next speakers were Neil Hackworth, Deputy Executive Director of the Kentucky League of Cities, and Bill Thielen, General Counsel for the Kentucky League of Cities. Mr. Thielen said that he would be concerned about a total ban on using governmental condemnation for private purposes. He described a situation where Shelbyville used condemnation to acquire property from "slum lords", used federal Housing and Urban Development money as well as local money to fix up the housing, and then sold the renovated properties back to the previous tenants.
Chairman Lindsay asked the members of the committee if they wished to address this situation now. Mr. Thielen responded that the system is working now and courts will determine if the condemnation is legitimate. In the end, if the awards are higher, the taxpayers must pay the bill for the higher awards.
Several committee members commented that if it takes 20 years to use the condemned property for economic development, the statute should be amended to set a maximum time limit. Senator Roeding suggested that the emphasis of the law should be on protecting the rights of private property owners.
The next speaker was Representative Kathy Stein who described the features of 2005 HB 360, relating to shared parenting, and 2005 HB 359, relating to child support guidelines. Representative Stein was accompanied by Judge Steve George, Chief Family Court Judge in Jefferson County, and Judge Robert McGinnis, Chief Regional Circuit Judge of the 18th Judicial Circuit, who is the judicial representative and Chairman of the Child Support Guidelines Commission.
Judge McGinnis indicated that the purpose of HB 359 was to update the child support guidelines to represent year 2000 statistical information. The bill raised some guidelines and reduced others based on the statistical information. The bill passed the House but died in the Senate.
Judge McGinnis indicated that the commission at first opposed the idea of shared parenting, but now that shared parenting arrangements are much more common, the commission now supports the bill which adjusts the child support guidelines in shared parenting arrangements to reflect the amount of shared parenting time and costs. Although shared parenting is much more frequent, judges, according to Judge McGinnis, are reluctant to modify the child support guidelines to reflect the new situation without statutory authorization to do so. Judge McGinnis also indicated that Kenton County is experimenting with a new program to adjust the guidelines for shared parenting. He indicated that some parents fear changes because they won't make as much money in child support under shared parenting and have a "dollars for days" attitude. Judge McGinnis described the bill as containing provisions to prevent abuse of the system.
Judge George indicated that the court should look at the historic perspective of parental involvement, parental problems, alienation and denial of children with regard to custody, as well as other factors. Judge George observed that people who work a lot may not have much additional time for the children and predicted that the courts may have more litigation as to shared parenting and proper adjustment of child support payments because child custody and support can be an emotional issue.
Senator Gibson asked "how do you hold a judge to the criteria?" to which Judge McGinnis replied that it was the duty of the appellate courts to do so. Judge McGinnis observed that appeals on child support are relatively rare, but there are criticisms that judges follow the child support guidelines too closely.
Senator Westwood commented that when he introduced shared parenting legislation several years ago, judges did not want the legislature interfering in their decision making and lawyers opposed the legislation because they wanted more money for their clients.
A question was asked about who pays for braces for a child's teeth. Judge McGinnis responded that unless they are necessary for medical reasons, the parent who wants them for the child must pay for them.
Judge George indicated that Jefferson County uses a parenting coordinator and mediation in divorce cases. Representative Owens suggested that the statute should allow for retroactive application. Chairman Lindsay asked who pays for the mediator and how much are they charged. Judge George responded that the costs are paid by the parties, that the cost is $160 per hour, and that the results are confidential. He also stated that most parties agree, and uncontested cases are handled directly by the judge. Paternity cases are handled by the judge's staff.
Judge McGinnis indicated that in his court the entire matter is handled by his staff without any additional charge to the litigants.
The meeting was adjourned at 12:40 PM.