Volume 42 - Issue 35 - August 31, 2023

State of Kansas

Attorney General

Updated Guidelines for State Agencies in Complying with the Private Property Protection Act; Reporting Requirement Regarding Regulatory Impacts on Property Rights and Property Values

Pursuant to K.S.A. 77-704, the Office of the Attorney General hereby updates the guidelines to assist state agencies in evaluating proposed governmental actions and determining whether such actions may constitute a taking.

State agencies are reminded that, before any formal rule or “governmental action” (defined in K.S.A. 77-703(b)) may be implemented, a takings assessment report following these guidelines must be submitted to both the Governor and the Attorney General. K.S.A. 77-706(d). Insofar as the action is a rule or regulation, the report must also be submitted to the Secretary of State and Director of the Budget. See K.S.A. 77-706(e), 77-416.

“Governmental actions” subject to the reporting requirement of K.S.A. 77-706 include the following, if any potential effect on private property rights or private property values may occur:

1. The proposal of legislation by a state agency;
2. proposed agency rules, regulations, or directives; or
3. proposed agency guidelines and procedures concerning the process of issuing licenses or permits.

“Private property” under the Act means any real property or interest arising from or relating to any real property in the state. K.S.A. 77-704(c). Consequently, the reporting requirements do not apply to actions that only affect personal property, intangible property, or other property rights not involving real property. However, “takings” of such other forms of property are still governed by the U.S. and Kansas Constitutions, and state agencies must remain vigilant that their actions do not take such property without just compensation.

Please note: The guidelines issued by the Office of the Attorney General and published in the Kansas Register on December 21, 1995, were read by some to suggest that the agency need only complete the required report if the agency, in its own judgment, concluded that a constitutionally compensable taking of private property would in fact occur as a result of the governmental action. Insofar as earlier guidelines suggested as much, they were incorrect. The Private Property Protection Act plainly requires state agencies to complete a report regardless of the agency’s assessment of whether a constitutionally compensable taking might occur: “Before any governmental action is initiated, the state agency shall prepare a written report available for public inspection that follows the guidelines established by the attorney general . . . .” K.S.A. 77-706(a) (emphasis added). From the date of publication of this update, all agencies must produce the required report before initiating any governmental action, as defined above, and must submit the report to the Attorney General and the Governor before implementing the governmental action.

The report required by K.S.A. 77-706 must contain the following:

1. A detailed description of how the governmental action would be implemented and how it would either affect the rights of property owners to use their property or affect the value of private property in Kansas, regardless of what the scale or the amount of the potential effect on private property rights would be.
2. A detailed description of the manner in which the proposed governmental action would substantially advance the purpose of protecting the health, safety, or welfare of the citizens of Kansas against a specifically identified risk.
3. A detailed description of all facts relied upon by the agency to justify the proposed governmental action’s effects, restrictions, or limitations on private property rights, uses, or values.
4. A detailed analysis of whether the proposed governmental action may constitute a compensable taking of private property (including references to pertinent caselaw) by:
   1. restricting the permissible uses of the private property,
   2. restricting the permissible activities on the private property,
   3. requiring a permit or license to conduct any activity on the private property when such a permit or license was not previously required,
   4. diminishing the ability of the owner to sell the private property, or
   5. diminishing the value of the private property.
5. A detailed description of any alternatives to the proposed governmental action that may:
   1. fulfill the legal obligations of the state agency, along with a description of the source of those legal obligations;
   2. reduce or mitigate the extent of the limitation on the use, or the reduction in value, of the private property; and
   3. reduce the risk to the state that the proposed governmental action would be deemed a compensable taking if the governmental action were challenged in court.
6. With respect to governmental actions regarding the issuance of permits, a detailed explanation of how any conditions imposed upon the issuance of such permits relate directly to the public health, safety, or welfare purpose for which the permit is issued, how the conditions advance that purpose, and how the conditions are authorized by law.
7. With respect to emergency governmental actions under K.S.A. 77-706(b), a detailed description of the facts relied upon by the agency in declaring the need for emergency action.

Agencies should keep in mind that a taking of private property can occur via regulation, without the government physically entering or taking possession of the private property. A compensable regulatory taking undeniably occurs whenever regulations completely deprive an owner of “all economically beneficial use[]” of his property. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992). However, regulatory takings are not limited to such extreme cases. A regulatory taking (requiring compensation of the property owner) can potentially occur wherever the regulation restricts the use of the property or devalues the property. The U.S. Supreme Court has stated that several factors must be considered in assessing whether a compensable regulatory taking has occurred. Those factors are:

1. “the economic impact of the regulation on the claimant,”
2. “the extent to which the regulation has interfered with distinct investment-backed expectations,” and
3. “the character of the governmental action.”

Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978). A report submitted to the Office of the Attorney General should analyze each of these factors when addressing requirements (4)(a)–(e) above. Finally, it should be remembered that takings need not be permanent to be compensable—the law applies to temporary takings as well.

The Office of the Attorney General will review any and all reports submitted to the Office pursuant to K.S.A. 77-706 and will notify the agency whether the report complies with the requirements of Kansas law, as described in this guidance. The agency should not proceed with the implementation of the proposed governmental action until the agency is notified that the report complies with the aforementioned requirements of Kansas law.

However, the law requires that the report be prepared and available for public inspection before any governmental action is initiated, except in very limited circumstances addressed by K.S.A. 77-706(b). Thus, insofar as the Attorney General’s review or approval is required for any governmental action (including but not limited to review of rules and regulations under K.S.A. 77-420) such approval will require not only a legally sufficient takings report consistent with these guidelines, but also evidence that such report was prepared and made available for public inspection at the beginning of considering the proposed governmental action.

Safe Harbor

The Attorney General recognizes that the timing requirements of the Act—i.e., a report prepared at the initiation of a proposed action but not submitted for review until immediately before implementation—have the potential to create inefficiencies. Therefore, in order to encourage the efficient use of government resources and limit wasteful spending of taxpayer dollars, state agencies may (but are not required to) submit their takings assessment reports to the Office of the Attorney General for review, comment, and/or approval prior to public inspection and initiation of the governmental action. Insofar as approval is obtained through this procedure, such approval shall be noted on the Attorney General’s letterhead or other form approved by the Attorney General and signed by the Attorney General or his designee. This memorandum of approval shall accompany the proposed action throughout its consideration and will constitute preclearance of the report at any future stage requiring Attorney General approval.

Proposed Legislation

As noted above, governmental action, as defined in K.S.A. 77-703(b), is not limited to regulatory promulgation. Legislation often originates from an executive-branch agency, whether in the form of revisions to existing laws or the creation of new statutes. K.S.A. 77-703(b) specifically identifies “proposed legislation” as “governmental action,” indicating that a takings analysis is required regardless of whether the legislation ultimately is passed into law. In this case, “initiation” and “implementation” occur at the same time: when the proposed legislation is introduced in either legislative house. Therefore, prior to the introduction in either legislative chamber of any agency-proposed legislation that may constitute a taking, a state agency must prepare a K.S.A. 77-706 report, make it available to the public, and submit a copy of that report to the Governor and the Attorney General.

The Office of the Attorney General will review the submitted report and may report to the legislature on its assessment of the report and the proposed legislation.

Proposed Agency Guidelines and Procedures Concerning the Process of Issuing Licenses or Permits

State agencies may develop policies and procedures concerning issuing licenses that are not embodied in any regulation. Before new or revised licensing-related policies or procedures that may constitute a taking under these Guidelines are introduced to the person or persons authorized to approve such policies and procedures, a state agency must prepare a K.S.A. 77-706 report and make it available to the public. Further, before such governmental action is approved, the state agency must file a copy of the report with the Governor and the Attorney General.

The Attorney General or his designee may advise the state agency regarding compliance with the Private Property Protection Act by letter or by personal appearance before the person or persons who approve such policies and procedures. No state agency should approve policies and procedures that constitute “governmental action” without written or other confirmation from the Office of the Attorney General that the K.S.A. 77-706 reporting requirements have been satisfied.

Material Changes to the Proposed Action After Preparation of the Takings Report

The Rules and Regulations Filing Act is designed to encourage public input into proposed rules and regulations and, in appropriate circumstances, amendment of proposed rules and regulations to account for public input. However, agencies must remember that, at some point, changes become so significant that the amended proposal cannot reasonably be seen as the same proposal; the rulemaking proceedings must start over. K.S.A. 77-421(c). Similarly, proposed governmental actions that do not go through the formal rulemaking process can change so significantly that they cannot fairly be understood as the same proposal. In either case, preclearance of a takings assessment report cannot extend to the altered proposal.

Where an agency intends to make material changes to a proposed action, it should consult with the Office of the Attorney General to determine whether a new takings assessment is needed. While the need for a new assessment in any particular case is necessarily fact-dependent, changes that lessen the proposed action’s burden on private property ordinarily will not require a new assessment, while changes that increase the burden on private property will.

Kris W. Kobach
Attorney General

Doc. No. 051439