Although the policy bill died that would have required the state to shift from a “no net loss” development impact standard to a “net ecological gain,” the concept is back as a study budget proviso.

All the dedicated readers out there might remember that a bill was introduced this session proposing to implement a net ecological gain standard across state and local environmental laws (HB 2550). Because cities are on the front lines of implementing development impact regulations, we were very concerned that this shift would put cities at risk of takings litigation.

Governments may not take private property without just compensation. This is a protection provided by both the state and federal constitutions.

One of the legal tests of a “takings” evaluation is that a government regulation cannot require a private property owner to mitigate impacts of a development project beyond what is proportional to the actual impact of the project. If they do, it is considered a taking and the government must compensate the property owner for the loss of use of the property.

A net ecological gain standard, by definition, likely exceeds this proportionality—putting cities at risk of lawsuits and compensation of takings.

HB 2250 was amended to reduce it to a study bill, but it did not advance out of committee in time. That concept is now back as draft budget proviso language directing the Office of Financial l Management to complete the study. The proposed proviso is still being negotiated. We are working to strengthen the language to include an assessment of the challenges to local governments in implementing this new standard, including the legal constraints and costs.