Amends TCA Title 29.

COMPENSATION FOR DIMINUTION This bill provides that if a public entity enacts or enforces a new land use regulation that restricts the existing uses of private real property or an interest in the real property, then the public entity must provide notice of the new land use regulation to the owner of an affected property, or the registered agent, by mail to the address referenced in the public entity's most current property tax records. The notice must be mailed within 10 business days of the enactment of the new land use regulation and must inform the owner that the new land use regulation may impact the owner's existing property rights and the owner may have only one year from the date of receipt of the notice to pursue any rights pursuant to this bill. This bill requires the owner of the property to be paid just compensation if a public entity enacts or enforces a new land use regulation that restricts the existing uses of private real property or an interest in the real property and has the effect of reducing the fair market value of the property by a minimum of 10 percent or $50,000, whichever amount is greater. APPLICABILITY This bill does not apply to the following: (1) A land use regulation that restricts or prohibits activities commonly and historically recognized as public nuisances under common law; (2) A land use regulation that restricts or prohibits activities for the protection of public health and safety; (3) A land use regulation to the extent the land use regulation is required to comply with federal law; (4) A land use regulation that restricts or prohibits the use of a property for the purpose of selling pornography or performing nude dancing. However, this provision does not affect or alter rights provided by the U.S. Constitution or Constitution of Tennessee with respect to such activities; or (5) A land use regulation that was enacted prior to the date of acquisition of the property by the owner or a family member of the owner who owned the subject property prior to acquisition or inheritance by the owner, whichever occurred first. DEMAND FOR COMPENSATION This bill authorizes an owner to demand just compensation under this bill by providing written notice to a public entity enacting or enforcing a land use regulation. The written notice must be sent by certified mail to the chief executive officer of the public entity and describe the affected property and identify the owner's interest in the property. The written notice must include a written appraisal and may include other evidence that supports the claim and demonstrates the loss in fair market value. Additionally, the written demand for compensation must be made within one year of owner's receipt of the notice required by this bill. DUTIES AFTER RECEIVING DEMAND FOR COMPENSATION This bill requires, within 90 days of receiving a written demand under this bill, the public entity to (i) provide just compensation to the owner; (ii) modify, remove, or choose not to apply the land use regulation to allow the owner to use the property for a use permitted at the time the owner acquired the property; or (iii) deny that compensation is due under this bill. CAUSE OF ACTION This bill provides that if a public entity denies that compensation is due, or denies the amount claimed to be due, and does not modify, remove, or choose not to apply the land use regulation or reach another agreement with the property owner within 90 days after a written demand for just compensation is received, then the owner has a cause of action against the public entity for compensation or other remedy under this bill in the circuit court for the county in which the real property is located. The failure of an owner of property to file an application for a land use permit with a public entity is not grounds for dismissal, abatement, or delay of a compensation claim under this bill. This bill also provides that in an action brought pursuant to this bill, if the prevailing party is the owner of the property, then the court may award the owner necessary and reasonable attorney fees, court costs, and expenses incurred by the owner from the date of submission of a written demand pursuant to this bill.