Per City of Billings Subdivision Regulations Appendix B, Section B.8, when 3 or more parcels of less than 160 acres each with common covenants or facilities pertaining to each parcel have been divided from the original tract, a pattern of development shall be presumed to be adopted for the purposes of evading the Montana Subdivision and Platting Act (the Act, or MSPA). Therefore, city staff recommends the City Council deny the exempt plat of Amended Certificate of Survey 3030, requiring the applicant to instead complete a minor subdivision.

Tom Llewellyn, on behalf of Stephen Zimmerer, submitted an exempt plat to the Planning Division to split the Remainder of Tract 2 of Certificate of Survey 3030, generally located south of Ironwood Drive and east of Woodfield Court. The agent on behalf of the applicant has requested to split the existing Tract into four (4) lots using an exemption from subdivision, a division made outside of a platted subdivision for the purpose of a single gift or sale in each county to each member of the landowner's immediate family, MCA 76-3-207 (1)(b) and City of Billings Subdivision Regulations Section 23-105 and Appendix B, Section C. Immediate family member means a spouse, children by blood or adoption, and parents, MCA 76-3-103(8) and City of Billings Subdivision Regulations, Appendix B, Section C.2. 

This exempt plat would create four (4) lots from the parent lot, with proposed Lots 1, 2, and 3 being gifted to Zainya Zimmerer (Child), Zahrah A. Zimmerer (Child), and Brenda Zimmerer (Spouse), respectively. Stephen Zimmerer would retain ownership of Lot 4. Whenever three (3) or more parcels of less than 160 acres each with common covenants or facilities pertaining to each parcel have been divided from the original tract, it is considered a pattern of development, per City of Billings Subdivision Regulations Appendix B, Section B.8. A pattern of development shall be presumed to be adopted for the purposes of evading the Montana Subdivision and Platting Act (the Act, or MSPA).  Staff reviewed the checkprint submittal of the exempt certificate of survey and determined that the exemption creates a pattern of development and is being used to evade the Act and that the exemption should be denied. Tom Llewellyn is appealing this determination and requesting a hearing with the governing body, City of Billings City Council, per City of Billings Subdivision Regulations Appendix B.5.

Because this has rarely happened, if at all, the process is outlined more specifically below for Council’s reference. Additionally, the evasion criteria outlined in Appendix B of the City's Subdivision Regulations is attached to this memo. 

Montana law provides that “exemption provisions of the Act are to be generally given a narrow interpretation." State ex rel. Dreher v. Fuller, (1993) 257 Mont. 445, 448-449, 849 P.2d 1045, 1047 (citing State ex rel. Florence–Carlton School District No. 15–16 v. Board of County Commissioners of Ravalli County (1978), 180 Mont. 285, 291, 590 P.2d 602, 605). The Act requires every city to adopt and provide for the enforcement of local subdivision regulations. MCA 76-3-501. The Act and the City’s subdivision regulations provide for exemptions from subdivision review and approval, unless the method of disposition is adopted for the purpose of evading the requirements of the Act. See MCA 76-3-201 and City's Subdivision Regulations, Section 23-105. The City’s subdivision regulations must establish criteria to use in determining whether a proposed method of disposition using an exemption is an attempt to evade the requirements of the Act or City regulations. MCA 76-3-504. 

The Montana Supreme Court has held “governing bodies have the power and duty to evaluate and determine from all the circumstances whether the proposed division of land is based on a purpose to evade subdivision requirements.” State ex rel. Dreher v. Fuller, 257 Mont. 445, 451 (1993) (citing State ex rel. v. Leach v. Visser, 234 Mont. 438, 447 (1989)). Additionally, a “local government may legitimately require one claiming an exemption from the Act’s requirements to make some evidentiary showing the exemption is justified…” Id.

The City of Billings is authorized to establish procedures to evaluate a proposed conveyance to determine if it is an attempted evasion of the Act. MCA 76-3-504(1)(p); see also Dreher v. Fuller, 257 Mont. at 451 (citing Withers v. County of Beaverhead, 218 Mont. 447, 450 (1985)). The City’s subdivision regulations establish both the criteria and a process for Council to evaluate a division of land to determine whether that division is for the purpose of evading the Act. See Appendix B of the City's Subdivision Regulations. 

Council should evaluate all relevant circumstances in assessing the intent of the subdivider. This may include the nature of the subdivider’s business, the nature of the use and the prior history of the tract, the proposed configuration of the tract after the transaction would be complete, and any pattern of exempt transactions that will result in the equivalent of a subdivision without review. See Dreher, 257 Mont. at 451-452, citing 40 Op. Att’y Gen. 58, 62 (1983). “A claimant who attempts to engage in a pattern of exempt transactions which will result in the equivalent of a subdivision without local government review, should be denied exemption… To allow an exemption in such circumstances would obviously subvert the Act’s public policy requiring a priori review of divisions of land which may have substantial impact on public health, safety, and general welfare.” Id. See also MCA 76-3-102. In this instance, Council will want to review the criteria in Appendix B, Section C. as it applies to gifts or sales to a member of the immediate family. See also MCA 76-3-207. 

“Because exemptions of statutes pertaining to health, safety, and welfare of the public should be narrowly construed, a party claiming the exemption should have the burden of proving his entitlement to the exemption.” Dreher, 257 Mont. at 453. Council may hear additional evidence at the public hearing to determine whether the use of the exemption was intended to evade the Act. If Council determines the information provided by the applicant overcomes the presumption that the exemption is being used to evade the Act, Council may authorize the use of the exemption. Appendix B, Section B.5.
 

Due to the applicant appealing the determination to City Council, a public hearing is required. Comments may be made by adjacent property owners during the City Council public hearing. 

City Council may:

• Approve the authorization of the use of an exemption for Amended Certificate of Survey 3030; or,
• Disapprove the authorization of the use of an exemption for Amended Certificate of Survey 3030. If the exemption is determined to be an evasion of MSPA, the landowner may submit a subdivision application for the proposed land division according to the City of Billings Subdivision Regulations.

The determination of use of the exemption has no fiscal impact on the Planning Division.

The request is for the City Council to determine whether the family transfer is intended to evade the Act.

The governing body and its agents, when determining whether an exemption is claimed for the purpose of evading MSPA, shall consider all of the surrounding circumstances. These circumstances may include but are not limited to:

(1) The nature of the use of the parcel.
The majority of the parcel is vacant and includes Cove Creek. Three (3) of the four (4) lots are of a size and configuration that resembles nearby residential development. 

(2)The prior history of uses of the particular tract in question.
The parcel is a vacant remainder parcel, most of the original C.O.S. 3030, Tract 2 has been developed into Ironwood Estates, 1st-4th Filings. The parcel was also annexed at the same time as the land associated with what is currently Ironwood Estates, 1st-4th Filings. 

(3) The proposed configuration of the tracts if the proposed exempt transaction is completed.
Lots 1, 2, and 3 would be accessed from Ironwood Drive. Lots 1 and 2 would have a shared access and utility easement along their shared property line for the benefit of Lot 3. This driveway would be 171.51 feet long, which requires an approved cul-de-sac or hammerhead turnaround at the terminus for emergency access and vehicle circulation. No such turnaround is depicted on the plat. Lot 4 would be accessed from Ironwood Drive, but primarily includes Cove Creek throughout its length and may not be suitable for development. 

(4) Any pattern of exempt transactions that will result in the equivalent of a subdivision without local government review.
Amended Certificate of Survey 3030 proposes four (4) lots through family transfer. The creation of four lots is also considered a minor subdivision. Staff found that the aforementioned circumstances reinforce the initial determination that this exempt plat is an attempted evasion of the Montana Subdivision and Platting Act. Lots 1-3 would effectively be a cul-de-sac neighborhood without the required internal road development or coordinated infrastructure improvements. This presents concerns of public safety and consistency of development and City standards in residentially developed areas that would be addressed by going through subdivision.  

Per City of Billings Subdivision Regulations Appendix B.6., staff is required to issue an advisory opinion on whether evasion would occur. After staff review and consideration, staff finds the development of four residential tracts with a common access results in a clear pattern of development equivalent and identical to a minor subdivision. By not going through subdivision review, an approved turnaround, road, streetlights, and sidewalks will not be constructed. All of these items have a direct relationship to emergency services, public safety and consistency of standards for residential development in the City.