SALEM - A judge on Friday struck down as unconstitutional a voter-passed property rights law that had required state and local governments to pay owners whose land was affected by land-use regulations, relaxing some of America's strictest zoning laws.

Marion County Circuit Judge Mary James struck down the law as violating five provisions of the state and federal constitutions.

Kevin Neely, a spokesman for the Oregon attorney general's office, said the state would seek a stay of James' decision pending an appeal.

The compensation law - passed as Measure 37 on the November 2004 ballot - requires that state and local governments either compensate land owners when regulations lower property values or waive the rules.

James said the statute violates equal protection provisions of the Oregon Constitution and a state constitutional ban on suspending laws except by authority of the Legislature.

She also ruled that the law breaches the separation of powers between government branches, ”intrudes on“ legislative authority and violates due process protections under the U.S. Constitution.

Foes of the law argued that it violates the ”equal privileges and immunities“ provisions of the state constitution because it gives benefits to people who bought their land before regulations were applied but not to those who purchased property later.

The judge said the distinction between those groups ”is not reasonably related to a legitimate state interest and, therefore, is unconstitutional.“

Dave Hunnicutt, the president of Oregonians in Action and main author of Measure 37, said the ruling was a complete surprise.

He said it would be impossible to craft any measure giving property owners compensation that would pass the tests created by James.

”The ruling is novel, to put it bluntly,“ said Hunnicutt. ”We are predicting a different outcome on appeal. If Judge James' ruling stands, then there is nothing property owners can do in this state to protect themselves.“

Since Measure 37 passed last fall, more than 2,000 claims for compensation or waivers have been filed throughout the state. Local officials have had to process claims because of deadlines in the law, even though they lack any guidance on uniform statewide standards.

In Coos County, there are 55 compensation claims outstanding, totaling an estimated $35 million.

County Commission Chairman John Griffith said the judge's decision flies in the face of the public's will.

”With 72 percent of Coos County voters and 61 percent of state voters voting for Measure 37, there will be a lot of unhappy people,“ Griffith said.

”I looked at it as a wakeup call from the state to begin a real good faith effort to salvage what could have been an orderly land-use scheme. But that didn't happen,“ he added.

Many claims have been brought by property owners wanting to subdivide to build houses, or who want to put commercial developments on land where current rules forbid that.

Only people who owned a tract of land before regulations affecting it were enacted can file a claim. A major dangling issue has been whether a property owner who is granted a waiver of a land-use restriction can pass along the waiver rights to new owners.

The land use planning watchdog group 1000 Friends of Oregon, which campaigned against Measure 37, argues that allowing transferable waivers could cripple planning and allow hodgepodge development across Oregon's open spaces.

Bob Stacey, executive director of the group, hailed Friday's ruling and said he was urging Gov. Ted Kulongoski and legislative leaders to convene a special session to ”pass legislation that deals fairly with people who have borne an unfair burden, but not at the expense of their neighbors.“

Voters approved a similar property compensation measure in 2000 as a constitutional amendment. But the state Supreme Court threw it out on grounds it contained too many changes to be rolled into a single amendment.

Because of that, Oregonians in Action drafted Measure 37 as a statutory change. That made it vulnerable, however, to arguments that it violated constitutional protections.

Striking at the heart of the compensation issue in the measure, the judge said the government can't be required to pay if it wants to enforce valid land-use regulations.

”A government cannot be forced to choose between exercising its power ... to regulate for public welfare, health or safety or paying private parties to comply with the law,“ James said. ”Because Measure 37 imposes limitations on the government's exercise of power to regulate land use in Oregon, it is unconstitutional.“

Oregon Attorney General Hardy Myers has said that the law doesn't allow waiver rights to be transferred. He has raising that issue in test court cases in Crook and Jackson counties.

The Legislature grappled with waiver issues and some other legal questions but couldn't agree any legislation to iron out the wrinkles of the law.