1.This Act may be cited as the Private
Property Rights Protection Act
.
2.Congress finds the following:
(1)The founding
fathers held dear the fundamental rights associated with the ownership of
private property.
(2)In 1788, James
Madison recognized the connection between freedom and property rights when he
wrote in Federalist No. 10 that the right to own property originates in free
thought and that it is the Government’s job to protect such rights.
(3)In 1792, in an
essay entitled Property
, James Madison wrote, where an
excess of power prevails, property of no sort is duly respected. No man is safe
in his opinions, his person, his faculties, or his possessions.
.
(4)In the
Property
essay James Madison also wrote, Government is
instituted to protect property of every sort. . . . This being the end of
government, that alone is a just government, which impartially secures to every
man, whatever is his own.
.
(5)In 1775, the
Virginia patriot Arthur Lee wrote, The right of property is the guardian
of every other right, and to deprive a people of this, is in fact to deprive
them of their liberty.
.
(6)In 1783, Benjamin
Franklin wrote, All the property that is necessary to a Man, for the
Conservation of the Individual and the Propagation of the Species, is his
natural Right, which none can justly deprive him of.
.
(7)In 1787, John
Adams wrote, The moment the idea is admitted into society that property
is not as sacred as the laws of God, and that there is not a force of law and
public justice to protect it, anarchy and tyranny commence.
.
(8)In 1795 Supreme
Court Justice William Patterson wrote, in the case Vanhorne’s Lessee v.
Dorrance: From these passages it is evident; that the right of acquiring
. . . property, and having it protected, is one of the natural, inherent, and
unalienable rights of man. Men have a sense of property: Property is necessary
to their subsistence, and correspondent to their natural wants and desires; its
security was one of the objects, that induced them to unite in society. No man
would become a member of a community, in which he could not enjoy the fruits of
his honest labor and industry. The preservation of property then is a primary
object of the social compact, and . . . was made a fundamental
law.
.
(9)In 1798, the
Supreme Court considered the case of Calder v. Bull, in which Justice Samuel
Chase recognized that government action which is contrary to the great
first principles of the social compact, cannot be considered a rightful
exercise of legislative authority
which he explained with the following
example: . . . a law that takes property from A and gives it to B: It is
against all reason and justice, for a people to entrust a Legislature with such
powers . . . .
.
(10)On March 6,
1860, Abraham Lincoln stated that the institution of slavery is reprehensible
because it offends the right of man to keep the fruits of his own labor and
thus denies man the right to own property.
(11)In a stark
departure from the honor and recognition given individual private property
rights under the United States Constitution, the United States Supreme Court in
the case of Kelo v. City of New London, issued a decision on June 23, 2005, by
a 5 to 4 vote, that eminent domain may be used to seize property for the
purpose of private economic development.
(12)Justice Sandra
Day O’Connor rightly stated in her dissenting opinion in Kelo, the
government now has license to transfer property from those with fewer resources
to those with more. The Founders cannot have intended this perverse
result.
.
(13)Justice O'Connor
further wrote, any property may now be taken for the benefit of another
private party, but the fallout from this decision will not be random. The
beneficiaries are likely to be those citizens with disproportionate influence
and power in the political process, including large corporations and
development firms.
.
(14)Justice O’Connor
also wrote about the effects of the Kelo ruling: To reason, as the Court
does, that the incidental public benefits resulting from the subsequent
ordinary use of private property render economic development takings for
public use
is to wash out any distinction between private and public
use of property—and thereby effectively to delete the words for public
use
from the Takings Clause of the Fifth Amendment.
.
(15)Justice Clarence
Thomas wrote, I do not believe that this Court can eliminate liberties
expressly enumerated in the Constitution.
.
(16)The City Council
of New London, Connecticut, created the New London Development Corporation
(NLDC
) as a 501(c)(3) non-profit organization and authorized the
NLDC to purchase property or to acquire private property for economic
development purposes by exercising eminent domain in the City’s name.
(17)NLDC’s actions,
which were the subject of the lawsuit in the Kelo case, were made possible by
numerous Federal grants and direct appropriations, including: $2,000,000 from
the Economic Development Administration in 2001, $750,000 from the Department
of Labor in 2000, $125,000 from the Fannie Mae Foundation in 2000, and an
earmark of $100,000 in the FY2001 VA–HUD appropriations Act (Public Law
106–988).
(18)The Kelo
decision stands as a repudiation of the principle of the Fifth Amendment, as
embodied by the writings of James Madison, Benjamin Franklin, John Adams, and
Abraham Lincoln, and also as had previously been recognized by the Supreme
Court.
(19)Congress has
encouraged the State and local governments’ practice of using eminent domain to
further economic development by using the Federal purse strings to incentivize
such practices through Federal grants and direct appropriations.
(20)Congress has
also created extensive tax-based incentives to encourage State and local
governments to condemn private property for economic development
purposes.
(21)In a joint
amicus brief, the National Association for the Advancement of Colored People
and the American Association of Retired Persons stated, The takings that
result [from the Court's decision in Kelo] will disproportionately affect and
harm the economically disadvantaged and, in particular, racial and ethnic
minorities and the elderly.
.
(22)The Supreme
Court’s decision to expand eminent domain is also troubling for religious
institutions, as this ruling will disproportionately negatively impact these
institutions as they are often non-profit and almost universally tax-exempt. As
a result, the property owned by religious institutions is particularly
vulnerable to this type of taking, as the ruling of the court disfavors
non-profit, tax-exempt property owners in favor of for-profit, tax generating
businesses.
(23)It is in the
best interest of the American people for Congress to prohibit Federal funding
and to restrict tax benefits from accruing to any person, party, or
governmental authority who would seek to acquire private property through
seizure by eminent domain for economic development purposes.
(24)Congress can
restrict the use of Federal funds and the availability of Federal tax
incentives to discourage the activities of State and local governments.
(25)It is the
responsibility and obligation of Congress to act to protect private property
rights and to further the protections afforded to private parties by the United
States Constitution under the Fifth Amendment and to prevent the unjust use of
the power of eminent domain.
3.For purposes of this Act:
(1)The term “acquiring party” means any person or party that
acquires a real property interest from a condemning authority, which took title
to such real property interest by the use of eminent domain or the threat of
the use of eminent domain, including any—
(A)individual;
(B)trust;
(C)charity;
(D)corporation;
(E)partnership;
or
(F)limited liability
company.
(2)The term blighted property
includes
any—
(A)property which
because of physical condition, use, or occupancy constitutes a public nuisance
or attractive nuisance;
(B)dwelling which,
because it is dilapidated, unsanitary, unsafe, vermin-infested, or lacking in
the facilities and equipment required by the housing code of the municipality,
is unfit for human habitation;
(C)structure which
is a fire hazard, or is otherwise dangerous to the safety of persons or
property;
(D)structure the
utilities, plumbing, heating, sewer, or other utility services of which have
been disconnected, destroyed, moved, or rendered ineffective such that the
property is unfit for its intended use;
(E)vacant or
unimproved lot or parcel of ground in a predominately built-up-neighborhood,
which by reason of neglect or lack of maintenance has become a place for
accumulation of trash and debris or a haven for rodents or other vermin;
(F)property that has
tax delinquencies exceeding the fair market value of the property;
(G)property with
code violations affecting health or safety that has not been substantially
rehabilitated within 1 year of the receipt of notice to rehabilitate from the
appropriate housing code enforcement agency; or
(H)abandoned
property.
(3)The term “condemning authority” means any authority,
utility, or co-operative which exercises the power of eminent domain either
directly or by a delegation of power, including any—
(A)State;
(B)county;
(C)municipality,
(D)city;
(E)town, whether
private or public;
(F)corporation,
whether for profit or not for profit; and
(G)district.
(4)For
purposes of sections 6, 7, and 8, the term government—
(A)means—
(i)a
State, county, municipality, or other governmental entity created under the
authority of a State;
(ii)any branch,
department, agency, instrumentality, or official of an entity listed in clause
(i); and
(iii)any other
person acting under color of State law; and
(B)includes the
United States, a branch, department, agency, instrumentality, or official of
the United States, and any other person acting under color of Federal
law.
(5)Incidental
economic benefitThe term “incidental economic benefit”—
(A)means the use of
any property for any project that is neither—
(i)a
public use; or
(ii)a
public purpose; and
(B)includes projects
which rely on eminent domain to acquire property and which are done—
(i)for
the purpose of enhancing or increasing the tax base of a condemning
authority;
(ii)for the purpose
of creating jobs within the jurisdiction of a condemning authority; or
(iii)in furtherance
of economic development.
(6)The term “property owner” means any person with a real
property interest, whether possessory or not, that is being taken under the
power of eminent domain.
(7)The term “public purpose”—
(A)means the use of
property acquired by eminent domain that furthers a legitimate governmental
purpose to directly and substantially protect the health, safety, and welfare
of the public; and
(B)includes—
(i)condemnation of
any severely blighted property;
(ii)the development
of any property to provide public utilities, including—
(I)electric;
(II)gas;
(III)phone;
(IV)cable;
(V)water service and
sewer; and
(VI)wi-fi
networks;
(iii)hydro-electric
projects and flood control measures;
(iv)development of
waste, recycling, and waste treatment facilities; and
(v)development of
any property to provide an essential public health or safety service such as a
privately operated prison or hospital.
(8)The term “public use”—
(A)means any use of
property acquired by eminent domain that is—
(i)used by a
governmental entity;
(ii)owned, operated,
or maintained by a government entity and used by the public as a right-of-way;
or
(iii)used by a
common carrier; and
(B)includes—
(i)right-of-ways;
(ii)roadways;
(iii)highways;
(iv)interstates;
(v)interchanges;
(vi)bike
paths;
(vii)waterways and
navigable waters;
(viii)airports,
railroads, and other transportation needs; and
(ix)public parks and
public buildings, including—
(I)schools;
(II)hospitals;
(III)prisons;
(IV)government
buildings; and
(V)sports stadiums,
theaters, or other public entertainment venues provided that any takings for
these projects is limited solely to the real property necessary for—
- (aa)the
construction of such stadiums, theaters or venues; and
- (bb)parking
facilities and public transportation and access roads to and from such
stadiums, theaters or venues.
(9)The term “real property interest” means any—
(A)fee title
interest;
(B)lease
interest;
(C)easement;
(D)development
rights;
(E)mineral
rights;
(F)water
rights;
(G)rights in real
property related to sky, air, or vision which affect the value of such real
property; or
(H)future interest
in any of the real property interests or rights described in subparagraphs (A)
through (G).
4.Denial of
Federal funds for takings not for the public use
(a)A condemning authority or acquiring party that engages or
participates in a taking or condemnation of any real property interest not for
a public use or public purpose, without the consent of the owner of such real
property interest, under the power of eminent domain pursuant to the Fifth
Amendment of the United States Constitution, or under any relevant State
constitution, statute, or regulation, shall not be eligible to receive any
Federal funds, including any funds appropriated by Congress or otherwise
expended from the Federal treasury.
(b)Certification
of eligibility to receive funds
(1)Any entity applying for Federal funds shall certify to
the appropriate Federal agency, under penalty of perjury, that any funds it
receives will not be used to—
(A)develop any real
property which is subject to or otherwise subsequently becomes subject to a
Fifth Amendment property protection statement;
(B)further any
economic development associated with an exercise of eminent domain power which
is not in furtherance of a public use or public purpose; or
(C)provide, further,
or enhance an incidental economic benefit.
(2)The Secretary of the Treasury shall promulgate rules and
regulations to establish the procedures and rules regarding the certification
required under paragraph (1), including—
(A)certification
language; and
(B)application
forms.
(3)Each Federal agency shall forward a copy of each
certification required under paragraph (1) that it receives to the Commissioner
of Internal Revenue.
(4)
(A)The
Commissioner of Internal Revenue may conduct an audit of any condemning
authority or acquiring party that has made a certification under paragraph (1)
and may review such books, records, and materials as the Commissioner
determines appropriate.
(B)If after an audit of a condemning authority or
acquiring party, the Commissioner of Internal Revenue determines that the
condemning authority or acquiring party violated the terms of the certification
required under paragraph (1), the condemning authority or acquiring party shall
reimburse the Department of the Treasury for any funds—
(i)received from any
Federal agency;
(ii)expended by the
Secretary of the Treasury in conducting the audit; and
(iii)together with
interest, compounded annually at a rate of 12 per centum, calculated from the
date of disbursement of such funds until the obligation has been repaid.
(C)An audit conducted under this paragraph—
(i)shall not be
limited to the year in which a suspected violation of the terms of the
certification required under paragraph (1) occurs; and
(ii)may extend back
to cover any year or years in the period beginning 10 years prior to the year
such audit commences.
(D)The
United States Court of Federal Claims shall have original and exclusive
jurisdiction over any appeal by a condemning authority or acquiring party of
any reimbursement obligation imposed under subparagraph (B).
5.Denial of tax
benefits for takings not for the public use
(a)Fifth Amendment
property protection statement
(1)Upon receipt of a notice from a condemning authority
which states the intent of the condemning authority to initiate an eminent
domain proceeding against a real property interest of a property owner, any
property owner who receives such notice may file a Fifth Amendment property
protection statement (in this section referred to as a PPS
) with
the appropriate State or local agency responsible for recording deeds, liens,
or mortgages of real property in which the affected real property interest is
located, provided that the property owner files the PPS not later than 90 days
after the receipt of such notice.
(2)Each PPS described in paragraph (1) shall state the basis on
which the property owner believes that a condemning authority has exceeded its
authority in exercising its eminent domain power to take or condemn the real
property interest of the property owner, including by using or intending to use
such taking or condemnation to create an incidental economic benefit.
(3)Filing Copy of
PPS with the commissioner of internal revenueA property owner
may submit a copy of each PPS such property owner filed under paragraph (1) to
the Commissioner of Internal Revenue.
(4)
(A)A property owner, the personal representative of a
property owner, the estate of a deceased property owner, or any qualified heir
of a deceased property owner (as such term is defined in section 2032A(e) of
the Internal Revenue Code) may voluntarily file a document terminating a PPS
with the appropriate State or local agency responsible for recording, deeds,
liens, or mortgages of real property in which the affected real property
interest is located.
(B)The
effect of filing a termination of PPS under subparagraph (A) shall be to void
such PPS.
(5)Involuntary
release of PPS
(A)A condemning authority may seek a judicial determination
of the validity of any timely filed PPS in any State court having jurisdiction
over takings or condemnation proceedings in the State in which the affected
real property interest is located.
(B)In any case initiated under subparagraph (A), a condemning
authority shall bear the burden of proof in demonstrating that such taking or
condemnation is not inconsistent with section 6(a).
(C)Upon a final determination of any court described in
subparagraph (A) that such taking or condemnation does not violate section
6(a), the court may enter an order releasing the PPS.
(6)The Secretary of the Treasury shall establish a uniform
format for all PPS and releases of PPS to be used by property owners.
(b)
(1)A PPS is intended to enhance the property protections
afforded by the Fifth Amendment by permitting a property owner to take action
to discourage those takings which are not in furtherance of either a public use
or public purpose.
(2)Effect of PPS
on compensation award to property ownerAny compensation awarded
for a taking pursuant to the Fifth Amendment shall be made without regard to
any PPS attaching to the property being taken.
(3)Additional
effects of a PPSA PPS shall—
(A)attach to the
real property interest which is described in the PPS; and
(B)bind the current
owner and all future owners, including successor in interests, assigns, or
heirs, who at any time hold title to all or any portion of such real property
interest.
(c)For a period of 20 years beginning on the January 1st
immediately following the date of recording of any PPS, any acquiring party
which acquires any real property interest which is subject to a PPS shall be
prohibited from claiming any benefit, deduction, or tax credit related to any
activities conducted within the geographical boundaries comprising the
jurisdiction of the condemning authority under the Internal Revenue Code of
1986, including the following:
(1)Section 27
(relating to taxes of foreign countries and possessions of the United States;
possession tax credit).
(2)Section 38
(relating to general business credits).
(3)Section 39
(relating to carryback and carryforward of unused credits).
(4)Section 40
(relating to alcohol used as a fuel).
(5)Section 41
(relating to credit for increasing research activities).
(6)Section 42
(relating to low-income housing credit).
(7)Section 45
(relating to electricity produced from certain renewable resources).
(8)Section 45A
(relating to Indian employment credit).
(9)Section 45B
(relating to credit for portion of employer social security taxes paid with
respect to employee cash tips).
(10)Section 45C
(relating to clinical testing expenses for certain drugs for rare diseases or
conditions).
(11)Section 45D
(relating to new markets tax credit).
(12)Section 45E
(relating to small employer pension plan startup costs).
(13)Section 45F
(relating to employer-provided child care credit).
(14)Section 47
(relating to rehabilitation credit).
(15)Section 103
(relating to interest on State and local bonds).
(16)Section 162
(relating to trade or business expenses).
(17)Section 163
(relating to interest).
(18)Section 164
(relating to taxes).
(19)Sections 165 and
166 (relating to ordinary losses)
(20)Section 167
(relating to depreciation).
(21)Section 169
(relating to amortization of pollution control facilities).
(22)Section 172
(relating to net operating loss deduction).
(23)Section 174
(relating to research and experimental expenditures).
(24)Section 175
(relating to soil and water conservation expenditures).
(25)Section 178
(relating to authorization of cost of acquiring a lease).
(26)Section 179
(relating to election to expense certain depreciable business assets).
(27)Sections 48(g)
and 170(h) (relating to Federal Historic Preservation Tax Incentives).
(28)Section 198
(relating to Brownfields Tax Incentives).
(29)Sections 1201
through 1298 (relating to capital losses).
(30)Section 1400F
(relating to Renewal Communities).
(31)Sections 1391
through 1398 (relating to Empowerment Zones and Enterprise Communities Tax
Incentives).
6.Protection of
Personal Property Rights
(a)No government shall engage or participate in a taking or
condemnation of any private real property interest under the power of eminent
domain for any purpose unless such taking or condemnation is either a public
purpose or a public use.
(b)This section applies in any case in which the
exercise of eminent domain—
(1)is by the Federal
Government;
(2)is related to a
program or activity that receives Federal financial assistance; or
(3)would affect,
commerce with foreign nations, among the several States, or with Indian
tribes.
7.
(a)
(1)A person may assert a violation of this Act as a claim or
defense in a judicial proceeding and obtain appropriate relief against a
government.
(2)Standing
to assert a claim or defense under paragraph (1) shall be governed by the
general rules of standing under article III of the Constitution.
(b)Any
pending action under which a government exercises its authority of eminent
domain shall not operate as a limit on a court from hearing any claim for
relief under this Act.
(c)If a plaintiff produces prima facie evidence to
support a claim alleging a violation of the Fifth Amendment takings clause or a
violation of section 6, the government shall bear the burden of persuasion on
any element of such claim.
(d)Adjudication of a claim of a violation of this Act in a
non-Federal forum shall not be entitled to full faith and credit in a Federal
court unless the claimant had a full and fair adjudication of that claim in the
non-Federal forum.
(e)Section 722(b) of the Revised Statutes (42 U.S.C. 1988(b))
is amended by inserting the Private Property Rights Protection
Act,
after the Religious Land Use and Institutionalized Persons
Act of 2000 (42 U.S.C. 2000cc et seq.),
.
(f)Authority of
United States to enforce this Act
(1)The United States may bring an action for injunctive or
declaratory relief to enforce compliance with this Act.
(2)Nothing
in this subsection shall be construed to deny, impair, or otherwise affect any
right or authority of the Attorney General, the United States, or any agency,
officer, or employee of the United States, acting under any law other than this
subsection, to institute or intervene in any proceeding.
8.
(a)This Act shall be construed in favor of a broad
protection of personal property rights, to the maximum extent permitted by the
terms of this Act and the Constitution.
(b)Nothing in this Act shall be construed to preempt State
law, or repeal Federal law, that is equally as protective of personal property
rights as, or more protective of personal property rights than, this
Act.
(c)If
any provision of this Act or of an amendment made by this Act, or any
application of such provision to any person or circumstance, is held to be
unconstitutional, the remainder of this Act, the amendments made by this Act,
and the application of the provision to any other person or circumstance shall
not be affected.