[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 48 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                 S. 48

   To return meaning to the Fifth Amendment by limiting the power of 
                            eminent domain.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 4, 2007

  Mr. Ensign (for himself, Mr. DeMint, and Mr. Inhofe) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
   To return meaning to the Fifth Amendment by limiting the power of 
                            eminent domain.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Private Property Rights Protection 
Act''.

SEC. 2. FINDINGS.

    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.

SEC. 3. DEFINITIONS.

    For purposes of this Act:
            (1) Acquiring party.--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) Blighted property.--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) Condemning authority.--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) Government.--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 benefit.--The 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) Property owner.--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) Public purpose.--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) Public use.--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) Real property interest.--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).

SEC. 4. DENIAL OF FEDERAL FUNDS FOR TAKINGS NOT FOR THE PUBLIC USE.

    (a) Denial of Funds.--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) In general.--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) Regulations required.--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) Notice to the irs.--Each Federal agency shall forward a 
        copy of each certification required under paragraph (1) that it 
        receives to the Commissioner of Internal Revenue.
            (4) Audits.--
                    (A) Authority.--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) Reimbursement obligation.--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) Audit of prior periods.--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) Appeal.--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).

SEC. 5. DENIAL OF TAX BENEFITS FOR TAKINGS NOT FOR THE PUBLIC USE.

    (a) Fifth Amendment Property Protection Statement.--
            (1) In general.--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) Contents of pps.--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 
        revenue.--A property owner may submit a copy of each PPS such 
        property owner filed under paragraph (1) to the Commissioner of 
        Internal Revenue.
            (4) Voluntary release of pps.--
                    (A) In general.--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) Effect.--The effect of filing a termination of 
                PPS under subparagraph (A) shall be to void such PPS.
            (5) Involuntary release of pps.--
                    (A) In general.--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) Burden of proof.--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) Final order.--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) Form of pps.--The Secretary of the Treasury shall 
        establish a uniform format for all PPS and releases of PPS to 
        be used by property owners.
    (b) Rules of Construction.--
            (1) In general.--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 
        owner.--Any 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 pps.--A 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) Tax Effects of PPS.--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).

SEC. 6. PROTECTION OF PERSONAL PROPERTY RIGHTS.

    (a) General Rule.--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) Scope of Application.--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.

SEC. 7. JUDICIAL RELIEF.

    (a) Cause of Action.--
            (1) In general.--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.--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) Jurisdiction.--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) Burden of Persuasion.--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) Full Faith and Credit.--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) Attorneys' Fees.--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) In general.--The United States may bring an action for 
        injunctive or declaratory relief to enforce compliance with 
        this Act.
            (2) Limitation.--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.

SEC. 8. RULES OF CONSTRUCTION.

    (a) Broad Construction.--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) No Preemption or Repeal.--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) Severability.--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.
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