I 112th CONGRESS 2d Session H. R. 3913 IN THE HOUSE OF REPRESENTATIVES February 7, 2012 Mr. DeFazio introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To amend the Natural Gas Act with respect to application of the right to exercise eminent domain in construction of pipelines for the exportation of natural gas, and for other purposes.

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Short title

This Act may be cited as the Reaffirming Constitutional Property Rights Act.

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Findings

The Congress finds the following: (1)The Fifth Amendment to the Constitution of the United States states … nor shall private property be taken for public use, without just compensation. This is a fundamental right of our citizenry that should not be trampled upon. (2)Federal Courts have found the authority of the Federal Energy Regulatory Commission to grant a private company the right of eminent domain to construct pipelines constitutional because supplying energy to the Nation meets the public use test, although property owners must be fairly compensated. (3)The Department of Energy currently has nine applications to export liquefied natural gas (LNG) either under review or already approved. However, a Department of Energy analysis shows that the exportation of LNG could raise the price of natural gas by almost 11 percent for households, leading to higher heating bills. The same analysis found a potential 27 percent increase in natural gas prices for industrial users, making energy intensive industries less competitive. The higher natural gas prices will also shift more electricity generation to coal burning power plants and potentially raise the price of electricity by up to 9 percent. This government study strongly suggests that supplying natural gas to LNG export terminals by definition does not meet the public use test. (4)In 2010, the Journal of Legal Studies published the results of a hedonic regression model using 80,000 sales to estimate the fair market value (FMV) of condemned properties whose owners reached compensation settlements with the condemner, New York City, between 1990 and 2002. More than 50 percent of these condemnees were compensated with less than fair market value. The average difference between settlements and fair market value was 23 percent. This study suggests that current eminent domain compensation rules may not ensure just compensation.

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Amendments to the Natural Gas Act

(a)

Limitation on use of eminent domain for exports

Section 7 of the Natural Gas Act (15 U.S.C. 717f) is amended by adding at the end the following new subsection: (i)Notwithstanding subsection (h), a holder of a certificate of public convenience and necessity may not exercise the right of eminent domain with respect to a pipeline to be constructed for the purpose of transporting natural gas to an LNG terminal for export to a foreign country from the United States. . (b)

Limitation on converting import terminal to export terminal

Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by adding at the end the following new subsection: (g)The Commission may not issue an order under this section authorizing exportation of any natural gas from the United States to a foreign country from an LNG terminal if such LNG terminal uses for such exportation any pipeline constructed for the purpose of transporting natural gas to such LNG terminal and for which a holder of a certificate of public convenience and necessity has exercised the right of eminent domain pursuant to section 7(h) of this Act after January 1, 2012. .