[Congressional Record Volume 140, Number 145 (Friday, October 7, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 7, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                        PROPERTY RIGHTS PROPOSAL

 Mr. HATCH. Mr. President, over the last year, I have been 
studying the problems posed by the takings clause to the fifth 
amendment and have concluded that a legislative solution may be 
necessary. Today, I would like to place into the Congressional Record a 
proposal I have developed for legislation entitled the ``Property 
Rights Litigation Relief Act'' so that the public as well as Members of 
the Senate can examine it. I hope the Judiciary Committee will give 
this issue a high priority next year.
  According to James Madison, the ``Father of the Constitution,'' 
government is instituted ``to protect property of every sort; as well 
that which lies in the various rights of individuals, as that which the 
term particularly expresses. Thus being the end of government that 
alone is a just government which impartially secures to every man 
whatever is his own.''
  Sadly, Mr. President, in the rush by some to resolve all social 
problems through the heavy hand of governmental regulation, we have all 
too often failed to honor Madison's philosophy. All too often in order 
to protect the environment or to promote the esthetics of our 
neighborhoods, we have placed a disproportionate burden on small 
landowners. All this in violation of the fifth amendment's command of 
just compensation and that property be taken only for public use.
  We have witnessed horror stories of the worst kind of arbitrary use 
of governmental power, in Utah and all around America, such as where a 
property owner was imprisoned for cleaning up his garage and backyard 
because the area was declared a wetland. Acts such as these have 
spawned a nationwide property rights movement--a revolt of small 
landowners, farmers and ranchers, and owners of ``mom and pop'' 
businesses. I believe that the fight to restore property rights is one 
of the premier civil rights issues of the nineties.
  To be sure, the need to protect our natural resources--our 
environemt--is of great concern. It is a legacy owed to posterity. But 
a balance needs to be struck between conservation and development, 
between the environment and the right of property.
  This proposed legislation would do just that. It will allow for the 
protection of the environment by affording no protection to those who 
actively pollute our rivers, land, or air. But it provides for the 
protection of private property through judicial action. It also 
establishes concrete standards for such claims, thereby clarifying 
what, heretofore, has been inconsistent and incoherent case law. 
Finally, it resolves the jurisdictional muddle between the Federal 
district courts and the Court of Federal Claims over takings litigation 
by allowing the action to be brought in either forum.
  Mr. President, I ask to place this proposed measure in the Record. 
This will allow the public to offer their counsel and advice as to the 
nature of the problem and the efficacy of the solution.
  The proposal follows:

     SECTION 1. SHORT TITLE.

       This Act may be cited as ``Property Rights Litigation 
     Relief Act of 1994.''

     SEC. 2. FINDINGS.

       The Congress finds that--
       (A) the protection in the Fifth Amendment to the 
     Constitution of the United States, against takings of private 
     property by the federal government without just compensation, 
     is an essential component of the liberty of individual 
     citizens;
       (B) these rights have been abrogated often by the 
     application of laws, regulations and other actions by the 
     federal government that adversely affect the value of private 
     property;
       (C) the ``Tucker Act,'' which delineates the jurisdiction 
     of courts hearing property rights claims, complicates the 
     ability of a property owner to vindicate a property owner's 
     right to just compensation for a governmental action that has 
     caused a physical or regulatory taking. The law currently 
     forces a property owner to elect between equitable relief in 
     the district court and monetary relief (the value of the 
     property taken) in the United States Court of Federal Claims. 
     Further difficulty arises when the law is used to urge 
     dismissal in the district court on the ground that the 
     plaintiff should seek just compensation in the Court of 
     Federal Claims, and used to urge dismissal in the Court of 
     Federal Claims on the ground that plaintiff should seek 
     equitable relief in district court. The Supreme Court of the 
     United States recently described the Tucker Act as ``badly 
     drafted'' and noted that the Court's decision in Keene 
     Corporation  v. United States, 1993 U.S. LEXIS 3726 (1993), 
     ``may have the salutary effect of hastening its repeal or 
     amendment.'' Id. at *41.

     SEC. 3. PURPOSE.

       The purpose of this Act is twofold: to establish a clear, 
     uniform, and efficient process whereby aggrieved property 
     owners can obtain vindication of rights guaranteed by the 
     Fifth Amendment to the Constitution of the United States, and 
     to amend the Tucker Act to correct procedural deficiencies 
     noted by the Supreme Court in Keene Corporation  v. United 
     States, 1993 U.S. LEXIS 3726 (1993).

     SEC. 4. DEFINITIONS.

       (A) ``Agency'' means a United States department, agency or 
     instrumentality of the United States that engages in activity 
     with the potential for taking private property, including any 
     military department, government corporation, government-
     controlled corporation, or other establishment in the 
     executive branch of the United States Government.
       (B) ``Final agency action'' means any action or decision 
     taken by an agency as defined by this law, including actions 
     treated as final under the doctrine of futility, that affects 
     property interests, or any other type of action or decision 
     that is intended to bind, or actually binds the owner of the 
     property.
       (C) ``Just compensation'' means compensation equal to the 
     fair market value of the private property taken, whether the 
     taking is by physical occupation or through regulation, 
     exaction, or other means, and shall include compounded 
     interest calculated from the date of the taking until the 
     date of entry of judgment.
       (D) ``Owner'' means the owner of property or rights in 
     property at the time the statute, regulation, rule, order, 
     guideline, policy or action was passed or promulgated, or the 
     time that the permit, license, authorization or governmental 
     permission was denied or suspended.
       (E) ``Private property'' or ``property'' means all property 
     protected by the Fifth Amendment to the Constitution of the 
     United States, the constitution or commonwealth in which the 
     property is located, or this Act, including, but not limited 
     to: (1) real property, whether vested or unvested, including 
     but not limited to estates in fee, life estates, estates for 
     years, or otherwise; inchoate interests in real property such 
     as remainders and future interests; personality that is 
     affixed to or appurtenant to real property; easements; 
     leaseholds; recorded liens; contracts or other security 
     interests in, or related to, real property; (2) any water 
     right, including any recorded lines on such water right; (3) 
     rents, issues, and profits of land, including but not limited 
     to minerals, timber, fodder, crops, oil and gas, coal or 
     geothermal energy; (4) rights provided by, or memorialized 
     in, a contract; (5) any interest defined as property under 
     state law; or (6) any interest understood to be property 
     based on custom, usage, common law, and/or mutually 
     reinforcing understandings sufficiently well-grounded in law 
     to back a claim of interest.
       (F) ``Taking of private property'' means any action whereby 
     ``private property'' is taken in such a way, including by 
     physical invasion, regulation, exaction, condition, or other 
     means, as to require compensation under the Fifth Amendment 
     to the United States Constitution or under this Act.
       (G) ``State agency'' means any state department, agency, 
     political subdivision, or instrumentality that carries out or 
     enforces a regulatory program required under federal law, has 
     been delegated administrative or substantive responsibility 
     under a federal regulatory program, or receives federal funds 
     in connection with a regulatory program established by a 
     state.

     SEC. 5. COMPENSATION FOR TAKEN PROPERTY.

       (A) In General.--No department, agency, or independent 
     agency, or instrumentality of the United States, or state 
     agency as defined in Section Four of this Act, shall take 
     private property except for public purpose and with just 
     compensation to the property owner. A property owner shall 
     receive just compensation where, as a consequence of a final 
     decision of any department, agency, or instrumentality of the 
     United States or state agency, ``private property'' (whether 
     all or in part) has been physically invaded, diminished in 
     value, or appropriated for use without the consent of the 
     owner, and
       (i) such final action does not substantially advance the 
     stated governmental interest to be achieved by the 
     legislation or regulation on which the final action is based. 
     The government shall bear the burden of proof with regard to 
     showing the nexus between stated governmental purpose of the 
     governmental interest and the impact on the proposed use of 
     private property; or
       (ii) such final action exacts the owner's constitutional or 
     otherwise lawful right to use the property or a portion of 
     such as a condition for the granting of a permit, license, 
     variance, or any other agency action without a rough 
     proportionality between the stated need for the required 
     dedication and the impact of the proposed use of the 
     property. The government shall bear the burden of proof with 
     regard to showing the proportionality between the exaction 
     and the impact of the proposed use of the property; or
       (iii) such final action results in the property owner being 
     deprived, either temporarily or permanently, of all or 
     substantially all economically beneficial or productive use 
     of the property or that part of the property affected by the 
     final action without a showing that such deprivation inheres 
     in the title itself. The government shall bear the burden of 
     proof with regard to showing that such deprivation of value 
     inheres in the title to the property; or
       (iv) such final action diminishes the fair market value of 
     property which is the subject of the final action by 25 
     percent or greater immediately prior to the governmental 
     action. The property owner shall bear the burden of proof 
     with regard to establishing the diminution of value of 
     property.
       (B) Compensation and Public Nuisance Exception to Payment 
     of Just Compensation.--No compensation shall be required by 
     virtue of this Act if the owner's use or proposed use of the 
     property amounts to a public nuisance as commonly understood 
     and defined by background principles of nuisance and property 
     law, as understood within the state within which the property 
     is situated, and to bar an award of damages under this Act, 
     the United States shall have the burden of proof to establish 
     that the use or proposed use of the property is a public 
     nuisance; otherwise where the final agency action directly 
     takes property or a portion of property under Section 5(A), 
     compensation to the owner of the property that is affected by 
     the final action shall be an amount equal to the difference 
     between--
       (i) the amount of the fair market value of the property or 
     portion of the property affected by agency action before it 
     become the subject of government regulation; and
       (ii) the fair market value of the property or portion of 
     the property at the time of the final action, except for 
     Section 5(A)(iv) in which case it will be 25 percent or 
     greater of the fair market value of the property at the time 
     of the final action.
       (iii) Compensation due under the Act shall include 
     compounded interest calculated from the date of the taking 
     until the date of entry of judgment.
       (C) Source of Compensation.--Except as provided ion Section 
     7 (Alternative Dispute Resolution), the compensation referred 
     to in this subsection shall be paid out of funds made 
     available to the federal agency or department by 
     appropriation for the fiscal year in which the property 
     deprivation referred to in Section 5(A) occurred, provided 
     that if no such funds have been made to the agency, such 
     payment shall be made from the Judgment Fund.

     SEC. 6. JURISDICTION AND JUDICIAL REVIEW.

       (A) A property owner may bring suit under this Act to 
     challenge the validity of legislation, a regulation, rule, 
     order, policy, guideline, or action that adversely affects 
     his or her interest in private property in either the United 
     States District Court or Court of Federal Claims. Each court 
     shall have concurrent jurisdiction over both claims for 
     monetary relief and claims seeking invalidation of any Act of 
     Congress or any regulation of an agency as defined by this 
     act affecting private property rights. The plaintiff shall 
     have the election of which court in which to file a claim for 
     relief.
       (1) Title 28 U.S.C. Sec. 1346(a)(2) (the district court) is 
     hereby amended, striking the clause ``not exceeding $10,000 
     in amount'' in the first sentence. The first sentence of 
     Title 28 U.S.C. Sec. 1346(a)(2) shall now read: ``Any other 
     civil action or claim against the United States, founded 
     either upon the Constitution, or any Act of Congress, or any 
     regulation of an executive department, or upon any express or 
     implied contract with the United States, or for liquidated or 
     unliquidated damages in cases not sounding in tort, except 
     that the district courts shall not have jurisdiction of 
     any civil action or claim against the United States 
     founded upon any express or implied contract with the 
     United States or for liquidated or unliquidated damages in 
     cases not sounding in tort which are subject to sections 
     8(g)(1) and 10(a)(1) of the Contract Disputes Act of 
     1978.''
       (2) Title 28 U.S.C. Sec. 1491(a)(1), (the ``Tucker Act,'' 
     Court of Federal Claims), is hereby amended by adding the 
     following clause at the end of the first sentence of 
     subsection (a)(1); ``or for invalidation of any Act of 
     Congress or any regulation of an executive department that 
     adversely affects private property rights in violation of the 
     Fifth Amendment.'' The first sentence of Title 28 U.S.C. 
     Sec. 1491(a)(1) shall now read as follows. ``The United 
     States Court of Federal Claims shall have jurisdiction to 
     render judgment upon any claim against the United States 
     founded either upon the Constitution, or any Act of Congress 
     or any regulation of an executive department, or upon any 
     express or implied contract with the United States, or for 
     liquidated or liquidated damages in cases not sounding in 
     tort, or for invalidation of any Act of Congress or any 
     regulation of an executive department adversely affecting 
     private property rights in violation of the Fifth 
     Amendment.''
       (B) Persons adversely affected by an agency action taken 
     pursuant to this Act shall have standing to challenge and 
     seek judicial review of that action.

     SEC. 7. ALTERNATIVE DISPUTE RESOLUTION.

       (A) In General.--Either party to a dispute over a taking of 
     property as defined by this Act or litigation commenced under 
     Section 6 of this Act may elect to resolve the dispute 
     through settlement or arbitration--
       (i) such alternative dispute resolution may only be 
     effectuated by the consent of all parties;
       (ii) arbitration procedures shall be in accordance with the 
     alternative dispute resolution procedures established by the 
     [  ]; and,
       (iii) in no event shall arbitration be considered a 
     condition precedent or an administrative procedure to be 
     exhausted prior to the filing of a lawsuit under this Act.
       (B) Compensation as a Result of Negotiated Settlements or 
     Arbitration.--The funds used for compensation to the owner 
     (as determined by the appropriate official of the federal 
     agency or department) shall be transferred to the agency from 
     the Judgment Fund for payment to the owner.
       (C) Review of Arbitration.--Appeal from arbitration 
     decisions shall be to the United States District Court or the 
     United States Court of Federal Claims in the manner 
     prescribed by law for the claim under this Act.
       (D) Payment of Certain Compensation.--If a review is 
     carried out pursuant to paragraph C, and the Court does not 
     rule in favor of the federal agency or department, the amount 
     of the award of compensation determined by the arbitrator 
     shall be paid from funds made available to the federal agency 
     or department by appropriation in lieu of being paid from the 
     Judgment Fund, provided that if no such funds have been made 
     available to the agency such payment shall be made from the 
     Judgment Fund.

     SEC. 8. RULES OF CONSTRUCTION.

       Nothing in this Act shall be construed to--
       (A) interfere with states' rights to create additional 
     property rights; or,
       (B) constitute a conclusive determination of the value of 
     any property for purposes of an appraisal for the acquisition 
     of property, or for the determination of damages.

     SEC. 9. ATTORNEYS FEES AND COSTS.

       The court, in issuing any final order in any action brought 
     under this Act, shall award costs of litigation (including 
     reasonable attorney and expert witness fees) to any 
     prevailing plaintiff.

     SEC. 10. EFFECTIVE DATE.

       This Act shall apply to any activity of the United States 
     Government after the date of enactment of this Act.

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