[Congressional Record Volume 143, Number 69 (Thursday, May 22, 1997)]
[Senate]
[Pages S5004-S5006]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Craig, Mr. Gramm, Mr. Enzi, Mr. 
        Cochran, Mr. Helms and Mr. Kempthorne):
  S. 781. A bill to establish a uniform and more efficient Federal 
process for protecting property owners' rights guaranteed by the fifth 
amendment; to the Committee on the Judiciary.


                    THE OMNIBUS PROPERTY RIGHTS ACT

  Mr. HATCH. Mr. President, I am pleased today to once again introduce 
the Omnibus Property Rights Act. Many Members of the Senate have as a 
paramount concern the protection of individual rights protected by our 
Constitution.
  One particular right--the right to own and use private property free 
from arbitrary governmental action--is increasingly under attack from 
the regulatory state. Indeed, despite the constitutional requirement 
for the protection of property rights, the America of the late 20th 
century has witnessed an explosion of Federal regulation that has 
jeopardized the private ownership of property with the consequent loss 
of individual liberty.
  Under current Federal regulations, thousands of Americans have been 
denied the right to the quiet use and enjoyment of their private 
property. Arbitrary bureaucratic enforcement of Federal and State 
regulatory programs has prevented Americans from building homes and 
commercial buildings, plowing fields, repairing barns and fences, 
clearing brush and fire hazards, felling trees, and even removing 
refuse and pollutants, all on private property.
  Fairness and simple justice demand that Americans owning property be 
entitled to the full use of their property. Ensuring compensation for 
regulatory takings is the first step toward restoring the fundamental 
right to own and use private property guaranteed by the takings clause 
of the fifth amendment to our Constitution. That is why I am once again 
introducing legislation--the Omnibus Property Rights Act--to protect 
private property owners from overzealous regulators. This bill, similar 
in substance and procedure to the bills I introduced last Congress, 
represents the most comprehensive legislative mechanism to date to 
foster and protect the private ownership of property.
  The omnibus bill contains three different approaches contained in 
different titles.
  The first substantive title of the bill encompasses property rights 
litigation reform. This title establishes a distinct Federal fifth 
amendment ``takings'' claim against Federal agencies by aggrieved 
property owners, thus clarifying the sometimes incoherent and 
contradictory constitutional property rights case law. Property 
protected under this section includes real property, including fixtures 
on land, such as crops and timber, mining interests, and water rights. 
This title is triggered when a taking, as defined by the Supreme Court, 
occurs. Moreover, it allows for compensation when the property, or 
``affected portion'' of property, is reduced in value by 33 percent or 
more.
  It has been alleged that this bill would impede government's ability 
to protect public health, safety, and the environment. This is not 
true. This first title contains a ``nuisance exception'' to 
compensation. It codifies that part of the 1992 Supreme Court decision 
in Lucas versus South Carolina Coastal Council, which held that 
restrictions on property use based on ``background principles of the 
state's law of property and nuisance'' need not be compensated. Thus, 
by adopting the Supreme Court's recent Lucas holding, the Omnibus 
Property Rights Act provides that only innocent property holders are to 
be compensated for government takings. Those that demonstrably misuse 
their property to pollute or to harm public health and safety are not 
entitled to compensation under the bill's nuisance provision.

  Finally, this title also resolves the jurisdictional dispute between 
the Federal district courts and the Court of Federal Claims over fifth 
amendment ``takings'' cases--sometimes called the Tucker Act shuffle--
by granting each court concurrent jurisdiction.
  A second title in essence codifies President Reagan's Executive Order 
12630. Under this title, a Federal agency must conduct a private 
property taking impact analysis before issuing or promulgating any 
policy, regulation, or related agency action which is likely to result 
in a taking of private property.
  A third title provides for alternative dispute resolution in 
arbitration proceedings.
  The three titles of the Omnibus Property Rights Act together function 
to provide the property owner with mechanisms to vindicate the 
fundamental constitutional right of private ownership of property, 
while instituting powerful internal incentives for Federal agencies 
both to protect private property and include such protection in agency 
planning and regulating.
  It is very significant that the nonpartisan Congressional Budget 
Office, after a year of research, concluded in a study dated March 8, 
1996, that the incentives built into the very similar bills I 
introduced last Congress would have encouraged agencies to act more 
responsibly, that the administrative cost of the bill would be quite 
small, and that compensation costs would be even smaller.
  Despite some critics' charges that these very similar bills would be 
too costly, CBO found that the costs of both the omnibus bills will 
diminish to an insignificant level over time. This is predicated on the 
CBO finding that each of the omnibus bills contain powerful incentives, 
which over time will reduce costs. These include: First, the bills' 
bright line legal standards, which better enable agencies to avoid 
takings disputes; second, the takings impact assessment requirement, 
which requires agencies to analyze the affect of proposed regulations 
on property rights; and third, the requirement that compensation be 
paid from the agency's budget, which inevitably will act as a deterrent 
to unconstitutional and unlawful takings. Based on extensive research, 
CBO estimated that each omnibus bill should cost no more than $30 or 
$40 million a year for the first 5 years of implementation, thereafter 
diminishing to insignificant amounts. The new bill will cost even less.


                     Importance of Private Property

  The private ownership of property is essential to a free society and 
is an integral part of our Judeo-Christian culture and the Western 
tradition of liberty and limited government. Private ownership of 
property and the sanctity of property rights reflects the distinction 
in our culture between a preexisting civil society and the state that 
is consequently established to promote order. Private property creates 
the social and economic organizations that counterbalance the power of 
the state by providing an alternative source of power and prestige to 
the state itself. It is therefore a necessary condition of liberty and 
prosperity.
  While government is properly understood to be instituted to protect 
liberty within an orderly society and such liberty is commonly 
understood to include the right of free speech, assembly, religious 
exercise and other rights such as those enumerated in the Bill of 
Rights, it is all too often forgotten that the right of private 
ownership of property is also a critical component of liberty. To the 
17th century English political philosopher, John Locke, who greatly 
influenced the Founders of our Republic, the very role of government is 
to protect property: ``The great and chief end therefore, on Men 
uniting into Commonwealths, and putting themselves under Government, is 
the preservation of their property.''
  The Framers of our Constitution likewise viewed the function of 
government as one of fostering individual liberties through the 
protection of property interests. James Madison, termed the ``Father of 
the Constitution,'' unhesitantly endorsed this Lockean viewpoint when 
he wrote in The Federalist No. 54 that ``[government] is instituted no 
less for the protection of property, than of the persons of 
individuals.'' Indeed, to Madison, the private possession of property 
was viewed as a natural and individual right both to be protected 
against government encroachment and to be protected by government 
against others.
  To be sure, the private ownership of property was not considered 
absolute. Property owners could not exercise their rights as a nuisance 
that harmed their neighbors, and government could use, what was termed 
in the 18th century, its despotic power of eminent domain to seize 
property for public use. Justice, it became to be believed, required 
compensation for the property taken by government.

[[Page S5005]]

  The earliest example of a compensation requirement is found in 
chapter 28 of the Magna Carta of 1215, which reads, ``No constable or 
other bailiff of ours shall take corn or other provisions from anyone 
without immediately tendering money therefor, unless he can have 
postponement thereof by permission of the seller.'' But the record of 
English and colonial compensation for taken property was spotty at 
best. It has been argued by some historians and legal scholars that 
compensation for takings of property became recognized as customary 
practice during the American colonial period.
  Nevertheless, by the time of American independence, the compensation 
requirement was considered a necessary restraint on arbitrary 
governmental seizures of property. The Vermont Constitution of 1777, 
the Massachusetts Constitution of 1780, and the Northwest Ordinance of 
1787, recognized that compensation must be paid whenever property was 
taken for general public use or for public exigencies. And although 
accounts of the 1791 congressional debate over the Bill of Rights 
provide no evidence over why a public use and just compensation 
requirement for takings of private property was eventually included in 
the fifth amendment, James Madison, the author of the fifth amendment, 
reflected the views of other supporters of the new Constitution who 
feared the example to the new Congress of uncompensated seizures of 
property for building of roads and forgiveness of debts by radical 
state legislatures. Consequently, the phrase ``[n]or shall private 
property be taken for public use, without just compensation'' was 
included within the fifth amendment to the Constitution.


            Current Protection of Property Rights Fall Short

  Judicial protection of property rights against the regulatory state 
has been both inconsistent and ineffective. Physical invasions and 
government seizures of property have been fairly easy for courts to 
analyze as a species of eminent domain, but not so for the effect of 
regulations which either diminish the value of the property or 
appropriate a property interest.
  This key problem to the regulatory takings dilemma was recognized by 
Justice Oliver Wendell Holmes in Pennsylvania Coal Co. v. Mahon, 260 
U.S. 393 (1922). How do courts determine when regulation amounts to a 
taking? Holmes' answer, ``if regulation goes too far it will be 
recognized as a taking,'' 260 U.S. at 415, is nothing more than an ipse 
dixit. In the 73 years since Mahon, the Court has eschewed any set 
formula for determining how far is too far, preferring to engage in ad 
hoc factual inquiries, such as the three-part test made famous by Penn 
Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), 
which balances the economic impact of the regulation on property and 
the character of the regulation against specific restrictions on 
investment-backed expectations of the property owner.
  Despite the valiant attempt by the Rehnquist Court to clarify 
regulatory takings analysis in Nollan v. California Coastal Comm'n, 483 
U.S. 825 (1987), Lucas v. South Carolina Coastal Council, 112 S.Ct. 
2886 (1992), and in its recent decision of Dolan v. City of Tigard, No. 
93-518 (June 24, 1994), takings analysis is basically incoherent and 
confusing and applied by lower courts haphazardly. The incremental, 
fact-specific approach that courts now must employ in the absence of 
adequate statutory language to vindicate property rights under the 
fifth amendment thus has been ineffective and costly.
  There is, accordingly, a need for Congress to clarify the law by 
providing bright line standards and an effective remedy. As Chief Judge 
Loren A. Smith of the Court of Federal Claims, the court responsible 
for administering takings claims against the United States, opined in 
Bowles v. United States, 31 Fed. Cl. 37 (1994), ``[j]udicial decisions 
are far less sensitive to societal problems than the law and policy 
made by the political branches of our great constitutional system. At 
best courts sketch the outlines of individual rights, they cannot hope 
to fill in the portrait of wise and just social and economic policy.''
  This incoherence and confusion over the substance of takings claims 
is matched by the muddle over jurisdiction of property rights claims. 
The Tucker Act, which waives the sovereign immunity of the United 
States by granting the Court of Federal Claims jurisdiction to 
entertain monetary claims against the United States, actually 
complicates the ability of a property owner to vindicate the right to 
just compensation for a Government action that has caused a taking. The 
law currently forces a property owner to elect between equitable relief 
in the Federal district court and monetary relief in the Court of 
Federal Claims. Further difficulty arises when the law is used by the 
Government to urge dismissal in the district court on the ground that 
the plaintiff should seek just compensation in the Court of Federal 
Claims, and is used to urge dismissal in the Court of Federal Claims on 
the ground that plaintiff should first seek equitable relief in the 
district court.
  This Tucker Act shuffle is aggravated by section 1500 of the Tucker 
Act, which denies the Court of Federal Claims jurisdiction to entertain 
a suit which is pending in another court and brought by the same 
plaintiff. Section 1500 is so poorly drafted and has brought so many 
hardships, that Justice Stevens, in Keene Corporation v. United States, 
113 S.Ct. 2035, 2048 (1993), has called for its repeal or amendment.
  Title II of the Omnibus Property Rights Act addresses these problems. 
In terms of clarifying the substance of takings claims, it first 
clearly defines property interests that are subject to the act's 
takings analysis. In this way a floor definition of property is 
established by which the Federal Government may not eviscerate. This 
title also establishes the elements of a takings claim by codifying and 
clarifying the holdings of the Nollan, Lucas, and Dolan cases.
  For instance, Dolan's rough proportionality test is interpreted to 
apply to all exaction situations whereby an owner's otherwise lawful 
right to use property is exacted as a condition for granting a Federal 
permit. And a distinction is drawn between a noncompensable mere 
diminution of value of property as a result of Federal regulation and a 
compensable partial taking, which is defined as any agency action that 
diminishes the fair market value of the affected property by 33 percent 
or more. The result of drawing these bright lines will not be the end 
fact-specific litigation, which is endemic to all law suits, but it 
will ameliorate the ever increasing ad hoc and arbitrary nature of 
takings claims.
  Finally, I once again want to respond to any suggestion that may 
arise that this act will impede Government's ability to protect the 
environment or promote health and safety through regulation. This 
legislation does not, contrary to the assertions of some, emasculate 
the Government's ability to prevent individuals or businesses from 
polluting. It is well established that the Constitution only protects a 
right to reasonable use of property. All property owners are subject to 
prior restraints on the use of their property, such as nuisance laws 
which prevents owners from using their property in a manner that 
interferes with others.
  The Government has always been able to prevent harmful or noxious 
uses of property without being obligated to compensate the property 
owner, as long as the limitations on the use of property inhere in the 
title itself. In other words, the restrictions must be based on 
background principles of State property and nuisance law already 
extant. The Omnibus Property Rights Act codifies this principle in a 
nuisance exception to the requirement of the Government to pay 
compensation.
  Nor does the Omnibus Property Rights Act hinder the Government's 
ability to protect public health and safety. The act simply does not 
obstruct the Government from acting to prevent imminent harm to the 
public safety or health or diminish what would be considered a public 
nuisance. Again, this is made clear in the provision of the act that 
exempts nuisance from compensation. What the act does is force the 
Federal Government to pay compensation to those who are singled out to 
pay for regulation that benefits the entire public.
  In other words, it does not prevent regulation, but fulfills the 
promise of the fifth amendment, which the Supreme Court in Armstrong v. 
United States, 364 U.S. 40, 49 (1960), opined is

[[Page S5006]]

``to bar Government from forcing some people alone to bear public 
burdens, which in all fairness and justice, should be borne by the 
public as a whole.''
  I hope that all Senators will join me in supporting this long overdue 
legislation.
                                 ______