[House Report 112-401]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-401
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PRIVATE PROPERTY RIGHTS PROTECTION ACT OF 2012
_______
February 17, 2012.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Smith of Texas, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 1433]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 1433) to protect private property rights, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 6
Background and Need for the Legislation.......................... 6
Hearings......................................................... 16
Committee Consideration.......................................... 16
Committee Votes.................................................. 16
Committee Oversight Findings..................................... 18
New Budget Authority and Tax Expenditures........................ 18
Congressional Budget Office Cost Estimate........................ 18
Performance Goals and Objectives................................. 20
Advisory on Earmarks............................................. 20
Section-by-Section Analysis...................................... 20
Dissenting Views................................................. 25
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Private Property Rights Protection Act
of 2012''.
SEC. 2. PROHIBITION ON EMINENT DOMAIN ABUSE BY STATES.
(a) In General.--No State or political subdivision of a State shall
exercise its power of eminent domain, or allow the exercise of such
power by any person or entity to which such power has been delegated,
over property to be used for economic development or over property that
is used for economic development within 7 years after that exercise, if
that State or political subdivision receives Federal economic
development funds during any fiscal year in which the property is so
used or intended to be used.
(b) Ineligibility for Federal Funds.--A violation of subsection (a)
by a State or political subdivision shall render such State or
political subdivision ineligible for any Federal economic development
funds for a period of 2 fiscal years following a final judgment on the
merits by a court of competent jurisdiction that such subsection has
been violated, and any Federal agency charged with distributing those
funds shall withhold them for such 2-year period, and any such funds
distributed to such State or political subdivision shall be returned or
reimbursed by such State or political subdivision to the appropriate
Federal agency or authority of the Federal Government, or component
thereof.
(c) Opportunity To Cure Violation.--A State or political subdivision
shall not be ineligible for any Federal economic development funds
under subsection (b) if such State or political subdivision returns all
real property the taking of which was found by a court of competent
jurisdiction to have constituted a violation of subsection (a) and
replaces any other property destroyed and repairs any other property
damaged as a result of such violation. In addition, the State must pay
applicable penalties and interest to reattain eligibility.
SEC. 3. PROHIBITION ON EMINENT DOMAIN ABUSE BY THE FEDERAL GOVERNMENT.
The Federal Government or any authority of the Federal Government
shall not exercise its power of eminent domain to be used for economic
development.
SEC. 4. PRIVATE RIGHT OF ACTION.
(a) Cause of Action.--Any (1) owner of private property whose
property is subject to eminent domain who suffers injury as a result of
a violation of any provision of this Act with respect to that property,
or (2) any tenant of property that is subject to eminent domain who
suffers injury as a result of a violation of any provision of this Act
with respect to that property, may bring an action to enforce any
provision of this Act in the appropriate Federal or State court. A
State shall not be immune under the 11th Amendment to the Constitution
of the United States from any such action in a Federal or State court
of competent jurisdiction. In such action, the defendant has the burden
to show by clear and convincing evidence that the taking is not for
economic development. Any such property owner or tenant may also seek
an appropriate relief through a preliminary injunction or a temporary
restraining order.
(b) Limitation on Bringing Action.--An action brought by a property
owner or tenant under this Act may be brought if the property is used
for economic development following the conclusion of any condemnation
proceedings condemning the property of such property owner or tenant,
but shall not be brought later than seven years following the
conclusion of any such proceedings.
(c) Attorneys' Fee and Other Costs.--In any action or proceeding
under this Act, the court shall allow a prevailing plaintiff a
reasonable attorneys' fee as part of the costs, and include expert fees
as part of the attorneys' fee.
SEC. 5. REPORTING OF VIOLATIONS TO ATTORNEY GENERAL.
(a) Submission of Report to Attorney General.--Any (1) owner of
private property whose property is subject to eminent domain who
suffers injury as a result of a violation of any provision of this Act
with respect to that property, or (2) any tenant of property that is
subject to eminent domain who suffers injury as a result of a violation
of any provision of this Act with respect to that property, may report
a violation by the Federal Government, any authority of the Federal
Government, State, or political subdivision of a State to the Attorney
General.
(b) Investigation by Attorney General.--Upon receiving a report of an
alleged violation, the Attorney General shall conduct an investigation
to determine whether a violation exists.
(c) Notification of Violation.--If the Attorney General concludes
that a violation does exist, then the Attorney General shall notify the
Federal Government, authority of the Federal Government, State, or
political subdivision of a State that the Attorney General has
determined that it is in violation of the Act. The notification shall
further provide that the Federal Government, State, or political
subdivision of a State has 90 days from the date of the notification to
demonstrate to the Attorney General either that (1) it is not in
violation of the Act or (2) that it has cured its violation by
returning all real property the taking of which the Attorney General
finds to have constituted a violation of the Act and replacing any
other property destroyed and repairing any other property damaged as a
result of such violation.
(d) Attorney General's Bringing of Action to Enforce Act.--If, at the
end of the 90-day period described in subsection (c), the Attorney
General determines that the Federal Government, authority of the
Federal Government, State, or political subdivision of a State is still
violating the Act or has not cured its violation as described in
subsection (c), then the Attorney General will bring an action to
enforce the Act unless the property owner or tenant who reported the
violation has already brought an action to enforce the Act. In such a
case, the Attorney General shall intervene if it determines that
intervention is necessary in order to enforce the Act. The Attorney
General may file its lawsuit to enforce the Act in the appropriate
Federal or State court. A State shall not be immune under the 11th
Amendment to the Constitution of the United States from any such action
in a Federal or State court of competent jurisdiction. In such action,
the defendant has the burden to show by clear and convincing evidence
that the taking is not for economic development. The Attorney General
may seek any appropriate relief through a preliminary injunction or a
temporary restraining order.
(e) Limitation on Bringing Action.--An action brought by the Attorney
General under this Act may be brought if the property is used for
economic development following the conclusion of any condemnation
proceedings condemning the property of an owner or tenant who reports a
violation of the Act to the Attorney General, but shall not be brought
later than seven years following the conclusion of any such
proceedings.
(f) Attorneys' Fee and Other Costs.--In any action or proceeding
under this Act brought by the Attorney General, the court shall, if the
Attorney General is a prevailing plaintiff, award the Attorney General
a reasonable attorneys' fee as part of the costs, and include expert
fees as part of the attorneys' fee.
SEC. 6. NOTIFICATION BY ATTORNEY GENERAL.
(a) Notification to States and Political Subdivisions.--
(1) Not later than 30 days after the enactment of this Act,
the Attorney General shall provide to the chief executive
officer of each State the text of this Act and a description of
the rights of property owners and tenants under this Act.
(2) Not later than 120 days after the enactment of this Act,
the Attorney General shall compile a list of the Federal laws
under which Federal economic development funds are distributed.
The Attorney General shall compile annual revisions of such
list as necessary. Such list and any successive revisions of
such list shall be communicated by the Attorney General to the
chief executive officer of each State and also made available
on the Internet website maintained by the United States
Department of Justice for use by the public and by the
authorities in each State and political subdivisions of each
State empowered to take private property and convert it to
public use subject to just compensation for the taking.
(b) Notification to Property Owners and Tenants.--Not later than 30
days after the enactment of this Act, the Attorney General shall
publish in the Federal Register and make available on the Internet
website maintained by the United States Department of Justice a notice
containing the text of this Act and a description of the rights of
property owners and tenants under this Act.
SEC. 7. REPORTS.
(a) By Attorney General.--Not later than 1 year after the date of
enactment of this Act, and every subsequent year thereafter, the
Attorney General shall transmit a report identifying States or
political subdivisions that have used eminent domain in violation of
this Act to the Chairman and Ranking Member of the Committee on the
Judiciary of the House of Representatives and to the Chairman and
Ranking Member of the Committee on the Judiciary of the Senate. The
report shall--
(1) identify all private rights of action brought as a result
of a State's or political subdivision's violation of this Act;
(2) identify all violations reported by property owners and
tenants under section 5(c) of this Act;
(3) identify the percentage of minority residents compared to
the surrounding nonminority residents and the median incomes of
those impacted by a violation of this Act;
(4) identify all lawsuits brought by the Attorney General
under section 5(d) of this Act;
(5) identify all States or political subdivisions that have
lost Federal economic development funds as a result of a
violation of this Act, as well as describe the type and amount
of Federal economic development funds lost in each State or
political subdivision and the Agency that is responsible for
withholding such funds; and
(6) discuss all instances in which a State or political
subdivision has cured a violation as described in section 2(c)
of this Act.
(b) Duty of States.--Each State and local authority that is subject
to a private right of action under this Act shall have the duty to
report to the Attorney General such information with respect to such
State and local authorities as the Attorney General needs to make the
report required under subsection (a).
SEC. 8. SENSE OF CONGRESS REGARDING RURAL AMERICA.
(a) Findings.--The Congress finds the following:
(1) The founders realized the fundamental importance of
property rights when they codified the Takings Clause of the
Fifth Amendment to the Constitution, which requires that
private property shall not be taken ``for public use, without
just compensation''.
(2) Rural lands are unique in that they are not traditionally
considered high tax revenue-generating properties for State and
local governments. In addition, farmland and forest land owners
need to have long-term certainty regarding their property
rights in order to make the investment decisions to commit land
to these uses.
(3) Ownership rights in rural land are fundamental building
blocks for our Nation's agriculture industry, which continues
to be one of the most important economic sectors of our
economy.
(4) In the wake of the Supreme Court's decision in Kelo v.
City of New London, abuse of eminent domain is a threat to the
property rights of all private property owners, including rural
land owners.
(b) Sense of Congress.--It is the sense of Congress that the use of
eminent domain for the purpose of economic development is a threat to
agricultural and other property in rural America and that the Congress
should protect the property rights of Americans, including those who
reside in rural areas. Property rights are central to liberty in this
country and to our economy. The use of eminent domain to take farmland
and other rural property for economic development threatens liberty,
rural economies, and the economy of the United States. The taking of
farmland and rural property will have a direct impact on existing
irrigation and reclamation projects. Furthermore, the use of eminent
domain to take rural private property for private commercial uses will
force increasing numbers of activities from private property onto this
Nation's public lands, including its National forests, National parks
and wildlife refuges. This increase can overburden the infrastructure
of these lands, reducing the enjoyment of such lands for all citizens.
Americans should not have to fear the government's taking their homes,
farms, or businesses to give to other persons. Governments should not
abuse the power of eminent domain to force rural property owners from
their land in order to develop rural land into industrial and
commercial property. Congress has a duty to protect the property rights
of rural Americans in the face of eminent domain abuse.
SEC. 9. DEFINITIONS.
In this Act the following definitions apply:
(1) Economic development.--The term ``economic development''
means taking private property, without the consent of the
owner, and conveying or leasing such property from one private
person or entity to another private person or entity for
commercial enterprise carried on for profit, or to increase tax
revenue, tax base, employment, or general economic health,
except that such term shall not include--
(A) conveying private property--
(i) to public ownership, such as for a road,
hospital, airport, or military base;
(ii) to an entity, such as a common carrier,
that makes the property available to the
general public as of right, such as a railroad
or public facility;
(iii) for use as a road or other right of way
or means, open to the public for
transportation, whether free or by toll; and
(iv) for use as an aqueduct, flood control
facility, pipeline, or similar use;
(B) removing harmful uses of land provided such uses
constitute an immediate threat to public health and
safety;
(C) leasing property to a private person or entity
that occupies an incidental part of public property or
a public facility, such as a retail establishment on
the ground floor of a public building;
(D) acquiring abandoned property;
(E) clearing defective chains of title;
(F) taking private property for use by a public
utility; and
(G) redeveloping of a brownfield site as defined in
the Small Business Liability Relief and Brownfields
Revitalization Act (42 U.S.C. 9601(39)).
(2) Federal economic development funds.--The term ``Federal
economic development funds'' means any Federal funds
distributed to or through States or political subdivisions of
States under Federal laws designed to improve or increase the
size of the economies of States or political subdivisions of
States.
(3) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, or any other territory or possession of the United
States.
SEC. 10. SEVERABILITY AND EFFECTIVE DATE.
(a) Severability.--The provisions of this Act are severable. If any
provision of this Act, or any application thereof, is found
unconstitutional, that finding shall not affect any provision or
application of the Act not so adjudicated.
(b) Effective Date.--This Act shall take effect upon the first day of
the first fiscal year that begins after the date of the enactment of
this Act, but shall not apply to any project for which condemnation
proceedings have been initiated prior to the date of enactment.
SEC. 11. SENSE OF CONGRESS.
It is the policy of the United States to encourage, support, and
promote the private ownership of property and to ensure that the
constitutional and other legal rights of private property owners are
protected by the Federal Government.
SEC. 12. BROAD CONSTRUCTION.
This Act shall be construed in favor of a broad protection of private
property rights, to the maximum extent permitted by the terms of this
Act and the Constitution.
SEC. 13. LIMITATION ON STATUTORY CONSTRUCTION.
Nothing in this Act may be construed to supersede, limit, or
otherwise affect any provision of the Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et
seq.).
SEC. 14. RELIGIOUS AND NONPROFIT ORGANIZATIONS.
(a) Prohibition on States.--No State or political subdivision of a
State shall exercise its power of eminent domain, or allow the exercise
of such power by any person or entity to which such power has been
delegated, over property of a religious or other nonprofit organization
by reason of the nonprofit or tax-exempt status of such organization,
or any quality related thereto if that State or political subdivision
receives Federal economic development funds during any fiscal year in
which it does so.
(b) Ineligibility for Federal Funds.--A violation of subsection (a)
by a State or political subdivision shall render such State or
political subdivision ineligible for any Federal economic development
funds for a period of 2 fiscal years following a final judgment on the
merits by a court of competent jurisdiction that such subsection has
been violated, and any Federal agency charged with distributing those
funds shall withhold them for such 2-year period, and any such funds
distributed to such State or political subdivision shall be returned or
reimbursed by such State or political subdivision to the appropriate
Federal agency or authority of the Federal Government, or component
thereof.
(c) Prohibition on Federal Government.--The Federal Government or any
authority of the Federal Government shall not exercise its power of
eminent domain over property of a religious or other nonprofit
organization by reason of the nonprofit or tax-exempt status of such
organization, or any quality related thereto.
SEC. 15. REPORT BY FEDERAL AGENCIES ON REGULATIONS AND PROCEDURES
RELATING TO EMINENT DOMAIN.
Not later than 180 days after the date of the enactment of this Act,
the head of each Executive department and agency shall review all
rules, regulations, and procedures and report to the Attorney General
on the activities of that department or agency to bring its rules,
regulations and procedures into compliance with this Act.
SEC. 16. SENSE OF CONGRESS.
It is the sense of Congress that any and all precautions shall be
taken by the government to avoid the unfair or unreasonable taking of
property away from survivors of Hurricane Katrina who own, were
bequeathed, or assigned such property, for economic development
purposes or for the private use of others.
SEC. 17. DISPROPORTIONATE IMPACT ON MINORITIES.
If the court determines that a violation of this Act has occurred,
and that the violation has a disproportionately high impact on the poor
or minorities, the Attorney General shall use reasonable efforts to
locate and inform former owners and tenants of the violation and any
remedies they may have.
Purpose and Summary
The Private Property Rights Protection Act prohibits state
and local governments that receive Federal economic development
funds from using eminent domain to transfer private property
from one private owner to another for the purpose of economic
development. Specifically, if a state or political subdivision
of a state uses its eminent domain power to transfer private
property to other private parties for economic development, the
state is ineligible to receive Federal economic development
funds for 2 fiscal years following a judicial determination
that the law has been violated. Additionally, the bill
prohibits the Federal Government from using eminent domain for
economic development purposes. Thus, the bill preserves the
constitutional protections for private property jeopardized by
the Supreme Court's decision in Kelo v. City of New London.\1\
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\1\545 U.S. 469 (2005).
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Background and Need for the Legislation
The Fifth Amendment to the U.S. Constitution, made
applicable to the states through the 14th Amendment, provides
that ``private property [shall not] be taken for public use,
without just compensation.''\2\ In other words, the Fifth
Amendment imposes two distinct conditions on the exercise of
the power of eminent domain: (1) that the taking must be for
``public use,'' and (2) that the owner must be paid ``just
compensation.'' As Justice O'Connor has explained, although the
Takings Clause presumes that governments are given the
authority to take property without an owner's consent, ``the
just compensation requirement spreads the cost of condemnations
and thus `prevents the public from loading upon one individual
more than his just share of the burdens of government.'''\3\
And, ``the public use requirement, in turn, imposes a more
basic limitation, circumscribing the very scope of the eminent
domain power: Government may compel an individual to forfeit
her property for the public's use, but not for the benefit of
another private person.''\4\
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\2\Additionally, as the Takings Clause is a prohibition, not an
express grant of power, the use of eminent domain is further restricted
by other limits on government power. For instance, the Federal
Government may only exercise its power of eminent domain if it is
necessary and proper for the execution of one of its enumerated powers.
United States v. Morrison, 529 U.S. 598, 607 (2000) (``Every law
enacted by Congress must be based on one or more of its powers
enumerated in the Constitution.'').
\3\Kelo, 545 U.S. at 497 (O'Connor, J., dissenting) (quoting
Monongahela Nav. Co. v. United States, 148 U.S. 312, 325 (1893)).
\4\Id.
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Unfortunately, the Kelo decision effectively ``delete[d]
the words `for public use' from the Takings Clause of the Fifth
Amendment''\5\ and thereby jeopardized the property rights of
all Americans. The decision has been resoundingly criticized
from all quarters. Indeed, in the wake of the Kelo decision, a
resolution, H. Res. 340, expressing grave disapproval of the
decision, was approved by the House of Representatives on June
30, 2005, by a vote of 365-33. Additionally, on November 3,
2005, 157 Democrats joined 218 of their Republican colleagues
in the House to pass the Private Property Rights Protection
Act,\6\ by a 376 to 38 vote margin. Regrettably, the bill was
not considered in the Senate. H.R. 1433 provides Congress with
another chance to enact these important reforms and prevent
eminent domain abuse by ending Federal monetary support for
takings of property for private economic development.
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\5\Id. at 494.
\6\H.R. 4128, 109th Cong.
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A. PROPERTY RIGHTS ARE FUNDAMENTAL RIGHTS
The protection of private property rights lies at the
foundation of American government. ``The conviction that
private property was essential for self-government and
political liberty was long a central tenet of Anglo-American
constitutionalism.''\7\ According to John Locke, whose writings
were widely read and quoted in the latter half of the
eighteenth century and highly influential with the Framers,
``[t]he great and chief end . . . of Mens uniting into
Commonwealths, and putting themselves under Government, is the
Preserving of their Property.''\8\ The Framers, who inherited
this tradition, ``were motivated in large part by the desire to
establish safeguards for property. They felt that property
rights and liberty were indissolubly linked.''\9\ James Madison
asserted at the Constitutional Convention that ``the primary
objects of civil society are the security of property and
public safety''\10\ and, in the Federalist Papers, that
``[g]overnment is instituted no less for the protection of
property than of . . . individuals.''\11\ Thus, Madison
believed that a government ``which [even] indirectly violates
[individuals'] property in their actual possessions, is not a
pattern for the United States.''\12\
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\7\James W. Ely, Jr., ```Poor Relation' Once More: The Supreme
Court and the Vanishing Rights of Property Owners,'' 2005 CATO Sup. Ct.
Rev. 39, 40 (2005).
\8\John Locke, Second Treatise Sec. 124 (emphasis added).
\9\Ely, supra note 7, at 40.
\10\1 The Records of the Federal Convention of 1787 at 147 (Max
Farrand ed., 1937).
\11\The Federalist No. 54 (James Madison); see also James Madison,
``Speech in the Virginia Constitutional Convention,'' reprinted in
James Madison: Writings 824 (Jack N. Rakove ed., 1999) (``[T]he rights
of persons, and the rights of property are the objects, for the
protection of which Government was instituted. These rights cannot well
be separated.'').
\12\James Madison, Property (1792), reprinted in James
Madison:Writings 515 (Jack N. Rakove ed., 1999).
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Accordingly, although the word ``property'' does not appear
in the Preamble of the Constitution,
The Federalist Papers make it very clear that each
objective enumerated in the Preamble involved, in part,
the protection of the citizen's property rights. In
fact, using the Madisonian conception that property
includes all of the fundamental aspects of the
integrity of the human person, life, liberty and
property, the whole preamble is about protecting the
citizens rights in property and property in rights.\13\
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\13\Hon. Loren A. Smith, Life, Liberty, & Whose Property?: An Essay
on Property Rights, 30 U. Rich. L. Rev. 1055, 1056 (1996).
Indeed, according to John Adams, ``[p]roperty must be
secured or liberty cannot exist.''\14\
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\14\6 John Adams, The Works of John Adams 280 (Charles Francis
Adams, ed. 1850).
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The early Supreme Court recognized Americans' fundamental
right to private property. In 1795, in an opinion authored by
Justice William Paterson, who was a delegate to the
Constitutional Convention, the Supreme Court declared,
``possessing property, and having it protected, is one of the
natural, inherent, and unalienable rights of man. . . . The
preservation of property then is the primary object of the
social compact.''\15\ Because, as Justice Story would later
explain, ``government can scarcely be deemed to be free, where
the rights of property are left solely dependent upon the will
of a legislative body, without any restraint. The fundamental
maxims of a free government seem to require, that the rights of
personal liberty and private property should be held
sacred.''\16\
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\15\Vanhorne's Lessee v. Dorrance, 2 U.S. 304, 310 (1795).
\16\Wilkinson v. Leland, 27 U.S. (2 Pet.) 627, 657 (1829).
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More recent Supreme Court opinions continue to acknowledge
the fundamental nature of property rights, recognizing that
``[i]ndividual freedom finds tangible expression in property
rights.''\17\ And that the ``right to enjoy property without
unlawful deprivation . . . is, in truth a personal right. . . .
In fact, a fundamental interdependence exists between the
personal right to liberty and the personal right in property.
Neither could have meaning without the other. That rights in
property are basic civil rights has long been recognized.''\18\
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\17\United States v. James Daniel Good Real Property, 510 U.S. 43,
61 (1993)
\18\Lynch v. Household Finance, 405 U.S. 538, 552 (1972).
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The sanctity and centrality of private property rights are
thus ingrained in our constitutional design. Therefore, it is
no accident that the Bill of Rights contains several
interrelated rights, in addition to the Takings Clause, a fair
reading of which anchors a variety of personal liberties on the
protection of property rights: the prohibition on infringing
people's right to keep and bear arms (Second Amendment); the
prohibition on quartering soldiers on private property (Third
Amendment); the prohibition on unreasonable searches and
seizures of property (Fourth Amendment); the prohibition on
depriving any person of life, liberty, or property without due
process of law (Fifth Amendment); the right to trial by jury
for controversies exceeding twenty dollars (Seventh Amendment);
and the prohibition of excessive bails and fines (Eighth
Amendment).\19\
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\19\See Bernard H. Siegan, Property and Freedom 20-21 (1997).
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B. PUBLIC USE AND KELO V. CITY OF NEW LONDON
Prior to Kelo, it was generally understood that the public
use requirement ``embodied the Framers' understanding that
property is a natural, fundamental right, prohibiting the
government from `tak[ing] property from A. and giv[ing] it to
B.''\20\ As Justice Story observed, ``[w]e know of no case, in
which a legislative act to transfer the property of A. to B.
without his consent, has ever been held a constitutional
exercise of legislative power in any state in the union.''\21\
Similarly, the distinguished jurist Thomas M. Cooley, in his
landmark 1868 treatise, asserted, ``[t]he public use implies a
possession, occupation, and enjoyment of the land by the
public, or public agencies; and there could be no protection
whatever to private property, if the right of government to
seize and appropriate it could exist for any other use.''\22\
And, the Supreme Court, in 1872, declared that ``[t]he right of
eminent domain nowhere justifies taking property for a private
use.''\23\ Thus, although the public use requirement has
traditionally allowed property to be taken for unambiguous
public uses, such as for roads, schools, and courthouses, prior
to Kelo it had been interpreted to prohibit the use of eminent
domain for private-to-private transfers of property.
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\20\Kelo, 545 U.S. at 510-11 (Thomas, J. dissenting) (quoting
Calder v. Bull, 3 U.S. (3 Dall.) 386, 388 (1798)).
\21\Wilkinson, 27 U.S. (2 Pet.) at 658.
\22\Thomas M. Cooley, A Treatise on the Constitutional Limitations
Which Rest Upon the Legislative Power of the States of the American
Union 531 (1868).
\23\Olcott v. The Supervisors, 83 U.S. (15 Wall.) 678, 694 (1872).
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Under pre-Kelo Supreme Court precedent, there were
generally three categories of takings that complied with the
public use requirement. First, it was clear that the government
could take land from its owner without his consent and transfer
it to public ownership for use as a public road, a public
hospital, or a military base.\24\ Second, Supreme Court
precedent recognized that a government could take private
property from an owner without his consent and transfer it to
private parties, referred to as common carriers, who would then
make the property available for the general public's use, such
as with a railroad, a public utility, or a stadium.\25\ Third,
and more controversially, the Supreme Court had interpreted the
public use requirement to permit a government to take private
property even though the property was subsequently put to
private use in two cases in which the previous use of the
property was determined to be harmful to the general
public.\26\
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\24\See, e.g., Old Dominion Land Co. v. United States, 269 U.S. 55
(1925); Rindge Co. v. County of Los Angeles, 262 U.S. 700 (1923).
\25\See, e.g., National Railroad Passenger Corporation v. Boston &
Maine Corp., 503 U.S. 407 (1992); Mt. Vernon-Woodberry Cotton Duck Co.
v. Alabama Interstate Power Co., 240 U.S. 30 (1916).
\26\Berman v. Parker, 348 U.S. 26 (1954); Hawaii Housing Authority
v. Midkiff, 467 U.S. 229 (1984).
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The Supreme Court's decision in Kelo greatly weakened the
public use requirement by adding a fourth category to this list
by upholding the use of eminent domain to take an individual's
private property and give it to another for purely private
economic development purposes. As the Court described the
reason for the City's taking of private property in Kelo: ``the
pharmaceutical company Pfizer Inc. announced that it would
build a $300 million research facility on a site immediately
adjacent to Fort Trumbull; local planners hoped that Pfizer
would draw new business to the area, thereby serving as a
catalyst to the area's rejuvenation.''\27\ The Supreme Court
held that the properties taken by the City were ``[not]
blighted or otherwise in poor condition; rather, they were
condemned only because they happen to be located in the
development area.''\28\ In fact, the Court held that it would
not even look at the question of whether the area in question
was in economic distress: ``[the City's] determination that the
area was sufficiently distressed to justify a program of
economic rejuvenation is entitled to our deference.'' \29\
Thus, because the takings were part of ``a `carefully
considered' development plan,''\30\ they were upheld as
constitutional.
---------------------------------------------------------------------------
\27\Kelo, 545 U.S. at 473.
\28\Id. at 475.
\29\Id. at 483.
\30\Id. at 478.
---------------------------------------------------------------------------
In reaching its determination that economic development
constitutes a public use, the Court ripped the words ``public
use'' right out of the Constitution. The Court determined that
the words ``public use'' are synonymous with ``public purpose''
such that the Court was able to pronounce that ``[t]he
disposition of this case therefore turns on the question of
whether the City's development plan serves a public
purpose.''\31\
---------------------------------------------------------------------------
\31\Id. at 480 (emphasis added).
---------------------------------------------------------------------------
C. THE DISSENTING OPINIONS IN KELO
Justice O'Connor, joined by the Chief Justice and Justices
Scalia and Thomas, and Justice Thomas in a separate dissent,
vehemently criticized the majority opinion. In the words of
Justice O'Connor, the majority opinion pronounced that
``[u]nder the banner of economic development, all private
property is now vulnerable to being taken and transferred to
another private owner, so long as it might be upgraded--i.e.,
given to an owner who will use it in a way that the legislature
deems more beneficial to the public.''\32\ In other words,
according to Justice O'Connor, ``the sovereign may take private
property currently put to ordinary private use, and give it
over for new, ordinary private use, so long as the new use is
predicted to generate some secondary benefit for the public--
such as increased tax revenue, more jobs, maybe even esthetic
pleasure.''\33\ However, ``[t]he Constitution's text . . .
suggests that the Takings Clause authorizes the taking of
property only if the public has a right to employ it, not if
the public realizes any conceivable benefit from the
taking.''\34\
---------------------------------------------------------------------------
\32\Id. at 494 (O'Connor, J., dissenting).
\33\Id. at 501.
\34\Id. at 510 (Thomas, J., dissenting).
---------------------------------------------------------------------------
Justice Thomas decried that not only did the Kelo majority
opinion ignore the original understanding of the public use
requirement, but its holding that the courts should defer to
the legislature's judgment as to what constitutes a public use
was a far cry from the lack of deference given to legislatures
when other constitutional rights are at issue:
We would not defer to a legislature's determination of
the various circumstances that establish, for example,
when a search of a home would be reasonable, or when a
convicted double-murderer may be shackled during a
sentencing proceeding without on-the-record findings,
or when state law creates a property interest protected
by the Due Process Clause. . . . The Court has
elsewhere recognized ``the overriding respect for the
sanctity of the home that has been embedded in our
traditions since the origins of the Republic,'' when
the issue is only whether the government may search a
home. Yet today the Court tells us that we are not to
``second-guess the City's considered judgments,'' when
the issue is, instead, whether the government may take
the infinitely more intrusive step of tearing down
petitioners' homes. Something has gone seriously awry
with this Court's interpretation of the Constitution.
Though citizens are safe from the government in their
homes, the homes themselves are not.\35\
---------------------------------------------------------------------------
\35\Id. at 518 (Thomas, J., dissenting) (citations omitted).
As Justice O'Connor pointed out, ``were the political
branches the sole arbiters of the public-private distinction,
the Public Use Clause would amount to little more than
hortatory fluff.''\36\ Moreover, as is discussed in the next
section, the dissenting opinions predicted that the effects of
the allowing takings for private economic development would
fall most harshly on people of lower economic means,
minorities, houses of worship, and farmers.
---------------------------------------------------------------------------
\36\Id. at 497 (O'Connor, J., dissenting).
---------------------------------------------------------------------------
D. EMINENT DOMAIN ABUSE DISPROPORTIONATELY AFFECTS
THE MOST VULNERABLE
The Kelo decision opened the door for virtually any
property to be taken by eminent domain for economic development
purposes. As Justices O'Connor and Thomas observed in their
dissenting opinions in Kelo, eminent domain abuse falls
disproportionately on the poor, minorities, and other groups
that are likely to be politically weak. Thus, the beneficiaries
of the Kelo decision, Justice O'Connor asserted, are ``likely
to be those citizens with disproportionate influence and power
in the political process, including large corporations and
development firms. As for the victims, the government now has
license to transfer property from those with fewer resources to
those with more.''\37\
---------------------------------------------------------------------------
\37\Id. at 505.
---------------------------------------------------------------------------
After Kelo, ``[n]othing is to prevent the State from
replacing any Motel 6 with a Ritz-Carlton, any home with a
shopping mall, or any farm with a factory.''\38\ In fact,
according to a 2007 study conducted by the Institute for
Justice,
---------------------------------------------------------------------------
\38\Id. at 503.
Eminent domain project areas include a significantly
greater percentage of minority residents (58%) compared
to their surrounding communities (45%). Median incomes
in project areas are significantly less ($18,935.71)
than the surrounding communities ($23,113.46), and a
significantly greater percentage of those in project
areas (25%) live at or below poverty levels compared to
surrounding cities (16%). . . . Taken together, more
residents in areas targeted by eminent domain--as
compared to those in surrounding communities--are
ethnic or racial minorities, have completed
significantly less education, live on significantly
less income, and significantly more of them live at or
below the Federal poverty line.\39\
---------------------------------------------------------------------------
\39\Dick M. Carpenter II & John K. Ross, Victimizing the Vulnerable
at 6 (2007).
Other recent studies show that areas populated by the poor
and minorities are far more likely to be targeted for
condemnation than other neighborhoods.\40\ These studies
confirm Justice Thomas' strong statement in dissent that,
---------------------------------------------------------------------------
\40\See, e.g., Dick Carpenter & John Ross, Empire State Eminent
Domain: Robin Hood in Reverse (2010) (describing extensive use of
eminent domain New York, especially against poor and minority
neighborhoods); Dick Carpenter & John Ross, ``Testing O'Connor and
Thomas: Does The Use Of Eminent Domain Target Poor And Minority
Communities?,'' 46 Urban Studies 2447 (2009).
Allowing the government to take property solely for
public purposes is bad enough, but extending the
concept of public purpose to encompass any economically
beneficial goal guarantees that these losses will fall
disproportionately on poor communities. Those
communities are not only systematically less likely to
put their lands to the highest and best social use, but
are also the least politically powerful. If ever there
were justification for intrusive judicial review of
constitutional provisions that protect ``discrete and
insular minorities,'' surely that principle would apply
with great force to the powerless groups and
individuals the Public Use Clause protects. The
deferential standard this Court has adopted for the
Public Use Clause is therefore deeply perverse. It
encourages those citizens with disproportionate
influence and power in the political process, including
large corporations and development firms, to victimize
the weak.\41\
---------------------------------------------------------------------------
\41\Kelo, 545 U.S. at 521-22 (Thomas, J., dissenting).
The studies also confirm the concerns raised by the
National Association for the Advancement of Colored People, the
American Association for Retired Persons, and other non-profit
organizations in their amicus brief to the Supreme Court in the
---------------------------------------------------------------------------
Kelo case:
Elimination of the requirement that any taking be for a
true public use will disproportionately harm racial and
ethnic minorities, the elderly, and the economically
underprivileged. These groups are not just affected
more often by the exercise of eminent domain power, but
they are affected differently and more profoundly.
Expansion of eminent domain to allow the government or
its designated delegate to take property simply by
asserting that it can put the property to a higher use
will systematically sanction transfers from those with
less resources to those with more. This will place the
burden of economic development on those least able to
bear it, exacting economic, psychic, political and
social costs. . . .
The history of eminent domain is rife with abuse
specifically targeting minority neighborhoods. Indeed,
the displacement of African-Americans and urban renewal
projects were so intertwined that ``urban renewal'' was
often referred to as ``Negro removal. . . .''
Well-cared-for properties owned by minority and
elderly residents have repeatedly been taken so that
private enterprises could construct superstores,
casinos, hotels, and office parks. For example, four
siblings in their seventies and eighties were forced to
leave their homes and Christmas tree farm to enable the
city of Bristol, Connecticut to erect an industrial
park. . . . Several African-American families in
Canton, Mississippi were similarly forced to leave the
homes they had lived in for over 60 years to clear land
for a Nissan automobile plant.\42\
---------------------------------------------------------------------------
\42\Brief of Amici Curiae National Association for the Advancement
of Colored People, AARP, Hispanic Alliance of Atlantic County, Inc.,
Citizens in Action, Cramer Hill Resident Association, Inc., and the
Southern Christian Leadership Conference in Support of Petitioners,
2004 WL 2811057 at *3-*9.
Eminent domain abuse also tends to affect religious groups
and their houses of worship and farmers and ranchers
disproportionately. Houses of worship and other religious
institutions are, by their very nature, non-profit and almost
universally tax-exempt. These fundamental characteristics of
religious institutions render their property singularly
vulnerable to being taken under the rationale approved by the
Supreme Court in favor of for-profit, tax-generating
businesses. As the Becket Fund for Religious Liberty wrote in
its amicus brief in the Kelo case, ``[r]eligious institutions
will always be targets for eminent domain actions under a
scheme that disfavors non-profit, tax-exempt property owners
and replaces them with for-profit, tax-generating businesses.
Such a result is particularly ironic, because religious
institutions are generally exempted from taxes precisely
because they are deemed to be `beneficial and stabilizing
influences in community life.'''\43\
---------------------------------------------------------------------------
\43\Brief of Amicus Curiae the Becket Fund for Religious Liberty,
2004 WL 2787141 at *3 (quoting Walz v. Comm'r, 397 U.S. 664, 673
(1970)).
---------------------------------------------------------------------------
In addition, many other charitable organizations will face
similar threats because of their tax-exempt status. Indeed,
several charitable organizations have faced condemnation
threats in recent years to satisfy municipal appetite for more
tax revenue.\44\
---------------------------------------------------------------------------
\44\Brief of Amicus Curiae the Becket Fund for Religious Liberty,
2004 WL 278714l, at *11 n.22 (citing Sue Britt, ``Moose Lodge Set for
Court Fight; Group to Fight Home Depot Land Takeover,'' Belleville
News-Democrat (Missouri), April 1, 2002, at 1B (Moose Lodge faced
condemnation in order to bring a Home Depot to the city); April
McClellan-Copeland, Hudson, ``American Legion Closer on Hall; City
Wants Building to Demolish for Project,'' Plain Dealer (Cleveland),
March 8, 2003, at B3 (American Legion property faced condemnation to
make way for small upscale shops, restaurants, and offices); Todd
Wright, ``Frenchtown Leaders Want Shelter to Move; Roadblock to
Revitalization?,'' Tallahassee Democrat, July 13, 2003, at Al
(describing threatened condemnation of homeless shelter to clear the
way for business development); Joseph P. Smith, ``Vote on Land
Confiscation,'' Daily Journal (Illinois), October 6, 2004, at 1A
(detailing threatened condemnation of a Goodwill thrift store in order
to build a shopping center)).
---------------------------------------------------------------------------
Additionally, according to the American Farmland Trust,
``[w]ith so much farmland on the urban edge and near cities
still in steep decline, ex-urban towns could be tempted by [the
Kelo] ruling to make farmland available for subdivisions.''\45\
As the American Farm Bureau Federation has pointed out, ``[a]s
valuable as that land is to our members and to the rest of the
country, however, it will often be the case that more intense
development by other private individuals or entities for other
private purposes would yield greater tax revenue to local
government.''\46\ Thus, the Kelo decision threatens American
farmers and ranchers ``with the loss of productive farm and
ranch land solely to allow someone else to put it to a
different private use.''\47\ American farmers and ranchers need
their private property rights protected ``if they are to find
economically feasible ways to use their land and remain in the
agriculture business--the business of feeding the American
populace.''\48\
---------------------------------------------------------------------------
\45\American Farmland Trust Policy Update (July 6, 2005).
\46\Brief Amici Curiae of the American Farm Bureau Federation et
al., 2004 WL 2787138, at *2-*4.
\47\Id.
\48\Id.
---------------------------------------------------------------------------
E. PRIVATE PROPERTY RIGHTS PROTECTION ACT
The Private Property Rights Protection Act protects
property owners by restricting the ability of state and local
governments to take private property for economic development
purposes if they receive Federal economic development funds.
Specifically, if a state or political subdivision of a state
uses its eminent domain power to transfer private property to
other private parties for economic development, the state or
political subdivision is ineligible to receive Federal economic
development funds for 2 fiscal years following a judicial
determination that the law has been violated. Additionally, the
bill prohibits the Federal Government from using eminent domain
for economic development purposes.
The bill's key provisions are contained in sections 2(a)
and 2(b). Section 2(a) sets out the state and local activities
that the bill prohibits:
No State or political subdivision of a State shall
exercise its power of eminent domain, or allow the
exercise of such power by any person or entity to which
such power has been delegated, over property to be used
for economic development or over property that is
subsequently used for economic development, if that
State received Federal economic development funds
during any fiscal year in which it does so.
And section 2(b) sets forth the consequence for a state or
local government that violates section 2(a):
A violation of subsection (a) by a State or political
subdivision shall render such State or political
subdivision ineligible for any Federal economic
development funds for a period of 2 fiscal years
following a final judgment on the merits by a court of
competent jurisdiction that such subsection has been
violated. . . .
In order to encourage state and local governments to return
private property that is taken for economic development to the
former private landowner, section 2(c) terminates the
ineligibility period if the offending state or local government
returns all real property the taking of which the courts
determine violated section 2(a).
As the bill is intended to preserve the property rights
protections jeopardized by the Supreme Court's decision in
Kelo, its definition of ``economic development'' continues to
allow the types of takings that have traditionally been
considered appropriate public uses. Traditional public uses
include those where the condemned land is actually ``used'' by
the public, either by building a government-owned structure on
it (such as a road or a bridge), or by constructing a privately
owned facility that the owner is legally required to allow the
general public to use, such as a public utility. The bill also
includes express exceptions for the transfer of property to
public ownership, and to common carriers and public utilities,
and for related things like pipelines, and makes reasonable
exceptions for the taking of land that is being used in a way
that constitutes an immediate threat to public health and
safety. Additionally, the bill makes exceptions for: the
incidental use of a public property by a private entity, such
as a retail establishment on the ground floor in a public
property; the acquisition of abandoned property; and for
clearing defective chains of title in which no one can be said
to really own the property in the first place. However, while
the bill does contain reasonable definitions and exceptions, it
also includes a rule of construction that provides that its
provisions shall be construed in favor of a broad protection of
private property rights, to the maximum extent permitted by the
terms of the bill and the Constitution.
Although the Private Property Rights Protection Act does
not directly overturn Kelo, it should largely eliminate
economic development takings, if states and their political
subdivisions elect to continue to receive Federal economic
development funds. Congress' power to condition the use of
Federal funds extends to prohibiting states and localities from
receiving any Federal economic development funds for a
specified period of time if such entities abuse their power of
eminent domain, even if only state and local funds are used in
that abuse of power. Such a broader prohibition is an
appropriate use of Congress' spending power, as the Supreme
Court has made clear that ``Congress may attach conditions on
the receipt of Federal funds . . . `to further broad policy
objectives by conditioning receipt of Federal moneys upon
compliance by the recipient with Federal statutory and
administrative directives.'''\49\ Congress may attach such
conditions to the receipt of Federal funds provided they are
``in pursuit of `the general welfare,''' related ``to the
Federal interest in particular national projects or programs,''
and that they are ``unambiguous.''\50\
---------------------------------------------------------------------------
\49\South Dakota v. Dole, 483 U.S. 203, 206 (1987) (upholding as
constitutional legislation in which Congress provided that a state
would lose 5% of its Federal transportation funds unless states
mandated a drinking age of 21).
\50\Id. at 207-208.
---------------------------------------------------------------------------
The bill denies states or localities that abuse eminent
domain all Federal economic development funds for a period of 2
years. There is a clear connection between the Federal funds
that would be denied and the abuse Congress is intending to
prevent: states or localities that have abused their eminent
domain power by using ``economic development'' as an improper
rationale for a taking should not be trusted with Federal
taxpayer funds for other ``economic development'' projects
which could themselves result in abusive takings of private
property.
Furthermore, to ensure that any conditioning of the use of
Federal funds is unambiguous, the bill includes a
``notification'' section that requires the Attorney General to
compile a list of the Federal laws under which Federal economic
development funds are distributed and communicate such list to
each state and also make it available on the Internet. This
will put states and localities on notice that if they receive
any Federal funds under the listed Federal laws, they must
refrain from abusing their power of eminent domain or risk
losing such funds for a period of 2 years. Moreover, only the
locality, and not the whole state, would lose its economic
development funds if only the locality abuses its eminent
domain powers.
Finally, the bill includes a provision providing that the
legislation would not become effective until the start of the
first fiscal year following the enactment of the legislation in
order to provide states and localities with sufficient lead
time within which to come into compliance with the legislation,
and the legislation would not apply to any project for which
condemnation proceedings have been initiated prior to the date
of enactment.
Hearings
The Committee's Subcommittee on the Constitution held 1 day
of hearings on H.R. 1433, on April 12, 2011. Testimony was
received from Lori Ann Vendetti, a homeowner from Long Branch,
N.J.; John Echeverria, Professor, Vermont Law School; and Dana
Berliner, Senior Attorney, Institute for Justice.
Committee Consideration
On January 24, 2012, the Committee met in open session and
ordered the bill H.R. 1433 favorably reported with an
amendment, by a roll call vote of 23 to 5, a quorum being
present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following roll call votes occurred during the Committee's
consideration of H.R. 1433.
1. An amendment by Mr. Nadler to strike ``public facility''
from the public uses for which a governmental unit may exercise
its power of eminent domain under the bill. Defeated 10 to 18.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle......................................................
Mr. Amodei...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson, Jr................................................. X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
[Vacant]........................................................
-----------------------------------------------
Total....................................................... 10 18
----------------------------------------------------------------------------------------------------------------
2. Motion to report H.R. 1433 favorably, as amended. Passed
23 to 5.
ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy.......................................................
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle......................................................
Mr. Amodei...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson, Jr................................................. X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
Mr. Polis.......................................................
-----------------------------------------------
Total....................................................... 23 5
----------------------------------------------------------------------------------------------------------------
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 1433, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 14, 2012.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1433, the
``Private Property Rights Protection Act of 2012.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Daniel
Hoople (for Federal costs), who can be reached at 226-2860, and
Melissa Merrell (for the State and local impact), who can be
reached at 225-3220.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 1433--Private Property Rights Protection Act of 2012.
As ordered reported by the House Committee on the Judiciary on
January 24, 2012
H.R. 1433 would deny Federal economic development
assistance to State or local governments that exercise the
power of eminent domain for economic development purposes or to
take property from a tax-exempt entity, such as a religious or
nonprofit organization. (Eminent domain is the right to take
private property for public use.) The bill also would prohibit
Federal agencies from engaging in such practices. Private
property owners would be given the right to bring legal actions
seeking enforcement of those provisions, and the legislation
would waive States' Constitutional immunity to such suits.
Finally, H.R. 1433 would require the Attorney General to notify
States and the public of how the legislation would affect
individuals' property rights and to report to the Congress each
year on private rights of action brought against State and
local governments.
CBO estimates that implementing this legislation would have
no significant net effect on discretionary spending over the
next five years. CBO estimates that additional reporting
requirements by the Attorney General would cost less than
$500,000 over the next five years, assuming appropriation of
the necessary amounts. Enacting H.R. 1433 would not affect
direct spending or revenues; therefore, pay-as-you-go
procedures do not apply.
H.R. 1433 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
but would impose significant new conditions on the receipt of
Federal economic development assistance by State and local
governments. (Such conditions are not considered mandates under
UMRA.) Because those conditions would apply to a large pool of
funds, the bill effectively would restrict the use of eminent
domain by State and local governments and would limit the
ability of local governments to manage land use in their
jurisdictions. Further, State and local governments could incur
significant legal expenses to respond to private legal actions
authorized by the bill.
CBO expects that few State and local governments would
receive reduced Federal assistance under the bill. Under
current law, the Federal Government provides economic
development assistance through several sources, including
programs of the Departments of Agriculture, Health and Human
Services, and Housing and Urban Development; the Economic
Development Administration; and various regional commissions.
CBO expects that most jurisdictions would not risk this
assistance by exercising the use of eminent domain in
situations described by the bill. Furthermore, the bill
provides several exceptions where the use of eminent domain
would not result in a reduction in Federal assistance,
including takings for public use, for public rights of way, to
acquire abandoned property, and to remove immediate threats to
public health and safety. Given existing State laws that
restrict powers of eminent domain and based on the historical
use of such power, CBO expects that the use of eminent domain
for purposes that would not meet any of the exceptions
specified in the bill would be minimal.
State or local governments found to have exercised the
power of eminent domain targeted by the bill would be
ineligible for Federal economic development assistance for two
years. In those cases, CBO expects that affected property would
be returned or replaced (which would reinstate eligibility) or
that Federal assistance would instead be provided to other
eligible entities. Any change in the pace of Federal spending
would be insignificant, CBO estimates.
The CBO staff contacts for this estimate are Daniel Hoople
(for Federal costs) and Melissa Merrell (for the State and
local impact). The estimate was approved by Theresa Gullo,
Deputy Assistant Director for Budget Analysis.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
1433 will preserve and protect private property rights.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 1433 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Section 1. Short title
Section 1 provides for the short title of the legislation,
the ``Private Property Rights Protection Act of 2012.''
Section 2. Prohibition of eminent domain abuse by States
Section 2(a) prohibits States and political subdivisions of
States (and any entity to which they have delegated the power
of eminent domain) from exercising its power of eminent domain
over property that is intended to be used for economic
development or is subsequently used for economic development,
if that State or political subdivision receives Federal
economic development funds during any fiscal year in which it
the property is so used or intended to be used.
Section 2(b) provides that a violation of subsection (a)
shall render a State or political subdivision ineligible for
Federal economic development funds for a period of 2 fiscal
years following a final judgment on the merits by a court of
competent jurisdiction that such subsection has been violated.
Moreover, any Federal agency charged with distributing those
funds shall withhold them for such 2-year period, and any such
funds distributed to a State or political subdivision shall be
returned or reimbursed to the appropriate Federal agency or
authority of the Federal Government, or component thereof.
Section 2(c) provides a State or political subdivision with
the opportunity to cure a violation of subsection (a). A State
or political subdivision can regain its eligibility to receive
Federal economic development funds if it returns all real
property the taking of which was found to have constituted a
violation of subsection (a) and replaces any other property
destroyed and repairs any other property damaged as a result of
such violation. Additionally, if there are penalties or
interest imposed by some other law for economic development
takings, those penalties and interest must be paid in order for
a violation to be cured.
Section 3. Prohibition on eminent domain abuse by the Federal
Government
Section 3 provides that the Federal Government or any
authority of the Federal Government shall not exercise its
power of eminent domain for economic development purposes.
Section 4. Private right of action
Section 4(a) provides that any private property owner or
tenant who suffers injury as a result of a violation of any
provision of this Act may bring an action in the appropriate
Federal or State court. It further clarifies that a State is
not entitled to sovereign immunity from any such action.
Additionally, it provides that a property owner claiming a
violation of this Act may seek any appropriate relief through a
preliminary injunction or a temporary restraining order.
Section 4(b) provides a 7-year statute of limitations from
the conclusion of condemnation proceedings for actions brought
pursuant to this Act. Section 4(c) provides that in any action
or proceeding under this Act, the court shall allow prevailing
plaintiffs reasonable attorneys' fees as part of the costs, and
include expert fees as part of the attorneys' fees.
Section 5. Reporting of Violations to Attorney General
Section 5 provides that private property owners and tenants
may report violations of the Act to the Attorney General and
that the Attorney General shall investigate reports of such
violations. Additionally, it provides that the Attorney General
shall notify the Federal agency, or state or local government
of an alleged violation and give the applicable governmental
unit 90 days to show that it is either not in violation or that
it has cured the violation. If after 90 days the Attorney
General determines that the applicable governmental unit is
still violating the Act or has not cured its violation, then
the Attorney General is to bring suit to enforce the Act unless
the owner or tenant has already brought such suit, in which
case the Attorney General shall intervene if the Attorney
General determines intervention is necessary to enforce the
Act.
Section 6. Notification by Attorney General
Section 6(a) provides that not later than 30 days after the
enactment of this Act, the Attorney General shall provide to
the chief executive officer of each State the text of this Act
and a description of the rights of property owners under this
Act. It also provides that not later than 120 days after the
enactment of this Act, the Attorney General shall compile a
list of the Federal laws under which Federal economic
development funds are distributed. Such list and any successive
revisions of such list shall be communicated by the Attorney
General to the chief executive officer of each State and also
made available on the Internet website maintained by the United
States Department of Justice.
Section 6(b) provides that not later than 30 days after the
enactment of this Act, the Attorney General shall publish in
the Federal Register and make available on the Internet website
maintained by the United States Department of Justice a notice
containing the text of this Act and a description of the rights
of property owners under this Act.
Section 7. Reports
Section 7(a) provides that not later than 1 year after the
date of enactment of this Act, and every subsequent year
thereafter, the Attorney General shall transmit a report
identifying States or political subdivisions that have used
eminent domain in violation of this Act to the Chairman and
Ranking Member of the Committee on the Judiciary of the House
of Representatives and to the Chairman and Ranking Member of
the Committee on the Judiciary of the Senate.
Section 7(b) requires each state and local authority that
is subject to a private right of action under this Act to
report to the Attorney General any information the Attorney
General needs to make the report required by subsection (a).
Section 8. Sense of Congress regarding rural America
Section 8 contains findings and a Sense of Congress that
the use of eminent domain for the purpose of economic
development is a threat to agricultural and other property in
rural America and that the Congress should protect the property
rights of Americans, including those who reside in rural areas.
Section 9. Definitions
Section 9 contains definitions of terms used in the Act.
The term ``economic development'' means taking private
property, without the consent of the owner, and conveying or
leasing such property from one private person or entity to
another private person or entity for commercial enterprise
carried on for profit, or to increase tax revenue, tax base,
employment, or general economic health. The term ``economic
development'' does not include: (A) conveying private property
to public ownership, such as for a road, hospital, or military
base, or to an entity, such as a common carrier, that makes the
property available for use by the general public as of right,
such as a railroad, or public facility, or for use as a right
of way, aqueduct, pipeline, or similar use; (B) removing
harmful uses of land provided such uses constitute an immediate
threat to public health and safety; (C) leasing property to a
private person or entity that occupies an incidental part of
public property or a public facility, such as a retail
establishment on the ground floor of a public building; (D)
acquiring abandoned property; (E) clearing defective chains of
title; and (F) taking private property for use by a public
utility (the term ``public utility'' is intended to include all
utilities providing electric, natural gas, telecommunications,
water and wastewater services and other essential services,
either directly to the public or indirectly through provision
of such services at the wholesale level for resale to the
public).
The term ``Federal economic development funds'' means any
Federal funds distributed to or through States or political
subdivisions of States under Federal laws designed to improve
or increase the size of the economies of States or political
subdivisions of States.
The term ``State'' means each of the several States, the
District of Columbia, the Commonwealth of Puerto Rico, or any
other territory or possession of the United States.
Section 10. Severability and effective date
Section 10(a) provides for a severability clause. Section
10(b) provides that this Act shall take effect upon the first
day of the first fiscal year that begins after the date of the
enactment of this Act, but shall not apply to any project for
which condemnation proceedings have been initiated prior to the
date of enactment.
Section 11. Sense of Congress
Section 11 states that it is the sense of the Congress that
it is the policy of the United States to encourage, support,
and promote the private ownership of property and to ensure
that the constitutional and other legal rights of private
property owners are protected by the Federal Government.
Section 12. Broad construction
Section 12 provides that the Act shall be construed in
favor of a broad protection of private property rights, to the
maximum extent permitted by the terms of this Act and the
Constitution.
Section 13. Limitation on Statutory Construction
Section 13 provides that nothing in the Act may be
construed to supersede, limit, or otherwise affect any
provision of the Uniform Relocation Assistance and Real
Property Acquisition Policies Act.
Section 14. Religious and Nonprofit Organizations
Section 14 provides that no State or political subdivision
of a State shall exercise its power of eminent domain over
property of a religious or other nonprofit organization by
reason of the nonprofit or tax-exempt status of such
organization if that State or political subdivision receives
Federal economic development funds during any fiscal year in
which it does so and makes States and political subdivisions
ineligible for Federal economic development funds for a period
of 2 years if they violate this prohibition. It further
provides that the Federal Government or any authority thereof
shall not exercise its power of eminent domain over property of
such organizations by reason of their nonprofit or tax-exempt
status.
Section 15. Report by Federal Agencies on Regulations and Procedures
Relating to Eminent Domain
Section 15 provides that each Executive department and
agency shall review all rules, regulations, and procedures and
report to the Attorney General on the activities of that
department or agency to bring its rules, regulations and
procedures into compliance with this Act.
Section 16. Sense of Congress
Section 16 provides that it is the sense of Congress that
any and all precautions shall be taken by the government to
avoid the unfair or unreasonable taking of property away from
survivors of Hurricane Katrina for economic development
purposes or for the private use of others.
Section 17. Disproportionate Impact on Minorities
Section 17 provides that if a court determines that a
violation of the Act has occurred and that the violation has a
disproportionately high impact on the poor or minorities, the
Attorney General shall use reasonable efforts to locate and
inform former owners and tenants of the violation and any
remedies they may have.
Dissenting Views
H.R. 1433, the ``Private Property Rights Protection Act,''
has the laudable purpose of preventing the abuse of the power
of eminent domain to benefit a private party at the expense of
another private party. It does so, however, by imposing vague
and inconsistent restrictions on state and local governments.
As a result, jurisdictions will be unable to determine in
advance what is prohibited, and therefore, how to avoid the
bill's disastrous financial penalties.
H.R. 1433 falls short of its purpose by being both over-
and under-inclusive. It would allow takings that have
historically been abused to the detriment of property owners
and vulnerable communities, while also potentially blocking
worthwhile projects with clear public purposes and public
benefits. The bill provides no remedy for an aggrieved property
owner or tenant and offers no mechanism to prevent a prohibited
taking from occurring. Instead, the legislation sets up a
system where, if the property owner or tenant prevails, the
jurisdiction would be subject to crushing penalties, while the
aggrieved property owner gets nothing.
For these reasons, and those set out below, we respectfully
dissent, and urge the House to reject this dangerously flawed
legislation.
DESCRIPTION AND BACKGROUND
H.R. 1433, the ``Private Property Rights Implementation Act
of 2011,'' would restrict the use of eminent domain by states
or political subdivisions. It would prohibit states and
political subdivisions from exercising eminent domain for
``economic development'' if the jurisdiction receives Federal
economic development funds during any fiscal year in which the
property is used or intended to be used for economic
development purposes. Persons whose property has been taken in
violation of the Act, or tenants of that property, would have
the right to sue the jurisdiction for temporary injunctive
relief for a period of 7 years following the completion of the
taking. A violation of the Act would result in the state or
political subdivision's ineligibility for any Federal economic
development funds for 2 fiscal years following a final ruling
on the merits. A jurisdiction could cure the violation by
returning the real property that was unlawfully taken,
replacing any property that was destroyed, and repairing any
damage.
A detailed section-by-section of the bill's substantive
provisions follows:
Section 2 of the bill prohibits states and political
subdivisions from exercising eminent domain for economic
development, if such economic development occurs within 7 years
following the exercise of eminent domain if Federal economic
development funds are received by the jurisdiction during any
fiscal year in which the property is used or intended to be
used. A violation, if found by a court of competent
jurisdiction, would result in a state or political
subdivision's ineligibility for any Federal economic
development funds for 2 fiscal years following a final ruling
on the merits. The appropriate Federal agency would withhold
the funds and if a violation occurs after funds have been
distributed, a state or political subdivision would reimburse
the appropriate Federal agency. States and political
subdivisions would not be ineligible for funds if a prohibited
taking is cured by returning the real property that was
unlawfully taken, replacing any property that was destroyed,
and repairing any damage. An amendment by Representative Sheila
Jackson Lee (D-TX), which was accepted by voice vote, added a
requirement that the state must also pay unspecified applicable
penalties and interest to retain eligibility for economic
development funds.
Section 3 of the bill prohibits the Federal Government from
exercising eminent domain for economic development.
Section 4 provides any private property owner or tenant who
has suffered an injury as a result of a violation of the Act
with a private right of action in the appropriate state or
Federal court. A private property owner has 7 years following a
state or political jurisdiction's taking of his or her property
and using it in violation of this Act to bring an action.
Prevailing plaintiffs are entitled to reasonable attorney's
fees. Costs and expert fees are included as part of the
attorney's fees.
Section 5 of the bill provides that a property owner or
tenant who suffers an injury as a result may report the
violation to the Attorney General (AG). The AG must conduct an
investigation and if he or she finds a violation, the AG must
notify the governmental entity of the violation. The
governmental entity has 90 days to demonstrate that no
violation has occurred, or to cure the violation by returning
the property, rebuilding any property destroyed, and repairing
any damage to the property. If not, the AG must commence an
action, unless the property owner or tenant has already brought
an action.
In addition, section 5 provides that the AG may only bring
an action in the 7-year period beginning at the conclusion of
the condemnation proceeding if, during that time, the property
is used for economic development.
Section 6 of the bill gives the AG the responsibility for
providing states with the text of the Act and a description of
the rights of property owners under the Act no later than 30
days after the Act's enactment. The AG is also responsible for
compiling an annual list of the Federal laws under which
Federal economic funds are distributed and providing that list
to states and posting that list on the Justice Department
website no later than 120 days after the Act's enactment.
Finally, the AG is responsible for publishing a notice
containing the text of this Act and a description of rights of
property owners under this Act in the Federal Register and on
the Justice Department's website no later than 30 days after
the date of the Act's enactment.
Section 7 of the bill requires the AG to provide an annual
report to the House and Senate Judiciary Committees identifying
states or political subdivisions that have used eminent domain
in violation of the Act. The report must identify all private
actions brought as a result of a state or political
subdivision's violation of this Act. In addition, the report
must identify all states and political subdivisions that have
lost Federal economic development funds as a result of a
violation of the Act, as well as describe the type and amount
of Federal economic development funds lost in each state or
political subdivision and the Agency that is responsible for
withholding such funds. Further, the report must identify
violations reported to the AG, and actions brought by the AG.
The report must discuss all instances in which a state or
political subdivision has cured a violation of the Act.
Finally, an amendment offered by Representative Jackson Lee,
and adopted by a voice vote, added a requirement that the
report must identify the percentage of minority residents
compared to the surrounding nonminority residents, and include
the median incomes of those impacted by a violation of the Act.
Section 8 of the bill expresses the Sense of the Congress
that Congress should protect the property rights of Americans,
including those who reside in rural areas.
Section 9 of the bill sets forth various definitions for
terms used in the Act. It defines the term ``economic
development'' as the taking of private property without the
owner's consent and conveying or leasing that private property
from one private owner to another private owner for commercial
enterprise carried on for profit, or to increase tax revenue,
tax base, employment, or general economic health. The
definition explicitly excludes several types of takings:
Lconveying of private property to public
ownership, such as for a road, hospital, or military
base;
Lconveying private property to an entity, such
as a common carrier, that makes the property available
for use by the general public as of right, such as a
railroad, public utility, or public facility;
Lremoving harmful uses of land provided such
uses constitute an immediate threat to public health
and safety;
Lleasing property to a private person or
entity that occupies an incidental part of public
property or a public facility, such as a retail
establishment on the ground floor of a public building;
Lacquiring abandoned property;
Lclearing defective chains of title;
Ltaking private property for use by a public
utility; and
Lredeveloping a brownfield site as defined in
the Small Business Liability Relief and Brownfields
Revitalization Act.
Section 9 also defines the term ``Federal economic
development funds'' as funds administered to improve or
increase a state or political subdivision's economy.
In addition, it provides that the term, ``State,'' includes
states, the District of Columbia, the Commonwealth of Puerto
Rico, and any other territory or possession of the United
States.
Section 10 of the bill provides that the provisions of the
Act shall be severable. The section also provides that the Act
takes effect upon the start of the first fiscal year following
its enactment, but that the Act does not apply to any projects
for which condemnation proceedings have been initiated prior to
the date of enactment.
Section 11 of the bill sets forth the Sense of the Congress
to encourage and promote the private ownership of property and
to ensure that the constitutional and other legal rights of
private property owners are protected by the Federal
Government.
Sections 12 and 13 of the bill concern statutory
construction. Section 12 requires that the Act be construed in
favor of a broad protection of private property rights. Section
13 provides that nothing in this Act may be construed to
supercede, limit, or otherwise affect any provision of the
Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970.
Section 14 of the bill prohibits the states from exercising
the power of eminent domain over property of a religious or
other nonprofit organization by reason of the nonprofit or tax-
exempt status of such organization.
Section 15 of the bill requires a report to the AG from
each executive department and agency of all rules, regulations,
and procedures and actions to bring them in compliance with the
Act.
Section 16 of the bill expresses the Sense of the Congress
that all precautions must be taken by the government to avoid
the unfair or unreasonable taking of property away from
survivors of Hurricane Katrina.
Representative Jackson Lee offered an amendment, adopted by
a voice vote, that would require the Attorney General to use
reasonable efforts to locate former owners and tenants of the
violation and notify them of any remedies they may have if the
court determines that a violation of the Act had occurred and
that the violation had a disproportionate impact on the poor or
minorities.
CONCERNS WITH H.R. 1433
I. THE PENALTY WILL FINANCIALLY CRIPPLE STATE AND LOCAL GOVERNMENTS AND
PROVIDE NO RELIEF TO PROPERTY OWNERS
A. The bill's penalties will bankrupt states and localities
1. LLoss of economic development funds for 2 years would
devastate state and local budgets
Although the bill purports to define ``Federal economic
development funds,'' it nevertheless requires the Attorney
General to ``compile a list of the Federal laws under which
Federal economic development funds are distributed.''\1\ The
Government Accountability Office, however, testified about the
difficulty of determining what qualifies as an ``economic
development program'':
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\1\H.R. 1433 Sec. 6(a)(2).
Absent a common definition for economic development, we
had previously developed a list of nine activities most
often associated with economic development. These
activities include planning and development strategies
for job creation and retention, development, developing
new markets for existing products, building
infrastructure by constructing roads to attract
industry to undeveloped areas, and establishing
business incubators to provide facilities for new
business operations.\2\
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\2\Economic Development: Efficiency and Effectiveness of Fragmented
Programs Are Unclear: Hearing Before the Subcomm. on Economic
Development, Public Building, and Emergency Management of the H. Comm.
on Transportation and Infrastructure, 112th Cong. (2011) (prepared
statement of William B. Shear, Director, Financial Markets and
Community Investment, Government Accountability Office).
For example, the U.S. Census Bureau reports that state and
local governments received $63.9 billion from the Department of
Transportation for fiscal year 2010, $30.3 billion of which was
from the Highway Trust Fund.\3\ States received more than $7
billion in Community Development Block Grants and $66 million
for Empowerment Zones and other economic development from the
Department of Housing and Urban Development.\4\ States received
more than $5 billion in capital programs from the Department of
Housing and Urban Development.\5\
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\3\United States Census Bureau, Federal Aid to States for Fiscal
Year 2010 at viii (Sept. 2011).
\4\Id. at 10.
\5\Id. at 11.
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These are only a few examples of Federal funding that could
be considered economic development funding.\6\
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\6\This statutory vagueness may nullify the bill's application to
states and localities. The Supreme Court has long held that ``when
Congress attaches conditions to a State's acceptance of Federal funds,
the conditions must be set out `unambiguously,' `[L]egislation enacted
pursuant to the spending power is much in the nature of a contract,'
and therefore, to be bound by `federally imposed conditions,'
recipients of Federal funds must accept them `voluntarily and
knowingly.' States cannot knowingly accept conditions of which they are
`unaware' or which they are `unable to ascertain.''' Arlington Cent.
School Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 296 (2006) (quoting
Pennhurst State School and Hospital v. Halderman, 451 U.S. 1 (1981))
(citations omitted).
---------------------------------------------------------------------------
Whatever the actual total a state might receive, the loss
of such funding for 2 years (or the requirement that a
jurisdiction repay such funds) would necessarily be
economically devastating.
2. LEven if a jurisdiction never exercised the power of
eminent domain for any reason, the effect on its
borrowing power would be catastrophic
In light of the bill's potential to bankrupt a
jurisdiction, there is a serious risk that a reasonable bond
underwriter could never be confident that a jurisdiction would
not, at some future point during the life of the bond, engage
in a prohibited taking, or convert a property taken by eminent
domain to a prohibited use. The penalties would necessarily
affect the ability of the jurisdiction to repay the bond. A
prudent underwriter would therefore have to take this
possibility into account and charge a substantial risk premium
to protect investors from the possibility that this legislation
might, in the future, impair a jurisdiction's ability to repay.
Moreover, a political subdivision would also be at risk that
the state or county on which it is dependent for funding and
services might incur the penalties, or that these units of
government would face increased borrowing costs limiting their
ability to aid a subdivision.
B. The bill is purely punitive, and fails to provide relief to
aggrieved property owners
While the penalties imposed on states and localities by
H.R. 1433 are substantial, it will not permit the plaintiff to
stop the taking before it happens and it will not compensate
the plaintiff other than what is already authorized under
applicable law. The only relief available is a ``preliminary
injunction or a temporary restraining order.''\7\ A prevailing
plaintiff may also recover costs, including reasonable
attorney's fees, and expert fees.\8\ As a result, the bill
would give a prevailing plaintiff only the satisfaction of
having bankrupted the community.
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\7\H.R. 1433 Sec. 4(b).
\8\H.R. 1433 Sec. 4(c).
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During the markup, Representative Jerrold Nadler (D-NY)
offered an amendment that would have allowed an owner or tenant
to bring an action as soon as she ``received notice of a final
determination that an action to take such owner's property by
eminent domain in violation of section 2 will proceed or . . .
[i]f the property is used for economic development in violation
of section 2 following the taking of that property by eminent
domain.'' It would have permitted a prevailing plaintiff to
``obtain appropriate declaratory, injunctive, or monetary
relief to enforce any provision of this Act.'' The amendment
would have prevented an unlawful taking and provided both
permanent injunctive relief and any applicable damages. The
amendment was rejected by voice vote.
II. THE PROHIBITIONS IN H.R. 1433 ARE VAGUE, AND ARE BOTH OVER
INCLUSIVE AND UNDER INCLUSIVE
Abuses of the eminent domain power have not been confined
to economic development projects. Public works, such as
highways and other projects explicitly covered by this
legislation, have also had a disproportionate impact on low-
income and minority communities. As Robert Caro in his seminal
work on urban political power, The Power Broker, observed:
[D]uring the 7 years since the end of World War II,
there had been evicted from their homes in New York
City for public works . . . some 170,000 persons. . . .
If the number of persons evicted for public works was
eye-opening, so were certain of their characteristics.
Their color for example. A remarkably high percentage
of them were [African American] or Puerto Rican.
Remarkably few of them were white. Although the 1950
census found that only 12 percent of the city's
population was nonwhite, at least 37 percent of the
evictees . . . and probably far more were nonwhite.\9\
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\9\Robert Caro, The Power Broker 967-8 (1974).
Because the definition of a prohibited taking for economic
development purposes explicitly exempts these types of public
works, H.R. 1433 would allow many of these past abuses to
continue with no restrictions.\10\
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\10\H.R. 1433 Sec. 9(1)(A)(I) permits ``conveying private property
to public ownership, such as for a road, hospital, airport, or military
base.''
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H.R. 1433 would also permit many projects where private
property is taken and conveyed to another private party. For
example, pipelines are exempt from the bill's prohibitions,\11\
including the controversial Keystone Pipeline, which is planned
to extend from Montana to Texas.\12\ The company has already
begun seeking to secure land along the right of way using
eminent domain, even though the project has not yet received
the necessary permits,\13\ which has prompted action at the
state and local level.\14\
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\11\H.R. 1433 Sec. 9(1)(A)(iv).
\12\According to the company website:
The proposed Keystone Gulf Coast Expansion Project is an
approximate 2,673-kilometre (1,661-mile), 36-inch crude oil
pipeline that would begin at Hardisty, Alberta and extend
southeast through Saskatchewan, Montana, South Dakota and
Nebraska. It would incorporate a portion of the Keystone
Pipeline (Phase II) through Nebraska and Kansas to serve
markets at Cushing, Oklahoma before continuing through
Oklahoma to a delivery point near existing terminals in
Nederland, Texas to serve the Port Arthur, Texas
---------------------------------------------------------------------------
marketplace.
TransCanada Working with State of Nebraska and Department of State to
Finalize New Route for Keystone XL through Nebraska, available at:
http://www.transcanada.com/keystone.html (last visited Feb. 12, 2012).
---------------------------------------------------------------------------
\13\Leslie Kaufman & Dan Frosch, Eminent Domain Fight Has a
Canadian Twist, N.Y. Times, Oct. 17, 2011, available at http://
www.nytimes.com/2011/10/18/us/transcanada-in-eminent-domain-fight-over-
pipeline.html?pagewanted=all.
\14\Michael Avok, Nebraska Lawmakers Debate Pipeline Eminent Domain
Rules, Reuters, Nov 8, 2011, available at http://www.reuters.com/
article/2011/11/09/us-usa-pipeline-nebraska-idUSTRE7A80MA20111109.
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Representative Mike Quigley (D-IL) offered an amendment
requiring the completion of a public report by the relevant
local environmental authority that has considered ``the
cumulative greenhouse gas emissions impacts of the pipeline
over a 50-year time frame and whether existing pipeline
capacity is adequate'' and ``the impacts of the project to
minority and low-income populations'' before eminent domain
could move forward for this purpose. The amendment was rejected
by voice vote.
The bill would also permit the use of eminent domain to
seize private property and give it to a private developer for
the purpose of constructing a sports stadium or shopping
mall.\15\ Localities have long used eminent domain to build
stadia, including the city of Arlington, Texas, which exercised
eminent domain to facilitate the construction of the stadium
for the Texas Rangers in which George W. Bush was, at the time,
a part owner.\16\ Representative Nadler offered an amendment
that would have dropped the term ``public facility'' from the
list of exemptions to prevent such an eventuality, but it was
rejected by a vote of 10-18.
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\15\H.R. 1433 Sec. 9(1)(A)(ii).
\16\Frank James, Texas Sports Plan Means Homes Will Have to Go:
Some Feel Drop-kicked by Eminent Domain, Invoked to Obtain Land for a
New Cowboys Stadium, Chicago Trib., July 18, 2005, available at http://
articles.chicagotribune.com/2005-07-18/news/0507180187_1_
eminent-domain-private-property-property-rights.
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III. H.R. 1433 IS AN ASSAULT ON STATES' RIGHTS
Since the Kelo decision, approximately 43 states have
enacted some sort of legislation in response.\17\ At least
three state supreme courts have read the public purpose prong
of their states' constitutions more narrowly than the Supreme
Court has read the Takings Clause in the U.S. Constitution.\18\
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\17\Ilya Somin, The Limits of Backlash: Assessing the Political
Response to Kelo, 93 Minn. L. Rev. 2100, 2101 (2009).
\18\Norwood v. Horney, 853 N.E.2d 1115 (Ohio 2006) (public use
requirement in state constitution not met by economic development
purpose); Board of County Comm'rs v. Lowery, 136 P.3d 639, 651 (Okla.
2006) (because state constitution places stricter limits on eminent
domain than the Federal constitution, the state could not condemn
easement for water pipelines to service private electric-generation
plant, as that would be a taking for private use); Benson v. South
Dakota, 710 N.W.2d 131, 146 (S.D. 2006) (dictum that state constitution
does not recognize ``public benefit'' category and permits taking only
for ``use by the public'').
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Testifying before the Constitution Subcommittee, Professor
John Echeverria of Vermont Law School explained that the
legislation is unnecessary because nearly every state had
enacted legislation in response to the Kelo decision. In his
testimony, he provided a review of the form that response has
taken. He explained the importance of the use of eminent domain
for public purposes, as contemplated by the Constitution, and
urged that the Federal Government should not substitute its
judgment for that of the states.\19\
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\19\Private Property Rights Protection Act of 2011: Hearing on H.R.
1433 Before the Subcomm. on the Const. of the H. Comm. on the
Judiciary, 112th Cong. (2012) at 32, n. 1. (testimony Professor John
Echeverria).
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While some may have believed, in the wake of the Kelo
decision, that Federal action was necessary, at this point,
states have responded, and Congress should not substitute its
judgment for that of the states.
IV. THE PROPONENTS OF H.R. 1433 HAVE MISINTERPRETED
THE KELO DECISION
In Kelo, the Supreme Court held that the municipality's use
of eminent domain to implement its area redevelopment plan
aimed at invigorating a depressed area was a ``public use''
within the meaning of the takings clause of the Fifth Amendment
to the Constitution, even though some of the property would be
turned over from private homeowners and business owners to
private developers.\20\ The majority opinion was grounded on a
century of Supreme Court precedent holding that ``public use''
must be read broadly to mean ``for a public purpose.''\21\
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\20\545 U.S. at 474 (2005).
\21\See, e.g., Hawaii Housing Authority v. Midkiff, 467 U.S. 229
(1984) (state's purpose of eliminating social and economic evils of a
land oligopoly a public purpose); Berman v. Parker, 348 U.S. 26 (1954)
(elimination of blight a public purpose); Fallbrook Irrigation Dist. v.
Bradley, 164 U.S. 112 (1896) (irrigation of arid land a public
purpose).
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In declining to rule that economic development does not
qualify as a ``public use,'' the Court nonetheless noted some
limitations. ``[T]he City would no doubt be forbidden from
taking petitioners' land for the purpose of conferring a
private benefit on a particular private party . . . Nor would
the City be allowed to take property under the mere pretext of
a public purpose, when its actual purpose was to bestow a
private benefit.''\22\ The Court also noted that the taking by
New London was ``executed pursuant to a `carefully considered'
development plan.''\23\
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\22\545 U.S. at 477-8.
\23\Id. at 478.
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The Kelo dissenters and the proponents of H.R. 1433,
however, argue that even a broad reading of ``public use'' does
not extend to private-to-private transfers solely to improve
the tax base and create jobs.\24\ For example, the dissent
observed that the ``most natural reading of the Clause is that
it allows the government to take property only if the
government owns, or the public has a legal right to use, the
property, as opposed to taking it for any public purpose or
necessity whatsoever.''\25\ As Justice Thomas explained:
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\24\545 U.S. at 506 (O'Connor, J., dissenting).
\25\Id. at 508 (Thomas, J., dissenting).
Allowing the government to take property solely for
public purposes is bad enough, but extending the
concept of public purpose to encompass any economically
beneficial goal guarantees that these losses will fall
disproportionately on poor communities. Those
communities are not only systematically less likely to
put their lands to the highest and best use, but are
also the least politically powerful. If ever there were
justification for intrusive judicial review of
constitutional provisions that protect `discrete and
insular minorities,' surely that principle would apply
with great force to the powerless groups and
individuals the Public Use Clause protects.\26\
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\26\Id. at 521 (citations omitted).
What the Kelo dissenters and the proponents of H.R. 1433 fail
to acknowledge, however, is that the majority decision
specifically excluded ``extending the concept of public purpose
to encompass any economically beneficial goal,''\27\ and, more
specifically stated that ``the City would no doubt be forbidden
from taking petitioners' land for the purpose of conferring a
private benefit on a particular private party.''\28\ Whatever
the Kelo decision may stand for, it most certainly does not
resemble the overwrought descriptions of it permitting the
``State [to] replac[e] any Motel 6 with a Ritz-Carlton, any
home with a shopping mall, or any farm with a factory.''\29\
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\27\Id.
\28\Id. at 478.
\29\Id. at 503.
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CONCLUSION
The power of eminent domain is subject to abuse and must be
exercised with great care. We also recognize that the courts
have a role in determining whether that power has been
exercised for a genuinely public purpose rather than a mere
pretext to confer a private benefit on another private party.
The states have responded to the Kelo decision in the
intervening years, and we do not believe that Congress should
now substitute its own judgment for that of the states.
Even if we were to consider the restrictions in this
legislation to be appropriate, the ruinous penalties imposed by
the bill, and the significant economic disruption it would
likely impose on state and local finances, would be disastrous
and provide no actual benefit to aggrieved homeowners and
tenants.
For these reasons, and those stated above, we respectfully
dissent, and urge our colleagues to reject this harmful
legislation.
John Conyers, Jr.
Jerrold Nadler.
Robert C. ``Bobby'' Scott.