[House Report 112-401]
[From the U.S. Government Publishing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-401

======================================================================



 
             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\
---------------------------------------------------------------------------
    \1\545 U.S. 469 (2005).
---------------------------------------------------------------------------

                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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \5\Id. at 494.
    \6\H.R. 4128, 109th Cong.
---------------------------------------------------------------------------

               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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \14\6 John Adams, The Works of John Adams 280 (Charles Francis 
Adams, ed. 1850).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \15\Vanhorne's Lessee v. Dorrance, 2 U.S. 304, 310 (1795).
    \16\Wilkinson v. Leland, 27 U.S. (2 Pet.) 627, 657 (1829).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \19\See Bernard H. Siegan, Property and Freedom 20-21 (1997).
---------------------------------------------------------------------------

              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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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'':
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    These are only a few examples of Federal funding that could 
be considered economic development funding.\6\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \7\H.R. 1433 Sec. 4(b).
    \8\H.R. 1433 Sec. 4(c).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.''
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------

             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\
---------------------------------------------------------------------------
    \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:
---------------------------------------------------------------------------
    \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.

                                  
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