[House Report 113-357]
[From the U.S. Government Publishing Office]
113th Congress } { Report
2d Session } HOUSE OF REPRESENTATIVES { 113-357
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PRIVATE PROPERTY RIGHTS PROTECTION ACT OF 2013
_______
February 25, 2014.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Goodlatte, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 1944]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 1944) to protect private property rights, having
considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 13
Committee Consideration.......................................... 13
Committee Votes.................................................. 13
Committee Oversight Findings..................................... 14
New Budget Authority and Tax Expenditures........................ 14
Congressional Budget Office Cost Estimate........................ 14
Duplication of Federal Programs.................................. 16
Disclosure of Directed Rule Makings.............................. 16
Performance Goals and Objectives................................. 16
Advisory on Earmarks............................................. 16
Section-by-Section Analysis...................................... 16
Dissenting Views................................................. 20
Purpose and Summary
The Private Property Rights Protection Act preserves the
constitutional protections for private property jeopardized by
the Supreme Court's decision in Kelo v. City of New London.\1\
It does this by conditioning state and local governments'
receipt of Federal economic development funds on their
restraint from using eminent domain to transfer private
property from one private owner to another for the purpose of
economic development. If a state, or political subdivision of a
state, uses its eminent domain power to take property for
private 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. The bill's provisions are enforceable through a
private right of action or through an action brought by the
Attorney General of the United States.
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\1\545 U.S. 469 (2005).
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Background and Need for the Legislation
The Fifth Amendment to the U.S. Constitution, made
applicable to the states through the 14th Amendment, provides
that ``private property [shall not] be taken for public use,
without just compensation.''\2\ In other words, the Fifth
Amendment imposes two distinct conditions on the exercise of
the power of eminent domain: (1) that the taking must be for
``public use,'' and (2) that the owner must be paid ``just
compensation.'' As Justice O'Connor has explained, although the
Takings Clause presumes that governments are given the
authority to take property without an owner's consent, ``the
just compensation requirement spreads the cost of condemnations
and thus `prevents the public from loading upon one individual
more than his just share of the burdens of government.'''\3\
And, ``the public use requirement, in turn, imposes a more
basic limitation, circumscribing the very scope of the eminent
domain power: Government may compel an individual to forfeit
her property for the public's use, but not for the benefit of
another private person.''\4\
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\2\Additionally, as the Takings Clause is a prohibition, not an
express grant of power, the use of eminent domain is further restricted
by other limits on government power. For instance, the Federal
Government may only exercise its power of eminent domain if it is
necessary and proper for the execution of one of its enumerated powers.
United States v. Morrison, 529 U.S. 598, 607 (2000) (``Every law
enacted by Congress must be based on one or more of its powers
enumerated in the Constitution.'').
\3\Kelo, 545 U.S. at 497 (O'Connor, J., dissenting) (quoting
Monongahela Nav. Co. v. United States, 148 U.S. 312, 325 (1893)).
\4\Kelo, 545 U.S. at 497 (O'Connor, J., dissenting).
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Unfortunately, the Kelo decision effectively ``delete[d]
the words `for public use' from the Takings Clause of the Fifth
Amendment''\5\ and thereby jeopardized the property rights of
all Americans. The decision has been resoundingly criticized
from all quarters. Indeed, in the wake of Kelo, a resolution
expressing grave disapproval of the Court's decision was
approved by the House of Representatives on June 30, 2005, by a
vote of 365-33.\6\ Moreover, public opinion polling showed that
Americans from across racial, ethnic, partisan, and gender
lines condemned the decision.\7\ Disapproval of Kelo was
expressed by 77% of men, 84% of women, 82% of whites, 72% of
African-Americans, and 80% of Hispanics. The decision was also
opposed by 79% of Democrats, 85% of Republicans, and 83% of
Independents. Furthermore, advocacy groups ranging from the
NAACP to the Libertarian Party and from the AARP to the
American Farm Bureau Federation stood in opposition to the
Court's decision.
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\5\Id. at 494.
\6\H. Res. 340, 109th Cong.
\7\Two national polls conducted in the fall of 2005 showed that 81%
and 95% of respondents were opposed to Kelo. American Farm Bureau
Federation Survey, Oct. 29-Nov. 2, 2005, Zogby International (showing
95 percent of respondents disagreed with the Court's ruling in Kelo);
The Saint Index Poll, Oct.-Nov. 2005, Center for Economic and Civic
Opinion at the University of Massachusetts/Lowell (showing 81 percent
of respondents disagreed with the ruling).
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On November 3, 2005, this widespread condemnation of the
Kelo decision led 157 Democrats to join 218 of their Republican
colleagues in the House to pass the Private Property Rights
Protection Act, by a 376 to 38 vote margin.\8\ Last Congress,
by voice vote, the House once again passed this legislation.
Regrettably, the Senate has failed to act on this important
legislation. H.R. 1944 provides Congress with another chance to
enact these important reforms and prevent eminent domain abuse
by ending Federal monetary support for takings of property for
private economic development.
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\8\H.R. 4128, 109th Cong.
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A. Property Rights Are Fundamental Rights
The protection of ownership of private property 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.''\9\ 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.''\10\ 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.''\11\
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\9\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).
\10\John Locke, Second Treatise Sec. 124 (emphasis added). ``It is
very clear that the founders shared Locke's and Blackstone's affection
for private property, which is why they inserted the eminent domain
provision in the Bill of Rights.'' Richard A. Epstein, Takings: Private
Property and the Power of Eminent Domain 29 (1985); see also James W.
Ely, Jr., ``The Constitution and Economic Liberty,'' 35 Harv. J. L. &
Pub. Pol'y 27, 29-30 (2012) (``John Locke and the Whig emphasis on the
rights of property owners profoundly influenced the founding
generation.'').
\11\Ely, supra note 9, at 40.
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James Madison asserted at the Constitutional Convention
that ``the primary objects of civil society are the security of
property and public safety''\12\ and, in the Federalist Papers,
that ``[g]overnment is instituted no less for the protection of
property than of . . . individuals.''\13\ Thus, Madison
believed that a government ``which [even] indirectly violates
[individuals'] property in their actual possessions, is not a
pattern for the United States.''\14\ Indeed, according to John
Adams, ``[p]roperty must be secured or liberty cannot
exist.''\15\ Accordingly, although the word ``property'' does
not appear in the Preamble of the Constitution,
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\12\1 The Records of the Federal Convention of 1787 at 147 (Max
Farrand ed., 1937).
\13\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.'').
\14\James Madison, Property (1792), reprinted in James
Madison:Writings 515 (Jack N. Rakove ed., 1999).
\15\6 John Adams, The Works of John Adams 280 (Charles Francis
Adams, ed. 1850); see also Arthur Lee, ``An Appeal to the Justice and
Interests of the People of Great Britain,'' in The Present Dispute with
America 14 (4th ed. 1775) (``The right of property is the guardian of
every other right, and to deprive a people of this, is in fact to
deprive them of their liberty.'').
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.\16\
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\16\Hon. Loren A. Smith, ``Life, Liberty, & Whose Property?: An
Essay on Property Rights,'' 30 U. Rich. L. Rev. 1055, 1056 (1996).
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.''\17\ 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.''\18\
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\17\Vanhorne's Lessee v. Dorrance, 2 U.S. 304, 310 (1795).
\18\Wilkinson v. Leland, 27 U.S. (2 Pet.) 627, 657 (1829).
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More recent Supreme Court opinions continue to acknowledge
the fundamental nature of property rights, recognizing that
``[i]ndividual freedom finds tangible expression in property
rights.''\19\ 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.
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\19\United States v. James Daniel Good Real Property, 510 U.S. 43,
61 (1993)
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That rights in property are basic civil rights has long
been recognized.''\20\
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\20\Lynch v. Household Finance, 405 U.S. 538, 552 (1972).
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The sanctity and centrality of private property rights are
thus ingrained in our constitutional design. Therefore, it is
no accident that the Bill of Rights contains several
interrelated rights, in addition to the Takings Clause, a fair
reading of which anchors a variety of personal liberties on the
protection of property rights: the prohibition on infringing
people's right to keep and bear arms (Second Amendment); the
prohibition on quartering soldiers on private property (Third
Amendment); the prohibition on unreasonable searches and
seizures of property (Fourth Amendment); the prohibition on
depriving any person of life, liberty, or property without due
process of law (Fifth Amendment); the right to trial by jury
for controversies exceeding twenty dollars (Seventh Amendment);
and the prohibition of excessive bails and fines (Eighth
Amendment).\21\
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\21\See Bernard H. Siegan, Property and Freedom 20-21 (1997).
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B. Public Use and Kelo v. City of New London
Prior to Kelo, it was generally understood that the public
use requirement ``embodied the Framers' understanding that
property is a natural, fundamental right, prohibiting the
government from `tak[ing] property from A. and giv[ing] it to
B.''\22\ 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.''\23\
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.''\24\
Moreover, the Supreme Court, in 1872, declared that ``[t]he
right of eminent domain nowhere justifies taking property for a
private use.''\25\ Thus, although the public use requirement
has traditionally allowed property to be taken for unambiguous
public uses, such as for roads, schools, and courthouses, prior
to Kelo it had been interpreted to prohibit the use of eminent
domain for private-to-private transfers of property.
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\22\Kelo, 545 U.S. at 510-11 (Thomas, J. dissenting) (quoting
Calder v. Bull, 3 U.S. (3 Dall.) 386, 388 (1798)).
\23\Wilkinson, 27 U.S. (2 Pet.) at 658.
\24\Thomas M. Cooley, A Treatise on the Constitutional Limitations
Which Rest Upon the Legislative Power of the States of the American
Union 531 (1868).
\25\Olcott v. The Supervisors, 83 U.S. (15 Wall.) 678, 694 (1872).
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Under pre-Kelo Supreme Court precedent, there were
generally three categories of takings that complied with the
public use requirement. First, it was clear that a 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.\26\ 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.\27\ 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.\28\
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\26\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).
\27\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).
\28\Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984);
Berman v. Parker, 348 U.S. 26 (1954).
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The Supreme Court's decision in Kelo greatly weakened the
public use requirement by adding a fourth category to this list
by upholding the use of eminent domain to take an individual's
private property and give it to another for purely private
economic development purposes. As the Court described the
reason for the City's taking of private property in Kelo: ``the
pharmaceutical company Pfizer Inc. announced that it would
build a $300 million research facility on a site immediately
adjacent to Fort Trumbull; local planners hoped that Pfizer
would draw new business to the area, thereby serving as a
catalyst to the area's rejuvenation.''\29\ 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.''\30\ In fact, the Court refused to 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.'' \31\ Thus, because
the takings were part of ``a `carefully considered' development
plan,''\32\ they were upheld as constitutional.
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\29\Kelo, 545 U.S. at 473.
\30\Id. at 475.
\31\Id. at 483.
\32\Id. at 478.
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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.''\33\
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\33\Id. at 480 (emphasis added).
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C. The Dissenting Opinions in Kelo
Justice O'Connor, joined by Chief Justice Rehnquist 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.''\34\ 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.''\35\ 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.''\36\
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\34\Id. at 494 (O'Connor, J., dissenting).
\35\Id. at 501.
\36\Id. at 510 (Thomas, J., dissenting).
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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.\37\
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\37\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.''\38\ Moreover, as is discussed in the next
section, the dissenting opinions predicted that the effects of
allowing takings for private economic development would fall
most harshly on people of lower economic means, minorities,
houses of worship, and farmers.
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\38\Id. at 497 (O'Connor, J., dissenting).
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D. LEminent 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.''\39\
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\39\Id. at 505.
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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.''\40\ In fact,
according to a study conducted by the Institute for Justice,
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\40\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.\41\
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\41\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.\42\ These studies
confirm Justice Thomas's strong statement in dissent that,
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\42\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.\43\
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\43\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
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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.\44\
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\44\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 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.'''\45\
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\45\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)).
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Moreover, 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.\46\
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\46\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)).
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In addition, 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.''\47\
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.''\48\ 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.''\49\ 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.''\50\
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\47\American Farmland Trust Policy Update (July 6, 2005).
\48\Brief Amici Curiae of the American Farm Bureau Federation et
al., 2004 WL 2787138, at *2-*4.
\49\Id.
\50\Id.
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E. LPost-Kelo State-level Eminent Domain Reform Is Insufficient
The Kelo decision generated a massive public backlash that
led most states to enact some sort of eminent domain
reform.\51\ Some have argued that these state-level reforms
have greatly diminished the problem of eminent domain abuse
and, therefore, legislation at the Federal level, such as the
Private Property Rights Protection Act, is unnecessary.
However, as one eminent domain scholar has observed:
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\51\As a result of public backlash, 43 states enacted legislation
intended to curb economic development takings in the years after the
Kelo decision.
Unfortunately, the majority of the new reform laws
are likely to be ineffective, imposing few or no
meaningful constraints on the use of eminent domain.
Many of them forbid takings that transfer property to
private parties for ``economic development,'' but allow
virtually identical condemnations to continue under
other names. For example, numerous states continue to
allow ``blight'' condemnations under definitions of
blight so broad that virtually any area qualifies.
Many of the states that have enacted ineffective
post-Kelo reforms or no reforms at all are among those
that make the most extensive use of eminent domain for
the benefit of private interests. They include such
large states as California, New York, New Jersey, and
Texas.\52\
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\52\The Civil Rights Implications of Eminent Domain Abuse: Hearing
Before the U.S. Commission on Civil Rights (2011) (statement of Ilya
Somin); see also James W. Ely, Jr., Post-Kelo Reform: Is the Glass
Half-Full or Half-Empty?, 17 Sup. Ct. Econ. Rev. 127 (2009).
What is more, most state eminent domain reform measures
were enacted as regular legislation--they were not embedded
into state constitutions. Eminent domain reforms that are not
enshrined into state constitutions will always be subject to
repeal or exception at the whim of state legislators. For
example, recent legislation in Alabama rolled back one of the
first state post-Kelo eminent domain reform laws. According to
testimony received by the Subcommittee on the Constitution,
``[i]n the wake of national outrage after the Court's decision,
[Alabama] was one of the first to enact a corrective reform
which, at least on paper, greatly limited eminent domain for
private purposes. Only last month, however, our state reversed
course and gutted a key element of this reform.''\53\ The new
Alabama law ``expressly allows the deployment of eminent domain
to benefit the automotive industry and other private
interests.''\54\
---------------------------------------------------------------------------
\53\H.R. 1944, the ``Private Property Rights Protection Act'':
Hearing Before the Subcomm. on the Constitution and Civil Justice of
the H. Comm. on the Judiciary, 113th Cong. (2013) (testimony of David
Beito, Professor, University of Alabama).
\54\Id.
---------------------------------------------------------------------------
In short, despite state-level reforms, ``eminent domain
abuse is still a problem, and Federal money continues to
support the use of eminent domain for private commercial
development.''\55\ Accordingly, Federal eminent domain
legislation, like the Private Property Rights Protection Act,
is still needed to curb abusive economic development takings.
---------------------------------------------------------------------------
\55\Id. (statement of Scott Bullock, Senior Attorney, Institute for
Justice).
---------------------------------------------------------------------------
F. 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 elect to receive Federal economic development
funds. Specifically, section 2(a) of the bill provides that:
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.
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, that state or
political subdivision is ineligible to receive Federal economic
development funds for 2 fiscal years following a judicial
determination that law has been violated:
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).
In addition, section 3 prohibits the Federal Government
from exercising its eminent domain power for economic
development purposes.
Because previous congressional efforts to restrict the
ability of federal, state, and local governments from using
certain Federal funds for economic development takings proved
largely ineffective,\56\ the bill provides for a private right
of action and an action by the Attorney General of the United
States to enforce the bill's provisions. The private right of
action provides that:
---------------------------------------------------------------------------
\56\See Section 726 of the Transportation, Treasury, Housing and
Urban Development, the Judiciary, and independent Agencies
Appropriations Act of 2006 (Pub. L. No. 109-115) (prohibiting the use
of funds made available by that Act for projects that seek to use the
power of eminent domain, unless eminent domain is employed only for a
public use); Statement of Scott Bullock, supra note 53 (``Congress's
previous efforts to restrict the use of certain Federal funds for
eminent domain . . . have unfortunately been ineffective.'').
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.
Similarly, the Attorney General enforcement provision provides
that if the Federal Government or a state or local government
fails to cure a violation of the Act within 90 days of being
notified of the violation, 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.''
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 public uses. Traditional public uses include those
in which the condemned land is actually ``used'' by the public,
such as for a public road, school, or military base. The bill
also includes express exceptions for the transfer of property
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 help eliminate economic
development takings in those states and political subdivisions
that elect to receive Federal economic development funds.
Congress's 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's
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.''\57\
---------------------------------------------------------------------------
\57\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) (internal quotations omitted).
---------------------------------------------------------------------------
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.''\58\ The Act does nothing more than use
Congress's ``spending power to create incentives for States to
act in accordance with''\59\ the pre-Kelo understanding of
``public use.'' And the fact that the Act's condition on
Federal spending applies beyond economic development projects
that are directly funded by Federal money is simply an
acknowledgement that ``[m]oney is fungible.''\60\
---------------------------------------------------------------------------
\58\Id. at 207-208.
\59\Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2602
(2012).
\60\Sabri v. United States, 541 U.S. 600, 606 (2004).
---------------------------------------------------------------------------
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 that
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 choose to
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, if a
locality abuses its eminent domain powers, only the locality,
and not the whole state, would lose its economic development
funds.
Finally, the bill includes a provision providing that the
Act does not become effective until the start of the first
fiscal year following its enactment in order to provide states
and localities with sufficient lead time within which to come
into compliance with the Act, and the Act's prohibitions do 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 and Civil
Justice held a hearing on H.R. 1944, on April 18, 2013.
Testimony was received from Susette Kelo, the lead plaintiff in
Kelo v. City of New London; David Beito, Professor, University
of Alabama, and Chair, Alabama State Advisory Committee of the
U.S. Commission on Civil Rights; Julia Trigg Crawford, farm
owner and manager, Sumner, Texas; and Scott Bullock, Senior
Attorney, Institute for Justice.
Committee Consideration
On June 4, 2013, the Subcommittee on the Constitution and
Civil Justice met in open session and ordered the bill H.R.
1944 favorably reported, without amendment, by a vote of 5 to
3, a quorum being present. On June 12, 2013, the Committee met
in open session and ordered the bill H.R. 1944 favorably
reported, without amendment, by voice vote, 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 there
were no recorded votes during the Committee's consideration of
H.R. 1944.
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. 1944, 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, June 27, 2013.
Hon. Bob Goodlatte, 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. 1944, the
``Private Property Rights Protection Act of 2013.''
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) and Melissa Merrell (for state and
local impact), who can be reached at 226-2800.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 1944--Private Property Rights Protection Act of 2013.
As ordered reported by the House Committee on the Judiciary
on June 27, 2013.
H.R. 1944 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 bill would
waive states' Constitutional immunity to such suits. Finally,
H.R. 1944 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.
The Federal Government provides economic development
assistance to state and local governments through several
programs, including the Community Development Block Grant
Program, the Social Services Block Grant Program, Economic
Development Administration Grants, Department of Agriculture
grants and loans, and grants made by the regional commissions.
CBO estimates that expenditures from those major programs
totaled more than $7 billion in 2012 (although, depending on
how the term is interpreted, some of those expenditures may not
meet the definition of economic development under the bill).
CBO expects that few state and local governments would
receive reduced Federal assistance because the use of eminent
domain for the purposes targeted by the bill would be
infrequent. Therefore, CBO estimates that implementing this
legislation would have no significant net effect on those
expenditures to state and local governments over the next 5
years. We estimate that additional reporting by the Attorney
General would cost less than $500,000 over the next 5 years,
assuming appropriation of the necessary amounts. Enacting H.R.
1944 would not affect direct spending or revenues; therefore,
pay-as-you-go procedures do not apply.
H.R. 1944 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA),
but it 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 the bill's provisions 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.
Many states have amended their constitutions or enacted
laws to directly or indirectly prohibit the use of eminent
domain for economic development purposes. Furthermore, the bill
would provide several exceptions, including takings for public
use, for public rights of way, for utilities, to acquire
abandoned property, and to remove immediate threats to public
health and safety. While data on eminent domain is difficult to
obtain at the national level, evidence suggests that its use
solely for economic development purposes is minimal compared to
other purposes, such as public infrastructure projects (which
would be allowed under the bill without penalty). Finally, CBO
expects that most state and local governments would not risk
the loss of Federal economic development assistance by
exercising the use of eminent domain in situations described by
the bill.
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 2
years. In those cases, CBO expects that property would be
returned or replaced (which would reinstate eligibility) or
that assistance would instead be provided to other eligible
entities. Any change in the pace of spending would be
insignificant, CBO estimates.
The CBO staff contacts for this estimate are Daniel Hoople
(for Federal costs) and Melissa Merrell (for state and local
impact). The estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
Duplication of Federal Programs
No provision of H.R. 1944 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that H.R. 1944 specifically directs
to be completed no specific rule makings within the meaning of
5 U.S.C. Sec. 551.
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.
1944, 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. 1944 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 2013.''
Section 2. Prohibition on eminent domain abuse by States.
Subsection (a) prohibits States and political subdivisions
of States (and any entity to which they have delegated the
power of eminent domain) from exercising the 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.
Subsection (b) provides that 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. Moreover,
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.
Subsection (c) provides that a State or political
subdivision can regain its eligibility to receive Federal
economic development funds if such State or political
subdivision returns all real property the taking of which was
found by a court 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.
Section 3. Prohibition on eminent domain abuse by the Federal
Government.
Section 3 provides that neither the Federal Government nor
any authority of the Federal Government shall exercise its
power of eminent domain for economic development purposes.
Section 4. Private right of action.
Subsection (a) provides that any owner of private property
who suffers injury as a result of a violation of any provision
of this Act may bring an action to enforce any provision of
this Act in the appropriate Federal or State court.
Additionally, this subsection provides that a property owner
claiming a violation of this Act may seek relief through a
preliminary injunction or a temporary restraining order.
Subsection (b) provides a 7-year statute of limitations
from the conclusion of condemnation proceedings for actions
brought pursuant to this Act.
Subsection (c) provides that 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.
Section 5. Reporting of Violations to Attorney General.
Section 5 provides that 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.
Section 6. Notification by Attorney General.
Subsection (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.
Subsection (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.
Subsection (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.
Subsection (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 has a duty to protect the
property rights of rural Americans.
Section 9. Sense of Congress.
Section 9 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 10. Religious and Nonprofit Organizations.
Section 10 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.
Section 11. Report by Federal Agencies on Regulations and Procedures
Relating to Eminent Domain.
Section 11 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 12. Sense of Congress.
Section 12 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 13. Disproportionate Impact.
Section 13 requires the Attorney General to use reasonable
efforts to locate former owners and tenants of a property that
is taken in violation of the Act, if the violation has a
disproportionate impact on the poor or minorities.
Section 14. Definitions.
Section 14 contains the following 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, except that
such term shall 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 ``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 15. Limitation on Statutory Construction.
Section 15 provides that noting 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 16. Broad construction.
Section 16 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 the Act and the
Constitution.
Section 17. Severability and effective date.
Subsection (a) provides for a severability clause.
Subsection (b) provides that the Act shall take effect upon the
first day of the first fiscal year that begins after the date
of the enactment, but shall not apply to any project for which
condemnation proceedings have been initiated prior to the date
of enactment.
Dissenting Views
H.R. 1944, 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. 1944 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 would get 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. 1944, 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:
Sec. 1. Short Title. This section designates the short
title of the bill as the ``Private Property Rights Protection
Act of 2013.''
Sec. 2. Prohibition on Eminent Domain Abuse By States. This
section prohibits states and political subdivisions from
exercising eminent domain for economic development within 7
years of the exercise of eminent domain if Federal economic
development funds are received during any fiscal year in which
the property is so used or intended to be used. A violation, if
found by a court of competent jurisdiction, will 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 will
withhold the funds, and if a violation occurs after funds have
been distributed, a state or political subdivision will have to
reimburse the appropriate Federal agency. States and political
subdivisions will 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. A state must also pay applicable
penalties and interest to retain eligibility.
Sec. 3 Prohibition on Eminent Domain Abuse By the Federal
Government. This section prohibits the Federal Government from
exercising eminent domain for economic development.
Sec. 4. Private Right of Action. This section provides any
private property owner or tenant who has suffered an injury as
a result of a violation of this Act with a private right of
action in the appropriate state or Federal court. A private
property owner or tenant 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 shall be entitled to reasonable
attorney's fees. Costs, and expert fees are included as part of
the attorney's fees. This section also waives a state's 11th
Amendment immunity from suit in Federal court.
Sec. 5. This section 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 shall conduct an
investigation. If the AG finds a violation, the AG must notify
the governmental entity of the finding of a violation. The
governmental entity will have 90 to demonstrate that no
violation has occurred, or to cure the violation by returning
the property, rebuilding any property destroyed, and repairing
any property damaged. If not, the AG ``will bring an action''
unless the property owner or tenant has already brought an
action.
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.
Sec. 6. Notification By Attorney General. This section
gives the Attorney General the responsibility for providing
states with the text of this Act and a description of the
rights of property owners under this Act no later than 30 days
after the Act's enactment.
The Attorney General 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 DOJ website no later than 120 days
after the Act's enactment. Finally, the Attorney General 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 DOJ website no later
than 30 days after the date of the Act's enactment.
Sec. 7. Reports. This section requires the Attorney General
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 this Act. The report
will identify all private actions brought as a result of a
state or political subdivision's violation of this Act. The
report will also 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. The report will also identify the
percentage of minority residents compared to the surrounding
nonminority residents and the median incomes of those impacted
by a violation of the Act. The report will also identify
violations reported to the AG, and actions brought by the AG.
Finally, the report will discuss all instances in which a state
or political subdivision has cured a violation of the Act.
States and localities are also required to report to the AG
such information with respect to such state or locality as the
AG needs to make the report.
Sec. 8. This section expresses the sense of the Congress
that Congress should protect the property rights of Americans,
including those who reside in rural areas.
Sec. 9. This section expresses 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.
Sec. 10. Religious and Nonprofit Organizations. This
section prohibits the states, localities, and the Federal
Government 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.
This section also specifies that a violation of its
prohibitions would render the jurisdiction 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.
Sec. 11. Report by Federal Agencies on Regulations and
Procedures Relating to Eminent Domain. This section requires
the head of each Executive department and agency to 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 the
Act.
Sec. 12. Sense of the Congress. This section expresses the
Sense of the Congress that all precautions shall be taken by
the government to avoid the unfair or unreasonable taking of
property away from survivors of Hurricane Katrina.
Sec. 13. Disproportionate Impact. This section provides
that, if a court determines that a violation of the Act has
occurred, and that the violation has had 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.
Sec. 14. Definitions. This section defines the term
``economic development'' for the purposes of identifying which
exercises of eminent domain are prohibited under the Act.
The term ``economic development'' means 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.
Several types of takings are explicitly excluded from the
definition of ``economic development.''
--The conveying of private property for public ownership,
such as for a road, hospital, or military base.
--Conveying 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.
--For use as a road or other right of way or means, open to
the public for transportation, whether free or by toll.
--For use as an aqueduct, flood control facility, pipeline,
or similar use.
--Removing harmful uses of land provided such uses
constitute an immediate threat to public health and safety.
--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.
--Acquiring abandoned property.
--Clearing defective chains of title.
--Taking private property for use by a public utility,
including a utility providing electric, natural gas,
telecommunications, water, and wastewater services, either
directly to the public or indirectly through provision of such
services at the wholesale level for resale to the public.
--Redeveloping of a brownfield site as defined in the Small
Business Liability Relief and Brownfields Revitalization Act.
This section also defines the term ``federal economic
development funds'' as funds administered to improve or
increase a state or political subdivision's economy.
A ``State'' includes states, the District of Columbia, the
Commonwealth of Puerto Rico, and any other territory or
possession of the United States.
Sec. 15. Limitation on Statutory Construction. This section
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.
Sec. 16. Broad Construction. This section requires that the
Act be construed in favor of a broad protection of private
property rights.
Sec. 17. Severability and Effective Date. The section
provides that the provisions of this Act shall be severable.
This section also provides that this Act shall take effect upon
the start of the first fiscal year following the enactment of
this Act, but that the Act will not apply to any projects for
which condemnation proceedings have been initiated prior to the
date of enactment.
CONCERNS WITH H.R. 1944
I. LTHE PENALTY WILL FINANCIALLY CRIPPLE STATE AND LOCAL GOVERNMENTS
AND PROVIDE NO RELIEF TO PROPERTY OWNERS
A. The bill's penalties could bankrupt states and localities
1. LLoss of economic development funds for 2 years would
devastate state and local budgets
States and localities currently rely of Federal funding for
a significant portion of their budgets. Much of this could be
deemed ``federal economic development funds.'' Should the
penalty actually be imposed on a jurisdiction, the loss in
funding could easily render that jurisdiction insolvent, with
catastrophic results.
The bill does not identify which funds qualify as ``federal
economic development funds.'' Rather, it requires the Attorney
General to ``compile a list of the Federal laws under which
Federal economic development funds are distributed.''\1\
---------------------------------------------------------------------------
\1\H.R. 1944 Sec. 6(a)(2).
---------------------------------------------------------------------------
According to the Congressional Budget Office,
The Federal Government provides economic development
assistance to state and local governments through
several programs, including the Community Development
Block Grant Program, the Social Services Block Grant
Program, Economic Development Administration Grants,
Department of Agriculture grants and loans, and grants
made by the regional commissions. CBO estimates that
expenditures from those major programs totaled more
than $7 billion in 2012 (although, depending on how the
term is interpreted, some of those expenditures may not
meet the definition of economic development under the
bill).\2\
---------------------------------------------------------------------------
\2\Congressional Budget Office, Cost Estimate for H.R. 1944, the
``Private Property Rights Protection Act of 2013, as ordered reported
by the House Committee on the Judiciary on June
12, 2013,'' (June 12, 2013) available at: http://cbo.gov/sites/default/
files/cbofiles/attachments/hr1944.pdf.
The Government Accountability Office, however, has
testified about the difficulty of determining what qualifies as
---------------------------------------------------------------------------
an ``economic development program:''
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.\3\
---------------------------------------------------------------------------
\3\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.\4\
---------------------------------------------------------------------------
\4\United States Census Bureau, Federal Aid to States for Fiscal
Year 2010 at viii (Sept. 2011).
---------------------------------------------------------------------------
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.\5\ States received more than $5 billion
in capital programs from the Department of Housing and Urban
Development.\6\
---------------------------------------------------------------------------
\5\Id. at 10.
\6\Id. at 11.
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These are only a few examples of Federal funding that could
be considered economic development funding.\7\ 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.
---------------------------------------------------------------------------
\7\This statutory vagueness may nullify the bill's application to
states and localities. The Supreme Court has long held that ``Congress
has broad power to set the terms on which it disburses Federal money to
the States, but 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).
---------------------------------------------------------------------------
2. LEven if a jurisdiction never exercised the power of
eminent domain for any reason, the effect on its
borrowing power would still be catastrophic
In light of the bill's potential to bankrupt a
jurisdiction, its ability to float bonds would be severely
impaired. A reasonable bond underwriter would 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.
Because the concomitant penalties would necessarily affect the
ability of the jurisdiction to repay the bond, a prudent
underwriter would have to take this possibility into account
and charge a substantial risk premium to protect investors.
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. As a result, even where the
current administration foreswears the use of eminent domain,
lenders would still have to lend as if the penalties might be
imposed by the action of a future administration.
B. LThe bill is purely punitive, and fails to provide relief to
aggrieved property owners
While the penalties imposed on states and localities by
H.R. 1944 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.''\8\ In fact, the
property owner or tenant may only bring an action ``following
the conclusion of any condemnation proceedings condemning the
property of such property owner or tenant.''\9\ A prevailing
plaintiff may also recover costs, including reasonable
attorney's fees, and expert fees.\10\ As a result, the bill
would give a prevailing plaintiff only the satisfaction of
having bankrupted the community.
---------------------------------------------------------------------------
\8\H.R. 1944 Sec. 4(a).
\9\H.R. 1933 Sec. 4(b) (emphasis added).
\10\H.R. 1944 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 the condemnation commenced,
rather than having to wait until ``the property is used for
economic development following the conclusion of any
condemnation proceedings condemning the property of such
property owner or tenant.''\11\ Instead of the penalty, which
would bankrupt the jurisdiction, the Nadler amendment would
have allowed the plaintiff to obtain ``equitable relief and
compensatory damages.''\12\ Unlike the underlying bill, 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.
---------------------------------------------------------------------------
\11\H.R. 1944 Sec. 4(b).
\12\Amendment to H.R. 1944 offered by Rep. Jerrold Nadler.
---------------------------------------------------------------------------
II. LTHE PROHIBITIONS IN H.R. 1944 ARE VAGUE, AND WOULD PROHIBIT
TRADITIONAL USES OF EMINENT DOMAIN, AS WELL AS PERMIT TAKINGS THAT, IN
THE PAST, HAVE BEEN SUBJECT TO ABUSE
Abuses of the eminent domain power have not been confined
to economic development projects of the kind prohibited by this
legislation. In fact, some of the greatest abuses cited by
critics of the Kelo decision have come about in the context of
public works, such as highways and other projects explicitly
permitted by this legislation. These projects have often 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.\13\
---------------------------------------------------------------------------
\13\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. 1944 would allow many of these past abuses to
continue with no restrictions.\14\
---------------------------------------------------------------------------
\14\H.R. 1944 Sec. 14(1)(A)(I) permits ``conveying private property
to public ownership, such as for a road, hospital, airport, or military
base.''
---------------------------------------------------------------------------
H.R. 1944 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,\15\
including the controversial Keystone Pipeline, which is planned
to extend from Montana to Texas.\16\ 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.\17\
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\15\H.R. 1944 Sec. 14(1)(A)(iv).
\16\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).
---------------------------------------------------------------------------
\17\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.
---------------------------------------------------------------------------
In testimony before the Subcommittee on the Constitution
and Civil Justice, Julia Trigg Crawford, the third generation
manager of her family farm in Sumner, Texas, whose land was
taken for the Keystone XL Pipeline, explained why the
extraordinary power of eminent domain should not be used for a
project of this type.\18\
---------------------------------------------------------------------------
\18\Hearing on H.R. ___, the ``Private Property Rights Protection
Act,''before the Subcomm. on the Const. and Civil Justice of the H.
Comm. on the Judiciary, 113th Cong. (Apr. 18, 2013) (prepared testimony
of Julia Trigg Crawford).
First, we don't believe a foreign corporation should
have more of a right to our land than we do. . . . We
don't want them horizontally drilling under the Bois
d'Arc Creek where we have State-given water rights. We
irrigate 400 acres of crop land from this creek, and
the pipeline would be just a couple hundred yards
upstream from our pumps. Any leak from that pipeline
would contaminate our equipment, and then our crops in
minutes. . . . When we politely asked them to seek a
way around us, TransCanada could have slightly altered
their route and traversed that neighboring land
differently, avoiding our property altogether. But
instead they just pulled out the club of eminent
domain.\19\
---------------------------------------------------------------------------
\19\Id. at 1 (emphasis added).
Ranking Member John Conyers, Jr. (D-MI), offered an amendment
that would have added pipelines carrying tar sands to the list
of takings prohibited by the bill. It was rejected by a 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.\20\
---------------------------------------------------------------------------
\20\The bill would allow the exercise of eminent domain ``conveying
private property. . . . 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.'' H.R. 1944 Sec. 14(1)(A)(ii). Stadia
and shopping malls are open to the public. Unlike a railroad, no
admission is charged to the general public to enter a shopping mall.
---------------------------------------------------------------------------
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.\21\
---------------------------------------------------------------------------
\21\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/0507180187X1X
eminent-domain-private-property-property-rights.
---------------------------------------------------------------------------
III. H.R. 1944 IS AN ASSAULT ON STATES' RIGHTS
Using the leverage of a catastrophic cut in Federal aid,
this bill would usurp a power traditionally exercised by
states. The Congressional Budget Office has observed,
[H.R. 1944] would impose significant new conditions on
the receipt of Federal economic development assistance
by state and local governments. . . . Because the
bill's provisions 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. . . . CBO expects that most state
and local governments would not risk the loss of
Federal economic development assistance by exercising
the use of eminent domain in situations described by
the bill.\22\
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\22\CBO, supra note 2.
This unprecedented intrusion of the Federal Government into
land use decisions is unnecessary. Since the Kelo decision,
approximately 43 states have enacted some sort of legislation
in response.\23\ 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.\24\
---------------------------------------------------------------------------
\23\Ilya Somin, The Limits of Backlash: Assessing the Political
Response to Kelo, 93 Minn. L. Rev. 2100, 2101 (2009).
\24\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'').
---------------------------------------------------------------------------
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.\25\
---------------------------------------------------------------------------
\25\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 of Professor John
Echeverria).
---------------------------------------------------------------------------
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.
This bill also exceeds the constraints that the Supreme
Court has placed on the exercise of Congress' spending clause
powers. There is no nexus between the funds received and the
action the proponents hope to regulate with this legislation.
Most recently, the Supreme Court greatly constrained
Congress' powers to regulate state conduct by attaching
conditions to the receipt of Federal funds. In its decision in
National Federation of Independent Business v. Sebelius,\26\
striking down the Medicaid expansion in the Affordable Care
Act, the Court observed,
---------------------------------------------------------------------------
\26\132 S.Ct. 2566 (2012).
We have upheld Congress's authority to condition the
receipt of funds on the States' complying with
restrictions on the use of those funds, because that is
the means by which Congress ensures that the funds are
spent according to its view of the ``General Welfare.''
Conditions that do not here govern the use of the
funds, however, cannot be justified on that basis.
When, for example, such conditions take the form of
threats to terminate other significant independent
grants, the conditions are properly viewed as a means
of pressuring the States to accept policy changes.\27\
---------------------------------------------------------------------------
\27\Id. at 2603-4.
In the case of this legislation, the project affected by the
bill need not have received economic development funds at all.
Even the agency undertaking the project need not have received
any Federal economic development funds to trigger the bill's
restrictions. The jurisdiction need only have received any
Federal economic development funds for any purpose no matter
how unrelated to the project itself, even if the jurisdiction
received only a de minimus amount of such funds. The connection
between the receipt of funds and the prohibited activity is
simply too tenuous, if it exists at all, to satisfy the Court's
restriction in Sibelius.
IV. THE PROPONENTS OF H.R. 1944 HAVE MISINTERPRETED
THE KELO DECISION
In Kelo, the Supreme Court held that the municipality's use
of eminent domain to implement its 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.\28\
---------------------------------------------------------------------------
\28\545 U.S. at 474 (2005).
---------------------------------------------------------------------------
The majority opinion was grounded in a century of Supreme
Court precedent holding that ``public use'' must be read
broadly to mean ``for a public purpose.''\29\
---------------------------------------------------------------------------
\29\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).
---------------------------------------------------------------------------
As early as 1916, the Supreme Court held that ``public
use,'' within the meaning of the Takings Clause, included ``for
a public purpose.'' As Justice Holmes wrote for the Court,
[T]o gather the streams from waste and to draw from
them energy, labor without brains, and so to save
mankind from toil that it can be spared, is to supply
what, next to intellect, is the very foundation of all
our achievements and all our welfare. If that purpose
is not public, we should be at a loss to say what is.
The inadequacy of use by the general public as a
universal test is established.\30\
---------------------------------------------------------------------------
\30\Mt. Vernon-Woodberry Cotton Duck Co. v. Alabama Interstate
Power Co. 240 U.S. 30, 32 (1916) (Delegation of state power of eminent
domain to power company for the purpose of building a dam a public use
within the meaning of the Takings Clause).
In declining to rule that economic development does not qualify
as a ``public use,'' the Court in Kelo 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.''\31\
---------------------------------------------------------------------------
\31\545 U.S. at 477-8.
---------------------------------------------------------------------------
The Court also noted that the taking by New London was
``executed pursuant to a `carefully considered' development
plan.''\32\
---------------------------------------------------------------------------
\32\Id. at 478.
---------------------------------------------------------------------------
The Kelo dissenters and the proponents of H.R. 1944,
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.\33\ 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.''\34\
---------------------------------------------------------------------------
\33\545 U.S. at 506 (O'Connor, J., dissenting).
\34\Id. at 508 (Thomas, J., dissenting).
---------------------------------------------------------------------------
As Justice Thomas explained:
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.\35\
---------------------------------------------------------------------------
\35\Id. at 521 (citations omitted).
What the Kelo dissenters and the proponents of H.R. 1944 fail
to acknowledge, however, is that the majority decision
specifically excluded ``extending the concept of public purpose
to encompass any economically beneficial goal,''\36\ 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.''\37\
---------------------------------------------------------------------------
\36\Id.
\37\Id. at 478.
---------------------------------------------------------------------------
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.''\38\
---------------------------------------------------------------------------
\38\Id. at 503.
---------------------------------------------------------------------------
CONCLUSION
The Constitution recognizes that the power of eminent
domain is subject to abuse and must be exercised with great
care. We recognize that the courts have an important 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 by
narrowing their own powers, and the powers of their
subdivisions, to take property, 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 would be disastrous for state and local finances 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.
Melvin L. Watt.