[House Report 109-262]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 109-262
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PRIVATE PROPERTY RIGHTS PROTECTION ACT OF 2005
_______
October 31, 2005.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
ADDITIONAL AND DISSENTING VIEWS
[To accompany H.R. 4128]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 4128) to protect private property rights, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
CONTENTS
Page
The Amendment.................................................... 1
Purpose and Summary.............................................. 4
Background....................................................... 4
Hearings......................................................... 13
Committee Consideration.......................................... 13
Vote of the Committee............................................ 14
Committee Oversight Findings..................................... 18
New Budget Authority and Tax Expenditures........................ 18
Congressional Budget Office Cost Estimate........................ 18
Performance Goals and Objectives................................. 19
Constitutional Authority Statement............................... 19
Section-by-Section Analysis and Discussion....................... 19
Changes in Existing Law Made by the Bill, as Reported............ 22
Additional and Dissenting Views.................................. 23
THE AMENDMENT
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Private Property Rights Protection Act
of 2005''.
SEC. 2. PROHIBITION ON EMINENT DOMAIN ABUSE BY STATES.
(a) In General.--No State or political subdivision of a State shall
exercise its power of eminent domain, or allow the exercise of such
power by any person or entity to which such power has been delegated,
over property to be used for economic development or over property that
is subsequently used for economic development, if that State or
political subdivision receives Federal economic development funds
during any fiscal year in which it does so.
(b) Ineligibility for Federal Funds.--A violation of subsection (a)
by a State or political subdivision shall render such State or
political subdivision ineligible for any Federal economic development
funds for a period of 2 fiscal years following a final judgment on the
merits by a court of competent jurisdiction that such subsection has
been violated, and any Federal agency charged with distributing those
funds shall withhold them for such 2-year period, and any such funds
distributed to such State or political subdivision shall be returned or
reimbursed by such State or political subdivision to the appropriate
Federal agency or authority of the Federal Government, or component
thereof.
(c) Opportunity to Cure Violation.--A State or political subdivision
shall not be ineligible for any Federal economic development funds
under subsection (b) if such State or political subdivision returns all
real property the taking of which was found by a court of competent
jurisdiction to have constituted a violation of subsection (a) and
replaces any other property destroyed and repairs any other property
damaged as a result of such violation.
SEC. 3. PROHIBITION ON EMINENT DOMAIN ABUSE BY THE FEDERAL GOVERNMENT.
The Federal Government or any authority of the Federal Government
shall not exercise its power of eminent domain to be used for economic
development.
SEC. 4. PRIVATE RIGHT OF ACTION.
(a) Cause of Action.--Any 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, and a State shall not be immune under the
eleventh amendment to the Constitution of the United States from any
such action in a Federal or State court of competent jurisdiction. Any
such property owner may also seek any appropriate relief through a
preliminary injunction or a temporary restraining order.
(b) Limitation on Bringing Action.--An action brought under this Act
may be brought if the property is used for economic development
following the conclusion of any condemnation proceedings condemning the
private property of such property owner, but shall not be brought later
than seven years following the conclusion of any such proceedings and
the subsequent use of such condemned property for economic development.
(c) Attorneys' Fee and Other Costs.--In any action or proceeding
under this Act, the court shall allow a prevailing plaintiff a
reasonable attorneys' fee as part of the costs, and include expert fees
as part of the attorneys' fee.
SEC. 5. NOTIFICATION BY ATTORNEY GENERAL.
(a) Notification to States and Political Subdivisions.--
(1) Not later than 30 days after the enactment of this Act,
the Attorney General shall provide to the chief executive
officer of each State the text of this Act and a description of
the rights of property owners under this Act.
(2) Not later than 120 days after the enactment of this Act,
the Attorney General shall compile a list of the Federal laws
under which Federal economic development funds are distributed.
The Attorney General shall compile annual revisions of such
list as necessary. Such list and any successive revisions of
such list shall be communicated by the Attorney General to the
chief executive officer of each State and also made available
on the Internet website maintained by the United States
Department of Justice for use by the public and by the
authorities in each State and political subdivisions of each
State empowered to take private property and convert it to
public use subject to just compensation for the taking.
(b) Notification to Property Owners.--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.
SEC. 6. REPORT.
Not later than 1 year after the date of enactment of this Act, and
every subsequent year thereafter, the Attorney General shall transmit a
report identifying States or political subdivisions that have used
eminent domain in violation of this Act to the Chairman and Ranking
Member of the Committee on the Judiciary of the House of
Representatives and to the Chairman and Ranking Member of the Committee
on the Judiciary of the Senate. The report shall--
(1) identify all private rights of action brought as a result
of a State's or political subdivision's violation of this Act;
(2) identify all 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;
(3) discuss all instances in which a State or political
subdivision has cured a violation as described in section 2(c)
of this Act.
SEC. 7. SENSE OF CONGRESS REGARDING RURAL AMERICA.
(a) Findings.--The Congress finds the following:
(1) The founders realized the fundamental importance of
property rights when they codified the Takings Clause of the
Fifth Amendment to the Constitution, which requires that
private property shall not be taken ``for public use, without
just compensation''.
(2) Rural lands are unique in that they are not traditionally
considered high tax revenue-generating properties for state and
local governments. In addition, farmland and forest land owners
need to have long-term certainty regarding their property
rights in order to make the investment decisions to commit land
to these uses.
(3) Ownership rights in rural land are fundamental building
blocks for our Nation's agriculture industry, which continues
to be one of the most important economic sectors of our
economy.
(4) In the wake of the Supreme Court's decision in Kelo v.
City of New London, abuse of eminent domain is a threat to the
property rights of all private property owners, including rural
land owners.
(b) Sense of Congress.--It is the sense of Congress that the use of
eminent domain for the purpose of economic development is a threat to
agricultural and other property in rural America and that the Congress
should protect the property rights of Americans, including those who
reside in rural areas. Property rights are central to liberty in this
country and to our economy. The use of eminent domain to take farmland
and other rural property for economic development threatens liberty,
rural economies, and the economy of the United States. Americans should
not have to fear the government's taking their homes, farms, or
businesses to give to other persons. Governments should not abuse the
power of eminent domain to force rural property owners from their land
in order to develop rural land into industrial and commercial property.
Congress has a duty to protect the property rights of rural Americans
in the face of eminent domain abuse.
SEC. 8. DEFINITIONS.
In this Act the following definitions apply:
(1) Economic development.--The term ``economic development''
means taking private property, without the consent of the
owner, and conveying or leasing such property from one private
person or entity to another private person or entity for
commercial enterprise carried on for profit, or to increase tax
revenue, tax base, employment, or general economic health,
except that such term shall not include--
(A) conveying private property 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.
(2) Federal economic development funds.--The term ``Federal
economic development funds'' means any Federal funds
distributed to or through States or political subdivisions of
States under Federal laws designed to improve or increase the
size of the economies of States or political subdivisions of
States.
(3) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, or any other territory or possession of the United
States.
SEC. 9. SEVERABILITY AND EFFECTIVE DATE.
(a) Severability.--The provisions of this Act are severable. If any
provision of this Act, or any application thereof, is found
unconstitutional, that finding shall not affect any provision or
application of the Act not so adjudicated.
(b) Effective Date.--This Act shall take effect upon the first day of
the first fiscal year that begins after the date of the enactment of
this Act, but shall not apply to any project for which condemnation
proceedings have been initiated prior to the date of enactment.
SEC. 10. SENSE OF CONGRESS.
It is the policy of the United States to encourage, support, and
promote the private ownership of property and to ensure that the
constitutional and other legal rights of private property owners are
protected by the Federal Government.
SEC. 11. BROAD CONSTRUCTION.
This Act shall be construed in favor of a broad protection of private
property rights, to the maximum extent permitted by the terms of this
Act and the Constitution.
PURPOSE AND SUMMARY
The purpose of H.R. 4128, the ``Private Property Rights
Protection Act of 2005,'' is to preserve the rights granted to
our Nation's citizens under the Fifth Amendment of the
Constitution and jeopardized by the Supreme Court decision in
Kelo v. City of New London.
BACKGROUND
The fundamental importance of private property rights
The protection of private property rights lies at the
foundation of American government. As James Madison wrote in
the Federalist Papers, ``[G]overnment is instituted no less for
the protection of property than of the persons of
individuals.'' \1\
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\1\ The Federalist No. 54, at 370 (Jacob E. Cooke ed., 1961) (James
Madison) see also James Madison, Property, National Gazette (Mar. 27,
1792), reprinted in 14 The Papers of James Madison 266 (Robert Rutland,
et al. eds., 1983) (``Government is instituted to protect property of
every sort * * * This being the end of government, that alone is a just
government, which impartially secures to every man, whatever is his
own.'').
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In 1795, the Supreme Court clearly articulated our
citizens' fundamental right to private property under the
Constitution when it declared: ``possessing property, and
having it protected, is one of the natural, inherent, and
unalienable rights of man. * * *'' \2\ And as Justice Story
explained years later, ``That 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.'' \3\
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\2\ Vanhorne's Lessee v. Dorrance, 2 U.S. 304, 310 (1795).
\3\ Wilkinson v. Leland, 27 U.S. (2 Pet.) 627, 657 (1829).
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President Abraham Lincoln often spoke of how at the heart
of the evil practice of slavery was a denial of property
rights: ``It is the same tyrannical principle,'' he said. ``It
is the same spirit that says, `You work and toil and earn
bread, and I'll eat it.' '' \4\
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\4\ Seventh Lincoln-Douglas debate, 15 October 1858; speech at
Springfield, 26 June 1857; in Abraham Lincoln, Collected Works, ed. Roy
P. Basler (New Brunswick: Rutgers University Press, 1953), 3:315;
2:405.
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More recently, the Supreme Court again rightly stated that
``[t]he right to enjoy property without unlawful deprivation *
* * is, in truth a personal right. * * * In fact, a fundamental
interdependence exists between the personal right to liberty
and the personal right in property. Neither could have meaning
without the other. That rights in property are basic civil
rights has long been recognized.'' \5\ The sanctity and
centrality of private property rights are thus ingrained in our
constitutional design.
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\5\ Lynch v. Household Fin. Corp., 405 U.S. 538, 552 (1972).
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The Supreme Court's Kelo decision
Notwithstanding this long history of the protection of
private property rights, on June 23, 2005, the Supreme Court
held in Kelo v. City of New London,\6\ that ``economic
development'' was a ``public use'' under the Fifth Amendment's
Takings Clause, which provides that ``nor shall private
property be taken for public use without just compensation.''
\7\ As the Court described the motivation for the Government's
taking of private property: ``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.'' \8\
The Supreme Court held that these properties ``were condemned
only because they happen to be located in the development
area,'' and that the taking was constitutional because it
``would be executed pursuant to a `carefully considered'
development plan.'' \9\
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\6\ 125 S.Ct. 2655 (2005).
\7\ U.S. Const., Amend. V (emphasis added).
\8\ Id. at 2659.
\9\ Id. at 2660-61.
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Justice O'Connor's dissenting opinion correctly summarized
the terrifying import of the Supreme Court's decision, stating
that ``To reason, as the Court does, that the incidental public
benefits resulting from the subsequent ordinary use of private
property render economic development takings `for public use'
is to wash out any distinction between private and public use
of property--and thereby effectively to delete the words `for
public use' from the Takings Clause of the Fifth Amendment.''
\10\
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\10\ Id. at 2671 (O'Connor, J., dissenting).
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The importance of the Takings Clause and its protection of
property rights is that it ``provid[es] safeguards against
excessive, unpredictable, or unfair use of the government's
eminent domain power--particularly against those owners who,
for whatever reasons, may be unable to protect themselves in
the political process against the majority's will. * * * The
public use requirement * * * 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. This requirement promotes fairness as well as
security.'' \11\
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\11\ Id. at 2672.
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As the dissent points out, as a result of the majority's
decision, ``The specter of condemnation hangs over all
property. Nothing 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. * * * Today nearly all real property
is susceptible to condemnation on the Court's theory. * * * Any
property may now be taken for the benefit of another private
party, but the fallout from this decision will not be random.
The beneficiaries 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. The
Founders cannot have intended this perverse result.'' \12\
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\12\ Id. at 2676.
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The Supreme Court's Kelo decision threatens the most vulnerable
Private business development can and does regularly occur
without an eminent domain proceeding. Economic development of
private property can take place without force, through
voluntary negotiation. When the agreements regarding economic
development cannot be reached, then economic development of
private property can only occur for public purposes. Local
governments have many different kinds of incentive, zoning, and
code enforcement tools to promote economic development. The
Kelo Court's endorsement of the Government's raw taking of
entire tracts of private property from one private person to
give to another private person who can put the land to some
imagined more valuable use threatens to enshrine into law, in
lieu of the free market a bureaucratic ``command and control''
of the economy long thought to have been relegated to the
dustbin of history.\13\
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\13\ As the National Association of Home Builders has stated, ``In
Kelo, the Supreme Court ruled that government entities can condemn any
property in the name of `economic development.' NAHB believes that it
is proper to use eminent domain when the project is for public use, but
it should not be used to transfer private property to another private
owner for the purpose of `upgrading' the land * * * Kelo substantially
weakens the rights of private land owners--the government can now take,
for nearly any reason, your land, subject to just compensation. This
decision has rightfully alarmed many Americans.'' Letter from National
Association of Home Builders to Members of Congress (June 30, 2005).
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African-Americans and the elderly
The National Association for the Advancement of Colored
People (``NAACP'') and the American Association of Retired
Persons (``AARP'') stated in their amicus brief to the Supreme
Court in the Kelo case that:
[The] holding that government may take property from a
private citizen for the purpose of giving it to another private
party purely for ``economic development'' is both inconsistent
with the language of the Constitution and dangerous.
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.\14\
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\14\ 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-*4.
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To hold that the public use requirement is satisfied
wherever there are potential economic benefits to be realized
is to render the public use requirement meaningless.\15\
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\15\ 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 *6.
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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 remova1.'' \16\
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\16\ 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 *7.
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Well-cared-for properties owned by minority and elderly
residents have repeatedly been taken so that private
enterprises could construct superstores, casinos, hotels, and
office parks. For example, four siblings in their seventies and
eighties were forced to leave their homes and Christmas tree
farm to enable the city of Bristol, Connecticut to erect an
industrial park.\17\ Several African-American families in
Canton, Mississippi were similarly forced to leave the homes
they had lived in for over sixty years to clear land for a
Nissan automobile plant.\18\
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\17\ 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 *7.
\18\ 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 *9 (citing Bugryn v. City of Bristol, 774 A.2d 1042
(Conn. App. Ct. 2001), appeal denied, 776 A.2d 1143 (Conn. 2001), cert.
denied, 534 U.S. 1019, 122 S. Ct. 544 (2001); David Firestone, ``Black
Families Resist Mississippi Land Push,'' The New York Times (September
10, 2001) at A20).
Eminent domain abuse has a history of disproportionately
impacting the minority community. For example, of all the
families displaced by urban renewal from 1949 through 1963, 63
percent of those whose race was known were nonwhite.\19\
Racially changing neighborhoods that lacked institutional and
political power were selected as blighted areas and designated
for redevelopment through urban renewal programs.\20\ ``The
purpose behind the designation of certain areas as blighted was
clear. Renewal advocates believed that the blighted land could
be put to a `higher use' under the right circumstances.'' \21\
As a result, ``across the nation, inner city neighborhoods were
designated as blighted, properties condemned, and land turned
over to private properties.'' \22\
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\19\ See B. Frieden & L. Sagalayn, Downtown, Inc. How America
Rebuilds Cities 28 (1989).
\20\ See Wendell E. Pritchett, The ``Public Menace'' of Blight:
Urban Renewal and the Private Uses of Eminent Domain, 21 Yale L. &
Pol'y Rev. 1, 6 (2003).
\21\ Id. at 21.
\22\ Id. at 47.
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In 1981, urban planners in Detroit, Michigan, uprooted the
largely lower-income and elderly Poletown neighborhood for the
benefit of the General Motors Corporation.\23\ The Poletown
condemnation became so notorious that the 1981 decision by the
Michigan Supreme Court that upheld it was overturned by that
same court just last year.\24\ In San Jose, California, ninety-
five percent of the properties targeted for economic
redevelopment are Hispanic or Asian-owned, even though only
thirty percent of businesses are owned by minorities.\25\
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\23\ See J. Wylie, Poletown: Community Betrayed 58 (1989).
\24\ See County of Wayne v. Hathcock, 684 N.W.2d 765, 786 (Mich.
2004) (overruling Poletown v. Detroit, 304 N.W.2d 455 (Mich. 1981), in
which the court upheld Detroit's condemnation of the homes of
approximately 3,438 persons, most of whom were elderly, retired,
Polish-American immigrants, to build a General Motors plant).
\25\ See Derek Werner, Note: The Public Use Clause, Common Sense
and Takings, 10 B.U. Pub. Int. L.J. 335, 350 (2001).
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Martin Luther King III, a former president of the Southern
Christian Leadership Conference, has said that ``eminent domain
should only be used for true public projects, not to take from
one private owner to give to another wealthier private owner.''
\26\
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\26\ Letter from Martin Luther King III, President of the Southern
Christian Leadership Council, to The Fort Trumbull Homeowners in New
London, Connecticut (December 2, 2002).
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Houses of worship
Houses of worship and other religious institutions are, by
their very nature, non-profit and almost universally tax-
exempt. These fundamental characteristics of religious
institutions render their property singularly vulnerable to
being taken under the rationale approved by the Supreme Court
in favor of for-profit, tax-generating businesses. In addition,
many other charitable organizations will face similar threats
because of their tax-exempt status.\27\
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\27\See, e.g., 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 A1 (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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The Becket Fund for Religious Liberty wrote in their amicus
brief in the Kelo case:
To affirm this broad expansion of eminent domain power [as
the Supreme Court did] is to grant municipalities a special
license to invade the autonomy of and take the property of
religious institutions. Houses of worship and other religious
institutions are, by their very nature, non-profit and almost
universally tax-exempt. These fundamental characteristics of
religious institutions render their property singularly
vulnerable to being taken under the rationale approved by the
[Supreme Court]. Religious 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.'' \28\
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\28\ 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)).
Because religious institutions are overwhelmingly non-
profit and tax-exempt, they will generate less in tax revenues
than virtually any proposed commercial or residential use.
Accordingly, when a municipality considers what properties
should be included under condemnation plans designed to
increase for-profit development and increase taxable
properties, the non-profit, tax-exempt property of religious
institutions will by definition always qualify and always be
vulnerable to seizure.\29\
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\29\ Brief of Amicus Curiae the Becket Fund for Religious Liberty,
2004 WL 2787141, at *11.
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It bears noting that while religious institutions face
additional eminent domain risks stemming from religious
discrimination, many other charitable organizations will face
similar dangers because of their tax-exempt status alone.
Indeed, several charitable organizations have faced
condemnation threats in recent years to satisfy municipal
appetite for more tax revenue.\30\
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\30\ 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
condenmation 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 condenmation 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 condenmation
of a Goodwill thrift store in order to build a shopping center)).
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Farmers
According to the amicus brief filed in the Kelo case by the
American Farm Bureau Federation:
The farmer and rancher members of amici curiae own and
lease significant amounts of land on which they depend for
their livelihoods and upon which all Americans rely for food
and other basic necessities. As 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. Thus, each of our
members is threatened by the decision * * * with the loss of
productive farm and ranch land solely to allow someone else to
put it to a different private use * * * American farmers and
ranchers need the protection of the Fifth Amendment 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.\31\
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\31\ Brief Amici Curiae of the American Farm Bureau Federation et
al., 2004 WL 2787138, at *2-4.
And according to American Farmland Trust President Ralph
Grossi, ``With so much farmland on the urban edge and near
cities still in steep decline, ex-urban towns could be tempted
by this ruling to make farmland available for subdivisions.''
\32\
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\32\ American Farmland Trust Policy Update (July 6, 2005).
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The American people resoundingly reject the Supreme Court's Kelo
decision
The Supreme Court's Kelo decision has been resoundingly
criticized from all quarters. A resolution, H. Res. 340,
expressing grave disapproval of the Kelo decision, was approved
by the House of Representatives on June 30, 2005, by a vote of
365-33.
The protection of private property rights is an issue of
primary concern to Americans today. According to a Wall Street
Journal/NBC News poll, ``In the wake of court's eminent domain
decision, Americans overall cite `private-property rights' as
the current legal issue they care most about.'' \33\ As
reported in the Wall Street Journal:
\33\ John Harwood, ``Poll Shows Division on Court Pick,'' Wall
Street Journal (July 15, 2005).
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[T]he issue has struck a nerve with Americans. In
Connecticut, where the Supreme Court case originated, a
Quinnipiac University poll shows just how much the eminent-
domain issue resonates. By an 11-to-1 margin, those surveyed
said they opposed the taking of private property for private
uses, even if it is for the public economic good. According to
the poll, 89 percent of those surveyed were against
condemnations for private economic development, compared with 8
percent for them. Douglas Schwartz, head of the poll, says he
has never seen such a lopsided margin on any issue he has
polled.\34\
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\34\ Michael Corkery and Ryan Chittum, ``Eminent-Domain Uproar
Imperils Projects,'' The Wall Street Journal (August 3, 2005) at B1.
Also, according to an American Survey poll conducted July
14-17, 2005, among 800 registered voters nationwide:
Passing legislation limiting the government's ability to
snatch private property should not be a heavy lift--especially
if lawmakers listen to their constituents * * * Congressional
action gets plenty of sympathy from constituents. Sixty-eight
percent of registered voters favor legislative limits on the
government's ability to take private property away from owners.
Public support for limiting the power of eminent domain is
robust and cuts across demographic and partisan groups. 62
percent of self-identified Democrats, 74 percent of
independents and 70 percent of Republicans support limits. Few
issues in recent memory have mobilized citizens against a
Supreme Court decision with such ferocity. \35\ Then people
were asked, ``Congress is considering legislation that would
say the Federal government cannot take private property for
private commercial development if homeowners object. It would
also say State and local governments can NOT take private
property for private commercial development against homeowners
wishes if any federal funds are being used in the project. What
about you, would you favor or oppose Congress placing these
limits on the ability of government to take private property
away from owners?'' A resounding 68 percent favored such
Congressional action. \36\
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\35\ Gary Andres, ``The Kelo Backlash: Americans Want Limits on
Eminent Domain,'' The Washington Times (August 29, 2005) at A21.
\36\ Gary Andres, ``The Kelo Backlash: Americans Want Limits on
Eminent Domain,'' The Washington Times (August 29, 2005) at A21.
Indeed, Americans' confidence in the Supreme Court keeps getting worse.
On June 21, 2005, the Gallup Poll released a survey in which it asked
whether people had confidence in the Supreme Court. The survey
concluded that the reported ``41% confidence rating is among the lowest
Gallup has ever found for this institution, and it perpetuates a
gradual decline in the public's confidence over the past three years.''
Joseph Carroll, Gallup Poll Assistant Editor, ``Americans' Confidence
in High Court Declines'' (June 21, 2005). In fact, respect for the
Supreme Court has dropped among citizens of all political dispositions,
including conservatives, moderates, and liberals Id.
Even Justice John Paul Stevens, who wrote the Kelo decision
for the five Justice majority, has said publicly he has
concerns about the results of that decision, if not the legal
reasoning behind it. Justice Stevens recently told the Clark
County, Nevada, Bar Association that if he were a legislator
instead of a judge, he would have opposed the results of his
own ruling by working to change current law. \37\
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\37\ Samantha Young, ``Committee Tackles Court's Property Ruling,
the Las Vegas Review Journal (September 8, 2005) (``Justice Stevens
told the Clark County Bar Association that if he were a legislator
instead of a judge bound by the law, he would have opposed the court's
ruling in the case, Kelo v. the City of New London'').
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H.R. 4128, the ``Private Property Rights Protection Act''
Property rights are civil rights. There can be no
individual freedom without the power of an individual to
control their own autonomy through the free use of their own
property. The Supreme Court's recent Kelo decision poses an
immediate threat to that essential freedom, and the most likely
victims will be the most vulnerable in our society if Congress
does not act.
Congress' power to condition the use of Federal funds
extends to prohibiting States and localities from receiving any
Federal economic development funds for a specified period of
time if such entities abuse their power of eminent domain, even
if only State and local funds are used in that abuse of power.
Such a broader penalty is an appropriate use of Congress'
spending power, as the Supreme Court has made clear that
Congress may attach conditions to the receipt of any Federal
funds provided such conditions are related to the ``Federal
interest in particular national projects or programs'' and that
they are ``unambiguous.'' \38\
---------------------------------------------------------------------------
\38\ See South Dakota v. Dole, 483 U.S. 203 (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).
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H.R. 4128 denies States or localities that abuse eminent
domain all Federal economic development funds for a period of
two years.\39\ Under such a penalty, there is a clear
connection between the Federal funds that would be denied and
the abuse Congress is intending to prevent: States or
localities that have abused their eminent domain power by using
``economic development'' as an improper rationale for a taking
should not be trusted with Federal taxpayer funds for other
``economic development'' projects which could themselves result
in abusive takings of private property.
---------------------------------------------------------------------------
\39\ H.R. 4128 also provides that any two year penalty period will
begin only after final judgment on the merits by a court that the state
or locality has violated the terms of this legislation.
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To ensure that any conditioning of the use of Federal funds
is unambiguous, H.R. 4128 includes a ``notification'' section
that would require the Attorney General to compile a list of
the Federal laws under which Federal economic development funds
are distributed and communicate such list to the chief
executive officer of each state (its Governors) and also make
it available on the Internet for use by the public and by the
authorities in each State and political subdivisions of each
State empowered to take private property and convert it to
public use subject to just compensation for the taking. That
way, States and localities will be put on notice that if they
receive any Federal funds under the listed Federal laws, they
must refrain from abusing their power of eminent domain or risk
losing such funds for a period of two years. Further, only the
locality, and not the whole State, would suffer the punishment
if only the locality abused its eminent domain powers. H.R.
4128 also contains a definition of ``Federal economic
development funds'' that the Department of Justice would use
when putting together its list of those Federal laws that meet
such definition. The notification provisions also provide that
basic information about the legislation be made available to
the public through the Department of Justice's Internet
website.
H.R. 4128 provides States and localities with an
opportunity to cure any violation before they lose any Federal
economic development funds by either returning or replacing the
improperly taken property.
H.R. 4128 also includes an express private right of action
to make certain that those suffering injuries for a violation
of this legislation be allowed access to State or Federal court
to enforce the provisions of the bill. Further, H.R. 4128
contains a statute of limitations of seven years following the
conclusion of any condemnation proceedings improperly
condemning the private property for an improper private use or
any subsequent allowance of the use of such property for an
improper private use.\40\
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\40\ This is to allow enforcement of the Act if the government says
it needs to use eminent domain to build a road, and it takes private
property to do so, but then it never actually builds the road but
instead gives the land to a large private company for use as a
business.
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H.R. 4128 also includes a fee-shifting provision--identical
to those in other civil rights laws--that allows a prevailing
property owner to be awarded attorney and expert fees as part
of the costs of bringing the litigation to enforce the bill's
provisions.
H.R. 4128 also includes a definition of ``economic
development'' that allows the types of takings that have
traditionally been considered appropriate public uses. The bill
also includes exceptions for the transfer of property to public
ownership, and to common carriers \41\ and public utilities,
and for related things like pipelines. The bill also 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. The bill also makes exceptions for: the merely
incidental use of a public property by a private entity, such
as a retail establishment on the ground floor in a public
property; for 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.
---------------------------------------------------------------------------
\41\ Black's Law Dictionary defines ``common carrier'' as an entity
that is ``generally required by law to transport * * * without refusal,
if the approved fare or charge is paid.'' Black's Law Dictionary (8th
ed. 2004). The term ``as of right'' is defined in Black's Law
Dictionary as ``by virtue of a legal entitlement,'' ibid, which is part
of the criteria that defines a common carrier's legal obligations, as a
publicly regulated entity, to allow access to the public. A common
carrier is something entirely different from, for example, a private
shopping mall, which is not open to the public as of right, as a
shopping mall generally has the right to exclude anybody from its
premises.
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H.R. 4128 also includes a rule of broad construction that
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.
Finally, H.R. 4128 includes a provision providing that the
legislation would not become effective until the start of the
first fiscal year following the enactment of the legislation in
order to provide States and localities with sufficient lead
time within which to come into compliance with the legislation,
and in any case the legislation would not apply to any project
for which condemnation proceedings have been initiated prior to
the date of enactment.
HEARINGS
The House Committee on the Judiciary held no hearings on
H.R. 4128.
COMMITTEE CONSIDERATION
On October 25, 2005, the House Committee on the Judiciary
received a referral of H.R. 4128. On October 27, 2005 the
Committee met in open session and ordered favorably reported
the bill H.R. 4128 as amended to the House by a recorded vote
of 27-3, a quorum being present.
COMMITTEE OVERSIGHT FINDINGS
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports 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. 4128, the following estimate and
comparison prepared by the Congressional Budget Office pursuant
to section 402 of the Congressional Budget Act of 1974.
October 31, 2005.
Hon. F. James Sensenbrenner, Jr.,
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. 4128, the Private
Property Rights Protection Act of 2005.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Gregory
Waring (for federal costs) and Marjorie Miller (for the state
and local impact).
Sincerely,
Douglas Holtz-Eakin.
Enclosure.
H.R. 4128--Private Property Rights Protection Act of 2005
H.R. 4128 would deny federal economic development
assistance to any state or local entity that uses the power of
eminent domain for economic development and would prohibit
federal agencies from engaging in this practice. The bill would
specifically prohibit state and local governments from taking
private property and conveying or leasing that property to
another private entity, either for a commercial purpose or to
generate additional taxes, employment, or general economic
health. A state or local government found to have violated this
prohibition would be ineligible for certain federal economic
development funds for two years, but could become eligible by
returning or replacing the property. The bill would give
private property owners the right to bring legal actions
seeking enforcement of these provisions and would waive states'
constitutional immunity to such suits.
CBO expects that implementing the bill would have no
significant impact on the federal budget because most
jurisdictions would not risk the economic development
assistance they receive from the federal government by using
eminent domain as described in the bill. Further, a few states
are considering legislation that would restrict the authority
of localities to take private property for economic development
projects. Because the bill would deny certain economic
assistance for up to two years to localities using eminent
domain in a way proscribed in the bill, the pace of spending
for some discretionary grant programs could be marginally
reduced. Enacting the bill would not affect direct spending or
revenues.
H.R. 4128 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 these conditions would apply to a large pool of
funds, the bill would effectively restrict the use of eminent
domain, and would have a significant impact on local
governments' powers to manage land use in their jurisdictions.
Further, state and local governments could incur significant
additional legal expense to respond to private legal actions
authorized by the bill.
On October 19, 2005, CBO transmitted a cost estimate for
H.R. 3405, the Strengthening the Ownership of Private Property
Act of 2005, as ordered reported by the House Committee on
Agriculture on October 7, 2005. H.R. 3405 contains similar
provisions that would deny federal economic development
assistance to any jurisdiction that uses the power of eminent
domain for economic development. CBO also estimates that
neither piece of legislation would have a significant impact on
the federal budget.
The CBO staff contacts for this estimate are Gregory Waring
(for federal costs) and Marjorie Miller (for the state and
local impact). This estimate was approved by Peter H. Fontaine,
Deputy Assistant Director for Budget Analysis.
PERFORMANCE GOALS AND OBJECTIVES
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
4128 is designed to preserve the property rights granted to our
Nation's citizens under the Fifth Amendment of the Constitution
following the Supreme Court's decision in Kelo v. City of New
London, which puts those rights in jeopardy.
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in art. I, Sec. 8, cl. 1 (the Spending
Clause), art. I, Sec. 8, cl. 3 of the Constitution, and Sec. 5
of Amendment XIV.
SECTION-BY-SECTION ANALYSIS AND DISCUSSION
The following section-by-section analysis describes the
bill as reported by the Committee on the Judiciary.
Section 1. Short title
Section 1 provides for the short title of the legislation,
the ``Private Property Rights Protection Act of 2005.''
Section 2. Prohibition of eminent domain abuse by States
Section 2(a) 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 or
political subdivision receives Federal economic development
funds during any fiscal year in which it does so.
Section 2(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 two fiscal years following a
final judgment on the merits by a court of competent
jurisdiction that such subsection has been violated, and any
Federal agency charged with distributing those funds shall
withhold them for such two 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.
Section 2(c) provides that a State or political subdivision
shall not be ineligible for any Federal economic development
funds under subsection (b) if such State or political
subdivision returns all real property the taking of which was
found by a court of competent jurisdiction to have constituted
a violation of subsection (a) and replaces any other property
destroyed and repairs any other property damaged as a result of
such violation.
Section 3. Prohibition on eminent domain abuse by the Federal
Government
Section 3 provides that the Federal Government or any
authority of the Federal Government shall not exercise its
power of eminent domain to be used for economic development.
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, and a State
shall not be immune under the eleventh amendment to the
Constitution of the United States from any such action in a
Federal or State court of competent jurisdiction. Any such
property owner may also seek any appropriate relief through a
preliminary injunction or a temporary restraining order.
Subsection (b) provides that an action brought under this
Act may be brought if the property is used for economic
development following the conclusion of any condemnation
proceedings condemning the private property of such property
owner, but shall not be brought later than seven years
following the conclusion of any such proceedings and the
subsequent use of such condemned property for economic
development.
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. 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. The Attorney General shall
compile annual revisions of such list as necessary. Such list
and any successive revisions of such list shall be communicated
by the Attorney General to the chief executive officer of each
State and also made available on the Internet website
maintained by the United States Department of Justice for use
by the public and by the authorities in each State and
political subdivisions of each State empowered to take private
property and convert it to public use subject to just
compensation for the taking.
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 6. Report
Section 6 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. The report shall
(1) identify all private rights of action brought as a result
of a State's or political subdivision's violation of this Act;
(2) identify all States or political subdivisions that have
lost Federal economic development funds as a result of a
violation of this Act, as well as describe the type and amount
of Federal economic development funds lost in each State or
political subdivision and the Agency that is responsible for
withholding such funds; and (3) discuss all instances in which
a State or political subdivision has cured a violation as
described in section 2( c) of this Act.
Section 7. Sense of Congress regarding rural America
Section 7 contains findings and a Sense of Congress that
the use of eminent domain for the purpose of economic
development is a threat to agricultural and other property in
rural America and that the Congress should protect the property
rights of Americans, including those who reside in rural areas.
Section 8. Definitions
Section 8 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 9. Severability and effective date
Subsection (a) provides for a severability clause.
Subsection (b) provides that this Act shall take effect upon
the first day of the first fiscal year that begins after the
date of the enactment of this Act, but shall not apply to any
project for which condemnation proceedings have been initiated
prior to the date of enactment.
Section 10. Sense of Congress
Section 10 contains a Sense of Congress providing 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 11. Broad construction
Section 11 provides that the Act shall be construed in
favor of a broad protection of private property rights, to the
maximum extent permitted by the terms of this Act and the
Constitution.
CHANGES IN EXISTING LAW BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, the Committee notes that H.R.
4128 makes no changes to existing law.
ADDITIONAL CONCURRING VIEWS OF REPRESENTATIVE LOFGREN
At markup, I intended to offer an amendment to this
legislation creating an exception to the definition of
``economic development'' for the development of affordable
housing for low-income residents. I ultimately decided not to
offer this amendment, however, based on my recognition, and the
apparent recognition of my colleagues, that this bill as
introduced does not in any way limit the ability of states and
local governments to exercise their eminent domain powers for
the building of affordable housing for low-income residents. In
fact, during markup, I pointed this out and received no
objections from my colleagues.
The provision of low-income housing, whether by a for-
profit or a non-profit entity, should not constitute ``economic
development'' under the definition in this bill because such
activity constitutes neither ``commercial enterprise'' nor an
activity designed to ``increase tax revenue, tax base,
employment or general economic health.'' Rather, the
development of affordable housing for low-income residents
constitutes a traditional public purpose for which eminent
domain powers have long been recognized. Given that this bill
will not in any way limit the exercise of eminent domain powers
for the development of affordable housing, I concur in the
Committee's report.
Zoe Lofgren.
DISSENTING VIEWS
We share our colleagues' concern that the Supreme Court's
recent decision in Kelo v. City of New London \1\ could open
the door to a dangerous expansion of the eminent domain power.
We are also concerned that this legislation, far from providing
a remedy for the historic abuses of eminent domain, will permit
the sorts of injustices with which we are all too familiar
while, at the same time, crippling local governments in the
pursuit of their legitimate public duties. This poorly crafted
bill, with broad, if uncertain, application, would place every
state and locality in permanent peril, without providing the
protection vulnerable communities need.
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\1\ 2005 Westlaw 1469529 (No. 04-108) (U.S. June 23, 2005).
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We share the unanimous conviction that private property
should never be taken for the private benefit of another
private person. There can be no more fundamental meaning of the
``public use'' clause of the Fifth Amendment.\2\ The awesome
power of eminent domain may not be exercised under our
constitution, regardless of the extent of due process or
compensation, if the purpose for which it is exercised is to
benefit a private party rather than the public interest.
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\2\ U.S. Const. amend. V: ``nor shall private property be taken for
public use, without just compensation'' (emphasis added).
---------------------------------------------------------------------------
The Supreme Court's efforts to define ``public use,'' and
Congress' legislative efforts to do so, are at the heart of
this debate.
While the Supreme Court has left the outer boundaries of
the definition of ``public use'' for future cases, the
Committee has attempted to provide a bright-line test to settle
the issue with finality. Unfortunately, a plain reading of the
legislation, and the debate in the Committee on its meaning,
show that the one thing it lacks is a bright-line. What exactly
is permitted or prohibited appears to have been unclear even to
the proponents of the legislation, many of whom could not agree
on the meaning of the definitions, nor could they agree on the
policy they were attempting to enact.
If the legislative history so far shows anything, it is
that Congress has no clear intent, and that the language it has
chosen is even less clear. Courts and local governments trying
to apply the standards in this bill will encounter rules so
convoluted, they could not hope to comply with any reasonable
degree of certainty.
The costs of running afoul of this legislation would be
catastrophic. Any taking, for any project, later determined to
have been in violation of this statute, would result in the
loss of two years of economic development funding for the state
or local government, even if the project received no such
funds. This determination and penalty could arise years, even
decades, after the original taking. The financial cloud hanging
over the entire jurisdiction ad infinitum would disrupt every
aspect of local governance.
For these reasons, we believe that this legislation is not
ready to be considered by the full House, and we respectfully
dissent.
Takings, public works and displacement
The history of eminent domain and displacement need not be
fully recounted here. Suffice to say that the exercise of
eminent domain has long fallen most heavily on the shoulders of
poor, minority, immigrant, working class, and other communities
lacking in political and economic power. As Hilary O. Shelton,
Director of the NAACP Washington Bureau, told the Subcommittee
on the Constitution:
The history of eminent domain is rife with abuse
specifically targeting racial and ethnic minority and poor
neighborhoods. Indeed the displacement of African Americans and
urban renewal projects are so intertwined that ``urban
renewal'' was often referred to as ``Black Removal.'' \3\
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\3\ Oversight Hearing on ``The Supreme Court's Kelo Decision and
Potential Congressional Responses Before the Subcomm. on the
Constitution of the House Judiciary Committee (2005) (Statement of
Hilary O. Shelton at 2) (Hereafter ``Shelton Testimony'').
Mr. Shelton testified that the burden on minority
communities has not been confined to projects involving private
economic development of the type at issue in Kelo. Mr. Shelton
cited a 1990 study showing that ``90% of the 10,000 families
displaced by highway projects in Baltimore were Africans
American.'' \4\
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\4\ Id. Citing Bernard J. Frieden & Lynn B. Sagalyn, Downtown,
Inc.: How America Rebuilds Cities 29, (1990).
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In his seminal work on urban political power, The Power
Broker, Robert Caro reports:
[D]uring the seven 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.\5\
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\5\ Robert Caro, The Power Broker 967-8 (1974).
The record indicates that, in addition to the impact on
property owners and their communities, families and small
business who rent rather than own property suffer displacement
often without compensation or a right to contest their
displacement.\6\ These burdens, whether for classically public
projects, or for economic development projects, fall most
heavily on those who can least afford the burden. As Mr.
Shelton observed, ``even if you dismiss all other motivations,
allowing municipalities to pursue eminent domain for private
development as was upheld by the U.S. Supreme Court in Kelo
will clearly have a disparate impact on African Americans and
other racial and ethnic minorities in our country.'' \7\
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\6\ Renters are often innocent, and powerless, bystanders in this
process. In poorer communities, absentee slum-lords have rights denied
to their tenants.
``Eminent domain is a vitally important tool. It is a power that
can be abused, as the painful experience in Boston's West End reminds
us. But Boston is also a place where eminent domain has been used
creatively. Consider the experience of the Dudley Street Neighborhood
Initiative, which has enabled a low-income community in Roxbury to
reclaim its future. The community confronted a serious problem.
Absentee owners held decaying properties that stood in the way of
redevelopment plans. The initiative lobbied the city to give it the
power of eminent domain. The result of this public/private partnership
has been a widely acknowledged improvement in the neighborhood.
David J. Barron and Gerald E. Frug, Make Eminent Domain Fair for
All, Boston Globe, August 12, 2005.
\7\ Shelton testimony, at 2-3.
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The penalty is disproportionate and threatens city and State financial
solvency
H.R. 4128 would impose a penalty on any jurisdiction out of
all proportion to the harm, or even the offending project,
involved. It would extend not just to those projects receiving
federal economic development assistance, but to any activity by
a state or local government, including those receiving no
federal funds of any kind.\8\ Similarly, all economic
development funds, including those having nothing to do with
the project in question, would be lost to the state or local
jurisdiction for two years. Unquestionably meritorious public
projects, even those that do not use eminent domain, would lose
funding. Because of the catastrophic loss of federal funds, the
municipality would face bankruptcy, endangering all municipal
functions.
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\8\ ``No State or political subdivision of a state shall exercise
its power of eminent domain * * * if that state or political
subdivision receives Federal economic development funds during any
fiscal year in which it does so.'' H.R 4128, Sec. 2(a).
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The jurisdiction would appear to face an open-ended risk of
this expansive penalty. A property owner would have seven years
from the conclusion of a condemnation proceeding to bring an
action alleging a violation of the Act.\9\ The Act would allow
such an action to be brought for an additional seven years
following ``the subsequent use of such condemned property for
economic development'' \10\
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\9\ H.R. 4128, Sec. 4(b).
\10\ Id.
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This would appear to leave the jurisdiction open to legal
attack, and expansive penalties, years, perhaps decades, after
the initial development. If, at any time in the future, any
portion of an otherwise permissible development is put to a
prohibited use, an action may be commenced within seven years.
There appears to be no point beyond which a jurisdiction could
consider other uses of land without risking potentially
catastrophic legal and financial exposure.
Once the property is taken, the jurisdiction's only
recourse would be to return the property and ``replace[ ] any
other property destroyed and repair[ ] any other property
damaged as a result of such violation.'' \11\ If this means
what it appears to say, the government would be forced to clear
the property previously taken, and restore any structures,
including homes, to their previous condition. It does not
specify how the subsequently vested rights of other parties are
to be handled. A jurisdiction could conceivably be required to
raze a half-acre plot in the middle of a multi-acre development
and rebuild a home in order to protect the public fisc.
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\11\ Id. Sec. 2(c).
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This unpredictable, open-ended, and substantial financial
exposure would be faced by any jurisdiction exercising eminent
domain with respect to even one property. It would be a risk so
great that cities would lose their ability to issue bonds.
States would face whatever liability might be imposed on
cities, and would suffer similar financial instability as a
result of this uncertainty. Even if the penalty is never
imposed, the mere uncertainty would be enough to place a cloud
over any jurisdiction's finances.
The prohibition if over broad and unreasonably vague
At the heart of the legislation is section 8(1) which
defines ``economic development.'' It is the inherent vagueness
of this definition, most of which consists of exceptions to the
general definition, that makes the bill truly unworkable.
The prohibition applies only to non-consensual takings, and
only to the actual conveying of that property from one private
person to another private person ``for commercial enterprise
carried on for profit, or to increase tax revenue, tax base,
employment, or general economic health.'' \12\
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\12\ Sec. 8(1). By its own terms, the bill excludes any claims not
involving a transfer of title. It would not include an assertion of a
regulatory or other taking theory. While some have attempted to broaden
the debate over Kelo to include so-called regulatory takings theories,
neither the Court, nor the proponents of this legislation, has
attempted to raise this far more dubious legal theory in this context.
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The definition contains a number of exceptions which create
a number of ambiguities and would seem to leave open the
possibility for perverse results.
For example, eminent domain is permitted if it conveys the
private property to a private 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. * * *'' \13\ A public facility, which is
privately owned, open to the public as of right would appear to
include a sports stadium or a shopping center. They are at
least as open to the public as a railroad, which provides a
seat as of right for the price of a ticket. Indeed, unlike the
railroad or the stadium, a shopping center is open to the
public without the need to purchase a ticket.\14\
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\13\ Sec. 8(1)(A).
\14\ Mr. Nadler offered an amendment to strike the phrase ``public
facility,'' which was rejected by the Committee. There was some doubt
whether a stadium would be a permitted use. Rep. Goodlatte argued that
a stadium might be a permitted use if it were open to the public as a
matter of right, but that a shopping center could never be a permitted
use because they are not, in his view, open to the public as a matter
of right. Markup of H.R. 4128, Unofficial Transcript 159-160 (Statement
of Mr. Goodlatte). Ms. Waters took the position that a stadium that was
privately owned could never be a permitted use. Id. at 165.
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There appears to have been a concern that private for-
profit uses might fall within the bill's prohibition because
they are not necessarily a ``common carrier, that makes the
property available for use by the general public as of right.''
Mr. Goodlatte offered an amendment, accepted by a voice vote,
that moved ``public utility'' from the common carrier clause of
paragraph (1)(A), and creating a new paragraph (1)(F) allowing
the ``taking of private property for use by a public utility''
thus removing any requirement that a public utility behave in
its traditional role as a common carrier in order to benefit
from the extraordinary governmental power of eminent
domain.\15\
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\15\ Congress has expanded the power of eminent domain for
transmission lines in recent energy legislation. Energy Policy Act of
2005, Pub. L. No. 109-58, Sec. 216(e) 119 Stat. 594, 948 (2005).
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The term ``blight'' is no longer used to describe a
permitted use, but the bill does refer to ``removing harmful
uses of land provided such uses constitute an immediate threat
to public health and safety.'' \16\ It is our hope that this
language will prove sufficiently narrow to eliminate the past
abuses of eminent domain under the pretext of removing
``blight.'' We remain concerned, however, that the new language
could be abused in the same manner as the ``blight'' exception.
We would hope that further clarification on this important
point would be possible.
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\16\ Sec. 8(1)(B).
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Public developments are also precluded if they lease
property to a private person ``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.'' \17\
This would seem to prohibit the use of eminent domain to build
such projects as New York's World Trade Center, which included
public offices, transportation facilities, public open space,
leased office space, and leased retail space. If a public
project were later privatized, the former property owner would
have a seven-year window to bring an action against the
jurisdiction that would result in the loss of all economic
development funds for two years.
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\17\ Sec. 8(1)(C).
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For these reasons, we believe that, however well
intentioned, the proposed legislation would fail to protect
vulnerable communities, allow projects of the type many
proponents seek to prohibit, and hinder many projects normally
considered to be in the public interest. Worse still, it would
create financial chaos for cities, states, and the bond and
insurance markets.
This careless response to the Kelso decision is also
unnecessary. States and localities are more than able to
respond to this decision. To the extent that they fail to do
so, the Congress would retain the ability and the authority to
deal more narrowly with any problems that may arise. As the
National League of Cities has reported,
The Kelo Court, affirming federalism, did not preclude `any
state from placing further restrictions on its exercise of the
Takings power.' Approximately 30 states are already reviewing
or planning to review their eminent domain laws during upcoming
legislative sessions, with the majority focused on just
compensation and comprehensive planning process modifications.
Since June 2005, Alabama, Texas, and Delaware enacted laws that
tighten the application of eminent domain power in each
state.\18\
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\18\ Letter to Hon. F. James Sensenbrenner & Hon. John Conyers,
Jr., from Donald J. Borut, Executive Director, National League of
Cities (Oct. 30, 2005).
Land use planning is primarily a state and local function.
For Congress to step in so precipitously, while states are
still acting, violates fundamental principles of federalism.
Were the states moving to take full advantage of the broadest
possible reading of the Kelo decision, Congress might well have
reason to move with equal dispatch. Just the opposite is true.
States and localities are responding to the same concerns
behind this legislation. They are, however, better able to
respond to local needs and local realities. Congress is still
free to respond to actual, rather than hypothetical, problems
should the need arise.\19\
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\19\ Representative Watt offered an amendment that would have left
only the ``Sense of the Congress'' language of section 7, reflecting
the view that Congress should state the principle that the power of
eminent domain must be exercised properly and with restraint, but that
congressional control over the minute details of these decisions goes
too far.
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We urge our colleagues to move with great care. The
uncertainty with which the Judiciary Committee proceeded during
its recent markup demonstrates just how chaotic a congressional
effort to act as a national zoning board would likely be. At
the very least, we would urge greater caution.
Jerrold Nadler.
Robert Scott.