SPEAKERS CONTENTS INSERTS Tables
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58–268
1999
STATE APPROACHES TO PROTECTING PRIVATE PROPERTY RIGHTS
HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
SEPTEMBER 23, 1997
Serial No. 106
Printed for the use of the Committee on the Judiciary
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For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
STEVEN SCHIFF, New Mexico
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB INGLIS, South Carolina
BOB GOODLATTE, Virginia
STEPHEN E. BUYER, Indiana
SONNY BONO, California
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
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JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
THOMAS E. MOONEY, Chief of Staff-General Counsel
JULIAN EPSTEIN, Minority Staff Director
Subcommittee on the Constitution
CHARLES T. CANADY, Florida, Chairman
HENRY J. HYDE, Illinois
BOB INGLIS, South Carolina
ED BRYANT, Tennessee
WILLIAM L. JENKINS, Tennessee
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BOB GOODLATTE, Virginia
BOB BARR, Georgia
ASA HUTCHINSON, Arkansas
ROBERT C. SCOTT, Virginia
MAXINE WATERS, California
JOHN CONYERS, Jr., Michigan
JERROLD NADLER, New York
MELVIN L. WATT, North Carolina
KATHRYN HAZEEM LEHMAN, Chief Counsel
KERI D. HARRISON, Counsel
JOHN H. LADD, Counsel
ROBERT J. CORRY, Counsel
C O N T E N T S
HEARING DATE
September 23, 1997
OPENING STATEMENT
Canady, Hon. Charles T., a Representative in Congress from the State of Florida, and chairman, Subcommittee on the Constitution
WITNESSES
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Campsen, Hon. Chip, a Representative in Congress from the State of South Carolina
Eagle, Steven J., Professor of Law, George Mason University School of Law
Hayman, Jane Cameron, Deputy General Counsel Florida League of Cities, Tallahassee, FL
Jacobs, Harvey, Professor, University of Wisconsin at Madison and Chair of the Department of Urban and Regional Planning
Marzulla, Nancie G., President and Chief Legal Counsel, Defenders of Property Rights
Russman, Hon. Richard L., Member, New Hampshire State Senate
Saunders, Dean, Former Member of the State of Florida House of Representatives
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Campsen, Hon. Chip, a Representative in Congress from the State of South Carolina: Prepared statement
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Eagle, Steven J., Professor of Law, George Mason University School of Law: Prepared statement
Hayman, Jane Cameron, Deputy General Counsel Florida League of Cities, Tallahassee, FL: Prepared statement
Jacobs, Harvey, Professor, University of Wisconsin at Madison and Chair of the Department of Urban and Regional Planning: Prepared statement
Marzulla, Nancie G., President and Chief Legal Counsel, Defenders of Property Rights: Prepared statement
Russman, Hon. Richard L., Member, New Hampshire State Senate: Prepared statement
Saunders, Dean, Former Member of the State of Florida House of Representatives: Prepared statement
APPENDIX
Material submitted for the hearing
STATE APPROACHES TO PROTECTING PRIVATE PROPERTY RIGHTS
SEPTEMBER 23, 1997
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House of Representatives,
Subcommittee on the Constitution,
Committee on the Judiciary,
Washington, DC.
The subcommittee met, pursuant to notice, at 1:10 p.m., in room 2237, Rayburn House Office Building, Hon. Charles T. Canady (chairman of the subcommittee) presiding.
Present: Representatives Charles T. Canady, Ed Bryant, Asa Hutchinson, Robert C. Scott, John Conyers, Jr., and Melvin L. Watt.
Also present: Kathryn Lehman, chief counsel; Keri Harrison, counsel; Brett Shogren, staff assistant; Michael Connolly, staff assistant; John Ladd, counsel; Robert Corry, counsel; and Brian Woolfolk, minority counsel.
OPENING STATEMENT OF CHAIRMAN CANADY
Mr. CANADY [presiding] The subcommittee will be in order. I am pleased to hold this hearing today to examine State approaches to protecting private property owners by providing compensatory or regulatory relief to owners when their property is burdened by state or local government action.
In the 104th Congress, I sponsored a bipartisan bill that would have required a Federal agency to compensate a property owner when the agency limited the use of the owner's property, so as to diminish the value of the property by 10 percent or more. After increasing the diminution of value trigger point to 20 percent or more and narrowing the scope of the bill to apply only to agency actions pursuant to wetlands regulations or the Endangered Species Act, the bill passed the House of Representatives by a lopsided vote of 277 to 148. Unfortunately, although similar provisions were favorably reported by the Senate Judiciary Committee, the bill never made it to the Senate floor for a vote.
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The takings clause of the Fifth Amendment to the United States Constitution limits government encroachment upon private property rights. However, we attempted to provide relief for property owners in the previous Congress because litigation under the takings clause has not been effective in fully protecting the legitimate rights of property owners.
Chief Judge Lawrence Smith, of the U.S. Court of Claims, in Bowles v. United States, stated, I quote, ''This case presents in sharp relief the difficulty that current takings law forces upon both the Federal Government and the private citizen. The Government here had little guidance from the law as to whether its action was a taking in advance of a long and expensive course of litigation. The citizen, likewise, had little more precedential guidance than faith in the justice of his cause to sustain a long and costly suit in several courts. There must be a better way to balance legitimate public goals with fundamental individual rights. Courts, however, cannot produce comprehensive solutions. They can only interpret the rather precise language of the Fifth Amendment to our Constitution in very specific factual circumstances. Judicial decisions are far less sensitive to societal problems than the law and policy made by the political branches of our great constitutional system. At best, courts sketch the outlines of individual rights; they cannot hope to fill in the portrait of wise and just social and economic policy.'' That's the close of the quotation from Judge Smith.
State legislators, some of whom will be testifying here today, are attempting to fill in that ''portrait of wise and just social and economic policy.'' States, however, cannot reduce Federal-agency regulation or provide relief for property owners who are burdened by Federal-agency actions. Supreme Court Justice Story, many years ago, stated that, ''One of the fundamental objects of every good government must be the due administration of justice, and how vain it would be to speak of such an administration when all property is subject to the will or caprice of the legislature and the rulers.'' I believe that the Congress needs to follow the lead of the states, and find a workable way to ensure that property owners are not subject to the will and caprice of governmental regulators.
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I look forward to hearing from the various perspectives of our witnesses today—who come from different states and have approached the issue of property rights in a variety of different ways. I believe that the experience in the states can be very helpful as the Congress considers what action we might take to protect the rights of private-property owners.
Mr. Scott.
Mr. SCOTT. Thank you, Mr. Chairman. I appreciate you conducting this hearing on State approaches to protecting private property rights. Along with all of my colleagues in the subcommittee, I am respectful of the bundle of rights enjoyed by private property owners.
Private property rights are among the most important liberty interests available in a free society. Drafters of the Bill of Rights went to great lengths to ensure that property rights would be established and protected. It's an honor to serve on this subcommittee to ensure that those rights continue to be strong and vibrant. Property rights, however, do not come in a vacuum. Numerous other equally important considerations of the public good at times must be raised against property rights of an individual. Property rights are not absolute. One cannot store nuclear waste in a residential neighborhood because such an action would threaten the public good. One cannot, by advocating property rights, avoid zoning restrictions which limit land use, because such violations would harm the public good. Public good, unfortunately, is a consideration that is often left out of the discussions on private property rights. We can ill afford to lose sight of the fact that these interests—that the interests of private property owners and the public are related. Any approach Government takes toward acknowledging this relationship must be sensitive to the delicate balancing act which must occur between the public good and the private property owner.
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The Florida statute, which we'll be discussing in detail by the—a number of today's witnesses, provides a vivid display of the complications of this type of legislation. The Florida statute enables a takings claim to—to happen when a property interest has been inordinantly burdened. By failing to include the other side of the equation in the statute, that is, the public's well being, Florida has created significant litigation that has a—that has had a chilling effect on the Government's ability to conduct even mundane tasks such as zoning and enforcing decency laws.
I am glad that we're having the hearing because it gives us an excellent opportunity to learn how compensatory and regulatory relief statutes affect the public's well being. I look forward to hearing from the witnesses today. To the witnesses, your comments are greatly appreciated.
Thank you, Mr. Chairman.
Mr. CANADY. Thank you. Mr. Watt.
Mr. WATT. I pass, Mr. Chairman.
Mr. CANADY. Thank you. We will now go to our first panel, and I'd like to ask the members of the first panel to come forward and take your seats.
On our first panel this afternoon, the subcommittee will hear from the Honorable Dean Saunders. Mr. Saunders is a former member of the State of Florida House of Representatives. While in office, he was one of the primary sponsors of the ''Bert J. Harris, Jr. Private Property Rights Protection Act.'' I'll add that Mr. Saunders was my State representative and represented the district which I previously represented in the State House of Representatives. So, it's a particular honor to welcome Representative Saunders today.
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Then we will hear from the Honorable Richard Russman. Senator Russman is a member of the New Hampshire State Senate, and I believe Senator Russman has testified previously before the Constitution Subcommittee. We want to welcome you back to today's hearing.
Next we will hear from Jane Hayman, who comes to us from Tallahassee, Florida. Ms. Hayman is the deputy general counsel of the Florida League of Cities.
And finally on the first panel this afternoon will be the Honorable Chip Campsen. State Representative Campsen comes to us from the South Carolina General Assembly where he is working to pass property rights legislation.
Again, I want to thank each of you for being with us here today, and I would request that you do your best to summarize your testimony in no more than 5 minutes. Try to be guided by the light. We're not going to strictly enforce that, but to the extent that you can, that would be helpful to us. And without objection, your full written statements will, of course, be made part of the permanent record of the hearing.
Mr. CANADY. Mr. Saunders.
STATEMENT OF DEAN SAUNDERS, FORMER MEMBER OF THE STATE OF FLORIDA HOUSE OF REPRESENTATIVES
Mr. SAUNDERS. Thank you, Mr. Chairman and members of the House Judiciary Subcommittee on the Constitution for inviting me here today. It's indeed an honor for me to be here and discuss with you Florida's legislation. I'll attempt to give you a brief history, an overview of the legislation, and then kind of give you an update on where we are today.
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The recent debate in Florida about property rights started in 1993 with the introduction of a bill that created a bright-line standard 40 percent diminution in value. If property was devalued by more than that by government regulation, it would be mandatory for a compensation to be paid by the offending government. That legislation really didn't go anywhere. It was obviously opposed by the local governments and environmental community state agencies. It was supported by the business community and landowners in general. The bill was, however, amended to create a study commission which was then later vetoed by the governor. The governor then created a Property Rights Study Commission of his own by executive order. I served on that commission as an appointee of the speaker of the house of representatives.
We took our task pretty seriously. We spent about 9 months going around the State, taking public testimony, talking to people, experts, on property rights cases. And there were a couple things, conclusions, that we came to. The first one was that we kind of felt on takings issues that it probably was best for us not to try to define for the judiciary when we thought a taking took place. And that was a pretty significant departure from, I think, where some States have gone. We decided that really we felt the judiciary, while we felt sometimes was maybe moving a little slowly, was moving in the direction of protecting private property rights. We did, however, feel like there were significant problems out there. We heard from landowners who had lost—you know, they'd bought—a young couple had bought a lot for $50,000 in a subdivision, houses all around them. It was sort of a Lucas-type situation. The water management district came in and claimed that they had jurisdiction of wetlands and that there wasn't enough property for them to build a house. Well, in reality, there probably was, had they been empowered somehow to work with the water management district and sort of come up with some alternative source of getting the building permit.
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So, we wanted to really focus on what we thought were the problems. We listened to property owners and they told us, we really want to use our property, so help us be able to use our property. So, we focused on coming up with a way, a methodology, that might do that.
We made recommendations to come up with a non-binding, non-judicial proceeding, sort of a third party-type situation where you could sit down and negotiate something out, because we were concerned that we didn't want to undermine Florida's growth management laws or environmental laws. All of that would have to have been ratified by the Government. So, you basically would have had somebody, a third party, who would negotiate—help negotiate a settlement that then would have to be ratified by the Government.
That bill was introduced in the 1994 legislature. It did not pass and—for a variety of reasons. Everybody seemed to be opposed to it. The landowners didn't like it because they didn't feel it went far enough. The environmental community was concerned, again, that it was going to undermine Florida's environmental laws. And local governments were concerned that they were just going to get handed a bill and they didn't know how much that bill was going to be.
In 1995, the situation changed a little bit. I also need to let you know that behind the scenes, in 1994—we have an ability for citizen's initiative in our state to put a ballot initiative on the Constitution. And the landowning—the landowner groups really were sort of backing a citizen's initiative to put a ballot on the Constitution. The Supreme Court struck that, so it never really stood up in 1994. Enter the 1995 legislative race after the 1994 elections. The political landscape around the country had changed rather significantly. It certainly changed in Florida. The Democrats in the House went from a solid majority to a slim, three-vote majority. A number of the conservative Democrats, me being one of those, were concerned about not having some legislation and we went to the Governor and asked him if he would help participate in the debate. And I see the light's on, Mr. Chairman. I'm not close to being finished. I'll try to hurry up.
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Mr. CANADY. I don't think anybody's going to object if you go ahead.
Mr. SAUNDERS. But I think the bottom line in all of that was the Governor was engaged in the debate. We asked him if he would participate and help us come up with some legislation. We felt, those of us in the conservative side of the Democratic Party, felt a little vulnerable in not having some legislation that was significant, we felt, to constituents that we represented. And the Governor agreed and he participated in the debate.
A working group was formed, and out of that—and that working group really was comprised of just about everybody under the sun. Those of us, the legislators who were interested in the debates, sort of worked in and out of the working group but they kind of worked themselves. The staff proposed creating a new court cause of action around a new standard, called inordinate burden, which, basically, is a fairness standard. It only went to existing uses of property or specific vested rights in property. It was prospective in nature, only dealing with new laws or rules, regulations, that were adopted after sine die of the legislature of May 11, 1995. The landowner groups felt that was significant but they were still concerned that we didn't have something to deal with these issues of what happens to all these rules and regulations and laws that are already on the books. How do we get treated by government fairly?
We then pulled up what we called section 2 of the bill which actually was legislation I had introduced, modeled again after the Property Rights Study Commission bill that created a non-judicial mediation process. We call them the special master process where if the landowner—the difference here is the landowner was empowered to sort of start the process, to put the ball in play. As local government will tell you, well, we can do that now, we can negotiate with landowners, we can hire a mediator. But the difference is, they have to agree to do it. In this situation, the landowner can bring them to the table but the landowner must pay for 50 percent of the cost which does have a chilling effect on him bringing those. That seemed to be the magic that sort of struck the deal.
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When we added section 2 of the bill which applied retroactively to any rules or regulations that were out there with the new court cause of action around the inordinate burden standard, that seemed to be the magic that did it. We had one dissenting vote in the legislature. It was signed by the governor and, it's, of course, now law. It's been 2 years in play.
I have, in my testimony, attached a Law Review article which explains some of it in more detail. I have described some of it.
Section 1 creates a new circuit court cause of action for property owners whose current use or vested right in a specific use of real property is inordinately burdened by the absence of a governmental entity. It was designed to be sort of a fairness standard. Again, we recognize that it may not raise to the level of a taking, but we did feel like there were landowners out there who were burdened, who were asked to bear what we called a disproportionate part of the societal good. If it was for society as a whole, then maybe, perhaps, society ought to pay for it.
Section 2 of the bill I also describe which creates a mediation process. I do want to say that I think one of the beauties about our bill is it created incentives to settle the case. If a claim was brought under section 1, a landowner had to give the government 180-day notice before he ever filed a claim in order for the government to make a settlement with him. In order to make sure that the field was level, if an offer was made and the landowner rejected it and the judge later found that the offer was reasonable, he has to pay not only his attorney's fees but the government's. Likewise, if the government—if the judge found the government to make an unfair settlement offer, then they would pay for the court cost. All of that said is its design to resolve to the issue and get to some ability of the landowner to use his property.
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How is it working? So far, we've had 12 cases filed under Section 1 of the bill and 29 cases filed under Section 2. Some of the section 1 cases have been dismissed because they apply to legislation or ordinances that were prior to the trigger date and, appropriately, they were dismissed. A couple of them have been settled and, in one instance, we have a local government who has refused to make a settlement offer and the others are pending.
I think if you talk to folks, which I have, who have been familiar with the Property Rights Act and are dealing with it, they would tell you that it is working the way the legislature intended it. We intended to solve the problems, not create more litigation. We wanted the landowner to be able to use his property in some way and we wanted to empower him to be able to negotiate with his government. The sky has not fallen, like some folks suggested we were doing. I think when you have 12 cases on section 1 and 29 on section 2, it's hardly fair to say that we have undermined all of Florida's growth management laws. There was one cost estimate of $8 billion cost to the government of enacting this property rights legislation.
To my knowledge, no government has paid any money in any of these claims. They've just worked it out with the landowner. The landowner doesn't get everything he wanted, nor does the government get everything they wanted, but there's a compromise that is reached.
I think the strengths of our legislation are that it does provide a legal remedy that are less than a constitutional taking, promotes settlement of the conflict, not more litigation, it creates rightness, and probably the most significant thing is that it has caused government to pause and think twice before they enact legislation.
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Palm Beach county was considering an ordinance that would have permanently designated a section of their county as agriculture. Well, at the time, the land was valued at about $25,000 or $26,000 an acre. Permanently designating it to agriculture with NAFTA, those guys were vegetable farmers. They would have nothing to do right now and be sitting on their land. The county decided maybe that's not a good, wise thing for us to do. That's the kind of thing that has happened with our bill.
There are some weaknesses. I will say that I think it is somewhat complex and difficult for a layperson to fully understand. And the new court cause of action is prospective only and it has significantly limited its application. I'm not here to suggest to you that we could really go retroactively and that there's a way to make that happen. But it has limited its application. That concludes my testimony, Mr. Chairman.
[The prepared statement of Mr. Saunders follows:]
PREPARED STATEMENT OF DEAN SAUNDERS, FORMER MEMBER OF THE STATE OF FLORIDA HOUSE OF REPRESENTATIVES
Thank you, Mr. Chairman and members of the House Judiciary Subcommittee on the Constitution for inviting me to testify to you about the State of Florida's Private Property Rights Bill. I was a member of the Florida House of Representatives and a prime sponsor of this legislation when it passed and became law in 1995. In my testimony, I will give you a brief recent history of the property rights debate in Florida, describe for you the law and how we got there, and report to you how it is working today.
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History
The recent property rights debate started in Florida in 1993 with the introduction of a bill requiring compensation for regulatory impacts that cause a diminution in value of 40% or greater to a particular property. The bill was strongly supported by landowners, agriculture, and business groups. It was vehemently opposed by local governments and the environmental community. The bill was amended to create a study commission, which, the Legislature passed. However the Governor vetoed the measure and instead created a study commission by Executive Order. I served on this Commission at the request of the Speaker of the House.
The Property Rights Study Commission conducted public hearings around the State. We heard testimony from all different view points: (1) the experts on property rights cases who told us how we could do very little at the State level to impact Federal Case Law, (2) local government officials who were concerned about the potential cost impacts to their governments and reminded us that Florida's Constitution prohibits unfunded mandates, (3) environmentalists who were concerned we might attempt to weaken environmental and growth management laws and (4) landowners who had suffered impacts told us all they really wanted was to use their property in the way they anticipated, they also told us they did not have the financial resources to fight a takings claim (even if they did their cases may not have risen to the level of a constitutional taking).
The Commission felt the cases were compelling enough to recommend a legislative response. We considered the assessment and diminution of value type of legislation other states were considering. We felt like the diminution of value threshold legislation would cause more conflict between property owners and government. Creating more litigation and not less. The assessment legislation we didn't feel did much of anything to provide relief to property owners. So we developed a recommendation that focused on what landowners told us they were most interested in—using their property. Our recommendation was to create a non-judicial dispute resolution process that could be triggered by the landowner. A third party appointed by a circuit judge would conduct a hearing and make a recommendation to the government, or governments, involved of ways to modify their ruling that might accommodate the landowners interests. The recommendation would have to be approved by the governments involved. This was to ensure that we did not undermine our existing environmental and growth management laws. If a landowner went through this process and did not get satisfactory results his case would be considered ''ripe'' for judicial review—eliminating the governments greatest defense—stalling.
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Legislation modeled after the Governor's Study Commission was introduced in the 1994 Legislative Session. Nobody seemed happy with the proposed legislation. Local Governments opposed it fearing they would have to pay a whole bunch of claims, the environmental community opposed it claiming it would weaken environmental laws and landowners opposed it claiming it didn't go far enough and was too bureaucratic. The landowners' groups were also working on a citizens' ballot initiative to amend the Constitution and didn't want anything to pass that might dampen those efforts. The Bill never went very far in the process.
The proposed ballot initiative obtained the necessary signatures to be placed on the ballot but it was removed from the ballot by the Florida Supreme Court for violating the single subject rule.
The 1994 Elections reduced the number of Democrats in the House of Representatives, and although they maintained the majority, it was a slim one. A group of Democratic Legislators from the House of Representatives' Conservative Caucus, who were concerned that failure to deal with landowner's concerns about private property rights might make them vulnerable in the next election cycle, met with the Governor and asked for his help in the debate. The Governor agreed to participate and asked his staff to work with the Legislators in coming up with meaningful legislation. A working group was formed.
The working group proposed legislation that would create a new court cause of action for government actions that inordinately burden property. Much of the language and basis of this new court cause of action came from the work done by the Governor's Property Rights Study Commission. The new court cause of action was prospective and only applicable to new laws, miles and ordinances. This was a real concern to landowners who wanted retroactive application. In an effort to satisfy the landowners, the working group recommended adding Section 2 of the bill which created an alternative dispute resolution mechanism, much like the 1994 legislation, that was retroactive in application. This proved to be the balancing mechanism that assured the bills passage with only one dissenting vote in the Legislature.
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Summary of Florida's Private Property Rights Protection Act
Attached is a Law Review article and the staff analysis of the bill which will explain the Act in detail. The following is a brief summary of the Bert J. Harris, Jr. Private Property Rights Protection Act. The Act was named after the long-time chairman of the House Agriculture Committee and champion of private property rights legislation.
Section 1 of the Act creates a new circuit court cause of action for property owners whose current use or vested right in a specific use of real property is inordinately burdened by the actions of a governmental entity. The new cause of action provides for relief, including compensation, to the private property owner for the actual loss to the fair market value of the real property at issue. Inordinately burdened means when an action of one or more governmental entities has directly restricted or limited the use of the property so that the owner is unable to attain reasonable, investment-backed expectations for the existing use or a vested right in the existing use of the property as a whole, or if the property owner is left with existing or vested uses which arc unreasonable such that the owner would permanently bear a disproportionate share of a burden imposed for the public good which should be borne by the public at large.
At least 180 days before initiating a lawsuit under Section 1 of the bill, the owner must give notice, with a valid appraisal, to the governmental entity which caused the inordinate burden. During that time frame, the entity must make a written settlement offer which would resolve the claim and a written, ripeness decision which identifies the allowable uses of the property. The ripeness decision or the expiration of the 180 day period is the last prerequisite to filing the action in circuit court.
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Section 1 of the bill applies prospectively and should not be construed under the law of takings for actions of governmental entities. The bill does not apply to the actions taken by a governmental entity which relate to the operation, maintenance, or expansion of transportation facilities and does not affect existing law relating to eminent domain as it relates to transportation. The bill does not apply to causes of action commenced more than one year after a law or regulation is first applied to the property at issue.
Section 2 of the bill establishes an alternative dispute resolution to land use and environmental claims and is separate and distinct from Section 1 of the bill. Under this section, a property owner who believes that action by a governmental entity has unreasonable or unfairly burdened the use of his real property may demand his claim be heard by a special master. The proceeding is informal with its main purpose being the facilitation of an informal resolution to the property owner's claim. If the special master proceeding is unsuccessful in resolving the dispute, the governmental entity must issue a written decision, which describes the use available to the property owner. The claim is then ripe for subsequent judicial proceedings.
How It Is Working
The law requires the Department of Legal Affairs to keep records of the claims filed under Section 1 and 2. Two years after the Act became law, there have been 12 cases filed under Section 1 and 29 filed under Section 2. Several of the Section 1 claims involved the application of regulations which predated the May 11, 1995 trigger date and so have either been or will be dismissed. Two of the cases settled, one local government has refused to make a settlement offer on three cases, and the others are pending. At least nine of the Section 2 claims have settled, several were withdrawn and the others are pending.
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Most of the people familiar with the Bert J. Harris, Jr. Private Property Rights Protection Act and the Legislature's intent when it passed the Act, would say it is having the exact affect that was intended—settlement of the conflict. It is obvious that with only 12 cases filed under Section 1 that the ''sky hasn't fallen'' as the opponents of property rights legislation suggested when the Act was passed. Property owners I spoke to regarding Section 2 of the Act were pleased with the overall affect. They are convinced that without it they would still be fighting the bureaucracy or would have had to resort to filing action in circuit court.
From my perspective as a strong proponent of protecting private property rights, I believe the strengths of the Florida law are: (1) It provides a legal remedy for cases that are less than a constitutional taking; (2) It promotes settlement of the conflict not more litigation; (3) It creates ripeness and probably the most significant; (4) It has made units of government think twice before adopting laws, regulations or ordinances that might unfairly burden someone's property. The weaknesses are: (1) It is complex and difficult for a lay person to fully understand (2) the new court cause of action is prospective only and has significantly limited its application.
Mr. CANADY. Thank you, Mr. Saunders. We appreciate your testimony.
Senator Russman.
STATEMENT OF HON. RICHARD L. RUSSMAN, MEMBER, NEW HAMPSHIRE STATE SENATE
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Mr. RUSSMAN. Thank you, Mr. Chairman and members of the committee. I appreciate you having me come back and I still have to tell you that takings bills, from where I sit and from where New Hampshire sits, are bad to the bone. I think that, as a practical matter, takings bills actually weaken protections for private property. Clearly, they undermine the needed safeguards for environmental protection, and they impose unjustified costs.
The notion of having people in the assessment type of bill review each and every regulation is costly and, even worse, the notion of paying people not to do what they probably ought not to be doing in the first instance is even worse. It's certainly budget-busting for States and it's budget-busting potentially for municipalities and for counties, such as the counties that Mr. Saunders referred to in terms of changing the zoning of the particular area that he referred to.
I think the other thing is a red tape issue as far as additional burdens put upon both landowners and government in terms of trying to hire other people, bureaucrats, and so on, to have to come to grips and associate and deal with the assessment or the compensation bills. Some are certainly worse than others. It's safe to say that all of us live downwind or downstream or next door to property where pollution or inappropriate activities could harm our health, our safety and our property values. Sixty million homeowners count on zoning, for example, to protect their property values. I mean, there has got to be an understanding that for—if we're going to increase somebody's rights; somebody else's rights are going to be diminished in some fashion. I don't think that we can have it both ways.
I think that the takings legislation is counterproductive. At a time when most Americans are asking government to cut back in terms of reducing red tape, bureaucracy, and cost, I think that you'll find that the takings bills manage to do very effectively all three of these things in a big way.
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My thought is that perhaps this would be—should be entitled the full employment act for attorneys. My son is in law school, I tried to talk him out of it, incidentally, but he decided to go anyway, and I said, you maybe want to specialize in property law because if takings bills go into effect, there's going to be an area that's going to be ripe to make a lot of money.
The Supreme Court, to the contrary, has been giving us very good guidelines over the years, very good guidelines, and I think will continue to do so on a case-by-case basis as it looks at each particular circumstances. We hear these anecdotal stories about property rights but there have been no scientific studies, no national studies, and I think that with the right group of attorneys, certainly creativity will run amok in terms of bringing takings legislation—takings cases for a variety of interests—of types of property interests.
I think that the takings bill certainly can have a number of unintended consequences. Even laws limited to use of land could include zoning, could include civil rights, could involve morality, and other laws that protect the public and neighboring homeowners from pollution, adult activities, discrimination, hazardous waste landspills, just to name a few of inappropriate land uses. There has been case after case already brought, as a matter of fact, for moral-type things as far as adult bookstores, things of that nature, cases brought, Americans with Disabilities Acts for access to toilet facilities and things of that nature, that certainly a takings claims are being raised. This would only encourage that type of thing. Those, I think, that are truly concerned about property rights would probably oppose takings legislation, as I have.
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With property rights come responsibilities. It is not—the notion that, if you buy a piece of land, your reasonable expectation is to make a lot of money, is always going to apply. There is no guarantee in our Constitution, or anywhere, that somebody who buys property is going to be able to make an awful lot of money. Now, we always point to the small case where—that the homeowner can't build because his property is wet but the reality of it is, there are certain instances that perhaps the person who sold him the land was wrong to do that. And maybe it is a cause of action to—against the developer who actually tried to sell that piece of land as a buildable piece of land in the first instance, and necessarily should have to pay for that himself instead of the rest of us.
The other thing I think we ought to look at is the notion that all the States that have looked at this, in terms of popular referendum, have, by wide margins, defeated it; Arizona, Rhode Island, Washington, and in New Hampshire, particularly. We had takings legislation, both assessments and compensations bills, put in for 5 years in a row, all voice votes, very little debate, all of them defeated. Never made it from one House into the other. If a particular law or statute has a problem that needs to be addressed, we ought to get out the scalpel and deal with that property and not take this broad brush and try to pass legislation such as this to try to deal with it.
In conclusion, I simply can't state strongly enough that this is a solution looking for a problem. Thank you. I'd be happy to answer questions.
[The prepared statement of Mr. Russman follows:]
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PREPARED STATEMENT OF HON. RICHARD L. RUSSMAN, MEMBER, NEW HAMPSHIRE STATE SENATE
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Mr. CANADY. Thank you, Senator.
Ms. Hayman.
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STATEMENT OF JANE CAMERON HAYMAN, DEPUTY GENERAL COUNSEL FLORIDA LEAGUE OF CITIES, TALLAHASSEE, FL
Ms. HAYMAN. Thank you, Mr. Chairman and members of this subcommittee. It is truly an honor to be here today and to be selected by from all the many experts, if one can be an expert, on this new legislation that you refer to as private property rights acts.
I represent the Florida League of Cities. We were the only surviving opponent to the Private Property Rights Act in Florida. So, in that capacity and with the dubious privilege, I served on the drafting committee of the Florida Act. This legislation was so heavily greased that I think Mazola probably should have had some type of stock price jump and I feel I was successful in at least obtaining one negative vote. [Laughter.]
I considered it a successful session. It's also an honor to be here among others from Polk County of Florida. For the other Members of the Committee, it seems we're highly represented, with the Chairman and Mr. Saunders and myself being a native of Polk county. I don't really know what that means but we're all here. But getting back to the point——
Mr. SCOTT. I think it reflects the power of the Chairman. [Laughter.]
Ms. HAYMAN. Getting back to the point, the effect of the Private Property Rights Act on Florida, and I'll limit my comments, if I may, to the first part of our Act, that being the Bert Harris portion, or the ''inordinantly burdened'' portion. How this has affected Florida? Albeit so far, it has not truly been a financial impact. There has not been the financial impact that we expected. Many of the cases that have been cited to you are still pending. No case has come to its full fruition. So, we really don't know if there's going to be a financial award from this.
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What has happened in Florida is it has had a deep and chilling effect on governmental actions for the public good. I cite to you two that are—well, three actually. One, which is most—one quite unintended consequence, but which has been alluded to here, and that is in two instances that I am personally aware of. The city was presented with an attempt to try to limit nude bars or outzone them in some way, and they were threatened with property rights acts.
Now, one would question whether that was truly the intent of the drafters of this legislation. The one city that was successful, which was Gainesville, had to go around and, rather than do it through their land development code, they did it through their conduct code. But that is far reaching, I believe, above just a designated land use, or being downzoned, or whatever a property owner may feel affects them by a governmental action.
The second instance is that of a crackhouse. Government goes in and tries to close down a crackhouse. The next thing that happens is they've been sued under—for harass. Now, you'd have to say, where's the balance there? You know, this one, actually, the property owner won. They came back—they didn't come back under Bert Harris, although Bert Harris was initially threatened, they came back under inverse condemnation and took the constitutional route which has always been available and it went all the way to the United States Supreme Court. The Court, unfortunately, denied cert. on that. We had some—somewhat, I believe, close to 40 amici on that case, and it was amazing to me that the Court wouldn't look at it. But, you know, the Court is there for a purpose.
I got a call from—I get a lot of calls from city attorneys who say, how can we accomplish this and not be—and be immune from Harris. It's very difficult. There are few outs in the law that you can kind of guide them toward but most of the time, they give me their scenario. And the third instance that I wish to bring to you just happened last week. I see my time has run, sir. May I have the privilege to continue?
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Mr. CANADY. You can. Yes, you can proceed.
Ms. HAYMAN. Because this example shows you one of the real problems and the one, at least the Florida League of Cities, would proffer to you. That being, you need to look at the problem before you try to find a cure. And in Florida the problem might well be the Growth Management Act. In this instance, a city was faced with going through a process that is mandated under the Growth Management Act of evaluating and appraising their plan. It's a periodic process that they have to do. Their first time up at the bat on that came after the so-called perspective date in the Act.
In other words, that all actions were frozen prior to—at the sine die in 1985. This was a process that they were undergoing later in time. So, this process was vulnerable to the act. In addition, the act itself—the underlying act, the Growth Management Act, had been amended on this one point since the 1985 sine die date. So that amendment was vulnerable under the act.
So, in other words, there was no protection, as was intended by the drafters, of the Growth Management Act available any longer. I hope I've made myself clear but—because that's a very complicated—in section 12 of our Act, exemption or, that's what everybody hangs their hat on, saying this is only perspective in nature but it's not perspective in nature. It's only perspective from the date—before the date of—for any ordinances or laws in effect on the date of the sine die, when the act was passed.
So, in that instance, the local government was truly on the horns of a dilemma. Do we abide by the law or do we not abide by the law and risk getting sued for not abiding by the law? My advice was I think you're just going to have to go forward and take your licks as they come. That is one example that I think is something that our legislature certainly must look at.
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In addition, our legislature continues to pass good and noble legislation. For instance, the Brownfields legislation that was passed last year. You may be familiar with that law. The law is designed to revitalize slightly polluted or unusable land, which occurs mostly, sometimes it's alleged it occurs, in minority districts. Well, the question will be, the first property owner that does not like what's happening is going to raise a Bert Harris claim. This is an act that was intended to protect the public good, make land available for development, and also improve the character of the neighborhood. And now it is available to one individual's whim over the public good. And, with that, I will go ahead and close my remarks with just the conclusion that I have in my written statement.
''As of today, Florida remains with a chilling process to redress an individual's grievance with government over the use of private property. Challenges to the constitutionality of the Act loom and government with skittish demeanor attempts to regulate the use of land to protect the public health, safety and welfare. The careful balance between an individual's right to use property and the government's responsibility to protect the public as a whole has shifted. The individual is empowered to prevail over the rights of the his neighbor.''
And thank you. I'll be available for questions.
[The prepared statement of Ms. Hayman follows:]
PREPARED STATEMENT OF JANE CAMERON HAYMAN, DEPUTY GENERAL COUNSEL, FLORIDA LEAGUE OF CITIES, TALLAHASSEE, FL
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Mr. Chairman and members of the subcommittee, it is an honor to address this panel on Florida's experience since adopting legislation designed to protect private property rights. In Florida, the legislation which has received the greatest attention is the Bert J. Harris, Jr., Private Property Protection Act and the Florida Land Use and Environmental Dispute Resolution Act, Ch. 70, Florida Statutes (1969)—legislation on which I had the dubious privilege of being a member of the drafting team.
BACKGROUND
Before I begin with comments directed specifically to the Act, it is important to frame the issue for discussion because it is so fundamental to the health, safety and welfare of the citizenry of not just each city in Florida but each city in this Nation and to the citizenry as a whole, and is so basic to the protections assured to each and every one of us by the Takings Clauses of our Federal Constitution, U.S. Const. amend. V, and in Florida by its Constitution, Art. X, §6, Fla. Const. (1968). The issue is government regulation for the public good of the use of an individual's private property.
In this decade it appears, at least to the Legislature of the State of Florida and a select group of Florida citizens, that the Constitutional protections are insufficient. In the minds of the of these groups, it appears that the Court battle to obtain redress from government actions has become too time consuming and costly. In addition, they appear to believe that the standards of proof the landowners must overcome are too stringent. The government was to become the insurer of each private property owner's expectation.
And so in 1995, Florida adopted the Bert J. Harris, Jr., Private Property Protection Act and the Florida Land Use and Environmental Dispute Resolution Act, Ch. 70, Florida Statues (1996). In the words of one of the sponsors, ''The individual should not bear the cost of societal decisions.'' But, query, should society bear the cost of one individuals gain?
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In brief the Act created a new statutory cause of action to redress the grievances of private property owners over government's intrusion on their land. The standard for reward under the Part I of the Act, more commonly referred to as the Bert Harris claim is the now infamous ''inordinate burden'' standard, §70.001(1)(e), Fla. Stat.
(e) The terms ''inordinate burden'' or ''inordinately burdened'' mean that an action of one or more governmental entities has directly restricted or limited the use of real property such that the property owner is permanently unable to attain the reasonable, investment-backed expectation for the existing use of the real property or a vested right to a specific use of the real property with respect to the real property as a whole, or that the property owner is left with existing or vested uses that are unreasonable such that the property owner bears permanently a disproportionate share of a burden imposed for the good of the public, which in fairness should be borne by the public at large. The terms ''inordinate burden'' or ''inordinately burdened'' do not include temporary impacts to real property; impacts to real property occasioned by governmental abatement, prohibition, prevention, or remediation of a public nuisance at common law or a noxious use of private property; or impacts to real property caused by an action of a governmental entity taken to grant relief to a property owner under this section. §70.001(1)(e) Fla. Stat.
(b) The term ''existing use'' means an actual, present use of activity on the real property, including periods of inactivity which are normally associated with, or are incidental to, the nature or type of use or activity or such reasonably foreseeable, nonspeculative land uses which are suitable for the subject real property and compatible with adjacent land uses and which have created an existing fair market value in the property greater than the fair market value of the actual, present use or activity on the real property. §70.001(1)(b) Fla. Stat.
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The standard for relief under Part II of the Act, more commonly referred to as the Dispute Resolution portion, is merely ''unreasonable or unfairly burden the use of real property.'' Both parts of the Act may result in compensation to the landowner and both parts have had an impact on the cities of Florida. However, I will limit my comments to the Part I of the Act, the ''inordinate burden'' part. There, the drafters clearly articulated in the Act that the cause of action created under the Act addressed governmental actions that may not rise to the level of a taking under the Federal or State Constitutions and were separate and apart from any such constitutional claims, §70.001(9), Fla. Stat.
Initially I will discuss the Acts effect on Florida's cities. I will then follow with the legislative evolution of the Act. Lastly, I'll provide you with a list of selected articles which demonstrate the confusion surrounding the meaning of the Act and suggest that the imprecise construction of the Act may indeed lead to a judicial quagmire when a cause under the Act is presented to the judiciary for interpretation.
THE FLORIDA EXPERIENCE
Let me begin by asserting that the Act has had a marked impact on the local governments of Florida. While I am not aware of any monetary awards that have been made under the Act, below are some actual scenarios of the chilling effect the Act has had on actions by Florida's cities. Actions which may demonstrate how society is bearing the cost of an individual's gain or whim:
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Not reflected in the examples above are the numerous telephone calls I receive at the Florida League of Cities about the Act. Most of the calls relay the chilling effect the Act has had on Florida's cities' ability to revitalize areas. Others are questions about how the city governing body can began or finish a project required by some other governmental entity and be immune from a claim. Recently, I received a call from a distraught city attorney who was genuinely caught in a dilemma. Obey the law or be sued for obeying the law. Our state comprehensive planning act requires that local government land use plans be reviewed and revised, or in statutory terms evaluated and appraised, on a periodic basis. The statute establishing this requirement has been amended since the adoption of the Act, making all actions to implement the evaluation and appraisal vulnerable under the Act. To comply with the statute, the city must amend its comprehensive plan. Actions pursuant to the amendment are subject to suit under the Act since both the provision establishing the requirement for evaluation and appraisal and the city's comprehensive plan adopted pursuant to the amended state comprehensive planning have now been amended and are outside of the original retroactive protection in the Act.
As the above examples demonstrate, the Act has not opened the floodgates of litigation as originally predicted; however, local government is overly circumspect. While this may please some, is it really for the good of the public at large? The Florida League of Cities believes not, as expressed in a recently prepared position paper on the private property rights movement.
PRIVATE PROPERTY RIGHTS
Florida League of Cities, Inc.
The adage that government cannot take an individual's private property without just compensation is a basic right our citizenry and is secured by the Constitutions of our people. However, early in this decade a populist movement arose which advanced the idea that the constitutional protection was not sufficient to protect private property against governmental regulation. The staunch opinion of the Florida League of Cities is that any misalignment in the balance of rights of the private property owner and those of the needs of the public at large falls directly on the state mandated land use constraints of the Growth Management Act. Municipalities in this State were and remain committed to balancing the protected private property rights of the individuals in their locales with the interests of the general public in their jurisdictions. The onslaught of the State wide and regional overlay regulations have tilted the balance between the rights of the private property owner and the needs of the locale. The following provides background and reasoning for our position.
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As the population of the Nation and its States grew and the character of commerce changed from agricultural to industrial around the turn of this century, land became scarce and the need to regulate the competing interests for the land's use became increasingly apparent to protect the public health, safety and welfare. The right to use one's land in the manner one chooses, many times creates a public nuisance to the citizenry as a whole. The right became limited to a personal right to use private property as long as the use did not harm the neighbor or the public at large. The people looked to their government to arbitrate and select the best use of the land for the public good. The government the closest to the people, the government best in the position to know the land and the owners of the land, the municipal governments, picked up the charge. Municipalities began establishing the safest and reasonable use of the land. This process evolved into classifying the parcels of land into zones, more commonly referred to as zoning and was sanctioned by the United States Supreme Court in the landmark case of Euclid v. Amber Realty, 272 U.S. 365 (1926). Since the zones were established by elected municipal officials, sworn to uphold the law and accountable to the people at the polls, the courts looked upon the zoning decisions with deference to the officials' decision.
In addition, the Constitutions of the State and Nation assure compensation to a private landowner if his land is taken by the government. The constitutional law of taking derives from the Just Compensation Clause of Amendment V of the Bill of Rights and Section 6 of Article X of the Florida Constitution. Both of these provision require that a private property owner be paid full compensation for property taken by the government. This taking can arise through an eminent domain process in which the property ownership is consumed by the government for a public purpose or through regulation when the full economically viable use of the property is obfuscated by the regulation. Thus, the law has not failed to ignore the ownership interest of a private property owner. In fact, it requires full compensation if government takes or substantially interferes with the property's use; however, the law became limited by the judicial recognition of the public welfare demands and allowed limited intrusion into private property rights as long as the intrusion by the government served a substantial public interest and did not deprive the landowner of all economically viable use of his land.
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As the economy of the State began to falter in the late 1980's coupled with the effects of full implementation of the Growth Management Act and mandated environmental regulation at its pinnacle and followed by the devastation of Hurricane Andrew, property owners began to feel strapped by the state imposed land use designation placed on their property. It seemed that the closest entity to blame for the lack of flexibility was the municipal government.
The Florida League of Cities does not accept this blame. It is the position of the Florida League of Cities whose membership is composed of private property owners, that the intrusions, if any, on the private property rights of individuals is caused by the over-regulation of land use in this state.
However, the populace movement in this State was spurred on by the landmark decision of Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The decision concerned a landowner who succeeded in having regulatory use of his land declared a taking. As a result the movement sought the strengthening of the standards for determination of a regulatory taking. In addition to pressure from the movement, the cities were faced with the Growth Management Act becoming the precursor to a line of cases by which the judiciary, culminating with the landmark Board of County Commissioners v. Snyder, 627 So. 2d 469 (Fla. 1993) decision which changed the rules for municipal decisions of zoning or rezoning land. What had traditionally been a pure legislative decision made by the municipal governing body and embraced with judicial deference now became a quasi-judicial decision judged by the presence of adequate, substantial competent evidence.
Even with the demands on the municipalities of mandated growth management and environmental laws and the stricter standards of Snyder, the requirements for heightened due process through the public meetings law and the protections of the ethics code, the Florida Legislature decided to use the hammer approach rather than adjusting the true cause of populace movement's discontent the growth management act and the requirements on cities thereunder. The Legislature demanded more stringent controls on the municipalities and more lenient legal standards for the declaration of a taking. The Legislature settled for an extensively process oriented law, the Bert Harris, Jr. Private Property Right Law, Ch. 70, F.S. This law inserts into the legal scheme a statutory cause of action with a new and less stringent standard, inordinately burden, into the takings law arena.
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As the result, the management of land has become far too strict. In fact, many municipalities are avoiding decisions which could benefit the public good out of real fear of being sued. The society has become one in which an individual's needs outweigh those of the people as a whole. The balance has indeed shifted. Left to their own unique position, as the government closest and most responsive to the people, the municipalities of the State could and would strike the fair accord.
When looking for a remedy, the people would be better served by examination of the cause of their discontent, e.g., government mandates like growth management and heightened environmental controls rather than increasing the cost of government through procedurally cumbersome statutory procedures.
Accordingly it is the position of the Florida League of Cities that the Constitution need not be changed to enhance private property rights over those currently existing in the Constitution, especially Art X, §6, Fla. Const. Instead, the people should look to their legislative leaders for true relief from State imposed, locally unresponsive statutory mandates.
LEGISLATIVE HISTORY
The private property debate in Florida, in modern times began as early as 1974. The current debate heated again three years prior to the adoption of the Act, in keeping with the unwritten rule in the Florida Legislature that any new idea takes approximately three years to pass. In 1993, while the Growth Management Act was undergoing a major revision, the Legislature was presented with bills filed in both Houses. Fla. HB 1437(1993) and Fla. SB 1100(1993) attempted to establish monetary reward for inverse condemnation when the limitation on fair market value of the property was limited by an arbitrary percentage. The bill made it to the floor of the House; however, the companion Senate bill was amended to create a Study Commission. The Senate bill passed, but was vetoed by the Governor. The Governor then appointed a Study Commission to review the issue and report to the 1994 Legislature.
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In 1994, the Legislature was again presented with a proposed constitutional amendment Fla. HJR 1847 (1994) while awaiting the report of the Governor's Task Force. HJR 1847 provided that if governmental action resulted in a ''non-negligible'' reduction in fair market value, full compensation was required and the failure to exhaust administrative remedies would not be necessary to make the claim ripe. HJR 1847 did not make it out of Committee, possibly due to the arrival of the Report of the Governor's Task Force. The Task Force recommended legislation which is similar to Part II of the Act, and introduced into our vocabulary ''inordinately limits the effective and practical use of real property'' as the standard for compensation. The Task Force's suggested legislation was filed by legislators and a working group of lobbyists, which included the Florida League of Cities, began to work on the bill. The day before the bill was sent back the House by the Senate, the sponsors pulled off the bill, and no bill passed in 1994. On the horizon, however, was an initiative petition to amend the Florida Constitution. The proposed initiative would have required full compensation for damages in the value of a vested property right.
In Florida, constitutional amendments must be approved by the voters. Before the referendum a proposed amendment offered by initiative of the people must meet both constitutional and statutory tests by the Florida Supreme Court. The Court has the authority to remove the proposal from the ballot if the initiative does not withstand the standards for review. The standards associated with the examination are based on ''due public notice.'' In other words, does the ballot title and summary of the proposed amendment provide sufficient notice to the electorate that they are aware of the content and understand the ramifications of the proposed amendment? Briefs from interested entities are accepted by the Florida Supreme Court to assist them in their deliberation. Among others the Florida League of Cities participated here and prevailed in removing the proposal from the ballot, Advisory Opinion to the Attorney General Re: Tax Limitation, et al. v. Jim Smith, 644 So.2d (Fla. 1994).
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Then in 1995, the Legislature was again presented with proposed constitutional amendments, Fla. SJR 218 (1995) which provided for compensation of the ''net diminution'' in fair market value of the private property if governmental action restricted the economically viable use of the property; Fla. SJR 968 (1995) which provided for an award of full compensation and attorneys' fees if the property lost ''significant value'' due to governmental regulation; Fla. HJR 1847 (1995) provided for compensation when governmental regulation resulted in a ''non-negligible'' reduction in the fair market value of the property; and general bills, Fla. SB 1326 (1995) which provided for full compensation for depriving or devaluing private property; Fla. HB 1381 (1995) which provided for full compensation for depriving or devaluing private property but exempted governmental actions by local government; Fla. SB 1868/Fla. HB 1335 (1995) which provided for a dispute resolution process which later became Part II of the Act; Fla. SB 2912 which later became the Senate companion to HB 1335 which became the Act. SJR 968 and SB 1326 were on a fast track and were heard by Committee early in the second week of Florida's sixty day Session. During his testimony in opposition to the legislation, the Governor's General Counsel suggested that in lieu of the proposed legislation, a statutory cause of action could be crafted and the Bert J. Harris, Jr. Private Property Rights Protection Act was born. The Governor pulled together a balanced drafting team which was assured by the sponsors of the proposed constitutional amendments that they would not push their proposals if the drafting team produced a product of which they approved. The bill made it to the floor, with the Florida League of Cities as its only opponent. The Senate bill was sent to the House and in the waning hours of the legislative day, an amendment was placed on the bill which substantially broadened its effect. The term existing use was amended beyond its plain meaning to include foreseeable uses of property. The bill, nevertheless passed without even a hearing by a House Committee and over a point of order.
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While the Florida League of Cities was sensitive to the will of the sponsors, its membership also believed that the essence of representative government was to balance the needs of the individual with the protection of the public good. To better explain, the remarks I presented before the Florida Senate Judiciary Committee at their first hearing on private property rights in 1995 follow:
City officials hear the same plea you have heard—and they are angry. They hear that government has overregulated their land—yes that government regulation has taken their land. They bought land with high expectations—and isn't that the American ideal
They are property owners themselves.—just as each of you are.
They are angry too.
However, to a greater and greater extent their hands are tied. The noose of government regulation is strangling even city government—the government closest to the people.
They were elected to represent the interest of the whole—the public interest. They took an oath to uphold the constitution of the State and of the Nation. They took an oath to not take the property without providing just compensation. Regardless of perception, they honor that oath.
These proposals are offered as a quick fix to that perception. Times have changed and the land use regulatory system has drastically changed in the past decade or more.
Peoples expectations have not.
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Other forces or interests may have tightened that noose a little more as regulation through mandate that is passed onto our cities.
It is these mandates be they properly motivated or not come without funding and hamstring you cities such as growth management or the Federal Clean Water Act. They are which are passed on the local governments to implement and now you wish us to indemnify the liability for your actions.
Local government's ability to act—regardless of the perception—has been equally drastically impacted by the changes mandated on the regulatory landscape.
Complaints about rezoning. Snyder [a Florida Supreme Court case which decreed certain rezoning a quasi-judicial in nature] changed that / Jennings [a Florida District Court of Appeal case which applied the prohibition of ex parte communications to all quasi-judicial actions in Florida] changed the manner in which local government can interact with the people.
People's expectations have not changed.
We are not attempting to point fingers—abuses may occur at the local level. But the law is in place to guarantee compensation.
Little people—these provisions do not protect the little person anymore than current law. Litigation is still required.
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People who enjoy the lifestyle of a community band together and form a city. If they are uncomfortable in a particular environment, they move on—the Constitution guarantees them that right too. But while there, they choose to live by the laws of the city—because we are a nation of laws—it's basic to our existence. Yes, we live in a democracy, but not a true democracy because what you propose is anarchy. We choose to live in a representative democracy. We place our trust in those whom we elect, our city officials, our county commissioner, yes, our school board members and even our legislators. Many believe that trust has been broken and instead find that the traditional remedy of the polls is not sufficient—although last November—it was used effectively, they seek to change the very foundation. —the constitution. That is their right.—
But their right ends where another's begins.
That's what this is all about.
As stated in your staff analysis, the result in government becoming the insurer of the fair market value of property.
The elected officials who compose League of Cities, although they sincerely embrace the rights of property owners, are also bound by their oath to protect to public good. The proposals before you, we submit, go far to disrupt the public good and possibly the very foundation of our representative government.
The League of Cities would ask that you reconsider the proposals before you today. Let's not act hastily and try to fix a perception by creating a greater problem.
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In the words of our far thinking forefather, Ben Franklin at the signing of the Declaration of Independence.
we must all hang together or assuredly we shall all hang separately.
The passage of the Act, the limited use of the Act and the failure of the constitutional amendment to reach the ballot, did not leave the supporters of the Act undaunted. In Section 12 of the Act, a provision was included to ensure the Act would be prospective and affect only laws, ordinances or governmental actions enacted after the adoption date of the Act. Nevertheless during the 1997 Legislature, bills were filled to make regulations adopted before the adoption of the Act available for challenge under the Act. In addition, in the summer of 1996, another constitutional initiative similar, in effect, to the one stricken in 1994 was subject to the Supreme Court's review. Among others, the Florida League of Cities submitted briefs in opposition. The Court again struck the proposed initiatives from the ballot. Advisory Opinion to the Attorney General Re: People's Property Rights Amendments Providing Compensation for Restricting Real Property Use Multiple Subjects, et al, 22 Fla. L. Weekly S21 (Fla. May 15, 1997). Florida is currently undergoing a constitutional revision. It is expected that the private property rights issue may again be debated by the Revision Commission.
CONCLUSION
As of today, Florida remains with an chilling process to redress an individuals grievance with government over the use of private property. Challenges to the constitutionality of the Act loom and government with skittish demeanor attempt to regulate the use of land to protect the public health safety and welfare. The careful balance between an individual's right to use property and the government's responsibility to protect the public as a whole has shifted. The individual is empowered to prevail over the rights of his neighbor.
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SUGGESTED REFERENCES
Jane Cameron Hayman & Nancy Stuparich, Private Property Rights: Regulating the Regulators, 70 Fla. Bar J. 55 (1996).
David L. Powell, Robert M. Rhodes & Dan R. Stengle, A Measured Step to Protect Private Property Rights, 23 FSU L. Rev. 255 (1995).
Nancy E. Stroud & Thomas G. Wright, Florida's Private Property Rights Act—What Will It Mean for Florida's Future?, 20 Nova L. Rev. 683 (1996).
Patrick W. Maraist, A Statutory Beacon in the Land Use Ripeness Maze: The Florida Private Property Rights Protection Act, 47 Fla. L. Rev 411 (1995)
David Spohr, Florida's Takings Law: A Bark Worse Than Its Bite, 16 Va. Envtl. L.J. 313 (1997).
Mr. CANADY. Thank you.
Representative Campsen.
STATEMENT OF HON. CHIP CAMPSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH CAROLINA
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Mr. CAMPSEN. Thank you, Mr. Chairman. I appreciate the opportunity to come and speak with you today about property rights. The first property rights bill that was considered in South Carolina was introduced in the 1995–1996 legislative session in the House by the Chairman of our House Judiciary Committee, Jim Harrison. That bill had a substantial diminution in value standard, whereby if government action resulted in a substantial diminution in value to property, it would be compensable under that bill. There was really little preparatory work done for that bill. The bill was really, more or less, a trial balloon. The proponents of the bill opted for a substantial diminution in value versus a bright-line approach because they felt that the bright-line approach was somewhat arbitrary and, in my opinion, it is also.
For example, I think you could have a regulation that diminished the value of a piece of property that may be a piece of farmland. It actually is being farmed today. And it may only be a 15 percent decrease in value, but if it affects your agricultural practices to the point where it's not economically feasible to farm, you've destroyed an existing use, yet it's not compensable. Whereas downzoning the density of a multifamily piece of property might result in a 30 percent diminution in value, but really the project remains feasible.
And so, we did not like the—I say we, I wasn't in the legislature then—rather the proponents didn't like the diminution in value approach and the opponents did not either. That bill did not get out of subcommittee. Then, in this session, the 1997–1998 legislative session, a bill was introduced which was more or less a planning bill modeled after President Reagan's Executive Order 12630 which did not add any substitive law to the law of takings, it would adopt or incorporate the substitive constitutional law of takings as the substitive law to be applied by the statute, and it simply required the attorney general to develop a set of guidelines as to what actions might constitute a taking regulators were to assess proposed regulatory actions according to those guidelines in order to avert a taking. The bill also had a mediation process.
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Now, there was a lot of opposition to that bill and although it actually was worked on for several years by the chairman of our Judiciary Committee with both proponents and opponents. But when it came down to the wire, there remained opposition to the bill, even though it added no substance to the law of takings. The political subdivisions of the State did not like the requirement to perform the assessment required by the bill, as they considered it too costly.
I was a sponsor of the bill but I frankly felt they had a good point, that it would be costly to do the assessments called for by the bill, and it would simply be more bureaucratic red-tape. So what the Constitution Law Subcommittee did in the House was supplant that bill by amending it in its entirety and replacing it with a bill that was very similar to Florida's bill, or at least section 1 of the Florida bill that would require or would allow compensation to a landowner where his property had been inordinantly burdened by governmental action. That bill ended up passing our House by a vote of 78 to 35. It presently is in the senate and before the senate's judiciary committee. We passed the bill in our house too late in the session for the senate to take it up this year, and so they will take it up in January of next year.
I'd like to go now into why I think there's need for property rights legislation, since I have limited time. James Madison in the Federalist Papers said this, when our country was founded. He said, in Federalist Paper No. 51, ''that if all men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed and, in the next place, oblige the government to control itself.''
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Now, the Founding Fathers had a deep sense and a deep fear, I believe, that the government that they were creating might, in fact, one day become as repressive and disrespectful of liberties as the government they just wrestled their freedom from. Therefore, in the Constitution they employed various devices to limit the power of Government. One is the concept of federalism and enumerated powers—the notion that the Federal Government would have only those powers which the States specifically delegated to them in the Constitution. The Ninth and the Tenth Amendments are the greatest expressions of this concept of federalism and enumerated powers. Also, separation of powers was a device to limit the power, the scope, and the reach of the Federal Government.
Finally, the Bill of Rights, was insisted upon by the States prior to ratification of the Constitution to protect the rights of individuals over and against the will of the majority, or the dictates of government. Property rights are as important to our liberties as are other rights that we find in the Bill of Rights. In Federalist Paper No. 41, Madison indicated that the protection of private property is the first object of government, or the first purpose of government. Even the Supreme Court has acknowledged this. In the case of Lynch v. Household Financial Corporation, the Court said, ''The dichotomy between personal liberties and private property rights is a false one. Property does not have rights, people do. The right to enjoy property without unlawful deprivation no less than the right to speak or the right to travel 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 would have meaning without the other.''
I think the Court is exactly right. What practical good is the right to free speech if the government can take your property from you because of what you might say? What practical good is the right of freedom from unreasonable search and seizure, again, if the government can take your property away from you? I think, in this country, we have not equated property rights with civil rights. We have not looked at property rights as a civil right but they are, in fact, a civil right. Property rights are foundational to liberty. They are one of those few rights that separate us from totalitarian regimes. The difference between this country and China or Cuba, in addition to being the freedom of speech, the freedom of religion, and the right to—to be free from unreasonable search and seizure, is the freedom to own and do with our property as we see fit.
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Now, even though there is a lot of dictum in the Supreme Court cases about property rights, I think the present status of the constitutional jurisprudence is lacking. The Court largely looks at, in taking these cases, whether there is a compelling enough reason for the government to act while scrutinizing actions that devalue someone's property. There are only two exceptions carved out in the constitutional jurisprudence that provide for a taking, per se, or that is a taking regardless of what the government's compelling interest is. One exception is set forth in the Lucas case which was decided down in my district in South Carolina, or the properties are in my district. The Lucas Court said that if all economic beneficial use of the property is taken by regulation, then you have a compensible taking. The other taking per se exception is found in Loretto, where the court said if you have a physical occupation to the property by the government, there is a regulatory taking.
Besides that, the Court looks at various factors to ascertain whether there is a compelling interest for the government to act. Now, I ask you this. What if the Court applied a similar approach to our other constitutional guarantees? What if, when it comes to the First Amendment, the Court's inquiry was, well, were all of your rights to speak taken away? Because only if we see that all of your rights to speak had been taken away will we find that there's been a violation of your Constitutional Rights.
If the Court were to apply the Lucas rationale to First Amendment cases, that's what they'd say. Consider a reporter in this hearing room, reporting on this hearing. A government regulator could come in and say, ''Let me see what you're going to write. Well, I'm not going to let you publish that in the paper. I'm not going to let you put it on television; I'm not going to let you put it on radio; but you can put it on the internet.'' Could you imagine the Court saying that there's been no violation of that individual's constitutional rights?
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But this is similar to the approach that the Court takes with regards to property rights. Or what about discrimination in employment? What if someone went to the IRS and said, ''I'm seeking employment,'' and they said, ''We don't hire people of your race?'' And then the individual went to the Department of Commerce which said, ''We don't hire people of your race either.'' They went to the U.S. Fish and Wildlife Service. Finally—finally—the Department of the Interior hires them. Could you imagine a court looking at that and saying, ''Well, not all of your opportunities for employment have been taken away, you did get a job, so there's been no violation of your constitutional rights.''?
I think it is clear that there is need to supplement the Fifth Amendment because the Court has really treated the Takings Clause like the red-headed stepchild of the Bill of Rights. And we have a rich history of supplementing our constitutional principles in this country. One of the criticisms leveled at our bill in South Carolina was that it's disrespectful to the Constitution. Well, my response was, I ask you this. Is the Civil Rights Act of 1964 disrespectful to the Fourteenth Amendment? Is the Voting Rights Act of 1965 disrespectful of the Constitutional guarantee of equal protection? Is the Administrative Procedures Act disrespectful of the constitutional requirement of due process? No, it's not. We have a rich history of supplementing constitutional principles when it is needed. And I think that it is clear that there is some need for Federal legislation in this area.
Now, another argument that I heard in South Carolina was that the will of the majority would be thwarted if this bill is passed—the will of the majority as it is expressed in comprehensive land use planning, and in environmental regulations. But you know, that is what the Bill of Rights is there for. And any legislation that is conceptually in the train of or of the same genre of the Bill of Rights is there to thwart the will of the majority—to protect the rights of the individual over and against the will of the majority. I think the Founding Fathers would be delighted to find that the will of the majority is thwarted when someone's property is about to be taken away by the government—when 80 percent, or 60 percent of the value of a citizens property is taken away.
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So, I think there is a need for this type of legislation and I think this legislation embodies the concept of the Golden Rule. You know, the Golden Rule says, do unto others as you would have them do unto you. We had the Lucas case down in South Carolina where David Lucas owned a piece of property, and had permits to build on it, legislation was amended, and the regulators came in and said you can't build a thing on your property. The property was worth $1.3 million, and many people stood by and applauded as the State Supreme Court in South Carolina said, ''The State is right, Mr. Lucas. You can't build on your property and you're not entitled to a dime.''
He had to spend years going to the U.S. Supreme Court to obtain relief, and it was no real relief. He spent years fighting in the courts, hundreds of thousands of dollars in attorneys' fees, and I will bet you a sizeable portion of my net worth that not one single individual who stood by and applauded as David Lucas's property was being taken from him and as he was stripped of over a million dollars of his net worth, I will bet you a sizeable portion of my net worth that not one of those individuals would hold the same view if they were in David Lucas's shoes.
You see, the problem with property regulation without requiring compensation is that it enables people to receive a benefit that they don't have to pay for. When government is required to pay for the public benefit, we see quite a different attitude on the part of government. Do you know what happened when the State of South Carolina got the property from David Lucas? They passed a variance—they passed a special variance allowing development on it, and they sold it, because, the state concluded it couldn't stand to pay that kind of money for the property. But they sure wanted Mr. Lucas to bear that burden on his own. We need legislation that has this inordinate burden language so that we don't inordinately burden people, like what happened to Mr. Lucas in South Carolina.
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I've gone over my time. Thank you, Mr. Chairman.
[The prepared statement of Mr. Campsen follows:]
PREPARED STATEMENT OF HON. CHIP CAMPSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH CAROLINA
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Mr. CANADY. Thank you, Representative Campsen. Mr. Scott is recognized.
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Mr. SCOTT. Thank you, Mr. Chairman. And Mr. Campsen, your discussion and reference to the fact that the will of the majority is really not relevant in a constitutional discussion is a point that is often missed around here. That if you have the rights, you've got them. It doesn't matter what the results were of a referendum. It doesn't matter what the—you pass a referendum, you cannot take away people's constitutional rights.
Mr. CAMPSEN. That's right.
Mr. SCOTT. It's nice to be reminded of that fact, that we do have some rights that the majority can't take away. Mr. Saunders, you indicated the standard—there was a fairness standard. Is that a workable standard that can consistently be applied? And predictably be applied?
Mr. SAUNDERS. In a section 1 case, well, in all fairness, Mr. Scott, you know that's what the Judiciary does with takings claims now and the constitution. They're individual, they're just, you know—one of the reasons we elected to go with this and not try to define for the Judiciary when we thought a takings case took place was because they are unique. They are factually-based, individual cases and they need to be decided on a case-by-case basis. In section 1 of the bill under the inordinate burden, there's an opportunity to build some case law in defining what an inordinate burden is——
Mr. SCOTT. You have a fairly young experience with the—when did the bill pass? Just a couple of years ago?
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Mr. SAUNDERS. It's been 2 years. So, it's really hard to say how it's going to be interpreted because none of the cases have actually gone to court. They have, in fact——
Mr. SCOTT. Have some—have some been settled?
Mr. SAUNDERS. Most—they have been settled or are pending. Two of the cases, to my knowledge, have been settled.
Mr. SCOTT. Okay, you have a loser pays provision in that process?
Mr. SAUNDERS. That's correct.
Mr. SCOTT. Is—if you reject an offer, if the rejection is reasonable but you still lose, do you owe the other side's attorney's fees?
Mr. SAUNDERS. That is how it is constructed. Uh——
Mr. SCOTT. So, you really have to gamble. It's not a question of an unreasonable refusal, it's any refusal and you're gambling the attorney's fees of the other side.
Mr. SAUNDERS. Correct. Correct. That was—part of the balancing act that we tried to play in this was, you know. We don't want a landowner just to bring a frivolous case and then go to court and make unreasonable claims.
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Mr. SCOTT. Well, we had Rule 11 on frivolous cases. Sometimes you can have a reasonable position and just happen to lose. Some of us believe that having to bet the farm on the results is a little unreasonable for the person that doesn't have real big pockets and can't afford to place the bet. Mr. Russman, you indicated—I think you said in your testimony that telling somebody not to pollute, which they shouldn't have been doing to begin with, shouldn't be calculated as a diminution in value. I can imagine that there are other things that you shouldn't be surprised about, a regulation that prohibits you from polluting, but you can be surprised by new regulation that comes out of nowhere, endangered species, or something, where you have a clear, significant dimunition of your use that cannot have possibly been predicted. Isn't there a difference between just general predictable zoning for public good and a directive not to pollute?
Mr. RUSSMAN. Well, I think specifically if there are statutes—whether the Endangered Species Act has some flaws in it or need some amendments, then that ought to be addressed. But, I mean, there is a greater good here in terms of whether it's regulating hog farms, or what have you, that—or nude dances, or anything along those lines of the Americans with Disabilities Act, that is working or working well but certainly if other areas, and I'm not sure that I'm answering your questions——
Mr. SCOTT. Well, if you've got a land area that is zoned for multifamily housing and you have plans, and whatnot, to build multifamily housing and an eagle builds a nest on that property, and the public good decides that we'd rather you didn't enjoy the value of your land, who should suffer the loss?
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Mr. RUSSMAN. Well, certainly in that particular case, that, perhaps, is an example of where the government should get involved and have to compensate the person in some fashion within certain parameters that would be set forth in the Endangered Species Act. And that is what I mean to say in terms of actually dealing with a specific act, rather than to try a broad brush and say that this should be applied across the board, irrespective of——
Mr. CANADY. The gentleman's time has expired. The gentleman will have two additional minutes.
Mr. SCOTT. Thank you, Mr. Chairman. So, basically, we're talking about what kinds of cases ought to be compensable, not whether or not the takings theory that's been advanced is a valid theory.
Mr. RUSSMAN. It needs to be on a case-by-case basis and, as I said in my remarks or at least in my testimony, that the Supreme Court has been giving very good guidance to planners, administrators and bureaucrats in terms of where the line is, and I hope would continue to do so.
Mr. SCOTT. Okay, Ms. Hayman, could you describe briefly what happens if a city decides to downzone some property, say, from multifamily zoning to single family, when the city council decides that the public good would be advanced? What happens to the property rights along that area or can the local property owners get an injunction against the downzoning?
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Ms. HAYMAN. Well, the injunction, of course, is always available. Whether they prevail or not is another story. You're talking about a rezoning issue. In Florida, rezonings are treated as different animals. They are no longer necessarily legislative decisions. We have a court case that came out, the Brevard County Board of County Commissioners v. Snyder, in which the Supreme Court told us that rezonings of small or single owner parcels would be considered quasi-judicial in nature. So——
Mr. SCOTT. Does that mean compensable?
Ms. HAYMAN. No, that's just the procedure that's followed.
Mr. SCOTT. Okay, well, if you wanted to downzone the property, would the landowners have the right for compensation? Or would their right be to enjoin you from downzoning them?
Ms. HAYMAN. They can certainly file and ask for an injunction. It would be up to the court to then decide whether the decision of the local government was arbitrary and capricious or whether it was reasonable. And those would be the standards——
Mr. SCOTT. But the local—the local landowner does not have a right not to be downzoned?
Ms. HAYMAN. The local landowner has the right to—yes, he may be downzoned, depending on whether it's consistent with the comprehensive plan, depending on whether the local government acted in a reasonable fashion and not arbitrarily and capriciously. Those are some of the standards that are used to make a decision of whether an injunction would lie.
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Mr. SCOTT. Thank you, Mr. Chairman.
Mr. CANADY. Thank you. Mr. Bryant.
Mr. BRYANT. Thank you, Mr. Chairman. I apologize for being late. I missed your oral statement but I have read your written remarks and I like you. I read here that you're known for your strong support for term limits, the death penalty, the line item veto, the balanced budget amendment and a return to biannual meetings for state legislature. It sounds good to me, and I don't understand why we can't agree on this one. [Laughter.]
Mr. BRYANT. Do you feel that there is a point if a landowner's use is not doing harm to his neighbors, if there is a point that a government can affect that use enough that the government ought to compensate that landowner.
Mr. RUSSMAN. Absolutely.
Mr. BRYANT. Where—is there a line that you could draw there?
Mr. RUSSMAN. It's—the problem is devils in the details. And I think that's, probably if we could do that, we wouldn't be here today. But, at the same time, there does have to be some balance, some reason. And because there have been so many more recent cases coming down from the Supreme Court dealing with this issue, I think that, and you're going to continue to see that, that that line is going to become a bit more firm with each decision as it comes by. And I think that we'll be able better to—to be able to define that. And I think the Supreme Court is doing a very effective job and a certainly good job in that respect.
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At the same time, I, for one, certainly would say that there is a point, and that is why it depends upon each particular case on a case-by-case basis, that the Court, in its wisdom, would have to decide, has the government overstepped and violated the person's Constitutional rights, and, therefore, taken the property that ought to be compensated. But, absolutely, there are points where we should not go. And that's why—in given statutes that we have already—that perhaps maybe overreaching or overstepping, we need to address those and make sure that people's property rights are protected.
Mr. BRYANT. Thank you. Ms. Hayman——
Ms. HAYMAN. Yes, sir.
Mr. BRYANT. There is a criticism of our position on this, that they're budget busters. And, of course, one thought that strikes me is well, no—I understand there are costs associated with that, but some of the money involved in this budget busting would have to go to landowners for their loss of use. And I just wonder, if they're being asked to suffer that loss and if they're not paid some. I mean, there's a lot of money involved here, and that's why I fall on the side of the property owner. Has your experience in Florida—I believe you're from Florida?
Ms. HAYMAN. Yes, sir.
Mr. BRYANT. Has it been that your implementation of your laws have busted the budget?
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Ms. HAYMAN. I can't honestly answer either way because none of the cases have come to fruition. Yes, we did offer that as a potential problem during the negotiations of the act. But right now, most of the problems are being negotiated out at the local level or any suits that have been filed or processes that have begun, they are still pending. So, we really don't have a real feel for that.
Mr. BRYANT. Senator, let me go back to you. I have just one quick question. We see, I don't know in your state as much of it, in my state of Tennessee we see the issue of farmers complaining about wetlands. Now, they are having land that is, in essence, being taken from them as they still own it. By legal title, they still pay taxes on it. But it is taken away and, since they cannot use it, they've owned the land for, it's been passed down from generation to generation, so it's not like they bought it with their eyes open that this was a wetland. Shouldn't they be compensated in some way for that?
Mr. RUSSMAN. I don't think, depending upon the extent. This is where you get into the balancing of what is the value of a wetlands area. And when he—that land was passed down to him, the land was wet. He knew it was wet or she knew it was wet, and certainly, that has some value. And as science has advanced and, perhaps, we recognize, albeit, that it's more and more value. At what point, if that's going to, say, dry up the water source for the town down below where the farmer lives, and that is part of his land, is it right to say that automatically he should be compensated?
I think the courts ought to take a look at that and, depending upon the extent of the wetlands and if there's any mitigation available and things of that nature, there ought to a dialog and if a dialog fails then the Supreme Court or some other court or competent jurisdiction ought to decide that issue. But it just shouldn't be an automatic where, if he has, say, 50 acres of wetlands, that he just automatically fills it in because he wants to put a shopping mall there or something.
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Mr. BRYANT. Thank you, Senator. I still like you, too. I still like you.
Mr. RUSSMAN. Thank you. [Laughter.]
Mr. CANADY. The gentleman from Michigan, Mr. Conyers.
Mr. CONYERS. Thank you, Mr. Chairman. Honorable Dean Saunders, you serve in the legislature?
Mr. SAUNDERS. I did.
Mr. CONYERS. You did. Up until how long ago?
Mr. SAUNDERS. Last year was my—four kids and I needed to make a little money and I decided not to run again.
Mr. CONYERS. Are you a lawyer?
Mr. SAUNDERS. No, sir, I'm not. I'm a real estate broker.
Mr. CONYERS. Real estate broker. Did you work with lawyers—I understand you're the lead author of the bill in your state?
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Mr. SAUNDERS. I am—there were probably three or four of us who played a significant role in it, Representative Conyers. Representative Bert Harris of Florida was kind of the grandfather of it, really. We named the Act after him.
Mr. CONYERS. Is he still in government?
Mr. SAUNDERS. No, sir, he is not.
Mr. CONYERS. He is not. He needed to make some money, too.
Mr. SAUNDERS. Well, I think after 78 years, I think he'd finally had enough. So——
Mr. CONYERS. Okay. Does any of your business that you work on making a little bit of money have anything to do with this legislation? And answer very carefully.
Mr. SAUNDERS. You—ask me the question again.
Mr. CONYERS. Okay. Does any of the activities that you do to make a little money have anything to do with this legislation? And answer the question carefully.
Mr. SAUNDERS. Not directly, no, sir, it doesn't.
Mr. CONYERS. Okay. Are you familiar with constitutional questions that deal with property?
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Mr. SAUNDERS. I am familiar with some of them, yes, sir.
Mr. CONYERS. Some of them. Did you know that there are people in the government in Florida that claim this to be an unconstitutional provision?
Mr. SAUNDERS. Well, they're entitled to their opinion, Representative Conyers. That's what the judges are for and the Judiciary is for and, if it's challenged under constitutional grounds, I am sure that they will issue a ruling. I fully expect, there's been talk of a couple of local governments challenging it, one of them challenged unconstitutional grounds the other day, and the judge said get out of here. You don't have any point——
Mr. CONYERS. So, in other words, the answer to my question is yes.
Mr. SAUNDERS. The answer to your question is that there are some people who question the constitutionality of it, yes.
Mr. CONYERS. Thank you. And you don't agree with the constitutional challenge that has been to this legislation in Florida?
Mr. SAUNDERS. No, sir, I don't. And again, you know, we have 400 and some odd local governments in 67 counties, all with attorneys, all elected officials. They're all entitled to their opinions and, again, certainly some of them question its constitutionality.
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Mr. CONYERS. And do you have any familiarity with the basis of the constitutional challenge?
Mr. SAUNDERS. In some terms, yes.
Mr. CONYERS. Okay, just between us, what's your idea of what the constitutional challenge is?
Mr. SAUNDERS. Well, one of them challenged it, basically saying that—well, I can't answer that specifically. Those were claims not on the constitutionality but based on other specific legal principles of the Act. They were—one, they won, and two, they were defeated on. Local governments challenging the Act.
Mr. CONYERS. So, you're really not familiar with what the constitutional basis of the challenge is?
Mr. SAUNDERS. Well, Representative Conyers, let's be frank about it.
Mr. CONYERS. Let's be frank.
Mr. SAUNDERS. You know, there are a lot of city attorneys who want to question the constitutionality of a lot of things because they don't like what the Act——
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Mr. CONYERS. But, you're not familiar with it.
Mr. SAUNDERS [continuing]. Does. No, sir, I'm not a lawyer and I'm not familiar with all those——
Mr. CONYERS. But—but that's—it's the problem——
Mr. SAUNDERS [continuing]. Challenges that they're raising but I don't think they have any application at all.
Mr. CONYERS. Well, that's interesting.
Mr. SAUNDERS. But that's what the Judiciary is for.
Mr. CONYERS. You don't know what the basis is but you don't think they have any valid claim.
Mr. SAUNDERS. This was a carefully crafted——
Mr. CONYERS. No, that wasn't a question. That was an observation that I made.
Mr. SAUNDERS. Okay.
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Mr. CANADY. The gentleman's time has expired. The gentleman will have two additional minutes.
Mr. CONYERS. I thank the Chair. So, if it were found, if this works its way to the United States Supreme Court and the Bert J. Harris, Jr. Private Property Rights Act is found to be unconstitutional, I presume you would read that case with great care.
Mr. SAUNDERS. If it were found to be unconstitutionable, and certainly if it were challenged and made it to the Supreme Court, I would be following it, yes, sir, because I have an academic interest in it.
Mr. CONYERS. Well, you have a more than academic interest in it. You have an economic interest in it, sir. Based on our discussion here this afternoon——
Mr. SAUNDERS. Well, I guess if you consider my 20 acre blueberry farm that I own with my father. Having an economic interest in private property rights, yes, sir, I guess that applies.
Mr. CONYERS. All right. Look, it's perfectly legal to come before this Committee and have an economic interest. I mean, that's not improper.
Mr. SAUNDERS. As a landowner, yes, sir, but I resent the impression that you're trying to——
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Mr. CONYERS. Inference.
Mr. SAUNDERS [continuing]. An inference that you're trying to suggest——
Mr. CONYERS. What benefits——
Mr. SAUNDERS [continuing]. That as my real estate brokerage business I somehow have some vested interest in this Act——
Mr. CONYERS. Oh, look—look, my friend, you and I have never met and I don't have any right to infer anything about your integrity. And if there's——
Mr. SAUNDERS. It certainly seems like you've been doing that in your questions.
Mr. CONYERS. Well, if I—if that's the impression you've drawn, I want to apologize right now, on the record, before our Committee, because that's not my intent.
Mr. SAUNDERS. I'll accept the apology.
Mr. CONYERS. Thank you very much and I'll stay away from this kind of questioning from now on. But on the constitutionality, what I would like to do, not in this round of questioning, is, if I can communicate with you further by mail or in person, you're always free to come into my office, I'd like to suggest to you that there may be some very serious constitutional grounds for this Act being thrown out.
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Mr. SAUNDERS. And what would those be, Representative Conyers?
Mr. CONYERS. Well, now, who is asking the questions at this hearing? [Laughter.]
Mr. SAUNDERS. Well, I mean, you questioned my knowledge of the Constitution and I——
Mr. CONYERS. I didn't question it. I sought information.
Mr. SAUNDERS. I just thought—since you were suggesting that it was, perhaps, unconstitutional, perhaps you might have some suggestions as to where——
Mr. CONYERS. I not only have some suggestions, I have far more than suggestions.
Mr. CANADY. The gentleman's time——
Mr. CONYERS. Thank you, Mr. Chairman.
Mr. CANADY [contiuing]. Has expired. So, I'll be asking the questions. Actually, I will follow up on that line of questioning and ask Ms. Hayman what arguments have been advanced against the constitutionality of the Florida statute. I won't ask you if you think it's unconstitutional, I'll just ask you what arguments have been advanced.
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Ms. HAYMAN. I'm aware of two. One, I don't know if it's actually been filed. There's been some discussion that the City of Miami Beach may be considering a challenge based on vagueness—a substantive due process challenge. There's also——
Mr. CANADY. Could you expand that? I mean, just——
Ms. HAYMAN. I really can't because I'm not involved——
Mr. CANADY. That's more like an assertion than an argument.
Ms. HAYMAN. I know. I haven't been——
Mr. CANADY. We can say that anything is arbitrary and capricious but——
Ms. HAYMAN. You know, I guess when you frame it in the lines of substitive due process it becomes a little more——
Mr. CANADY. The judges will know it when they see it?
Ms. HAYMAN [continuing]. Constitutional. Sir?
Mr. CANADY. The judges will know it when they see it?
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Ms. HAYMAN. Well, that's why they're there. [Laughter.]
Ms. HAYMAN. The second one that I'm aware of was raised in the city of West Palm Beach. And it was raised as to the citizens of the City asked, by initiative, which they have the right to do under the city charter, for the—either the chart code or the charter to be changed to lower a height requirement in the zoning code. Wait, I'm backwards. To raise it, to 15 feet versus 5 feet. The City challenged the constitutionality, I believe this is true.
Mr. CANADY. But what does that have to do with the ''Bert Harris Act?''
Ms. HAYMAN. And then filed the Bert Harris claim in addition. It's just—they were entwined by the facts, that's the only reason I raise that.
Mr. CANADY. Okay, but let me ask you this. Is it the position of the Florida League of Cities that the bill is unconstitutional? And being against the bill, did you argue that the bill would be unconstitutional if passed?
Ms. HAYMAN. I don't recall that, no.
Mr. CANADY. Are you aware of any of the opponents raising arguments that it was unconstitutional?
Ms. HAYMAN. I'm thinking. There may have been some testimony or arguments to that affect. In the working group, I don't recall that being raised. [Looks at Mr. Saunders.] I looked to Mr. Saunders because he attended some of those working groups.
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Mr. CANADY. Okay. Let me go back to something else you were talking about, Ms. Hayman. You mentioned some crackhouse litigation. I didn't quite follow that.
Ms. HAYMAN. The city—Okay——
Mr. CANADY. Do you want to try to give a——
Ms. HAYMAN. Sure, I'd be happy to expand on that. The city of St. Pete, through their nuisance board, closed down a crackhouse. It was proven to be an apartment house in which the drug crack was sold and used. And so the city closed it down for a period of 6 months, giving the landowner that period of time to clean up the house, to clean up——
Mr. CANADY. Find other, more reputable tenants.
Ms. HAYMAN [continuing]. The apartments. Ah, I'm not going to answer that. [Laughter.]
Ms. HAYMAN. But I'm sure it was the hope of the city. The landowner did not object during the nuisance abatement board processings which are quasi-judicial in nature whatsoever to the action of that board, then went forward after the fact and raised the specter of a possible Bert Harris claim. Instead of going through the Bert Harris process, he then went through the inverse condemnation process and, which is, if I may, just to digress one moment on that, is interesting because I also have been approached by many—by several, I can't say many, by several developer attorneys who have told me that they recommend to their developer clients that they go through the inverse condemnation process, rather than go through the Bert Harris process because it's so cumbersome and so unknown. They feel that the standards are clearer through the constitutional inverse condemnation——
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Mr. CANADY. But back to the——
Ms. HAYMAN. But back to the——
Mr. CANADY. Back to the crackhouse——
Ms. HAYMAN. Back to the crackhouse, the landowner prevailed at the Second District Court of Appeal, the city went forward to the Florida Supreme Court. The Florida Supreme Court denied review. We took it up to the United States Supreme Court. As I mentioned before, there were approximately 40 amici from around the nation, including the Illinois, California, New York and Michigan League of Cities and we had more coming in, past the filing time that wished to join in that suit, but we were denied cert.
Mr. CANADY. Without objection, I'll give myself two additional minutes. [Laughter.]
Ms. HAYMAN. Chair's privilege.
Mr. CANADY. The Second D.C.A. opinion was based on an interpretation of the United States Constitution?
Ms. HAYMAN. Yes.
Mr. CANADY. Okay. We'll move on from that. Let me ask Representative Saunders and Representative Campsen to address this. And, in your work on this issue with respect to state legislation, have you become aware of circumstances that you believe would justify Congress in passing legislation on the same subject, particularly with respect to regulation under the Endangered Species Act and wetlands regulations, or anything else? Representative Saunders.
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Mr. SAUNDERS. Thank you, Mr. Chairman. Representative Canady, I would suggest that Senator Russman has a point when he suggests that there maybe some specific remedies under special laws and acts that may provide some relief. The thing that I think—the beauty about what we did in Florida was we said, what is the real problem? What's the focus? What's the issue? We decided against, remember, against trying to define constitutionally what a taking is. We said, let's create a new remedy. And we heard landowners tell us we want to use our property. Now, we know we're not going to be able to get everything we want, but we've got to have some way to focus on that. And that's what we did in our legislation. I would suggest to you that there are a lot of folks who are hampered by Federal regulations, as well, who would like to be able to use their property but are somehow prohibited from doing it. Is there a better way to build a mousetrap without undermining the laws and regulations that you have? We created that sort of a situation. We've basically, if you really want to boil it all down to the chase, we created the ability to have a glorified variance procedure without changing the laws, without changing the rules, or regulations, so that a specific landowner could get some relief in variance to it to use his property. In the Endangered Species Act, I would again say, focus on the issue. We want to protect species habitat. Landowners want to continue to use their property. Can you do both? Absolutely. Talk to the landowner. Find out what he's interested in.
Mr. CANADY. My—my additional time has expired. Without objection, I will give myself one additional minute.
Mr. CANADY. Representative Campsen, do you want to briefly comment on that same point?
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Mr. CAMPSEN. Yes, I think there would be—there's a call for some type of Federal legislation because—the Federal Government is not subject to the jurisdiction of our state legislation. And much of our regulatory scheme that affects property in this country has an etiology or origin with the Federal Government, even many programs administered by the state. And those of us even—those of us who are involved in government were surprised to learn that, oftentimes, even though it's a State agency or a State staff individual enforcing a regulation, it really has a Federal origin.
And so, if we feel like property rights need to be buttressed in this country, really the states and the Federal Government have a role because of the differing levels of legislation and I'd like to make one other comment that I didn't have a chance to get really into. But this bill really is not—a lot of charges have been thrown against the Florida Act and our act which is so similar that's it's vague, but it really is built upon principles of existing law. I mean, principles of equitable estoppel, imminent domain law, the constitutional law of takings, the due process concept of vested rights—very established law. And I commend it to your Committee for consideration of similar Federal legislation.
Mr. CANADY. Well, thank you very much again.
Mr. SCOTT. Chairman, could I ask a——
Mr. CANADY. Mr. Scott, you're recognized.
Mr. SCOTT. Thank you. Representative Campsen, did I understand you to suggest that if we pass Federal regulations that are implemented by the States, that that might trigger the compensation by the State?
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Mr. CAMPSEN. No, I did not.
Mr. SCOTT. Would that—if—in Florida, I guess, Ms. Hayman, if we pass Federal legislation that's implemented by the state, could that trigger a taking by the state for which compensation would have to be paid by the State?
Mr. CAMPSEN. No, in our act, that is specifically excluded.
Mr. SCOTT. Is it——
Mr. CAMPSEN. Federal regulations enforced by the states or excluded, and I think it would not be constitutionally permissible, even if we did not have that provision in our act for such regulation to fall under purview of the act.
Mr. SCOTT. Okay. You're in New Hampshire. What about Flor——
Mr. CAMPSEN. No, South Carolina.
Mr. SCOTT. Excuse me, South Carolina. What about Florida?
Ms. HAYMAN. The Florida Act does exempt from the definition of ''inordinate burden'' in the Act any Federal actions, because we can't touch Federal actions. But if you were to adopt a Federal act that would preempt our ability at the state to legislate on the issue preempt or supplement, however you adopt it, yes, we would be possibly subject to having to provide compensation.
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Mr. SCOTT. Okay. In another question, you said only a couple of cases have been settled. Can you give us—we have seen a lot of shocking cases of claims being filed, and there's a difference between claims being filed and claims being paid. Can you give us an example of some that have actually been paid?
Mr. SAUNDERS. I can give you some examples of claims that have been filed. Again, none have been paid. There's not been any monetary——
Mr. SCOTT. I'm not interested in the ones that are filed because they can——
Mr. SAUNDERS. Well, these have been——
Mr. SCOTT [continuing]. They have not been particularly instructive.
Mr. SAUNDERS. These cases have been settled or they were—you know, our act has only been—is only 2 years old. One situation involved a city where a gentleman had a communications tower. He wished to erect two more communications towers. The city told him, we don't want you to do that. He filed a claim for $1.8 million. The city contacted a lawyer who I actually spoke to yesterday about this. He said, they actually asked me to help them, Dean. He said, they knew they were in trouble; that they had a problem and they wanted to settle it, and so they settled on allowing the landowner to build one communications tower according to where they wanted it built; not the two that he wanted; not the way he wanted to do it, but he was able to build one, and both parties left satisfied.
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In another case filed against the water management district, landowners sought to develop some property; the district opposed it. The brought a Harris Act claim. It was subsequently ruled that the ordinance he was actually attacking was prior to the May 11th trigger date, so he really had no claim, but because of this act, they were forced to sit down and talk together, and they worked it out. Now the landowner has not continued to seek doing that.
Under section 2 of the bill which is the mediation part which goes back retroactive, there have been a number of cases that have brought, primarily on vested rights, that have been settled, but I would like to point out that section 2 of the bill requires the Government to ratify it. A typical situation: the landowner says, ''I'm denied. I'm pulling you in to the special master process.'' The special master meets; he makes a recommendation. The county sends their county attorney; they negotiate with the landowner, then it must go to the county commission for ratification. All those situations, about 10 of those cases, have been settled with the approval of the county commission.
In one particular situation, the gentleman clearly has vested rights. He's done everything the county's told him to do to vest those rights, but the county commission does not want to adopt it even though they've got a former circuit court judge well regarded in the community who has acted as the special master; made the recommendation; said, ''You guys are trampling all over his rights.'' They voted 3 to 2 to not do it. I think that could be considered a weakness, but it also points to the arguments of the communities that say, ''We don't have any rights in this.'' They don't have to do it. It's only if it makes sense, and if they want to take their chance in court, that's what's happened, because now the gentleman is right, and he can take his case to circuit court, and the judge will rule. Thank you.
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Mr. CANADY. Thank you, and, again, I want to thank the members of this panel for your testimony. It has been very interesting and very helpful. We appreciate your taking the time to be with us today.
Ms. HAYMAN. Thank you.
Mr. CANADY. And now I'll ask that the members of our second and final panel come forward and be seated.
There are three members on this panel, and on our second panel we will first hear from Professor Steven Eagle. Professor Eagle teaches at the George Mason University School of Law and is an expert on property rights and constitutional law.
The subcommittee will then hear from Professor Harvey Jacobs. Professor Jacobs teaches at the University of Wisconsin at Madison where he is Chair of the Department of Urban and Regional Planning.
And finally this afternoon, we will hear from Nancie Marzulla. Ms. Marzulla, a leading authority on property rights law, is President and Chief Legal Counsel of Defenders of Property Rights. She is also the co-author of Property Rights: Understanding Government Takings and Environmental Regulation.
I want to thank you all for being with us here this afternoon. I would ask that you do your best to summarize your testimony in 5 minutes or less although, as you have probably observed, we have not strictly observed the 5 minute rule. Your full written statements will, without objection, be made a part of the permanent record of the hearing. Again, we thank you for being with us.
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We'll begin with Professor Eagle.
STATEMENT OF STEVEN J. EAGLE, PROFESSOR OF LAW, GEORGE MASON UNIVERSITY SCHOOL OF LAW
Mr. EAGLE. Thank you, Mr. Chairman and members of the subcommittee. I appreciate this opportunity to testify here today. I think it's especially appropriate that the subcommittee is looking to the States for potential solutions to property rights issues, because, after all, the States are the primary guardian of our individual rights. Some States have, in fact, developed some worthwhile solutions that the Congress should explore.
The main solution that I want to speak with you about, although I will mention some of the others, is that regarding ripeness legislation that is specifically addressed by the Harris Act in Florida. I think that non-lawyers have little idea of the immense complexity involved in bringing any kind of Fifth Amendment takings challenge in the Federal courts.
In his testimony in the first panel, Representative Campsen mentioned the fact that it would be rather incongruous if a State could take away your freedom to say some things, and then deny that you have a claim because it allowed you to say others. I think it's equally incongruous if a State were to say, ''Submit your speech to us; we will then decide whether you can give it, and we would be happy to engage in a long-drawn-out negotiation process with you. We will go over your speech, clause by clause, and each time we look at it, we would suggest that, ''Well, it might pass muster if you tweak it a little more and change this clause and take out that paragraph and so on.'' If it turned out that the State never did reject a speech, because it knew that would make it suspect to a Federal court challenge, so it always kept suggesting modifications, but rarely accepted a speech as making its high standards, this process could go on for 10 years.
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Now, I think the subcommittee would readily recognize that this would be a ludicrous denial of a person's First Amendment rights. But that, the same logic summarizes the current situation with respect to the Fifth Amendment.
In pages 11 and 12 of my written testimony, I quote from Justice Brennan, who certainly was no enemy of activist Government. In 1986, he warned about the fact that municipal officials were being instructed in training courses to avoid any final negative land use decisions, because that's what would trigger the possibility of a takings review.
The Florida statute provides for a 180-day period, after a demand from a property owner, during which the governments that have propounded regulations would have to issue a so-called ''ripeness decision;'' in other words, they would have to give a definitive statement of what the owner is allowed to do with his or her land, and that statement would be the basis for judicial review.
Now, the Supreme Court's patchwork doctrine creates an incredibly high ripeness threshold with many prongs and branches—the mere tip of the iceberg of which is alluded to in my written statement. This situation is a self-inflicted wound. There is no constitutional reason why the Federal courts can't hear most of these cases. Rather, the Supreme Court has strung out a prudential reason why the courts won't hear them. Essentially, it boils down to the fact that the Supreme Court and Federal Judges generally don't like to be super zoning boards; and don't like to get involved in the minutia of land use regulation. I suppose, equally, judges don't like having to read dirty books or dirty movies to see where the limits of free speech are. But they understand that's their duty. If this Congress adopted a requirement with respect to Federal agency actions that there be a ripeness statement, certainly that could be done. Since the ripeness rule is mostly a prudential and not a constitutional requirement, Congress may pass legislation requiring the courts to act upon the stated reasons given by the local governments after an opportunity for them to raise them.
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The second point I want to raise is the need for a fairer standard of owner compensation along the lines—if I may continue briefly, Mr. Chairman—along the lines of the Florida ''inordinate burden'' standard. Right now, the U.S. Supreme Court in the Penn Central case, which is still for most purposes our standard of takings, has adopted an ''ad hoc'' test; a vague balancing test; a test giving extreme deference to local government. For the Congress to propound a new standard along the lines of ''inordinate burden'' would signal to the courts that they have to draw the line further toward reasonableness, perhaps along the line of the Supreme Court's rough proportionality test in its recent Dolan decision.
Now, if the Court did this with respect to Federal activities or federally-funded State activities only, I don't think there would be a serious constitutional issue. Granted, if the Congress did this with respect to State actions generally, then you get a problem along the lines we just saw in the City of Boerne v. Flores case.
I think, though, that these two elements—having a ripeness test that's reasonable and having a substantive test along the lines of the Florida inordinate burden test—are absolutely required. The impact analysis along the lines of NEPA and along the lines of that adopted by seven States is imperative as well. Thank you.
[The prepared statement of Mr. Eagle follows:]
PREPARED STATEMENT OF STEVEN J. EAGLE, PROFESSOR OF LAW, GEORGE MASON UNIVERSITY SCHOOL OF LAW
Mr. Chairman, distinguished members of the subcommittee:
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My name is Steven J. Eagle. I am a professor of law at George Mason University.
I testify today in my personal capacity as a teacher of property and constitutional law whose principal interest is the study of regulatory takings. I want to thank the subcommittee for giving me this opportunity to testify on what the Congress might learn from the states that have developed innovative legislation for the protection of private property rights.
The problem of defining property rights often has been called intractable and the problem of enforcing property rights is difficult. But I have confidence that well-advised congressional action can play an important role in vindicating individual rights. I hope that my testimony will assist the subcommittee in its efforts.
Recommendations for Subcommittee Consideration
At the outset of my formal testimony, I think it would be useful for me to present those aspects of state approaches to protecting property rights that I think would be most germane to federal legislation and worthy of subcommittee consideration. The points made here are explained in the balance of my testimony.
Consider granting owners access to federal court through adoption of a Florida-style ''ripeness decision'' requirement
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The present federal ''ripeness test'' allows state agencies to play almost-endless games in order to avoid giving property owners a ''final decision'' upon which they could sue in federal court. Since ripeness in this context is a matter of prudence rather than of Constitutional import, Congress should provide affirmative access to the federal courts to owners who do not receive a timely and definitive statement of their rights from agencies that regulate their lands.
Consider establishing a fairer substantive standard for owner compensation along the lines of the Florida ''inordinate burden'' standard.
This might be accomplished through ordinary legislation with respect to actions of federal agencies. It might be effectuated for actions of state agencies as well, through Congress's power under Section 5 of the Fourteenth Amendment.
Consider establishing strong statutory requirements for takings impact assessments for federal actions along the lines of the Texas statute (or Executive Order 12,630).
Property owners aggrieved by the absence or insufficiency of takings impact assessments should be granted the right to raise these claims in federal court. If they prove correct, they should benefit from a presumption that the agency could not meet its burden to demonstrate the necessity for the regulation or action.
Consider establishing a ''pay or withdraw'' requirement for federal actions that significantly affect property rights along the lines of the Texas statute.
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Federal agencies now have to pay compensation for the period during which regulations subsequently determined to violate the Takings Clause are in effect. First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987). However, the case allows for ''reasonable delays,'' and, as a practical matter, First English damages rarely are obtained. A statute that provides for an expedited review of a agency action, followed by a clear requirement that it quickly pay permanent compensation or withdraw an impermissible regulation, should pass muster under First English and will make almost all affected owners better off.
The Importance of ''Property''
The protection of the individuals right to property has been a fundamental tenant of American jurisprudence. I have developed this theme at some length in my takings treatise and in my Senate testimony on property rights protection during the 104th Congress. Steven J. Eagle, Regulatory Takings, 39–74 (1996); Testimony, Oversight Hearing Before the Senate Committee on Environment and Public Works, The Likely Effects of Pending Proposals to Legislatively Redefine the Constitutional Right to Just Compensation for Property Owners (H.R. 925, S. 605) July 12, 1995. [Available on Westlaw, 1995 WL 412477.] Here, I will simply note that the total deprivation of a person's property was deemed by the Supreme Court in Lucas v. South Carolina Coastal Council to be ''inconsistent with the historical compact recorded in the Takings Clause that has become part of our constitutional culture.'' 505 U.S. 1003, 1028 (1992). As the Court declared in Lynch v. Household Finance Corp.: ''Property does not have rights. People have rights. . . . 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.'' 405 U.S. 538, 552 (1972).
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The Nature of the Problem
By now members of the Congress are well aware of the popular dissatisfaction resulting from arbitrary or Draconian regulations. During the 104th Congress the House of Representatives passed H.R. 925, the Private Property Protection Act of 1995. The Senate Judiciary Committee reported out S. 605, the Omnibus Property Rights Act of 1995. The House bill would have provided compensation where the regulatory diminution exceeded twenty percent of value and the Senate bill where it exceeded thirty-three percent of value. However, the House bill applied only to federal actions under the Clean Water Act, the Endangered Species Act, and provisions of the Food Security Act of 1985. The Senate bill was considerably broader in scope. While neither bill ultimately was enacted, the strong support that they received attests to a growing congressional responsiveness to the property rights issue. The resentment of citizens who have suffered large monetary losses due to the casual disregard of their property rights continues to impel protective legislation. Not infrequently, the fact that officials may commandeer property rights without paying for them leads to the institution of programs that are feasible only if their real costs to landowners are disregarded. Even where actions that result in the loss of property rights are perfectly justified, failure to compensate still is a moral and Constitutional wrong. ''The Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'' Armstrong v. United States, 346 U.S. 40, 49 (1960).
Since these hearings concern mechanisms for property protection rather than the need for it, I will not rehearse the governmental actions that have awakened a large segment of the public to the need for reform. There is by now a considerable literature in this area. I will cite to a few sources containing references to others: Jonathan Adler, Environmentalism at the Crossroads (D.C.: Capital Research Center, 1995); James V. DeLong, Property Matters (N.Y: The Free Press, 1997); Richard Pombo and Joseph Farah, This Land is Our Land: How to End the War on Private Property (N.Y.: St. Martins Press, 1996).
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Likewise, I will not rehearse the line of United States Supreme Court cases that have led to the erosion of property rights protection. These include Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), in which the Court gave carte blanche to the new disciplines zoning and planning without careful qualification; Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), where it combined ''ad hoc'' adjudication coupled with great deference towards governmental officials; and United States v. Riverside Bayview Homes, 474 U.S. 121 (1985), where the Court deemed it reasonable for occasionally damp lands to be classified as navigable waters of the United States.
In fairness, at times judicial actions that seem excessive do accurately reflect legislative intent, or at least legislative aspirations as inserted in statutes. Such was true in the well-known Endangered Species Act ''snail darter'' case, Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978). Chief Justice Burger noted that it might ''seem curious'' that the ''survival of a relatively small number of three-inch fish among all the countless millions of species extant would require the permanent halting of a virtually completed dam for which Congress has expended more than $100 million.'' However, ''the plain language of the Act, buttressed by its legislative history, shows clearly that Congress viewed the value of endangered species as ''incalculable.'' Id. at 187–188. While Congress might intend ''incalculable'' benefits from statutes such as the ESA, it clearly is not prepared to levy ''incalculable'' taxes to pay for them. Courts then are relegated to the options of declaring parts of popular programs unconstitutional, or of countenancing the diminution of property rights that agencies utilize to remain within authorized expenditure levels.
State Takings Legislation
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The failure of the courts to provide sufficient protection to private property rights has led to the introduction of protective legislation in almost every state. For an overview, see Nancie G. Marzulla, ''State Private Property Rights Initiatives as a Response to 'Environmental Takings,' '' 46 S. Cal. L. Rev. 613 (1995).
As of earlier this year, at least seventeen states have passed property rights legislation.
These are listed in the Appendix, and comprise Delaware, Florida, Idaho, Indiana, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, North Dakota, Tennessee, Texas, Utah, Washington, West Virginia, and Wyoming. In addition, North Carolina has a very limited statute. It is somewhat difficult to generalize about the contents of these statutes, since there are many variations. My goal here is to divide the statutes into two general classifications and to highlight the features that are or are not desirable in federal legislation.
Takings Impact Assessment Statutes
The most common type of enactment is the so-called ''assessment'' statute. These statutes require an assessment of whether the intended actions of state agencies constitute ''takings,'' as the courts now interpret that term. (All of the state statutes discussed in my testimony provide for prospective application only.) An agency determining that its actions would constitute a ''taking'' would either have to modify it to as to not run afoul of the Constitution or else provide compensation. These statutes have an inspiration—and a model.
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The inspiration is the assessment mechanism established in the National Environmental Policy Act of 1969 (NEPA), 42 USCA §4321, 4332(2)(C). The Act imposes broad planning and assessment requirements on federal agencies. See 40 C.F.R. §1500.2. The model is the Reagan Administration's Executive Order 12,630, entitled ''Governmental Actions and Interference With Constitutionally Protected Property Rights.'' 53 F.R. 8859 (1988), reprinted in 5 U.S.C. §601. The Order requires that federal agencies consider evaluate their prospective actions in light of guidelines promulgated by the Attorney General based on current Supreme Court jurisprudence. While the sufficiency of the assessment under NEPA has proved outcome determinative in numerous cases, E. O. 12,630 did not provide for private rights of enforcement.
A recent article by Professor Mark Cordes includes a handy compilation of state property rights laws. Mark W. Cordes, ''Leapfrogging the Constitution: The Rise of State Takings Legislation,'' 24 Ecology L.O. 187 (1990). Cordes groups the states into those in which the attorney general decides if agency rules are in compliance (Indiana and Delaware); those in which agencies may make their own informal determinations pursuant to attorney general guidelines (Idaho, Michigan, Tennessee); and those requiring agencies to prepare formal, written analysis that must include assessments of alternative actions that might have less impact on property rights (Kansas, Louisiana Montana, North Dakota, Texas, Utah, West Virginia). Of this last group of states, some require an estimate of the cost of compensation and the source of payment (Louisiana, Montana, North Dakota, West Virginia). Finally, Kansas, Utah, West Virginia, Louisiana, and North Dakota require that the assessment contain an affirmative justification for the restriction. Id. at 206–208.
The scope of these regulations also varies significantly. A few states limit the assessment process to select state agencies (West Virginia, Michigan). About half of the states impose their requirements on all state agencies, but not political subdivisions (Delaware, Kansas, Montana, North Dakota, Tennessee, Utah). Four states include both state agencies and all or most local governments (Washington, Idaho, Texas, Louisiana). Id. at 208.
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Three states preclude judicial review of the assessments (Idaho, Kansas, Washington). Two states require limited judicial review (Delaware to ensure that the attorney general has reviewed the rule in question and Texas for voiding the action, but only if no assessment has been prepared). Other states have no explicit rule. Id. at 210.
Compensation Statutes
Unlike the assessment statutes, the compensation statutes do provide relief to adversely affected landowners. These statutes preclude compensation where the proscribed use constituted a common law nuisance. Some proposed legislation would have required compensation if there had been any diminution in value due to the restriction. The best known example is Washington, where a measure was enacted but then overturned by statewide referendum.
Four states have enacted compensation statutes. Mississippi requires that just compensation be paid for regulation of agricultural and forest land causing a forty percent diminution in value. Miss. Code Ann. §49–33–1 to –19 (Supp. 1996). Louisiana's similar law is triggered by a twenty-percent diminution. La. Rev. Stat. Ann. §3:3601–02 (West Supp. 1997). Both statutes refer to the ''affected'' land or ''part'' of land.
The Texas statute
The Texas law, passed in 1995, is a combined assessment and compensation statute. Tex. Gov't Code Ann. §2007.043(a). It provides for a written and comprehensive review of the proposed action and alternatives and for judicial relief should no analysis be undertaken. Most importantly, it provides that were there is a twenty-five percent diminution in value the agency either must pay or must withdraw the regulation or action. The statute exempts cities, defers applicability to counties until 1997, and also exempts ''good faith'' emergency responses to threats to life or property and responses to threats to the public safety or health that do not create unnecessary burdens. The statute defines a taking in terms of whether the action ''affects an owner's private real property . . . in whole or in part or temporarily or permanently . . . and is the producing cause of a reduction of at least 25 percent in the market value of the affected real property.'' It is unclear whether the 25 percent diminution could be applied to the affected segment of the parcel or must be applied to the parcel as a whole. Some commentators suggest the latter approach. See Cordes, 24 Ecology L. Q. at 216–217; Jerome M. Organ, ''Understanding State and Federal Property Rights Legislation,'' 48 Okla. L. Rev. 191, 214 (1995).
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The Florida statute
Florida's ''Bert J. Harris, Jr., Private Property Rights Protection Act'' is the most innovative of the state property rights statutes. Fla. Stat. Ann. §70.001 (West Supp. 1997). Its compensation trigger point is not a set percentage diminution, but rather the imposition of an ''inordinate burden.'' §70.001 (2).
The terms ''inordinate burden'' or ''inordinately burdened'' mean that an action of one or more governmental entities has directly restricted or limited the use of real property such that the property owner is permanently unable to attain the reasonable, investment-backed expectation for the existing use of the real property or a vested right to a specific use of the real property with respect to the real property as a whole, or that the property owner is left with existing or vested uses that are unreasonable such that the property owner bears permanently a disproportionate share of a burden imposed for the good of the public, which in fairness should be borne by the public at large. The terms ''inordinate burden'' or ''inordinately burdened'' do not include temporary impacts to real property; impacts to real property occasioned by governmental abatement, prohibition, prevention, or remediation of a public nuisance at common law or a noxious use of private property; or impacts to real property caused by an action of a governmental entity taken to grant relief to a property owner under this section. §70.001(3)(e).
This provision in some respects tracks takings tests propounded by the Supreme Court, particularly the ''investment backed expectations'' language in Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978). On the other hand, the ''disproportionate share of a burden imposed for the good of the public'' language is new. While its rhetorical genesis might be in the previously quoted ''fairness and justice'' declaration in Armstrong v. United States, 346 U.S. at 49, that formulation was a dictum. A strong case that the language of the Florida act is intended to be more than dicta can be made from its first section:
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. . . The Legislature recognizes that some laws, regulations, and ordinances of the state and political entities in the state, as applied, may inordinately burden, restrict, or limit private property rights without amounting to a taking under the State Constitution or the United States Constitution. The Legislature determines that there is an important state interest in protecting the interests of private property owners from such inordinate burdens. Therefore, it is the intent of the Legislature that, as a separate and distinct cause of action from the law of takings, the Legislature herein provides for relief, or payment of compensation, when a new law, rule, regulation, or ordinance of the state or a political entity in the state, as applied, unfairly affects real property. §70.001 (1) (emphasis added).
The Florida statute also contains procedural provisions that are innovative and potentially very important. The first is its careful provision for the award of damages. The trial court is charged with ascertaining whether the owner had a property right that was inordinately burdened. If so, it would ascertain the percentage of compensation due from each governmental entity involved, if there is more than one. §70.001(6)(a). At this point a jury is empanelled to determine the amount of compensation owed.
. . . The award of compensation shall be determined by calculating the difference in the fair market value of the real property, as it existed at the time of the governmental action at issue, as though the owner had the ability to attain the reasonable investment-backed expectation or was not left with uses that are unreasonable, whichever the case may be, and the fair market value of the real property, as it existed at the time of the governmental action at issue, as inordinately burdened, considering the settlement offer together with the ripeness decision, of the governmental entity or entities. . . . §70.001(6)(b).
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Perhaps most important, the Florida act develops an innovative mandate that the agency issue to the owner a ''ripeness decision.''
During the 180-day-notice period [prior to the owner being permitted to file an action], unless a settlement offer is accepted by the property owner, each of the governmental entities provided notice . . . shall issue a written ripeness decision identifying the allowable uses to which the subject property may be put. The failure of the governmental entity to issue a written ripeness decision during the 180-day-notice period shall be deemed to ripen the prior action of the governmental entity, and shall operate as a ripeness decision that has been rejected by the property owner. The ripeness decision, as a matter of law, constitutes the last prerequisite to judicial review, and the matter shall be deemed ripe or final for the purposes of the judicial proceeding created by this section, notwithstanding the availability of other administrative remedies. §70.001(5)(a).
The ripeness decision also serves the same function as a settlement offer, providing a baseline against which the court could measure whether the limitation of the owner to uses provided in that decision would constitute an ''inordinate burden.''
How Congress Might Benefit From State Approaches to Protecting Property Rights
The treatment of property owners by the federal government and by the states has been deficient in two principal ways. The first is that property rights are defined too narrowly. The second is that those property rights that are recognized are insufficiently protected.
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Expanding the Definition of Property Rights
At present, private property rights are not protected in the manner that the Due Process clauses of the Fifth and Fourteenth Amendments and the Takings Clause of the Fifth Amendment in my opinion require. The vague, overly-deferential, and ad-hoc balancing test of Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), still controls in most circumstances. Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), requires compensation where there has been a complete deprivation of all economic enjoyment, but no governmental agency rationally would take and pay for 100% of value when it could take 95% and pay nothing. A case that might prove more effective in protecting property rights is Dolan v. City of Tigard, 512 U.S. 374 (1994). However, while the Court in Dolan does provide for a ''rough proportionality'' between governmental exactions on development and the burdens imposed on government by that development, the principle so far applies only to ''adjudicative determinations.'' Id. at 385. While Justice Clarence Thomas eloquently has raised the question of why an unreasonable exaction can constitute a taking if imposed by a city agency but not by a city council, the Court has been unwilling to consider the issue. See Parking Association of Georgia v. City of Atlanta, 115 S.Ct. 2268 (1995) (Thomas, J., dissenting from denial of certiorari).
In my view, the Congress has the right to expand the Constitutional protections for property rights beyond the Supreme Court's current interpretation using its powers under Section 5 of the Fourteenth Amendment. The basis for this view is that state deprivations of property rights are essentially violative of due process, and also because the circumstances that recently led the Supreme Court to strike down an exercise of Congress's power under Section 5 are not applicable here. City of Boerne v. Flores, 117 S.Ct. 2157 (1997). In the Boerne case, the Court found that the Religious Freedom Restoration Act ''is so out of proportion to a supposed remedial or preventive object that it cannot be understood as responsive to, or designed to prevent, unconstitutional behavior.'' Id. at 2170. In the property rights area, however, a long and detailed history of deprivations does justify invocation of Congress's remedial power to enforce the Fourteenth Amendment under Section 5. Furthermore, it was in Chicago, Burlington & Quincy R.R. v. Chicago, 166 U.S. 226 (1897), that the Court first required that a state entity compensate a landowner whose property it had taken. The Court noted that the Fourteenth Amendment Due Process Clause regulated the substance, as well as the form, of a taking. Id. at 234–35. Tellingly, the Court now interprets this case not as providing substantive due process, but rather as incorporating the bill of rights into the Fourteenth Amendment. See Ronald D. Rotunda, et al., Treatise on Constitutional Law: Substance & Procedure §15.11 n.29 (1986, 1991). Whether the federal remedy for uncompensated takings by the states is limited to the Fifth Amendment Takings Clause as incorporated in the Fourteenth Amendment, or includes the Fourteenth Amendment Due Process Clause, is still hotly contested. See Justice Stevens' argument favoring the Due Process approach in Dolan v. City of Tigard, 512 U.S. 374, 405–407 (1994) (Stevens, J., dissenting), and the sharp retort in the majority opinion written by Chief Justice Rehnquist. Id. at 383–384 & n. 5.
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Congress might prefer a statutory alternative, which would be sufficient for takings arising from federal agency actions and could be imposed as a condition to the receipt of federal funds by state and local programs. The Florida Private Property Rights Protection Act's ''inordinate burden'' standard is yet to be fleshed out. However, it clearly is intended to be broader than the Supreme Court's current Fifth Amendment takings requirements. Congressional should give serious evaluation to implementing such a standard.
Expanding Procedural Protections for Property Rights
As I have noted, I fault as too weak the Supreme Court's ad hoc regulatory takings test enunciated by the late Justice William Brennan in Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978). However, to the extent that Justice Brennan did recognize property rights, he was vociferous in objecting to the artifices by which government thwarts them. Indeed, the term ''regulatory taking'' first appeared in a Supreme Court opinion in Justice Brennan's dissent in San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 621, 636 (1981). There he asked the rhetorical question if ''a policeman must know the Constitution, then why not a planner?'' Id. at 661 n.26. Why should not a government official with the power to rearrange the landscape of cities take individual rights as much into account as a prosecutor charged with ferreting out crime must take into account the constitutional rights of suspects?
The ''Ripeness Test'' Deprives Owners of Recourse to Federal Court
One sometimes-forgotten aspect of Justice Brennan's dissent in San Diego Gas is of particular importance in this subcommittee's work. Brennan attacked the fact that, even in those rare instances where the courts did find that a regulation constituted a compensable taking, government typically would not take ''no'' for an answer. ''Invalidation hardly prevents enactment of subsequent unconstitutional regulations by the government entity.'' 450 U.S. at 655, n.22.
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He quoted remarks and publications by planners showing how changes in regulation could be used to pile delay upon delay:
At the 1974 annual conference of the National Institute of Municipal Law Officers in California, a California City Attorney gave fellow City Attorneys the following advice: 'IF ALL ELSE FAILS, MERELY AMEND THE REGULATION AND START OVER AGAIN.' 'If legal preventive maintenance does not work, and you still receive a claim attacking the land use regulation, or if you try the case and lose, don't worry about it. All is not lost. One of the extra ''goodies'' contained in the recent [California] Supreme Court case of Selby v. City of San Buenaventura, 10 C. 3d 110, [109 Cal. Rptr. 799, 514 P.2d 111 (1973)] appears to allow the City to change the regulation in question, even after trial and judgment, make it more reasonable, more restrictive, or whatever, and everybody starts over again.' * * * 'See how easy it is to be a City Attorney. Sometimes you can lose the battle and still win the war. Good luck.' '' Longtin, ''Avoiding and Defending Constitutional Attacks on Land Use Regulations (Including Inverse Condemnation),'' in 38B NIMLO Municipal Law Review 192–93 (1975) (emphasis in original). Id.
The most distressing aspect of this situation is that almost nothing has changed. One needs to look no further for confirmation than the Supreme Court's May decision in Suitum v. Tahoe Regional Planning Agency, 117 S.Ct. 1659 (1997). Bernadine Suitum, an elderly woman in frail health, had purchased with her husband a subdivision lot near the Nevada shore of Lake Tahoe. Construction of their dream house had to be deferred because of his illness and death. When she finally was ready to build, Mrs. Suitum's requested permission from the agency, which regulates land use in the region. It turned her application down, applying a general growth-control formula to determine that her property was ineligible for development. No special characteristic of her lot or plans was questioned. The agency did give her allegedly valuable ''Transferable Development Rights,'' which could be sold by her to a developer in another area. Ownership of the TDRs would permit the developer to construct a larger building than otherwise permitted. The agency asserted that Mrs. Suitum's cause of action was not ripe until after she sold the TDRs. After eleven years of onerous and expensive administrative review and litigation, the Court has now declared that Mrs. Suitum's claim to the right to build her retirement home is ripe for adjudication. After a decade of battle, this widow has won the right to go to court to gain permission to build a house on her land in a subdivision of similar houses.
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At every step of the way, the agency was able to use an effectively unlimited amount of taxpayer funds to delay the resolution of the claim of an elderly person of modest health and means.
This notion of ''ripeness'' has proved to be the greatest barrier to the protection of property rights. The Supreme Court's ''ripeness doctrine'' never was enunciated full-blown, but arose as the aggregate effect of a series of cases in which the Court, for one procedural reason or another, was reluctant to reach the merits of the dispute. See MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340 (1986); Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985); San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 621 (1981); and Agins v. Tiburon, 447 U.S. 255 (1980). I emphasize here that we are not speaking of the normal requirements that a matter involves a case or controversy over which the court has jurisdiction or the normal prudential requirements. Rather, the Supreme Court has developed ''a special ripeness doctrine applicable only to constitutional property rights claims.'' Timothy V. Kassouni, ''The Ripeness Doctrine and the Judicial Relegation of Constitutionally Protected Property Rights,'' 29 Cal. W. L. Rev. 1, 2 (1992).
The basic statement of the Supreme Court's special ripeness test for takings was enunciated in Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985). The test has two prongs: finality of the governmental land use decision, and the amount of compensation (if any) that the government agreed to pay. Id. at 194. While these tests sound simple, they are but the surface of an astoundingly difficult process.
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The ''Finality'' Prong
A succinct summary of the final decision requirement of Williamson County has been developed by one of the leading practitioners in this area of law, Michael Berger. He has categorized the cases into (at the moment) five branches this first prong:
(1) The property owner must apply for a specific use. Agins v. City of Tiburon 447 US 255 (1980).
(2) The property owner apparently must make more than one application. A ''meaningful'' application for use is required. Penn Central Transp. Co. v. City of New York, 438 US 104 (1978) and MacDonald, Sommer & Frates v. Yolo County, 477 US 340 (1986). Berger notes that in MacDonald the applicant initially requested that level of development and density that the general plan and the zoning plan called for.
(3) The owner must apply for a variance. Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985). The notion is that if government is not prepared to permit a use under a planning or zoning ordinance they will be amenable to waiving the ordinance.
(4) The owner must obtain a ''final'' determination of what the government will permit. Williamson County, Id.
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As Berger notes, the professional skill of a planner is to devise an abstract and general scheme of development and to ascertain if the specific proposal of a landowner violates the plan. Planners are not trained in discerning the optimal specific use of any given parcel or the exact configuration of its buildings and other design elements. He adds: ''Anyone who thinks that he can get a planning agency to tell him what he can do on his land has probably been abusing some controlled substance—or doesn't understand the planning process. Id. at 58–159 (emphasis in original).
(5) The owner must suffer actual injury by application of the regulation. Hodel v. Virginia Surface Mining & Reclamation Ass'n 452 US 264 (1981), et al. See Michael Berger, The Ripeness Mess, SB14 ALI–ABA 155 (1997).
These sub-prongs have themselves generated internal rules and tests. The complexity of the ripeness test is only hinted at here. See Gregory M. Stein, ''Regulatory Takings and Ripeness in the Federal Courts,'' 48 Vand. L. Rev. 1 (1995), and Steven J. Eagle, Regulatory Takings, 628–640 (1996).
The ''State Compensation'' Prong
The ''state compensation'' prong of Williamson County results from the particular requirements of the Takings Clause: ''The Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation. . . . [B]ecause the Fifth Amendment proscribes takings without just compensation, no constitutional violation occurs until just compensation has been denied.'' 473 U.S. at 194 & n.13 (emphasis in original). The government need not even tender payment. The opening of the doors of its courts is sufficient, since ''all that is required is that a 'reasonable, certain and adequate provision for obtaining compensation' '' exist at the time of the taking. Id. at n.13. Until the landowner runs the panoply of substantive and procedural obstacles in state court on the compensation issue, he or she has no right to a federal court hearing on federal constitutional claims.
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Preclusion from Federal Court
The Williamson County ripeness requirements do not permit an owner to assert his or her federal claim under the Takings Clause until that owner has bargained with local authorities and has sued for compensation in state court. However, the existence of this state litigation, at which the property owner might have asserted federal claims, could mean that the federal courts would abstain from hearing the case at all. If this is true, then a property owner looses access to federal court to assert a wrong under the U. S. Constitution because the federal courts have forced that person, to become an involuntary plaintiff in state court. The answer the answer to whether this is the case might be ''yes.'' Mission Oaks Mobile Home Park v. City of Hollister, 989 F.2d 359 (9th Cir. 1993), Old Vail Partners v. County of Riverside, 108 F.3d 338 (9th Cir. 1997) (unpublished disposition). It might be ''no.'' Dodd v. Hood River County, 59 F.3d 852 (9th Cir. 1995). Or, then again, it might be ''maybe.'' Von Kerssenbrock-Praschma v. Saunders, XXX F.3d XXX, 1997 WL 428880 (8th Cir. August 1, 1997).
It is vital that the Congress open the doors of the federal courts to property owners seeking to assert their federal rights. A bill introduced by a member of the Committee on the Judiciary, Mr. Gallergly, is intended to do just that. H.R. 1534.
Furthermore, where an owner claims that his or her property has been taken by the federal government, the Supreme Court in Williamson County deemed the availability of compensation to owners through suit under the Tucker Act sufficient. 473 U.S. at 194, 28 U.S.C. §1491(a)(1) (vesting jurisdiction in the Court of Federal Claims respecting claims against the United States ''founded either upon the Constitution, or any Act of Congress or any regulation. . .''). Later, in Preseault v. Interstate Commerce Commission, the Court required a denial of compensation under the Tucker Act as a requisite to a challenge to the validity of the underlying regulation as well as to the alleged taking based upon it. 494 U.S. 1 (1990). This state of events again brings to mind the inequity whereby aggrieved owners must seek money damages in the Court of Federal Claims, but injunctive or declaratory relief in the U. S. District Court. Mr. Smith of Texas has pending in the Committee on the Judiciary a bill ''to end the Tucker Act shuffle'' and to allow owners to seek full relief in the Court of Federal Claims or in the District Courts. H.R. 992. This type of relief is sorely needed.
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The Expense of Reform
There will be a cost to the enhanced protection of property rights. It would take the form of a mixture of increased compensation awards to property owners and the loss of governmental actions not feasible if compensation need be paid. However, there would be a gain to the American people to the extent that actions, which would be wasteful if the costs to property owners are taken into account, would be averted. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), was the first case in which the Supreme Court found that a regulation might constitute a compensable taking. Justice Oliver Wendell Homes declared: ''We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.'' Id. at 416.
Similarly, the Congress might want to augment the Supreme Court's takings compensation formula. ''Just compensation'' almost never is full compensation, since the landowner almost invariably loses more than the government takes. An succinct explanation is contained in Coniston Corp. v. Village of Hoffman Estates, 844 F.2d 461, 464 (7th Cir. 1988):
Compensation in the constitutional sense is . . . not full compensation, for market value is not the value that every owner of property attaches to his property but merely the value that the marginal owner attaches to his property. Many owners are ''intramarginal,'' meaning that because of relocation costs, sentimental attachments, or the special suitability of the property for their particular (perhaps idiosyncratic) needs, they value their property at more than its market value (i.e., it is not ''for sale''). Such owners are hurt when the government takes their property and gives them just its market value in return. The taking in effect confiscates the additional (call it ''personal'') value that they obtain from the property, but this limited confiscation is permitted provided the taking is for a public use.
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In addition, there is no requirement for compensation for the often-heavy relocation costs and incidental damages that individuals and businesses often incur when they are forced to move to accommodate governmental programs. Congress should consider providing compensation for at least some of these costs as a general rule. See Lynda J. Oswald, Goodwill and Going-Concern Value: Emerging Factors in the Just Compensation Equation, 32 B. C. L. Rev. 283 (1991); Michael H. Schill, Intergovernmental Takings and Just Compensation: A Question of Federalism, 137 U. Pa. L. Rev. 829 890–892 (1989).
Appendix: States adopting property rights legislation
See Del. Code Ann. tit. 29, §605 (Supp. 1996); Fla. Stat. Ann. §70.001 (West Supp. 1997); Idaho Code §67–8001 to 67–8004 (1995); Ind. Code Ann. §4–22–2–31 to 4–22–2–32 (West Supp. 1996); Kan. Stat. Ann. §77–701 to 77–707 (Supp. 1995); La. Rev. Stat. Ann. §3:2609,: 3622.1 (West Supp. 1997); 1996 Mich. Legis. Serv. 101 (West); Miss. Code Ann. §49–33–1 to 49–33–19 (Supp. 1996); Mo. Ann. Stat. §536.017 (West Supp. 1996); Mont. Code Ann. §2–10–101 to 2–10–105 (1995); N.D. Cent. Code §28–32–02.5 (Supp. 1995); Tenn. Code Ann. §12–1–201 to 12–1–206 (Supp. 1996); Tex. Gov't Code Ann. §2007.041 to .045 (West 1996); Utah Code Ann. §63–90–1 to 63–90–4 (Supp. 1996); Wash. Rev. Code §36.70A.370 (West Supp. 1997); W. Va. Code §22–1A–1 to 22–1A–3 (1994); Wyo. Stat. Ann. §9–5–301 to 9–5–305 (Michie 1995). One other state, North Carolina, has passed an extremely limited takings statute. Source: Mark W. Cordes, ''Leapfrogging the Constitution: The Rise of State Takings Legislation, 24 Ecology L. Q. 187, 190 n. 16 (1997).
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Mr. CANADY. Thank you. Mr. Jacobs.
STATEMENT OF HARVEY JACOBS, PROFESSOR, UNIVERSITY OF WISCONSIN AT MADISON AND CHAIR OF THE DEPARTMENT OF URBAN AND REGIONIAL PLANNING
Mr. JACOBS Like all the other people who have been called, I want to thank the committee for the opportunity to present testimony today.
As my written testimony outlines, throughout this 1997 year I have supervised a national study on the impacts of State-based private property rights laws. I have commissioned a set of papers on the impacts in seven States in particular: Arizona, Florida, Kansas, Maine, Mississippi, Montana, and Wisconsin. What I'd like to do first is give you what I think is the summary of this research I say ''I think,'' because until I got the phone call to come to this committee hearing, I had not completed the analysis of this research.
Five points come from an examination of these States. First is as other witnesses have emphasized. On the whole, not enough time has really passed to know what the impact of these laws really is. Most of these laws have only been passed in the last year or two. We are just beginning to see what their impacts will be. It's very early in the process.
Point number two, there seems to be very little relationship between the adoption of State-based laws and the existence of non-existence of on-the-ground problems in a particular State. We've already heard at this hearing comments about supposed horror stories from the Endangered Species Act or implementation of section 404 of the Clean Water Act. Yet, in many of the States included in this study, as well as in other States, there were no particular parallel abuses—alleged abuses—that appeared to prompt the introduction of these laws.
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Three, there are a set of States where the existence of these laws appears to have had no impact whatsoever for example Kansas, which is an assessment law State. And Mississippi, a compensation law State. The researchers affiliated with this project were the very first people to go to State offices and ask to see any of the paperwork related to these laws. That is, the State agencies are doing what they're supposed to do, yet, many of the interest group representatives knew little and seemed to care little about the existence of these laws.
Four, in a few States, and these would be States like Arizona and Florida, where development pressures are strong and administrative practices by the Government can act to significantly curb private property rights, the existence of these laws does appear to have had a substantial chilling effect on the development of State law, rules, and regulations. Others have spoken to this—I can come back to it if the committee would like.
Fifth, and finally, a point alluded to by a few, but I think not focused enough upon, these State-based laws may be having the opposite effect intended by their proponents. Many of these laws are put forward from the point of view of helping the small landowner, the private property owner. Yet I think it's fair to say that private property rights operates in a fixed universe; to make mine stronger, may make yours weaker. We have a set of State and local regulations, such as zoning, which came into effect precisely to protect the interests of adjoining landowners. To the extent we enshrine a particular concept of private property rights for one group of landowners, we threaten the private property rights, which are often protected by regulatory structures such as zoning, of another group of property owners.
Those are my five major conclusions. I would like to, in line with the comments that have been made by the prior witnesses, offer some comments about two other points, if I might, Mr. Chair. One is about the debate among the Founding Fathers and their opinions on private property. I would like to enter into the record a point that—there was a great deal of debate among the Founding Fathers about the question of private property and how malleable it should be to a sense of the public interest.
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Just as proponents of these laws can find quotes by Madison and others to support their position, one can, likewise, find equally strong quotes from others of the Founding Fathers to support the opposite position. So, for example, Benjamin Franklin said at one point, ''Private property is a creature of society, and is subject to the calls of that society whenever its necessities require it, even to the last farthing.''—We don't use farthings anymore, but I think the point is clear.
My point is that there was not a monolithic point of view about society's relationship—the Government's relationship to private property among the Founders. They had perspectives that spanned the political spectrum as we do today.
And, finally, if I might, Mr. Chair, I would like to emphasize that while the proponents of these state-based laws want to point to recent Government regulation as the cause for them, in fact, going back to colonial times, States have quite regularly, consistently and heavily restricted private property rights in the public interest, they have done so in a variety of forms, and they have done so in particular, both at the State level and the Federal level, as we have seen changing technology and changing social values.
So, for example, prior to the invention of the airplane, we all owned our private property all the way to heaven—which is the way the traditional latin phrase defining private property explained our land rights to us. With the invention of the airplane, it became necessary for the courts to take that private property away from us so that we could not claim trespass every time an airplane flew over our property. They did this without compensation to facilitate technological change and social progress.
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Likewise, in the 1960's, as part of the civil rights movement, the private property rights of lunch counter owners and restaurant owners to decide who they would serve on the basis of race was taken away from them. It was taken away absent compensation and reflective of changing social values.
We have consistently, for over 200 years, acknowledged that private property is a social relationship between the individual and the Government which needs to be reshaped as social values change and as technology changes. I think we have done, on the whole, a pretty good job of it, and I think we continue to talk with each other about it, and in our reasonably messy American form of Government, I think we've progressed down a good path with it. Thank you.
[The prepared statement of Mr. Jacobs follows:]
PREPARED STATEMENT OF HARVEY M. JACOBS, PROFESSOR, UNIVERSITY OF WISCONSIN AT MADISON AND CHAIR OF THE DEPARTMENT OF URBAN AND REGIONAL PLANNING
INTRODUCTION
Background. Over the last year I have supervised a research project on the impact of state-based private property rights legislation.1\ This project has been conducted under the auspices of and with funding from the relatively new North American Program of the Land Tenure Center at the University of Wisconsin-Madison. This Program was established with funding from the Ford Foundation, the W. W. Kellogg Foundation, and the Otto Bremer Foundation for the purpose of examining the changing nature of land and natural resource ownership in the North America, and to conduct research and public education about these changes. I help to coordinate the Program, specifically the sub-area of social cultural conflict over land and natural resources.
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The research project selected seven states for detailed examination. These states were selected because they represented both geographic diversity within the U.S., and diversity of type of private property rights legislation.
Types of State Legislation. State-based private property legislation comes in three basic forms: assessment laws, compensation laws, and conflict resolution laws. Assessment laws require a designated government office to conduct assessments of proposed legislation, rules and regulations to determine how it will impact private property rights. These laws are built upon the model of environmental impact assessments, and are referred to by their proponents as ''look before you leap'' bills. Compensation laws require that private property owners be compensated when governmental laws impose a burden on their property (reduce their property value) by a predetermined percentage. Conflict resolution laws set up a formal process for negotiation among aggrieved parties, sometimes through the establishment of a new office for conflict resolution, whereby impacts on private property rights can be discussed and hopefully resolved to the satisfaction of all concerned.
Extent of State Laws. The number of bills and states which have passed these laws varies somewhat based on how and what you count. Emerson and Wise (1997) offer up a set of 25 states that have passed these laws between 1991 and 1996. These states are concentrated in the plains and mountain sections of the country, though the states vary from Maine to Florida, and Rhode Island to Washington. Emerson and Wise identify 17 states that have passed assessment laws (including Arizona and Washington which later had them repealed by referendum, though Arizona then passed another law), and 6 states that have passed compensation laws (including Washington that later had it repealed by referendum). None of the laws predate 1991, and most have been passed in the last two to three years.
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States in National Study. Seven states were selected for this study: Arizona, Florida, Kansas, Maine, Mississippi, Montana, and Wisconsin. Six of these seven states (all except Wisconsin) have adopted some form of private property rights legislation. Arizona has a conflict resolution law, Florida a compensation and conflict resolution law, Kansas an assessment law, Maine an assessment and conflict resolution law, Mississippi a compensation law, Montana a conflict resolution law, and Wisconsin a proposed compensation law. Researchers in and/or familiar with these states prepared commissioned papers on the impact of the laws in their designated state.2\ This included an examination of the law in the context of the state's constitutional and administrative framework, and interviews with representatives of key interest groups concerned with and/or affected by the law. Then, this past month, in August, a workshop was held in Madison, Wisconsin for the individual researchers to present their work to each other, and for us to piece together a national picture from the puzzle of individual states. Thus, what I am presenting today is very much a work in progress; the final results will probably not be available for another six months.3\
The Impacts of State-based Laws: Five Points
At this early stage five points can be drawn from this research about the impacts of state-based private property rights laws.
One, on the whole not enough time has passed since the laws have been passed to really know what their impact will be. Many have been in place only a year or two, and in some cases their implementation was delayed until this year. So, in a very real sense, it is too early to tell whether they are going to have much of an impact, if that impact will be positive (as their proponents expect it be), negative (as their opponents hope it will be), or more muddled and situational (which is more likely).
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Two, there seems to be little relationship between the adoption of state-based laws and the existence or non-existence of on-the-ground problems in a particular state. That is, at the national level the private property rights movement is informed by a set of ''horror'' stories about the supposed abuse of administrative and regulatory power that comes from the implementation of a set of selected federal laws, specifically the Endangered Species Act, and section 404 of the Clean Water Act (relating to wetlands). In many of the states in this study, and other states that researchers were aware of, there were no particular parallel abuses that appeared to prompt the introduction these laws.
Three, there are a set of states where the existence of these laws appears to have no impact whatsoever. For example, in Kansas (an assessment law state) and Mississippi (a compensation law state), researchers associated with this project were among the first to make inquiries about the law to state agencies responsible for them, and many of the interest group representatives knew little and seem to care little about the laws. That is, in a selected set of states these laws appear to irrelevant to what is going on politically and administratively.
Four, in a few states, where development pressures are strong and administrative practices by government can act to significantly curb private property right values, such as Arizona and Florida, the existence of private property laws has had a chilling effect on the development of law, rules and regulations. This effect means that existing laws, rules and regulations move towards being frozen in place, because the administrative structure is uncertain about the impact of the private property rights laws, and finds it easier to do nothing than to do something and find itself subject to the new law's provisions. The impact of this is that the administrative structure may find itself unable to respond flexibly to new situations, conditions and technology and thus will become literally stuck.
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Fifth, and finally, the state-based laws may be having the opposite effect intended by their proponents. That is, in those states where they are not being ignored, if the intent of the laws is to provide more security for the private property rights of small landowners, they may instead be making landowners private property rights more vulnerable and thus insecure. Most local and state land and environmental laws and regulations, such as zoning, are developed and implemented to manage neighbor to neighbor conflict, and to provide a degree of investment security for the individual landowner. These laws and regulations rarely spring forth without due cause. Instead they appear when individual landowners or the public at large experience problems with the existing, non-regulated private property rights system of land and environmental resource management. Private property rights laws which reach up and down a state's administrative system serve to threaten the major asset and security of most Americans.
Directions for the Future
Shifting the Terms of the Debate. From one point of view, the private property rights movement, the source of the state-based bills, has been enormously successful in their efforts. Even more so than the specific bills which have been passed in any particular state, their success is in how they have captured and reframed the public debate about private property rights.
From a period spanning from at least 1970 to 1990, the private property rights debate was seen through the lens provided by environmental and related interests. From the point of view of these interest groups, private property rights needed to be constrained and reshaped to fit changing social values and social conditions. The environmental community argued (not incorrectly from my point of view, see the following section), and the judicial system largely agreed, that most legislative and regulatory changes that impinged on private property were reasonable when viewed from the perspective of a necessary balance between the public interest and the private interest in land.
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The ''success'' of the private property rights movement is to have forced the policy debate to their side. Now it is increasingly common for private property related issues to be debated from the point of view of having to justify why it is that impositions on private property rights should be allowed. For the debate to even be set up in this way shows the difference a decade can make.
The Immediate Future: Four Trends. In terms of the immediate future, I foresee three primary trends.
First, the locus of private property rights legislative activity is likely to stay at the state level. There is an increasing recognition among many of the parties to land and environmental management disputes, that the vast majority of these issues are local in nature. So, it is in the state houses, rather than in Congress, that we are likely to see this struggle unfold. This does not discount serious national/federal debates over the content of the Endangered Species Act, the wetlands provision of the Clean Air Act, or the management of public lands. Nor am I diminishing the leadership of nationally based private property rights organizations. Rather, I am suggesting that federal activity will be focused on particular issues, while more broad-based issues related to private property rights will be taken up by the states, where the locus of debate on these matters has largely been for much of this century.
Two, the nature of state bills is likely to move toward conflict resolution laws and away from compensation and assessment bills (which can be thought of as first generation responses to these issues). This is likely to be true for several reasons. The first generation responses are proving either difficult to adopt because of local concern over their cost (in terms of compensation laws), or difficult to implement (in terms of assessment laws). And conflict resolution laws present the issue as more reasoned (who could disagree with the notion that we should all sit down and work out solutions to these problems). But the impact of these bills are themselves uncertain, reflecting how they get written, who gets access to the conflict resolution process, the terms of resolution dictated by the statute, etc.
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Three, there is likely to be increasing outcry and backlash from those negatively affected by private property rights legislation. To some extent, these laws operate in a universe of fixed resources. That is, what is an advantage or added security to your private property rights becomes a disadvantage or insecurity to mine.
To date, the media has set up the private property rights issue as a struggle between (virtuous or crazy, depending on your point of view) environmentalists, on the one hand, and (land-raping, responsible-managing, job/growth creating, depending on your point of view) landowner/developers, on the other hand. But, at bottom it is about the most important asset possessed by most American families—their land and home.
In the high profile fight over this issue we tend to forget that most laws and regulations restricting private property came about because other, often adjoining, private property owners were unduly affected by the relatively unconstrained private property use of certain landowners. This is origin of zoning, the oldest and most common form of regulation restricting private property. Zoning was invented in the 1910s because conservative, middle-class landowners needed to protect their private property rights. And they needed some security in planning for the use of their land. Zoning restricts the private property rights of some landowners to secure the private property rights of other landowners. This was zoning's origin, and this remains the major rationale for zoning. And the U.S. Supreme Court, even in its most conservative incarnations, has found this to be a reasonable balancing act.
If I am correct in my prediction that private property rights legislation will concentrate at the state level, then I believe that those landowners who will find their private property rights made less secure through the adoption of these laws (and I believe they are in the majority) will increasingly assert their interests in this fight.
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Four, the push for state-based bills has resulted in renewed creativity among planners, public administrators, and their peers in the regulatory community. There has long been an internal debate among those characterized by the private property rights movement as ''regulators,'' about ways to, on the one hand, respect the integrity of private property, and, on the other hand, achieve public objectives in land and environmental planning and policy. The professional journals are full of ideas for doing just this. The ''success'' of state-based private property legislation is facilitating a renewal of this debate and encouraging policy experimentation at the state and local levels. In line with the backlash that I foresee as the third trend, the regulatory community is finding a citizenry both more demanding of and receptive to creative solutions to land and environmental management problems.
A Final Thought: On the Fixedness of Private Property
Much of the debate about private property legislation is at root a debate about the very nature of private property—specifically its fixedness (or rigidity) in contrast to its fluidity.
Proponents of private property legislation put forth the idea that a particular view of private property is enshrined in the U.S. Constitution, reflecting a consensus among the country's founders. This view is that private property has a priori integrity, and can only be compromised subject to the restrictions of the ''takings'' clause of the Fifth Amendment. And proponents argue that the modification of private property by laws and regulation is a relatively recent phenomenon, associated most noticeably with the rise of the environmental movement.
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It is true that certain founders took especially strident perspectives on the necessary integrity of private property. However it is also true that others took the opposite perspective. For example, Benjamin Franklin noted with force ''private property is a creature of society, and is subject to the calls of that society whenever its necessities require it, even to the last farthing.'' And both sides took inspiration from the writing of John Locke. In support of Franklin's position, for example, Locke noted:
For it would be a direct contradiction for any one to enter into society with others for the securing and regulating of property, and yet to suppose his land, whose property is to be regulated by the laws of society, should be exempt from the jurisdiction of that government to which he himself, and the property of the land, is subject.
So there was not one point of view about the place and role of private property among the country's founders. They, like us today, had positions that span the political spectrum.
As for the proponents second position, history shows us that the states especially have exercised substantial regulatory restrictions over private property rights since colonial times. And, more importantly, private property rights have been substantially reshaped at various times in U.S. history to reflect changing social values and changing technologies. So, in the early part of this century, after the invention and commercial development of the airplane, private property owners lost their air rights est usque ad coelum (all the way to heaven; the traditional definition of air rights in private property) without compensation. Courts found that allowing private property owners to continue on with this older definition of private property was too strangulating on the need for technological development and progress. Similarly, in the 1960s, reflecting changing social values, restaurant owners lost their private property rights to exclude patrons on the basis of race, again absent compensation.
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My point is that from my analysis and understanding of history and law, private property has always been a socially defined and flexible concept.
This does not take away from private property's strong cultural meaning, and its attachment to our concepts of American freedom, liberty and citizenship. In fact, it is precisely because private property is married to these concepts that we fight so strongly over it. But I believe that what we have learned from our over 200 years of Constitutional history is that for America to grow and change with changing times, we can not and will not allow any one group's definition of private property to portray our past or present. Working together we will define private property as it makes sense to our needs of the present, in light of our Constitutional framework.
1. The project is titled ''State-based Property Rights Legislation and the Security of Individual Land Tenure: A National Assessment.''
2. Researchers and their papers were as follows:
Arizona—Ms. Kirk Emerson, Visiting Scholar, Udall Center for Studies in Public Policy, University of Arizona—''Evaluating the Impacts of Arizona's Private Property Rights Legislation on the Security of Individual Land Tenure.''
Florida—Prof. Richard G. RuBino, Department of Urban and Regional Planning, Florida State University—''The Chilling Effect of Florida's Private Property Rights Protection Acts on Growth Management and Environmental Regulation.''
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Kansas—Prof. Eric Strauss, Chair, Graduate Program in Urban Planning, University of Kansas—''The Kansas Private Property Protection Act: A Success Story for Environmentalists.''
Maine— Dr. Tadlock Cowan, Department of Sociology, Dartmouth College—''Property Rights Legislation in Maine: The Not-So-Quiet Revolution in Land Use Control.''
Mississippi—Prof. Rhonda Phillips Culp, Department of Geography and Area Development, University of Southern Mississippi—''The Mississippi Agricultural and Forestry Activity Act: An Analysis of the Impacts on Individual Land Tenure and Property Rights.''
Montana—Mr. Bruce Farling, Montana Council, Trout Unlimited, Missoula, Montana—''Look Before You Leap Private Property Assessments: An Evaluation of the 1995 Montana Private Property Assessment Act and the 1995 Amendments to the Montana Environmental Policy Act.''
Wisconsin—Mr. James A. Kurtz, Bureau of Legal Services, Wisconsin Department of Natural Resources, and Ms. Stacey L. Swearingen, Institute for Environmental Studies, University of Wisconsin-Madison—''Property Rights and the Security of Land Tenure in Wisconsin: An Analysis of Wisconsin Assembly Bill 521, 1995 Legislative Session.''
commentary—Prof. Ann Louise Strong, Department of City and Regional Planning, University of Pennsylvania,—''A Commentary on Seven Papers Addressing State-Based Property Rights Legislation and Its Impact on Security of Land Tenure.''
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3. The first formal presentation of this research, prior to the request to appear at this hearing, is to be in early November at the annual meeting of the Association of the Collegiate Schools of Planning. I will present a paper titled: ''Those Laws and My Land! The Impact of State Property Rights Laws on the Security of Individual Land Tenure,'' on a panel I have organized titled ''State Property Rights Laws in Perspective.'' The final report of the research project will be available from the North American Program of the Land Tenure Center sometime after February 1998.
RESOURCE REFERENCES
Bosselman, Fred, David Callies and John Banta. 1973. The Taking Issue: An Analysis of the Constitutional Limits of Land Use Control. Washington, D.C.: United States Government Printing Office.
Brick, Philip D. and R. McGreggor Cawley, eds. 1996. A Wolf in the Garden: The Land Rights Movement and the New Environmental Debate. Lanham, MD: Rowman and Littlefield.
Ely, James W. Jr. 1992. The Guardian of Every Other Right: A Constitutional History of Property Rights. New York, NY: Oxford University Press.
Emerson, Kirk and Charles R. Wise. 1997. ''Statutory Approaches to Regulatory Takings: State Property Rights Legislation Issues and Implications for Public Administration,'' Public Administration Review 57, 5: forthcoming.
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Freilich, Robert H. and RoxAnne Doyle. 1994. ''Takings Legislation: Misguided and Dangerous,'' Land Use Law and Zoning Digest 46, 11: 3–6.
Jacobs, Harvey M., ed. 1998. Who Owns America? Social Conflict Over Property Rights. Madison, WI: University of Wisconsin Press (forthcoming).
Jacobs, Harvey M. 1996. ''Whose Rights, Whose Regulations? Land Theory, Land Policy, and the Ambiguous Future of the New Private Property Rights Movement in the U.S.,'' Environmental Planning Quarterly 13, 3: 3–8.
Jacobs, Harvey M. 1995. ''The Anti-Environmental, 'Wise Use' Movement in America,'' Land Use Law and Zoning Digest 47, 2: 3–8.
Jacobs, Harvey M. and Brian W. Ohm. 1995. ''Statutory Takings Legislation: The National Context, the Wisconsin and Minnesota Proposals,'' Wisconsin Environmental Law Journal 2, 2: 173–223.
Marzulla, Nancie G. 1995. ''State Private Property Rights Initiatives as a Response to 'Environmental Takings','' South Carolina Law Review 46, 4: 613–640.
Strong, Ann Louise, Daniel R. Mandelker and Eric Damian Kelley. 1996. ''Property Rights and Takings,'' Journal of the American Planning Association 62, 1: 5–16.
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Mr. CANADY. Thank you, Professor Jacobs. Ms. Marzulla.
STATEMENT OF NANCIE G. MARZULLA, PRESIDENT AND CHIEF LEGAL COUNSEL, DEFENDERS OF PROPERTY RIGHTS
Ms. MARZULLA. Thank you, Mr. Chairman. My name is Nancie Marzulla, and I am President of Defenders of Property Rights. Defenders is the only national public interest legal foundation devoted exclusively to protecting property rights.
I am delighted to testify to you about the importance of private property rights and to discuss why we believe that legislative reform is so necessary.
I concur, with the other witnesses about the importance of private property rights. There's no question but that the Framers of our Constitution clearly understood and recognized the need for vigorous protection of private property rights. They also understood the vital relationship between private property rights on the one hand and individual liberty and economic prosperity on the other.
Property rights, in short—is really the line drawn in the sand to prevent the tyranny of the Government over the individual. Regardless of how defined, the Fifth Amendment specifically requires the Federal Government to pay just compensation whenever private property is taken or confiscated.
Before the explosion of laws effecting private property rights began in the 1970's, Federal courts really had little difficulty administering justice under the Just Compensation Clause. Most Government takings were bold and obvious, such as the flooding of land. In these straightforward circumstances, Federal courts readily ordered the payment of compensation to injured land or property owners. Today, however, the situation is dramatically different, because environmental and other land use regulations destroy property rights on an unprecedented scale, and the lines or the contours of a regulatory taking are decidedly less clear than regular condemnations such as the flooding of land.
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Even well-intended regulations to protect coastal zone areas or wetlands or endangered species, all too often leave individuals with nothing but bare titles to their land. And that's one point, I think, that bears some clarification the Fifth Amendment's just compensation requirement is policy neutral. In fact, it assumes that a taking is for a beneficial purpose. Importantly, it adds a once that taking has occurred, that compensation must be paid, again, for that laudable or beneficial purpose.
Certainly, the Supreme Court—and I know there's been some discussion about this today and other courts have done much, particularly from 1987 forward, to help clarify the requirements of the Fifth Amendment where property has been taken due to application of a regulatory program. But even with that guidance, the litigation necessary to vindicate one's constitutional rights is a long, arduous, and expensive process. Few individual landowners can afford to pay for the cost of litigation that can take a decade or more—I think I recounted in my written testimony cases that are still in litigation today that have been going on for 15, 16, 17 years in which, the property owner has yet to obtain the constitutional compensation to which he is guaranteed. As a result, landowners are increasingly being deprived of most, if not all, of the ability to make reasonable use of their property with no recourse.
To address these problems, property owners have organized in the States to support passage of laws designed to protect their constitutional rights. For example, beginning 1992, virtually every State in the country has introduced one or more property rights bills for consideration. To date, 26 States have passed property rights legislation or commissioned a study on the need for property rights reform.
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Generally speaking, that legislation can be broken down into two categories: the first category include planning bills that require Government to ''look before it leaps''—in other words, to perform a takings impact analysis prior to promulgating any new regulation that could adversely affect property rights. The second category is compensation legislation that identifies a specific diminution in value that trigger the payment of monetary damages.
Of the 22 States that have passed property rights legislation, 12 are planning bills, 3 are compensation bills, 3 are both planning and compensation bills, and 4 are other types of bills that can't be placed squarely into either category.
Ideally, property rights legislation should have the following three components: one, it should require Government to avoid taking private property whenever possible; two, in the event of an unavoidable taking, it should require the payment of just compensation, and three, it should set up a speedy process with clear guidelines for resolving disputes.
Illustrative of State property rights legislation are two statutes that have been in effect in Florida and Texas since 1995. Both enjoyed broad-based, bipartisan support and are also the most comprehensive bills in the country. I urge you to consider and study closely the Florida property rights bill that I know has been discussed; but, I also urge you to take a close look at the Texas property rights bill that has been in effect since September 1995. In my written testimony, I attached a summary of some of the results of that bill and its impact on the budget and so forth—in the course of its 2-year history.
In closing, let me say in both of these States, Florida and Texas, that the enactment of these laws has had no substantial impact on State finances and has not interfered with State regulatory programs. Equally important, the protection of property rights has been achieved consistent with the maintenance of high environmental quality standards. According to our reports from Texas and Florida, the results reveal that for State governments to carry out their business and obey the Constitution at the same time. Thank you.
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[The prepared statement of Ms. Marzulla follows:]
PREPARED STATEMENT OF NANCIE G. MARZULLA, PRESIDENT AND CHIEF LEGAL COUNSEL, DEFENDERS OF PROPERTY RIGHTS
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to appear before this Subcommittee today to discuss the vital need for private property rights legislation. The need for property rights legislation was well-described in a decision by Chief Judge Loren A. Smith of the Court of Federal Claims:
This case presents in sharp relief the difficulty that current takings law forces upon both the federal government and the private citizen. The government here had little guidance from the law as to whether its action was a taking in advance of a long and expensive course of litigation. The citizen likewise had little more presidential guidance than faith in the justice of his cause to sustain a long and costly suit in several courts. There must be a better way to balance legitimate public goals with fund amental individual rights. Courts, however, cannot produce comprehensive solutions. They can only interpret the rather precise language of the Fifth Amendment to our constitution in very specific factual circumstances. To the extent that the constitutional protections of the Fifth Amendment are a bulwark of liberty, they should also be understood to be a social mechanism of last, not first resort. Judicial decisions are far less sensitive to political branches of our great constitutional system. At best courts sketch the outlines of individual rights, they cannot hope to fill in the portrait of wise and just social and economic policy.
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Bowles v. United States, 31 Fed.Cl. 37 (1994)
I serve as President of Defenders of Property Rights, the only national public interest legal defense foundation dedicated exclusively to the protection of constitutionally-guaranteed property rights. Through a program of litigation, education and legislative support, Defenders seeks to realize the promise of the Fifth Amendment of the U.S. Constitution that private property shall not be ''taken for public use, without just compensation.'' Defenders has a large national membership representative of the property owners, users and beneficiaries of the rights protected by the Constitution and traditional Anglo-American property law. Founded in 1991, Defenders has since then participated in every landmark property right case in recent years, including Lucas v. South Carolina Coastal Commission, Dolan v. city of Tigard, Reahard v. Lee County, Florida, and Suitum v. Tahoe Regional Planning Agency. Defenders has also devoted a significant amount of resources to analyzing legislative proposals concerning property rights at both the state and federal levels.
Despite the fact that the United States Constitution imposes a duty on the government to protect private property rights, in reality, they are often left unprotected. As reflected in various provisions in the Constitution, the Founding Fathers clearly recognized the need for vigorously protected property rights. They also understood the vital relationship between private property rights, individual rights and economic liberty. Property rights is the ''line drawn in the sand'' protecting against tyranny of the majority over the rights of the minority.
Today, environmental regulations destroy property rights on an unprecedented scale. Regulations designed to protect coastal zone areas, wetlands and endangered species habitants, among others, leave many owners stripped of all but bare title to their property. In recent years, courts have done much to restore vigor to the Fifth Amendment. For instance, in Nollan v. California Coastal Commission, the Supreme Court ruled that a land use regulation will be upheld only when it (1) serves a legitimate state interest; and (2) does not deny an owner ''economically viable use of his land.'' Similarly, in Lucas v. South Carolina Coastal Council, the Supreme Court held that denying an owner all economically beneficial and productive use of his land requires payment of compensation unless the prohibited use constitutes a public nuisance as defined and understood by background principles of common law. In Dolan v. City of Tigard, the Supreme Court ruled that the government could not unconditionally demand that a property owner give up a portion of her land for a public right of way in exchange for a building permit. The court held that any exaction must be ''roughly proportional'' and necessary to address the public burdens created by the new use of the property. In Suitum v. Tahoe Regional Planning Agency, an elderly widow who was completely banned from improving her property finally got to have her day in court, as the Supreme Court overturned a Ninth Circuit decision which would have barred her claim as ''unripe.''
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Nevertheless, cases in which landowners possess the resources and perseverance to prevail against a massive federal government are few and far between. Landowners are increasingly being deprived of most, if not all, economically beneficial uses of their land by government action and regulation. The Founding Fathers' intent for private property to be protected was clear. They could never have envisioned, however, the growth of a leviathan government which has occurred of late years. If the Fifth Amendment is going to be worth more than the paper it is written on, private property protection must be strengthened. Adopting legislation to protect property owners will help fulfill the promise of those who wrote the Bill of Rights.
I. The United States Constitution imposes a duty on government to protect private property rights because property rights are an essential element of a free society
Within the Constitution numerous provisions directly or indirectly protect private property rights. The Fourth Amendment protects against unreasonable searches and seizures. The Fifth Amendment states that no person shall ''be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.'' The Fourteenth Amendment echoes the Due Process Clause, stating that no ''State shall deprive any person of life, liberty, or property without due process of law. . .'' Indirectly, the Contracts Clause protects property by forbidding any state from passing any ''law impairing the Obligation of Contracts.'' U.S. CONST. art. 1, §10.
The reason why the Constitution places such strong emphasis on protecting private property rights is because the right to own and use property is critical to the maintenance of a free society. Properly understood, property is more than land. Property is buildings, machines, retirement funds, savings accounts and even ideas. In short, property is the fruits of one's labors. The ability to use, enjoy and exclusively possess the fruits of one's own labors is the basis for a society which individuals are free from oppression. Indeed, there can be no true freedom for anyone if people are dependent upon the state (or an overreaching bureaucracy) for food, shelter and other basic needs. Where the fruits of your labors are owned by the state and not by you, nothing is safe from being taken by a majority or a tyrant. As a government dependent, the individual is ultimately powerless to oppose any infringement of his rights (much less degradation of the environment) because the government has total control over them. People's livelihoods, possibly even their lives, can be destroyed at the whim of the state.
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One of the most eloquent commentators on the relationship between freedom and property rights was Noah Webster. The noted American educator and linguist said: ''Let the people have property and they will have power—a power that will forever be exerted to prevent the restriction of the press, the abolition of trial by jury, or the abridgment of many other privileges.'' Not surprisingly, the world's greatest oppressors have also understood the intrinsic link between property rights and freedom. As Karl Marx explained in the Communist Manifesto: ''You reproach us with planning to do away with your property. Precisely, that is just what we propose. . . The theory of the Communists may be summed up in a single sentence: Abolition of private property.''
II. Property rights today are under siege and courts have not gone far enough in providing for their protection
Never before have government regulations threatened to destroy property rights on so large a scale and in so many different contexts as they do today. In just two decades, the United States has developed, from scratch, the most extensive governmental environmental protection programs in history. Environmental regulations have become an elaborate web of intricate laws and regulations covering every conceivable aspect of property use. For example, we have regulatory programs dealing with marine protection, safe drinking water and toxic substance control. We have regulatory schemes dealing with coastal zone management, ocean dumping, global climate protection and clean water (including the wetlands program); we have federal programs regulating air emissions, automobiles, endangered species, wild horses and burros, new chemicals, chlorofluorocarbons, waste disposal and the cleanup of soils and groundwater; we regulate surface mining, underground mining, forestry, energy production, transportation of all kinds and every conceivable aspect of the use and development of land, water, minerals and other resources. But we do not have a single statute dealing with the protection of private property rights.
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A. Courts alone cannot adequately protect private property rights.
In 1922, Justice Oliver Wendell Holmes declared that a regulation that went too far would be recognized as an unconstitutional taking of private property. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). Since that time, courts have struggled with the question of when a regulation does, in fact, go too far. There has been no clear articulation of when the exercise of regulatory authority will violate the Just Compensation Clause. In 1978, after surveying fifty years of takings jurisprudence, Justice William Brennan threw up his hands in dismay and declared, ''This Court, quite simply, has been unable to develop any 'set formula' for determining when 'justice and fairness' require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.'' Penn Central Transp. Co. v. New York City, 438 U.S. 124 (1978). Justice Brennan then identified three factors which still guide courts in determining whether the Fifth Amendment has been violated: (1) the character of the government's action; (2) the reasonableness of the owner's investment-backed expectations; and, (3) the economic impact of the regulation.
Since 1978, the court has identified at least three areas which also constitute per se violations of the Fifth Amendment. In Hodel v. Irving, 481 U.S. 704 (1987), the Supreme Court held that destruction of the right to devise private property violates the Fifth Amendment. In Nollan v. California Coastal Commission, 483 U.S. 825 (1987), the Supreme Court determined that a property regulation which does not substantially advance its avowed governmental purpose also constitutes a taking. In 1992, in Lucas v. South Carolina Coastal Council, 112 S.Ct. 2866 (1992), the Supreme Court held that destruction of all productive and beneficial uses of private property violated the Fifth Amendment.
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Despite these efforts by courts to flesh out Fifth Amendment guarantees, there are still many open questions in takings jurisprudence. Indeed, the most troublesome question is the one posed in 1922—determining when a regulation ''goes too far.''
III. Takings litigation today is a long, expensive and arduous process which only the most well-financed and dedicated property owner can endure
The scales of justice are unfairly tipped in favor of the government when citizens are faced with the threat of losing their property due to regulatory burdens. Not only are the laws drafted to ease the litigation burden of the government, but the costs of takings litigation can range in the hundreds of thousands or even millions of dollars, too high for the average citizen to bear. Consequently, many citizens faced with a government takings claim cannot pursue their rights under the Fifth Amendment. The government, on the other hand, does not face a similar shortage of resources (at least, in comparison to the individual property owner), and can often pursue a vigorous defense of the case without constraint. Adding to the hardship, procedural hurdles often bar litigation on the merits of takings claims for anywhere from five to ten years, or longer!
A few examples of reported cases demonstrate how arduous and interminable the litigation of takings claims against the federal government can be:
On October 2, 1980, Florida Rock Industries was denied a wetlands permit to mine limestone on its property in southern Florida. In 1982, the company filed suit against the federal government, alleging an unconstitutional taking. Following a 1985 judgment in the company's favor, the government appealed, and the case was remanded. In 1990, following another trial, the plaintiff won again, and the government appealed. In 1994, the case was remanded again, and the Supreme Court declined to hear the government's appeal in 1995. Now in its third trial, the case is awaiting a decision from the Court of Federal Claims. The company is still seeking relief for a taking that occurred over seventeen years ago.
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Paul Presault's litigation odyssey began in 1981, when he sued the State of Vermont to reclaim a strip of land the state had used to run a government-operated railroad through his front yard. In 1989, the Supreme Court sent him back to ''square one'' under the strictures of the Tucker Act. (28 U.S.C. §1500) After sixteen years and two trips to the Supreme Court, Paul Presault still has not collected a dime of the money owed him by the government and he is now back in the U.S. Court of Federal Claims awaiting another legal hearing.
Between 1978 and 1980, property belonging to W.O. and Eliza Narramore was flooded due to government operation of the Painted Rock Dam. The couple filed suit in 1980, seeking to enjoin the United States from flooding their land. By 1988, the case had been to the appellate court once already and remanded. At the new trial, the government moved to dismiss the suit on the grounds that the Narramores' claim should have been for compensation through the Court of Federal Claims. In 1992, the Federal Circuit agreed with the government—transferring the case to the Court of Federal Claims and sending the Narramores back to the beginning for a third time. Their case is still pending.
In 1983, the federal government placed, without his permission or knowledge, groundwater monitoring wells on land owned by Mr. Hendler in Riverside, California, and issued various orders forbidding certain uses of the property. In September of 1984, Mr. Hendler and other joint owners of the property filed suit against the federal government, alleging an unconstitutional taking of their property rights. After five years of bitter litigation, the case was dismissed in December 1989. The Hendler plaintiffs appealed, and the U.S. Court of Appeals for the Federal Circuit reversed the case in the summer of 1991. The case was tried again in 1995, more than twelve years after the government first physically invaded Hendler's property and is now headed for appeal again in the U.S. Court of Appeals for the Federal Circuit.
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Yuba Natural Resources Co. had acquired mineral rights to a parcel of federal land in 1905. Seventy years later, the government tried to renege on the transfer. Yuba sued for title to the mineral rights, and finally won in 1982. That seven-year struggle cleared the way for Yuba to file suit for just compensation in the Court of Federal Claims. Not until 1990—a full fifteen years after the government backed out on its seventy-year-old deal—did Yuba finally prevail, when the Federal Circuit affirmed the award of damages.
In May of 1982, Loveladies Harbor Inc. was denied a wetlands permit to develop property it owned in New Jersey, and filed suit in the U.S. Court of Federal Claims in April 1983. After extensive litigation in both the Federal District Court and the Court of Federal Claims, the plaintiff was awarded judgment in 1990. The government appealed, then moved to dismiss that appeal. Finally, in 1994, the Court of Appeals for the Federal Circuit affirmed the judgment for plaintiff—more than twelve years after the original permit denial.
IV. Protection of private property rights need not be the enemy of achieving important social objectives
Legal and economic scholars have long argued that private property owners protect their property from environmental harm with greater vigor than the government. After all, it is the value of their property that will be diminished if the property is damaged. Individuals, guided by free market incentives, are often better stewards of the environment than the heavy hand of government. Nevertheless, there are instances in which the government will act to protect the environment by regulating private property. The purpose of the Just Compensation Clause is not to stop government from acting, but rather to avoid individual property owners from being singled out to pay the costs of achieving social good. In protecting the environment, we need to make sure that the Fifth Amendment's mandate—that if society as a whole benefits from government actions, then society as a whole should pay—be complied with.
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We have heard the government regulators argue that requiring compensation for takings will prohibit the government from protecting enough land. Economically speaking, the Just Compensation Clause ensures that only property worth the cost of protecting will be regulated by requiring compensation for takings, the government is forced to weigh the costs and benefits of its regulatory schemes. The Just Compensation Clause thus protects property owners, government, and the environment. Property owners are protected from arbitrary government regulations that destroy the economic viability of their land. Government is protected because the Clause will slow the government from taking too much land, thus destroying the productive forces of the economy that finance government. The best stewards of land, the owners, will have the proper incentives to guard and defend it from environmental destruction with more intensity than any government bureaucrat or agency. Since no one has the right to use his property in a manner which would injure the public, those uses of private property which are public nuisances can be freely prohibited by the government. Finally, those areas deemed by society worthy of the investment of resources to protect, or which private incentives fail to protect, can be preserved with limited and targeted regulation.
Critics of property rights proposals assert that such legislation is unfair because it only allows for the payment of compensation if property is taken. To be equitable, they assert, property owners should pay government for the benefits bestowed on them by regulation. The straight forward legal response to this position is that the Constitution does not speak to this issue. The Fifth Amendment, which contains the only express money guarantee in the Constitution, states simply that ''[N]or shall private property be taken for public use, without just compensation.'' The obligation to pay property owners for property which has been taken simply attaches whenever government action works a taking. Armstrong v. United States, 364 U.S. 40, 49 (1960). Federal property rights legislation would merely enforce this constitutional right because courts have such difficulty in applying it in situations where property is taken due to confiscation regulations.
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Additionally, examination of these so-called ''free benefits'' reveals that property owners usually do pay for such amenities. Bridges do not magically appear—they are paid for by taxes imposed upon productive members of society such as property owners. The whole rationale of ad valorem taxes is to capture value added to property after purchase. Taxes come from profits made from ownership; and, special taxes are assessed from owners benefiting from services like sewer line renovation and mosquito abatement.
There is no free ride for property owners. They are not asking for a windfall from the government, just what they are constitutionally entitled to if their property is taken from them.
V. Private property rights legislation will not bring about economic chaos
Opponents of property rights assert that legislation to compensate owners for the taking of their land will bankrupt the United States' treasury. Even if that is the case, the government should not expect to get a free ride on the backs of its citizens. Society as a whole should pay for what it takes, and not ask individual citizens to shoulder the entire burden of achieving a social objective.
More often than not, however, property rights legislation will actually reduce government costs over the long run in two important ways:
First, it requires government agencies to directly consider less expensive alternatives in proposals focusing on planning, which explicitly require government agencies to ''look before they leap'' by calling for a ''takings impact analysis'' before regulations go into effect. Compensation bills, which define a point at which a payment must be made, indirectly help keep the costs of government programs down because if government has to pay for what it takes, then government will automatically think before it destroys private property rights.
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Secondly, by avoiding the taking of private property, property rights bills spare government the expense of fighting lengthy and costly litigation. Either compensation will be automatically required, or the government will have avoided the taking through careful planning. Would it not have made more sense and saved taxpayer dollars to have avoided these adverse judgments in the first place?
VI. Property rights legislation has been extremely successful at the state level
We know that property rights need legislative protection—the only question what kind of legislation will be most helpful. Fortunately, the federal government can look to the states—laboratories of democracy—to see how various types of legislation have served to protect this important constitutional right. To date, twenty-six states have enacted property rights laws. These can be broken down into two categories—''look before you leap'' legislation and compensation legislation.
The ''look before you leap'' laws require government agencies to conduct a ''takings impact analysis'' of its actions. Government regulators already conduct a variety of impact studies before taking official action; for example, environmental impact studies. A takings impact study would allow the government agency to predict possible effects of the agency's action on private property. After completing such a study, the agency may make an informed decision about the proposed action, and avoid or minimize possible liability for constitutionally prohibited takings.
By contrast, compensation laws allow the property owner to claim just compensation after a government action has already devalued his property. If a government action reduces the value of a property beyond the statutory threshold—usually expressed as a percentage of value—the property owner may ask the government to pay the difference. States vary as to whether the property owner files his claim in court, or must first seek payment directly from the agency, but the guiding principle remains the same: government must pay its own way rather than ride on the backs of private property owners.
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Two more comprehensive bills are worthy of closer review: Texas and Florida. In Texas, the ''Private Real Property Rights Preservation Act,'' enacted in June of 1995, incorporates both ''look before you leap'' and compensation approaches to protect private property rights. First, it requires Texas governmental entities to prepare a ''Takings Impact Assessment'' before enacting an ordinance, rule, policy, or guideline. Second, it provides that a property owner whose real property has been devalued by 25% or more by government action may sue in the state courts for invalidation of the government action. The government agency then has a choice: allow the courts to invalidate its action, or compensate the property owner. This approach preserves the government's interest in certain types of regulation, and protects the public treasury from excessive obligation to property owners, while still protecting the property owner's interest in his land. In Texas, property rights legislation has been a win/win scenario for everyone involved.
The state of Florida has also taken a multi-pronged approach to protecting private property rights. On May 18, 1995, Florida Governor Lawton Chiles signed the Bert J. Harris, Jr. Private Property Protection Act of 1995. Under the Florida's law, a property owner whose property has been ''inordinately burdened'' by a government action can file a claim with the head of the government agency responsible for the action, or each agency if more than one is involved. From that time, the agency and property owner have 180 days to settle the claim to their mutual satisfaction. Under the Act, the agency has broad discretion to offer various forms of settlement, including adjustment of its own action, land swaps, and transferable development rights. If the property owner does not accept the agency's settlement offer within the 180-day window, the agency must then issue a ''ripeness decision,'' detailing the permissible uses of the land. Upon the issuance of a ripeness decision, or the agency's failure to issue the required ripeness decision, the issue would be ripe for judicial adjudication as a matter of law.
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Requiring a ''ripeness decision'' is designed to remove one of the most significant hurdles facing property rights litigants on their road to relief. A regulatory agency must articulate which property uses would be permissible on the land and it encourages settlement, as regulators better understand the impact of their decisions on individual property owners. On the other side of the coin, the property owner has a written document from the agency which provides clear guidance as to what productive use he might be able to make of his land, removing fear and uncertainty which might otherwise drive him towards litigation.
Importantly, the ''sky has not fallen'' in either Texas or Florida. Although critics predicted that each of these bills would ''bust the budget'' due to increased compensation claims, or would lay waste to the environment, or would put zoning boards out of business, none of these dire predictions have come to pass. What we can learn from this on the federal level is that property rights legislation can be successful for both sides—those who seek to protect private property and those who seek to regulate it. We can learn from the creative and diverse solutions of fifty states to the conflict between the regulatory state and the private property owner. The question is no longer ''Can property rights legislation work?'' or even ''How?'' With the success of property rights legislation across the country, the only question that remains is, ''Why not?''
VII. A sound property rights bill must contain an adequate definition of ''taking' and prompt compensation to the property owner
The central problems of current takings law are dual: (1) the ambiguity inherent in a case-by-case ad hoc definition of what constitutes a taking, and (2) interminable litigation prior to payment of just compensation for the property taken. Legislation must address both of these issues if it is to ameliorate the burden placed on the property owner and to have the salutary effect of providing greater certainty for the guidance of the government and its citizens alike. I wish to underscore the point that sound property rights legislation will not only cure the injustice when a single property owner is forced to bear a burden which, in fairness, should be borne by the public as a whole; it will also provide guidance for government agencies in implementing their regulatory programs so as to avoid unnecessary government interference with private property rights.
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President Reagan issued Executive Order 12630 on March 15, 1988. That Executive Order, titled ''Governmental Actions and Interference with Constitutionally Protected Property Rights,'' had the same dual purposes which should be served by property rights legislation. Section 1(b) of that Order provides:
Responsible fiscal management and fundamental principles of good government require that government decision-makers evaluate carefully the effect of their administrative, regulatory, and legislative actions on constitutionally protected property rights. Executive departments and agencies should review their actions carefully to prevent unnecessary takings and should account in decision-making for those takings that are necessitated by statutory mandate.
Regrettably, however, executive agencies have utterly ignored the Executive Order, requiring that Congress act to provide the discipline which those agencies have refused to impose upon themselves.
Private property rights legislation should define a taking in terms which can readily be applied by the Courts to specific factual settings. The federal courts have provided at least two approaches to defining what constitutes a taking. The first approach analyzes the issue in terms of the diminution in value caused by the regulatory action. [See, e.g. Keystone Bituminous Coal Association v. DeBenedictis, 480 U.S. 470 (1987) and Florida Rock Indus. v. United States, 18 F.3d 1560 (Fed.Cir. 1994)]. The second approach analyzes the issue by ascertaining whether a recognizable property interest, deedable to the government, has been taken. [See, e.g., Loveladies Harbor Inc. v. United States, 28 F.3d 1171 (Fed.Cir. 1994) and Nollan v. California Coastal Commission, 483 U.S, 825 (1987)]. Either of these approaches would provide far greater certainty than the case-by-case, ad hoc approach described so despairingly by Justice Brennan in the Penn Central decision. By providing to the government a bright line definition of what constitutes a taking, Congress will not only foreshorten much useless litigation but, more importantly, will allow agencies to craft their own regulatory actions so as to avoid unnecessary takings of private property.
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Second, private property legislation should provide prompt and fair compensation when a taking does occur. Current takings litigation is fraught with pitfalls for the property owner. The government routinely asserts defenses such as lack of ripeness, mootness, statute of limitations, filing in the wrong court (i.e., District Court versus Court of Federal Claims, lack of jurisdiction, lack of case or controversy - to name just a few. Eliminating this procedural nightmare would do much to put the ''justice'' back in ''just compensation''. Providing an arbitration remedy might also serve to minimize the time and expense invested by both sides in litigating these complex and frustrating cases.
Finally, Congress must be careful to provide in any such legislation the full measure of just compensation. This should include, in addition to the value of the property taken, interest representing the reasonable use value of the money denied the property owner from the date of taking. The successful property owner should also be entitled to recover attorneys fees and costs of the litigation, including expert witness fees (such as appraisers); for in many cases these expenses exceed the value of the property taken, at least when the litigation extends over many years.
I would be pleased to answer any questions that you may have.
Mr. CANADY. Thank you very much. Mr. Scott, you're recognized.
Mr. SCOTT. Thank you, Mr. Chairman. I think part of the dilemma that we're in is trying to figure out when a taking occurs. I think there's general consensus—not universal, but general—that there are circumstances when the Government regulations has so diminished value that a taking has occurred. We've mentioned airplanes flying over the land; civil rights laws, and I guess criminal statutes of general application might theoretically reduce the value of the land, but if you're doing a professional assessment, real estate assessment, of the value of the land, I can't imagine that the value of the land was diminished when we passed civil rights laws. Am I wrong on that?
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Mr. JACOBS I know of no studies that I can give you. I suspect that if we were to go back in time to the 1960's, that there were a set of white restaurant owners who found their property, in the social climate of the times and in the region of the country they were in, worth less as a result of the implementation of those laws at the time. It probably did bounce back afterwards, but I am aware of no studies that I can point out to you at this time about that.
Ms. MARZULLA. I'd like to just add one thought, if I could. Even if a property owner could successfully show that his property had been devalued by the passage of civil rights laws, it would not be a compensable taking under the Fifth Amendment, because one does not have a right to compensation for use of property that violates other provisions of the Constitution.
Mr. EAGLE. Mr. Scott, may I add one comment to that remark? We've talked about value, and about diminution in value. I don't believe Congress should protect value. For instance, consider a situation in which a landowner has a parcel on a U.S. highway that's worth a lot of money because every potential customer is in stop-and-go traffic on that highway. Suddenly Government opens up an interstate a mile down the road and the value of the parcel on the U.S. highway falls. As far as I'm concerned, if it falls 95 percent, that's just an operation of the market; no one owns the right to have something worth a lot. What is owned is not monetary value, rather it's the right to exclude others, to use, and to alienate one's interest.
Mr. SCOTT. And how do we decide when the—so the taking would occur when you have a diminished use?
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Mr. EAGLE. Yes, sir.
Mr. SCOTT. And not value.
Mr. EAGLE. And how do we decide when that is? Is that——
Mr. SCOTT. Well, I mean, if you have diminished use that is not associated with—you're talking compensation, so you've got to be talking value.
Mr. EAGLE. Well, we're talking about compensating for the loss, and the loss is measured in dollars. Just as if someone loses a limb in an accident, we have to compensate in dollars, but what's lost is not dollars; it's the limb.
Mr. SCOTT. Okay. Well, if you have an environmental—endangered species, and you can no longer use your land, because the public decided that you can't use land within 500 yards of an eagle's nest, is that diminished use?
Mr. EAGLE. I believe it is, and I believe that——
Mr. SCOTT. And if there is diminished use, and I assume you could also associate that with a reduction in assessment value, that would be the damage.
Mr. EAGLE. Well, I think we have to start off by looking for the appropriate baseline. When Mr. Jacobs said before that society changes as to our ideas of what's acceptable and what isn't, that may be true, and that can happen very quickly. In the case of wetlands, for instance, it happened relatively quickly. In the case of the ESA, it happened quickly. The advantage to me of the kind of historic background approach to what constitutes property rights that the Supreme Court adopted in the Lucas case, is that we have to start with a historic understanding of what an owner owns and what he doesn't.
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Clearly, the right to put toxic poisons into the air on your land or in the water is something owners never owned under the common law. Therefore that's not something the State takes away when it forbids the practice. On the other hand, take the case of wetlands regulation or the eagle's nest. Say that the State suddenly says, in contravention of long established rights that one has a right to use one's land productively, that ''now you don't, because we think this environmental value is more important.'' That's certainly a governmental prerogative, but Government is doing that to establish a good, not to prevent a harm and I think that constitutes a taking.
Mr. CANADY. The gentleman's time has expired. The gentleman will have two additional minutes.
Mr. SCOTT. Thank you.
Then, can you—I guess our challenge is to come up with a list of things that are situations that would create the taking and another list that's probably equally painful to the landowner but would not constitute a taking.
Mr. EAGLE. Yes, it's a difficult choice, Mr. Scott, and I think the inordinate burden test that the Florida statute adopted, for instance, the use of the word ''inordinate'' really doesn't mean high in an absolute sense; it means out of proportion. When the contribution that the given landowner is expected to make to the public good is unfairly out of proportion, that's when compensation is due.
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Mr. SCOTT. Mr. Jacobs.
Mr. JACOBS Mr. Scott, I think it would be a mistake for Congress or for the State houses to try to generate these lists. As someone who teaches zoning regulations, the first thing I teach my students is, as soon as you make a list of permitted and conditional use, the next day it's out of date, because the way we use land changes dynamically. We can never think of all of the things we need to or should.
I do think that this question——
Mr. SCOTT. And, therefore, you're back to the subjective inordinate?
Mr. JACOBS. I think you're back to the subjective, and I think it is really, actually, a very fundamental issue. As the committee's probably aware, in Wisconsin, in the early 1970's, there was famous case decided at the State supreme court level, Just v. Marinette County, where the State supreme court said that an owner of wetlands should not presume that they own any rights to that property other than to use it in its natural use and that all other uses were to be given to the landowner by Government. Now, this is probably a more radical interpretation of private property than many of us would feel comfortable with. But, in fact, the Wisconsin supreme court in a very recent case last year, reaffirmed the basic principles of this case for Wisconsin.
Mr. SCOTT. But what about—one problem we have in my area is the definition, when it's a wetland and when it isn't, and you can pay somebody $50,000, and they'll give you a little map, and ''Here's the wetlands; here's where you can build.'' The core of engineers will give you another map; no overlapping space.
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Mr. JACOBS Right.
Mr. SCOTT. And then the next one—a tiebreaker comes up. I mean, at some point or another—and then you change or tweak the regulations a little bit, and all the maps are obsolete, but if you change those—if you buy property, and you know you can't build on wetlands, and then they keep changing, isn't there some inherent unfairness in that?
Mr. JACOBS And I agree with you. I think there is. I think there's a political issue but not a legal or a constitutional one. I think there's a political issue that is gotten at in the Florida statute about the notion of the inordinate burden; that is, I think we should not be asking individual landowners to carry too large a burden on behalf of society. That's why we have various relief mechanisms that we've developed in my field of urban planning in public administration and in other venues. But I think it's a mistake to try to come up with a list to say specifically when that is.
Mr. SCOTT. Can I have one additional minute?
Mr. CANADY. The gentleman will have one additional minute.
Mr. SCOTT. I think the panelists have gone back and forth. If they just keep going, I'd be—did you have a comment?
Mr. EAGLE. Yes, I'd like to say, Mr. Scott, in reference to that that I think that ''property rights'' is no more merely a ''political issue'' than rights to freedom of religion, freedom of speech or any other attribute of our liberty is merely a ''political issue.'' To be sure, it is certainly political, but freedom of ownership of property is put in the Constitution precisely to make it more than that and to have it more than simply subject to majoritarian whim.
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In the Just case, for instance, from Wisconsin, and in the Lucas case, we see that once Government is free of the constraint of having to compensate an owner, there's absolutely no assurance that Government is going to draw the line in a wise place. It's just too tempting to assume that you could put all the burden and costs of a governmental improvement on that owner rather than have the public bear it in the form of tax money.
Mr. SCOTT. Ms. Marzulla, did you have any additional comment?
Ms. MARZULLA. Not in this context; if you have another question.
Mr. SCOTT. Mr. Jacobs.
Mr. JACOBS I guess the final comment I'll make is that I have to disagree with my colleague here in the sense that if we look at the vast majority of land use and environmental regulations in this country, zoning and related kinds of regulations, they are not by any stretch of the imagination as strict as they could be. They are, in fact, very reasonable, community-based comprises of the balance between private property rights and the public interest, and I think that in most cases, not all, but in most cases, we do a very good job of sitting down with each other and talking through these issues and coming up with a rule framework that works. We have particular instances where we've failed, but in general, I think it works reasonably well.
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Mr. SCOTT. Thank you, Mr. Chairman.
Mr. CANADY. Thank you. Let me go back to a point that Professor Eagle raised in his testimony about the ripeness issue. That is a matter which is being pursued, actually, in legislation that has been filed and is moving elsewhere in the Judiciary Committee.
Let me ask Professor Jacobs to respond on that issue. Isn't something necessary to ensure that individual landowners aren't just whipsawed and delayed and delayed and delayed without ever actually—or without having a timely opportunity to get an adjudication on the merits of whether their rights are being denied?
Mr. JACOBS Characterize it that way, Mr. Chairman, I would completely agree with you. I think it's unfair to landowners to be dragged through a regulatory process that goes on, by any reasonable stretch of the imagination, as too long, but I also think it's unfair to have adjoining landowners burdened unfairly because of decisions by a particular landowner. It's a balancing act.
Mr. CANADY. Well, I don't necessarily disagree with the concern about the impact of particular uses on one property on other property. I mean, that is something that is considered in the zoning context, but I am aware of projects that are proposed where it seems the owners of the property can never—or it takes them an extremely long time to get any kind of an answer. Basically, it's up to them to kind of guess what might work. They're told what won't work, but they're never told what will work, and then it's back and forth, back and forth, and in some cases it seems pretty obvious that the object is to keep anything from happening on that particular land and to deprive them of any use of their property.
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You're experienced in this area. You don't think that happens with some frequency? In all candor here?
Mr. JACOBS No, in all candor. I think if we compared the number of cases that go through the regulatory structure, both land use and environmental, that ''work'' versus the ones that ''don't work'', I think the ones that don't work are actually minuscule. I think it does happen. We hear about the high profile horror stories. What we don't hear about is all the cases that proceed along quite reasonably for the landowners concerned.
Mr. CANADY. Again, Professor Jacobs, I wouldn't necessarily disagree with that——
Mr. JACOBS So, I guess my answer's no, Mr. Chairman. I don't think it happens with a great deal of frequency.
Mr. CANADY. I guess my perspective on that is different, although I think, perhaps, in the vast majority of cases things do work relatively fairly. That doesn't mean that there are not a significant number of cases—and, of course, if you're the individual affected, that case is most significant.
Mr. JACOBS Absolutely.
Mr. CANADY. Professor Eagle.
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Mr. EAGLE. I have some grave doubts about whether Mr. Jacobs is right on that point, but let's assume that he is. I still think that answer totally misses the mark, because one hallmark of legal decisions is that most people in the future are going to simply steer their conduct to be guided by the decisions that have been handed down, and so they won't go to court. So, when courts make rules, and when courts say that a developer could be strung along for 10 years by a local zoning board and not be able to go into Federal court for that period, what that tells future developers is that you simply better accede to an extortionate settlement where you give up many of your rights in land. The alternative is going to be a process where you can be played with for 10 years, and unless you have an incredibly large amount of resources, you can't win. So, it's not the fact that many cases might or might not happen, it's the fact that landowners are intimidated, because they understand very well where this process goes down the road.
Ms. MARZULLA. Mr. Chairman, I'm——
Mr. CANADY. Ms. Marzulla, if you could—yes, if you would.
Ms. MARZULLA. We track the number of inquiries and requests for legal assistance that we get at Defenders, and I can tell you that we get two or three calls every single day from individual property owners seeking relief from confiscatory Government regulations. We handle both Federal cases, that is lawsuits brought against the Federal Government, as well as lawsuits brought against State and local governments for Fifth Amendment violations, and the breakdown of those cases is approximately 50, 50; that is about 50 percent of the people calling us for assistance want relief against federal regulations dealing with, for example, endangered species wetlands, and the other remaining 50 percent involve the local land use issues, and one just quick example——
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Mr. CANADY. My time has expired, but without objection, I'll give myself two additional minutes. [Laughter.]
Ms. MARZULLA. Thank you.
I think the ripeness problem that you identified is a serious problem for property owners, and that's one particular feature of the Florida bill that I think is extremely effective.
Just one quick example: we represented Stephen Page who was trying to get a building permit to build a home, a single-family home, in the City of Pacific Grove, California. It's in a building lot that was zoned and, sub-divided for the building of a single-family home. He spent years, 6 or 7 years, trying to get architectural approval and then a building permit. He finally got architectural approval after submitting something like 22 plans and spending hundreds of thousands of dollars on engineers and architects. At one point during an architectural review board hearing, one of the commissioners turned to him and said that the type of house she would approve she had dreamed of the night before. It was a house formed in the shape of a seashell, and she saw herself as a seagull flying over the house that she would approve, a seashell built of twigs and feathers.
Mr. CANADY. Was that on the record?
Ms. MARZULLA. Yes, it was.
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Mr. CANADY. I'd love to see the transcript. So much for arbitrary and capricious. [Laughter.]
Let me ask you, Professor Jacobs, about the benefits to individual landowners of the Endangered Species Act. You talk about the benefits of zoning—the mutual benefits of zoning, and obviously this is something that some people would dispute, but I'm willing to assume that there are benefits to landowners in zoning frameworks and accept that as a justification for zoning schemes, but how can we justify basically requiring that an individual landowner turn his property into a public preserve for the protection of a species? Aren't we—in that circumstance, aren't we really imposing only a disadvantage on that landowner for the benefit of the public? And distinct from what happens in the zoning context.
Mr. JACOBS Mr. Chairman——
Mr. CANADY. I give myself one additional minute for you to answer.
Mr. JACOBS I'm not an expert on the Endangered Species Act, it's not my area of expertise, and so I really don't feel prepared to offer an answer that I can stand behind.
Mr. CANADY. Can you think of any analogous benefit to the landowner who's subject to impositions under the Endangered Species Act to the benefits in the zoning scheme?
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Mr. JACOBS Yes, I can. We do have studies in the land economics literature and in the planning literature of people whose land is protected and actually find that that land holds its value and in some cases raises in value as a result of the environmental protection and the insulation of those environmental regulations. So, there is one specific potential advantage to a landowner in a particular place. It's not going to happen to all landowners in all places. So, that's one example I can give you.
I think your point—if I can imply where you're going—is that this might be an instance where individuals are being asked to carry a heavy burden on behalf of society, and I think there may be instances; there probably are instances where this is in fact the case, and I think in these kinds of instances I would be up front with my colleagues at this table in suggesting that we need to sit down and figure out mechanisms where all parties concerned feel that the outcome is fair, both the landowners and the public which is looking for something from the landowner. What that should be, whether it should be in a particular legislation or whether it should be compensation, I think is open to question, but I think the fact that we should sit down together, absolutely.
Mr. CANADY. Well, my additional, additional, time has expired. So, with that, I will thank the members of this panel. Your testimony has been very interesting and informative. We appreciate your participation today.
This subcommittee is adjourned.
[Whereupon, at 3:20 p.m., the subcommittee adjourned.]
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A P P E N D I X
Material Submitted for the Hearing
PREPARED STATEMENT OF HON. BOB TURNER A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS
My name is Bob Turner and I am a State Representative from Texas. I represent 17 mostly rural counties in the central and western part of the state. I have served in the Texas Legislature since 1991. I am a sheep rancher by profession and serve also as the Executive Director of the Coleman Development Company. When I'm not tending my flock, by that I mean my sheep and my constituents, I try to boost the economic vitality of our little town by encouraging job-providing industries to locate in Coleman.
I retired from the Army Reserve after 35 years of service. I spent 17 years serving on the school board, part of that time as president. I have served on the board of the Texas Farm Bureau. I am a past chairman of the National Rural Health Committee. There are other things I could mention, but the point is I have a pretty good record of public service. I do the things I do because I like to think I can make a difference and that is why I am here today.
Texas is a beautiful place, so different from one region to another that each could be a separate state. Because of the way Texas entered the union, 98% of the land is privately owned and we'd like to keep it that way, but it's getting more and more difficult. Not because the government has been on a buying spree, but because the government is controlling more and more private property through regulatory means. Through federal laws like the Endangered Species Act and the Clean Water Act, the government has been telling landowners what they cannot do with their land, and then charging them big money for the privilege of exercising what remains of their property rights.
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We all understand the concept of eminent domain—a government's ability to condemn private property for a public use. Our constitution clearly states that the government cannot take private property without just compensation, and when government takes title to private property for highways or other public works projects the landowners are being compensated. They may not like the idea of losing their land, but at least they are being compensated.
What I am here to discuss today is the regulatory taking of private property. For example, if the government determines there are wetlands or endangered species or even endangered species habitat on private property, a landowner is prohibited from making certain uses of that land—like building a home or farming. Landowners argue that when the government limits the uses that can be made of private property in the name of environmental protection, it has, in essence, taken the land by regulation and they believe they are entitled to compensation in this case as well.
These land use limitations have a negative impact on the value of the property and even the threat of government regulation can have a ripple effect. In 1994, the federal government threatened to designate 33 counties in central Texas as critical habitat for the endangered golden-cheeked warbler. Just the specter of such a designation caused lending institutions to place a moratorium on loans on property in those counties, because they feared the value of their collateral—the land itself—would drop below the loan amount. Landowners also have argued that when the government through its actions devalues private property, a taking of their property has occurred for which they should be compensated.
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By the way, the federal government did not designate critical habitat in 1994, but only because Texas landowners absolutely refused to allow it to happen. I wouldn't have wanted to be the U.S. Fish and Wildlife Service employee that had to face thousands of furious Texas landowners in public meetings back then. 1994 was an interesting year for property rights in Texas. The federal government seemed to be coming at landowners with one regulatory scheme after another, all of which would have limited the use and value of private property.
Texas landowners banded together and defeated every proposal, but they were so angry about having to fight off their own government that they demanded we pass a Private Property Rights Act in the Texas Legislature in 1995. And we did. Of course, the act has no effect whatever on the actions of the federal government. Also, cities are exempted from the provisions of our bill. (The Texas Municipal League is a very powerful lobby.)
The most important aspect of our Private Real Property Rights Preservation Act is the so-called ''look before you leap'' requirement for state agencies, boards and commissions, political subdivisions of the state, institutions of higher learning and counties. Those entities are required to perform a takings impact assessment (TIA) before they implement rules affecting private property. If the TIA indicates the proposed action would reduce the market value of the affected property by at least 25%, the idea is for the entity to take another look at the proposed regulation.
If they go ahead with the regulation, the bill gives the landowner the right to sue for invalidation of the ordinance, rule, regulation, or whatever the offending action was. If the landowner is successful, however, the governmental entity may choose to compensate the landowner out of its own budget rather than invalidate the offending action.
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Environmentalists absolutely hated this bill. They testified it would lead to environmental Armageddon and drain the state's coffers. Nothing of the kind has happened, of course, and the bill has done exactly what we intended it to do—which was to make government think about the impact of its proposed regulations on private property rights before it acted. Only one lawsuit has been filed on the basis of the act, and it was filed by an environmental organization on behalf of several landowners protesting a permit that was granted to a confined animal feeding operation located near them. The suit was ruled invalid, however, because the property rights act was not actually the proper basis for the lawsuit. The act applies only to governmental actions that directly affect private property.
I live and ranch on land that has been in my family since 1905, and I think I speak for other landowners when I say it's not compensation for governmental takings that we seek. What we really want is for the government not to take our land in the first place.
The constitution should protect private property rights, but it doesn't seem to matter much to people anymore. It seems as if the 5th and 14th Amendments have become the forgotten amendments. I think, too, that those of us who serve sometimes forget that the proper role of government is to protect—not abuse—the rights of its citizens. With that in mind, I believe that a federal Private Property Rights Act is appropriate and necessary and the Texas Property Rights Act would make an excellent model.
Thank you for your time. I would be happy to entertain your questions.
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