A bill pending in the Senate that endorses compensating private property owners when federal regulations warrant the “taking” of their land has local officials concerned about how they may be affected.
S. 605, the Omnibus Property Rights Act of 1995 was reported out of the Senate Judiciary Committee by a vote of 10–7 last December and is awaiting full Senate consideration.
The bill requires compensation when the “taking” of private property rights by the federal government results in a decrease in property value by at least 33 percent. (A similar bill in the House would compensate for diminished property value of at least 20 percent for certain federal regulations.)
Other provisions in the bill would: 1) clarify the law by which courts judge takings claims, 2) establish an arbitration procedure to reduce litigation, 3) enact into law (currently an executive order) a requirement that government agencies consider the effect of their actions before they act, and 4) create a streamlined administrative appeal and compensation procedure which applies to claims arising from the Endangered Species Act and the wetlands provision of the Clean Water Act.
“This bill helps the little guy, the family farmer and the individual property owner who cannot afford the expense and delay of federal litigation,” claims Judiciary Committee Chairman Orrin Hatch (R-Utah), a bill cosponsor.
Members of the Administration, however, consider this tampering with the Constitution.
“It’s a bad idea,” maintains James F. Simon, Deputy Assistant Attorney General, Environment and Natural Resources Division, Department of Justice. At a meeting of NACo’s Environment, Energy and Land Use Steering Committee at the Legislative Conference in Washington, D.C. last month, Simon asserted that the Fifth Amendment already protects property owners from unjust takings, and that the courts should continue to make decisions on a case-by-case basis. “It’s been working for 200 years. We don’t see any reason to change it.”
“It is the Constitution of the United States, not this bill, that establishes and entitles the American people to compensation for property taken by the federal government,” countered Senator Hatch. “This bill merely enforces that constitutional right found in the Takings Clause of the Fifth Amendment. It does this by codifying and clarifying recent Supreme Court opinions establishing standards interpreting and implementing the Takings Clause.”
Describing the bill as a “budget buster,” Simon believes it would generate thousands more court cases by those seeking compensation, costing local governments administrative time as well as money.
But Hatch pointed to a Congressional Budget Office (CBO) report that he feels refutes that argument: “CBO concluded in the study that increased litigation under the bill would be minimal due to the ever-increasing costs of litigation. CBO also concluded that the administrative costs of the bill would be minimal because the bill creates incentives for the federal government not to violate constitutional property rights.”
Hatch also tried to allay fears that local government would be held liable as well. “S. 605 only applies to federal agency action,” he said, “and not to purely state action or any local action. ... Under S. 605, if the federal government requires state agencies to commit takings, the corresponding federal agency will still be liable.”
Because it is federal agencies that will be ultimately liable in a takings claim, Simon worries that the feds will be less flexible in allowing states and counties to implement federal programs that may require a takings, i.e. coastal zone management, wetland protection, water/air protection. “The federal agencies would be less willing to delegate because they’re going to be on the hook to pay.”
Simon asserts that one of the bill supporters’ goals is to replicate similar legislation in the state legislatures.
Hatch denies this. “The command of the Fifth Amendment, ‘nor shall private property be taken for public use without just compensation,’ already applies equally to federal, state and local government entities,” he reminded. “The primary purpose of S. 605 is merely to codify and clarify existing Supreme Court precedent in this area.”
Property rights laws are already on the books in 18 states, but only a handful require compensation. However, the ground swell of support in the states may finally be dying down, as was witnessed in the state of Washington last November. By a 3-to-2 margin, voters rejected a property rights initiative requiring landowners to be compensated for any decrease in the value of their property due to state or local government regulation.
“The Administration is trying to make regulations better and cheaper,” Simon said, but altering constitutional standards, it believes, is excessive.