Sadly, we fear the reason is this: A constituent who attacks his Congressman makes the Nightly News. But the Congressman who champions the cause of his constituents does not. What a tragedy what hypocrisy! Respectfully submitted, ROGER AND SHARON GAUTREAU. The CHAIRMAN. Thank you, Mr. Chaconas. We are happy to have you before the committee, and we have been happy to have both of you before the committee. We will keep the record open for statements of other Members of Congress, and others as well, because we would like to have as much public input as we can on this issue. Believe it or not, I think the desire on both sides is to do what is best under the circumstances here, and I am convinced that we have to do something about the out-of-control Federal regulations in our society and the, I think, inappropriate takings that go all over our society against people like Nellie Edwards, who testified today, and in some way yourself and others. To make a long story short, we appreciate your being here. Senator BIDEN. Thank you very much. I think you both are an example of the other side of the equation that is never talked about. The reason why we have these laws in the first place and no one is suggesting that regulators don't overregulate sometimes and that bureaucrats don't abuse, but your case is pretty clear, it seems to me. Assume you hadn't even purchased the property; if you had been an adjacent property owner, the ability of that developer to use the wetlands the way he did would have caused you damage and caused your neighbors damage. I think we all kind of forget the reason why we pass these laws in the first place. It is not because property owners said, you know, we are not going to pollute, we don't want to do that, we will self-regulate ourselves, we are not going to do these bad things. Having said that, professor, I would like to ask you a question. You gave a very articulate statement laying out how we have historically viewed public and private property, and how they intersect, but let me ask you about this legislation. Are you for it or against it? Ms. ROSE. I don't think it is a good idea. I think it disrupts takings jurisprudence as it is, which I think is necessarily fact-specific, case by case. Senator BIDEN. So you are against it? Ms. ROSE. Yes. Senator BIDEN. Secondly, you were in the room when I was asking my questions about whether or not this legislation would affect some of the hypotheticals that I raised. Have you read the legislation? Ms. ROSE. I have, but I haven't had a chance to look as closely as some of the other witnesses here who were working on it all along. Senator BIDEN. Do you believe that-and if you don't have enough knowledge to make the judgment now, I would like you to submit an answer to this in writing. Where a Federal agency, like the Food and Drug Administration, refused to allow a product to be marketed, would this constitute the cost to that individual com pany-if it exceeded a third of its value, would it constitute a private property that had been taken for purposes of this legislation? Ms. ROSE. Senator, I don't know enough about the Food and Drug Administration to be able to speak to that. I could speak, though, to the other hypothetical that you were raising in that connection, and that was the imposition of effluent limitations on plants. I think the way that litigation would work would be the following. Effluent limitations cost the plant something; every year, they cost the plant something. That means that that plant has annual costs that it did not have before. It makes the total value of that plant property less when you think of the total value of the property as being a stream of income over time. There are now more expenditures that must be taken every year. If those expenditures amount to a third-also, I should say the portion stuff can be manipulated quite a lot, as you were suggesting earlier in some of your questions, but if those additional costs amount to a loss in the stream of income that then would take the value of the capital plant down by a third, then I think that you are going to see lots of litigation and I suspect that is what would happen. I was interested that the previous panel did not regard that as likely to happen. It seems to me extremely likely to happen. Senator BIDEN. They went beyond that. They said it wasn't property; it didn't fit the definition of property. Ms. ROSE. I was also interested to see that, and my own view about this legislation is that it expands the view of what is private property and diminishes the view of public rights. It is implicit in the lack of defenses that are here for publics asserting the ability to protect public rights. Senator BIDEN. Professor, does this legislation, as you understand it, apply to that cost that the regulation requires a property owner to expend in order to be able to continue to use the property? Ms. ROSE. I am sorry. I missed the first part of the question. Senator BIDEN. If a regulation requires a property owner to expend money to be able to legally continue to use the property as they have been using it, is that property? Does that constitute property, the expenditure of capital? Is that capital property? Ms. ROSE. Well, what happens is that a land owner or anybody, any owner, would have to spend money, say, annually, and that means that the value of the underlying asset diminishes, so you can turn the property into that asset. If you have got to spend more to keep up a farm, for example, it means your annual profits are less and the total value of the farm is less. Those are the instances where I think we are likely to see litigation that property has been taken. Senator BIDEN. I have one more question and then I will submit the rest of my questions in writing. If this bill allows a court, which it does, as I understand it, to invalidate a law Congress passes, and as I understand the legislation-my chief counsel is trying to find it for me and I want to get the exact language. If this bill allows a court to invalidate a law Congress passes, doesn't that mean judges can override the judgment that the Congress makes about public health and safety, and may reasonably limit the highest value of that property use? Let me just read it to you here. It says, "Jurisdiction and Judicial Review. A property owner may file a civil action under this act to challenge the validity of any agency action that adversely affects the owner's interest private property in either the U.S. District Court or the U.S. Court of Federal Claims. This section constitutes express waiver of the sovereign immunity of the United States. Notwithstanding any other provision of law and notwithstanding the issues involved, the relief sought, or the amount in controversy, each court shall have concurrent jurisdiction over both claims of monetary relief and claims seeking invalidation of any act of Congress or any regulation of an agency as defined under this act affecting private property rights. The plaintiff shall have the election of the court in which to file a claim for relief." Is that unusual? Ms. ROSE. Well, Senator, this is an area of Federal jurisdiction that I don't know entirely well, but it does seem to me that one would think about some of these considerations. Courts do invalidate statutes of Congress from time to time. The difference here is that the constitutional provision that is under consideration is the Takings Clause, and that clause provides for just compensation if there has been a taking. I think there are many, many issues about what constitutes a taking, and I think that those are best dealt with by courts. Nevertheless, once having found a taking, the remedy is just compensation, rather than invalidation of a statute. In part, the reason for that is that a statute might be invalid with respect to a particular property, but you wouldn't want to knock out the whole regulatory scheme because there has been some overreaching on that particular property. Senator BIDEN. So isn't this an unusual or additional or an unintended grant of authority-not unintended to the courts to allow them under takings jurisprudence to invalidate a statute? Ms. ROSE. It seems unusual to me. It seems that this is a very heavy cannon to apply when the instances of takings are so individual and so much questions of site-by-site specific applications of statutes. Senator BIDEN. I don't have any further questions, Mr. Chairman. I thank the witnesses, and with your permission, I would like to be able to submit some questions in writing. I think, Mr. Chaconas, you made an incredibly articulate statement for the proposition which you are positing, which is that this is a two-way street. Mr. CHACONAS. Thank you, sir. [The questions of Senator Biden are located in the appendix.] The CHAIRMAN. Thank you, Senator Biden. We wanted to thank all witnesses for being here today. We think it has been a good hearing and we appreciate your being here. We have a statement from Senator Abraham which we will include in the record. [The prepared statement of Senator Abraham follows:] PREPARED STATEMENT OF SENATOR SPENCER ABRAHAM Mr. Chairman, I want to express my strong support of the "Omnibus_Property Rights Act" introduced by my distinguished colleague, the Senator from Kansas. I believe this bill will address a significant problem affecting the economic and personal freedom of too many Americans. Unfortunately, under the Supreme Court's current, restrictive interpretation of the Takings Clause of the Fifth Amendment, a property owner whose land value has been diminished by a use restriction usually cannot receive compensation unless the restriction has rendered his property valueless. As a result, virtually no substantive or even procedural obstacles hinder unelected bureaucrats from imposing economically devastating use restrictions on private land. The Omnibus Property Rights Act solves this problem by providing that a landowner shall receive full compensation whenever federal government action directly reduces the value of his land by one-third or more. The "directly" qualifier precludes compensation for "consequential damages," such as those suffered by the owner of a gas station on a rural two-lane highway when a parallel superhighway is built nearby. The Act also requires agencies to conduct a "takings impact analysis" before imposing a regulation "which is likely to result in a taking of private property," thus forcing regulators to consider the consequences of the regulations they propose. In this way the bill will protect Americans from unnecessary regulations that inhibit their full use of their own, private property, and see to it that necessary regulations that take away significant use and value from this land are accompanied by proper compensation. Mr. Chairman, I feel it necessary in expressing my support for this bill to confront certain myths currently being bandied about concerning our attempt to see that regulatory takings are accompanied by proper compensation. The first myth is that the Act would create a new "entitlement." This myth should sway no one because obviously a property owner who is compensated for losses caused by the federal government is different in kind from the person who simply receives a government handout. The second myth is that the Act would increase the deficit. Again, there is no basis for this view. CBO has scored the Act as revenue neutral, largely because any compensation awarded under the Act must be paid out of the operating budget of the agency that imposed the regulation and not out of any fund set up specifically to cover judgment awards. The third myth is that the Act will require compensation for polluters and others who engage in noxious uses of their property. I am happy to say that this myth also is without foundation because the Act expressly provides that no compensation is required if the restricted use is a nuisance under the common law of the State in which the property is located. Since such use rights do not inhere in the owner's title to begin with (as they are not recognized at common law) restrictions on such uses do not impinge on the property owner's rights. One final myth I would like to address is the claim that the Act is "anti-environment." Mr. Chairman, the Act does not ban environmental regulation. Indeed the issue raised by property rights legislation is not whether a clean environment, preservation of pristine wilderness and so on are worthy goals. Instead the issue is whether the burdens associated with those societal benefits shall be borne by a few unlucky landowners or by society, through its government. Simple justice demands that society pay for societal benefits. Mr. Chairman, none of these myths match reality because the "Omnibus Property Rights Act" aims only to protect the well-grounded rights of property owners. If we are serious about protecting the liberties of the American people against governmental intrusion we must enact laws that effectively protect them from that intrusion. This bill will do exactly that and in a measured, reasonable manner. The CHAIRMAN. With that, we will recess until further notice. [Whereupon, at 1:55 p.m., the committee was adjourned.] THE OMNIBUS PROPERTY RIGHTS ACT The committee met, pursuant to notice, at 10:15 a.m., in_room 303, Utah State Capitol, Salt Lake City, ÚT, Hon. Orrin G. Hatch (chairman of the committee), presiding. OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. The CHAIRMAN. Today we will consider private property, specifically the unjust seizures of private property. Make no mistake. This hearing is not a hearing on the importance of safeguarding the environment, which I-which I do support. Nor is it about legitimately protecting wilderness areas, which I also support. Nor is this hearing about the sometimes necessary condemnation of certain private properties to benefit the common good in the building of necessary highways and schools, which are routinely compensated. What this hearing involves is the uncompensated taking of private property that has, in some cases, been in families for generations, takings by Federal regulations. Tomorrow is the Fourth of July. It's America's Independence Day. Our forebearers fought a revolution to protect certain liberties that they felt were founded not on the ruler's largesse, but on a higher law. In order to ensure that those basic rights would never be infringed, the Founders enshrined them in the Bill of Rights. One of those rights was written into the fifth amendment which nor shall private property be taken for public use without just compensation." The fight to maintain that right goes on in our society. says, A well-intentioned desire on the part of Federal regulators to protect a wide variety of interests has led to a dramatic increase in the amount of private property that is effectively taken by devaluation. To be clear, not every Federal regulation amounts to a taking. Furthermore, some regulations which infringe on property rights are worthwhile. However, when a regulation does have the effect of taking private property, the owner of that property should receive just compensation. Anything less is a violation of a basic liberty heralded in the Constitution and specifically written in the Constitution. Frankly, I find it hard to believe that some people claim that compensating Americans for a government taking is such a novel concept. After all, no one disputes the laws that pro |