covered either cause pollution or involve the exercise of traditional police powers. For example, section 204(d)(1) of S. 605 plainly states that no compensation shall be required if the use of the property constitutes a nuisance. This is the same rule adopted by the U.S. Supreme Court in Lucas vs. South Carolina Coastal Council in 1992. Acts of pollution are a nuisance and, thus, polluters will not benefit under this bill.

Many of these laws and regulations simply fall outside the scope of traditional police power authority, and are based on entirely different grounds. The Endangered Species Act, for example, was enacted under the Commerce Clause. While the Act finds a "public interest" in preserving species, the Act does not say that the "health, safety and morals" of the country require it. The Endangered Species Act therefore falls outside the traditional "police power" matrix of federal regulation. ESA regulations that restrict or deny use of private property therefore cannot claim possible exemption from the Fifth Amendment's just compensation requirements.

Our organization has long supported fiscal responsibility by the federal government. It is not our intention to see private property legislation "bust the federal budget." Undoubtedly, you have heard this claim. But it only points out that if the cost is that high, then it is now being borne by property owners. If the federal government wants to use the property for the good of all, it is only fair that all share in its cost.

ADMINISTRATIVE PROCEDURES

Farm Bureau is particularly interested in and supportive of an administrative procedure for private property owners to obtain compensation for lost property rights.

Some Farm Bureau members know first hand the exorbitant costs associated with pursuing litigation to protect their legitimate private property rights. These people often have to pursue claims through an administrative process before going to federal or state court, and then maybe to an appeals court before their claims are finally resolved. Pursuing these claims take a great deal of time, but also a great deal of money spent for attorney fees, court costs, discovery and other costs as they go through the various steps. Most Farm Bureau members cannot afford to pursue such claims at all and thus are victims of the process.

Providing private property rights protection under the Constitution means nothing if there is no way to enforce them. Private landowners should not be precluded by the high costs of our legal system from protecting their property rights. While our government should be sensitive to the property rights of private landowners and structure regulations in such a way that does not impact those rights, this is unfortunately not the case in actual practice. An affordable administrative procedure that allows private property owners to protect their legal rights is an absolute necessity, and we are pleased that a simplified, less formal and less expensive and time-consuming procedure is provided in these bills.

REFOCUS ENVIRONMENTAL PROTECTION

By placing the responsibility for costs of environmental protection on the public where it belongs, agencies would have to refocus their regulatory efforts toward legitimate governmental interests. Where public policy implementation is achieved at little or no cost, as in the uncompensated restrictions on private property rights, there is virtually no limit to what agencies believe they can do. Where the perceived benefits of promoting governmental policies are separated from the costs of implementing those policies, there is no governmental accountability or public responsibility. In fact, they feel obligated to regulate even more, while lines of legitimate governmental interests in carrying out congressional mandates become blurred. The result is overregulation.

Associating costs to governmental regulation of endangered species and wetlands regulations will refocus the agencies on their proper and legitimate regulatory responsibilities. In the case of wetlands, agencies will be forced to focus on protection of those wetlands that are important for public health and safety purposes by making assessments of the functions and values of wetlands and determining which are most worthy of protection. With regard to endangered species, agencies will have to concentrate on how best to protect species instead of spending their appropriated funds on trying to convince the public to support such things as wolf and grizzly bear introduction.

There is no question that positive incentives would result in better protection and would better accomplish the goals of the programs better than negative regulation. This is especially true for the Endangered Species Act, where over 20 years of negative regulatory direction has produced only a handful of species that have achieved

the recovery goals of the Act. Farm Bureau actively supports the idea of incentive programs for both wetlands and for endangered species protection as a means of achieving the goals of both regulatory programs without infringing on private property rights.

"GIVINGS"

We also comment on the issue of government action as a “giving". It is unfortunate that "takings" and "givings" are discussed as part of the same issue. The government "givings" concept is not rooted in the Constitution.

Bruce Yandle, Alumni Professor of Economics and Legal Studies at Clemson University, puts it this way: "In contrast, if a highway is built near the owner's land, and her land increases in value, the owner has received no property rights [emphasis added]. She has no legal right to stop a later decision to relocate the highway. She has simply won a lottery. If a regulatory decision is made to close the highway due to congestion or flooding, and the landowner's property values fall by 50 percent, that is no taking and no compensation is due. Payment is required when rights are transferred, not when luck of the draw affects values."

The "givings" and "takings" issues have been raised with respect to price and income support programs for farmers and ranchers. If payments to agricultural producers were reduced, that would have an impact on land values because some portion of the yearly payments has been capitalized into the value of land. That would certainly cause hardship for those producers, but it is not a takings as defined by the Constitution. There is no constitutional right to receive farm program payments. The issue is not about value of property. It is about the right to own and use that property, and regulations that restrict that ownership and use.

Farm Bureau believes that there are many cases where property owners gain value in their land through the actions of the federal government, but they can also gain value from several other sources. But nowhere are those gains deemed to constitute "property rights." That is the crucial issue in this debate.

CONCLUSION

Government at all levels has been disregarding private property rights for so long that it will take considerable change to fully protect private property rights as intended by the Constitution.

We support S. 605, the Omnibus Property Rights Act of 1995, as an important step in the rebalancing of power between property owners and government.

Senator THURMOND. Thank you very much. Pleased to have you here.

Our next witness is Ms. Merrily Pierce.

STATEMENT OF MERRILY PIERCE

Ms. PIERCE. Good morning, Mr. Chairman, and members of the Committee. My name is Merrily Pierce, and I am a homeowner. I am also vice president of the Fairfax County Federation of Citizens Associations, which was founded 55 years ago. The Federation is the largest civic association in the county and the umbrella organization for over 150 homeowner associations representing about 200,000 homeowners.

We rarely, if ever, have an opportunity or reason to address a Senate Committee, and we are honored to be here this morning. I am here because of our concern over S. 605. The fifth amendment of the U.S. Constitution states that there shall be no takings of private property without just compensation. This provision is self-executing. No laws need to be passed to define it nor to implement it. What actually is a taking of private property is defined by the courts on a case-by-case basis looking at the specific facts of the case, including the effects of the proposed action on neighbors, the community and broad public interest.

This procedure has defined takings of private property since the Constitution was adopted. The Federation supports the Constitution and, therefore, strongly opposes S. 605.

In weighing this so-called property rights legislation, we think that Congress should recognize that the largest number of property owners in this country are homeowners. This legislation would most definitely hurt, not help, this constituency.

First of all, we have to ask why our tax dollars should be used to compensate more often than now required and what limitations will the Congress put on increasing the mandated frequency of payment?

In simple terms, S. 605 would take dollars out of the pockets of our members and of homeowners across the country.

Second, the legislation represents an ominous threat to the security of our private property rights. Our homes are the most important investment most of us will make in our lifetimes. We want to protect the value of that investment. Therefore, we depend on basic health, safety, zoning and environmental regulations to help us maintain our quality of life and those property values. Takings legislation would undermine the laws and regulations which protect our communities and our homes.

I have included several examples of situations we have faced in our county in my written testimony. I have time to cite only one recent disaster to homeowners, which could have been prevented had the necessary regulations been in place.

In the middle of our county, there is a large, well-established community of 1,500 homes. The community of Mantua has its own elementary school, tennis courts, a swim club, a stream valley park with trails, meandering streams and established hard-wood trees throughout. A strong citizens association organizes neighbors for parades, holidays and to welcome newcomers. This is a community with a rare sense of place and used to be a sought-after location for home buyers.

Five years ago a resident noticed oil flowing on the surface of a stream that ran through the back of her yard. An investigation uncovered a significant problem at a petroleum storage tank farm facility nearby. Shock became terror when the community learned that the plume of oil, estimated at 300,000 gallons, had leaked from the tank farm, under the adjacent four-lane highway, under the treed buffer area, under commercial properties along the highway and under 17 homes in the community.

How did the community suffer as private property owners? The properties over the plume suddenly became worth half of their value, adjacent homeowners saw their values reduced by 30 percent and the next ring of homeowners also experienced a loss in value. In the first 2 years of this disaster, Fairfax County lost over $800,000 in real estate taxes.

The entire community was stigmatized. Prospective home buyers stayed away and real estate agents avoided the community. Five years after the oil leak was first discovered, 60 families who lived on streets directly affected by the spill have moved. The community is still fighting to restore its proud reputation. The situation should never have been permitted to occur. Had the oil company had monitoring wells on site, which they now have, they would have had

advanced knowledge of the leaks in time to correct them. We consider the regulation put in place following the disastrous leak to be private property protection legislation. The owners of the tank farm had a responsibility to operate a safe facility.

Takings legislation would require homeowners to pay to prevent having their property damaged by irresponsible neighbors. We feel this would represent an enormously unfair financial burden on the homeowning taxpayer.

Government at all levels must ensure basic safeguards so that people need not fear unnecessary damage by other property owners because they live downstream, downwind or downhill. The Mantua oil spill demonstrates the need for environmental protection laws to protect property rights in another respect as well."

Following the discovery of the spill, a number of homeowners filed suit based on Virginia nuisance law to recover loss of their property values. Unfortunately, last April, a Federal Appeals court rejected the suit and concluded that the homeowners could not recover for loss of value because the underground spill was not physically perceptible from the homeowners' property.

This result clearly demonstrates to us the inadequacy of nuisance law to protect homeowners and a need for reasonable across-theboard regulations and standards to meet today's problems. Common and codified law is full of examples of regulations preventing property owners from harming others or the community as a whole. For example, materials and practices which create fire hazards are regulated. The condition and operation of motor vehicles is regulated. At the national level, Clean Water legislation and other environmental laws protect our communities, our homes and our wallets.

To require homeowners to pay to prevent damage caused by irresponsible land use nearby will be costly, is unnecessary and goes against our basic American values of owning our own homes.

All property owners are and should be entitled to constitutional protection, but certain landowners should not be the beneficiaries of what we feel could be a new entitlement program that would pay them for the costs of complying with the standards that protect the majority

Senator THURMOND. I believe your time is up. Are you about through?

Ms. PIERCE. One sentence. We believe this bill to be hurtful to our members as taxpayers and homeowners. Thank you very much. Senator THURMOND. Thank you. Mr. Joseph Sax?

STATEMENT OF JOSEPH L. SAX

Mr. SAX. Mr. Chairman, I am Joseph Sax, counselor to Secretary Bruce Babbitt, Department of the Interior. Thank you for the opportunity to testify this morning.

In addition to my written statement, I would like to submit for the record testimony previously given by other Administration witnesses before the Committee on Environment and Public Works on this bill, S. 605, and other related bills.

Senator THURMOND. Without objection, they will be admitted. Mr. SAX. Thank you, Mr. Chairman. In testifying today, my primary concern is to dispel the misconception that S. 605 does no

more than to implement or to reflect the private property protection embodied in the fifth amendment and also to speak about the nuisance defense.

On the contrary, S. 605 embodies a radical departure from the constitutional standard adopted by the Supreme Court. For 150 years, the interpretation and meaning of the takings provision of the Constitution has been vouched safe to the Supreme Court of the United States. All during that period, in every era and every Justice, with a remarkable degree of unanimity, regardless of their views otherwise, have interpreted the takings provision in a way that is inconsistent with each of the primary elements of this Bill S. 605. They have rejected the segmentation notion implicit in this bill under the affected portion language.

They have required that expectations be taken into account, which play no role in this bill. They have said the diminution of value alone, except where all value has been taken away, is not a sufficient standard.

They have rejected the notion that any single factor, such as diminution, is decisive, and they have said that nuisance need not be present in order to disallow compensation. It would be hard to find an issue of any kind of constitutional interpretation on which there has been such widespread unanimity. I would urge that the greatest caution be exercised before departing in the radical way that this bill does from the collective judgment and the collective wisdom of the court over so long a period and with such unvarying consistency.

I would like to turn now to the nuisance defense and to supplement the comments that were made earlier by Senator Biden. Section 605 contains a narrow exemption, which would avoid a duty to compensate if the regulated use constitutes a nuisance. The court has expressly rejected a taking standard that required a determination of whether a regulated activity was a nuisance according to the common law. Because so much conduct falls outside the scope of the nuisance doctrine, the court has routinely allowed regulation for conduct that was not a nuisance; destruction of diseased trees, liquor prohibition and conventional urban zoning.

Neither common law nuisance nor the novel formulations in other bills provide the public with adequate protection. Many environmentally harmful activities now regulated by Federal law are not nuisances in at least some states, though they may be nuisances in others. Of course, there would be an enormous divergence of result and lack of uniformity under this bill.

Some of them have been mentioned earlier; flooding caused by filling of adjacent property, hazardous waste contamination of property, ground water contamination, asbestos removal and contamination of a creek by a leaking landfill, all cases of pollution, all governed by Federal law. These are the examples that have led opponents of the bill to say that this bill would generate, in some circumstances, a duty to compensate polluters for not polluting, since nuisance law was never intended and has never served as a complete protection of all human health risks and other threats to the public welfare. Indeed, the reason Federal environmental laws were enacted in the first place was to address problems that were not being adequately addressed under state nuisance law in the