minute. You have got to pay me for the cattle prices that went down during that month they were quarantined." We are not going to do that. We can't control our livestock otherwise.

These laws restrict private property rights, but the benefiting of protecting the community from negligent landowners outweighs the costs incurred by the individual.

Some feel that property rights of the individual should override the well-being of the community. That is not the American tradition. It is not rural American tradition. Both our traditional American values and the value of our rural land are at stake in this debate. Each landowner has rights, but also has responsibility to their neighbors.

Senator LEAHY. Mr. Chairman, as you know, the Ruby Ridge hearings are starting up, and I am a member of that panel, and I would ask if I might be excused to go to that.

Senator THURMOND. Thank you very much, Senator, for your appearance.

Senator LEAHY. Thank you.

Senator THURMOND. If any of the Senators on the committee have any questions, obviously, you may indicate to me, and we will give you the opportunity. Otherwise we will just get statements from the Senators who are testifying and then move on to the wit

nesses.

We will now move to our second panel, Senator Richard C. Shelby. We are very pleased to have you with us.

STATEMENT OF HON. RICHARD C. SHELBY, A U.S. SENATOR

FROM THE STATE OF ALABAMA

Senator SHELBY. Thank you, Mr. Chairman. I am pleased to be before the Judiciary Committee this morning. After this, I am scheduled to testify over on the House side on another matter. I would like to respond to some questions. If you have any, any of you, including Senator Biden or Senator Simon or Senator DeWine, the Chairman, himself, we will do our best to answer them.

Mr. Chairman, I believe that this is an opportunity to speak about title V of the Omnibus Property Rights Act. That is why I am here. While there have been some criticisms of this section, just a few minutes ago, I feel confident the criticisms are unfounded and based on a fundamental lack of understanding of property rights.

Some have suggested title V amends the Endangered Species Act and the Clean Water Act and, therefore, should be addressed in the Environment and Public Works Committee and not this Committee. I believe this is not correct. Title V does not attempt to change the laudable goals of those Acts. Instead, title V is about property rights and the Government regulations that infringe on those rights. We do not, Mr. Chairman, attempt to change any goals of these statutes, but merely seek, yes, merely seek, to change the administration of the laws with respect to property rights.

Although the goals of the Endangered Species Act are commendable, the means by which the act chooses to achieve the goals, I believe, are simply misguided, ineffective and doomed for failure.

Instead of treating endangered species as the assets that they truly are, the Endangered Species Act has caused endangered spe

cies to be a tremendous liability borne by very few specific property

owners.

To illustrate, assume the Federal Government passed a regulation that said, "Any house that is found with a Vincent van Gogh painting must be vacated and no individual may live in that house because van Gogh is dead, the paintings are in short support and they are highly valued." We all know that.

Now suppose that a family living in a home that has been in the family for generations finds a van Gogh painting in the attic or in the wall. The incentives the family faces are simple: report the finding to the Government, who will throw them out of their home, without compensation, or destroy the picture in order to hide it from the Government so they can continue to live in their home. This is what the Endangered Species Act does. Landowners are very familiar with the phrase, “shoot, shovel and shut-up." In essence, if a property-owner finds an endangered species on his or her land, he has, under the act, the incentive to shoot it, shovel it away and not tell anyone he found it. This adversarial relationship exists because the ESA currently does nothing to encourage the conservation of endangered species.

In the United States, 895 species are currently listed as endangered or threatened. After more than 20 years, only two species have been delisted because of the success of the act. Of the 23 species that have been delisted, 13 were from data errors that is, they should not have been listed in the first place, and seven have become extinct. That is a very poor record, I believe. These numbers validate the assertion that the Endangered Species Act has not achieved the purposes it was set out to achieve.

Another criticism of title V is that it costs too much money. That may be convenient, but the more important question is, “How much is the Endangered Species costing us in its present form?" This is not an easy question to answer. First of all, the Fish and Wildlife Service is not forthcoming with estimates. Although they are required by law to report the Federal expenditures used in regards to the ESA, the data remains largely unpublished and seems to be attained only through the Freedom of Information Act.

However, based on information from the Inspector General, estimates suggest that Federal expenditures on the Endangered Species Act run between $9 and $13 billion a year. This figure does not include State and local expenditures, the reduction in tax revenues due to the reduced business activity, land devaluation and lost jobs. Some critics claim that the Endangered Species Act and Wetlands regulation do not physically take land away from individuals and, thus, should not be considered a taking. That claim is missing the fundamental principle of property rights.

Property rights are not simply rights of ownership, but a bundle of rights that include the right to utilize property as one chooses. As such, a regulatory taking is a de facto taking and, therefore, a violation, I would submit, of the fifth amendment.

Title V simply requires notice and consent from property owners before Federal agencies and their agents can enter a private property owner's land for purposes of the Endangered Species Act or Wetlands laws.

In addition, this title ensures that property owners rights are considered and respected when agency decisions or actions are taken pursuant to these two laws by providing an administrative appeals process that we don't have today. The process calls for the owner to be given access to the information collected, a description of the way the information was collected, yes, and an opportunity to discuss the accuracy of the information.

Lastly, it requires the agency itself to determine whether a taking has occurred and, if so, to compensate the private property owner for the loss in fair market value of the property.

A property owner who is deprived of at least a third or more of the fair market value would be entitled to receive compensation under our bill. The agency would be required to pay the fair market value of the property if purchased or the difference between the fair market value of the property without the restrictions and the fair market value of the property with restrictions.

In closing, Mr. Chairman, I would like to quote two insightful, but diametrically opposed, philosophers. The first is from Friedrich von Hayek, most commonly associated with Austrian economics. He once said, "The system of private property is the most important guaranty of freedom, not only for those who own property, but scarcely less for those who do not." Mr. Hayek understood that the most basic tenet of a free society starts with private property rights.

Even Karl Marx realized this. The Communist Manifesto written in 1848 states, "*** the theory of Communists may be summed up in the single sentence; Abolition of private property."

Make no mistake, Mr. Chairman, regulatory takings effectively abolish private property rights. Karl Marx knew it, Friedrich von Hayek knew it, and the American people know it.

Mr. Chairman, I also have a statement from Senator Nickles, who is a co-sponsor of this section of the bill with me, and he asked me to ask that it be placed in the record after my testimony. Senator THURMOND. Without objection, that will be done. [The prepared statement of Senator Nickles follows:]

PREPARED STATEMENT OF SENATOR DON NICKLES

Mr. Chairman, of all the freedoms we enjoy in this country, the ability to own, care for, and develop private property is perhaps the most crucial to our free enterprise economy. In fact, our economy would cease to function without the incentives provided by private property. So sacred and important are these rights, that our forefathers chose to specifically protect them in the Fifth Amendment to the U.S. Constitution, which says in part, “nor shall private property be taken for public use, without just compensation.

Unfortunately, some federal environmental, safety, and health laws are encouraging government violation of private property rights, and it is a problem which is increasing in severity and frequency. We would all like to believe the Constitution will protect our property rights if they are threatened, but today that is simply not true. The only way for a person to protect their private property rights is in the courts, and far too few people have the time or money to take such action. Thus many citizens lose their Fifth Amendment rights simply because no procedures have been established to prevent government takings.

Many people in the federal bureaucracy believe that public protection of health, safety, and the environment is not compatible with protection of private property rights. I disagree. In fact, the terrible environmental conditions exposed in Eastern Europe when the Cold War ended lead me to believe_that_property ownership enhances environmental protection. As the residents of East Berlín and Prague know

all too well, private owners are more effective caretakers of the environment than communist governments.

Yet the question remains, how do we prevent overzealous bureaucrats from using their authority in ways which threaten property rights? The bill that is before us today, The Omnibus Property Rights Act of 1995, addresses this issue in several ways. First, it requires the government to assess whether existing or proposed regulations result in an unconstitutional taking of property prior to acting. Second, it requires compensation if any property that is taken for public use without the consent of the owner is devalued by 33 percent or more. Third, it creates a streamlined cause of action by which property owners can obtain compensation for the taking of their property.

The Omnibus Property Rights Bill of 1995 also includes provisions of the Private Property Owners Bill of Rights, S. 239, that Senator Shelby and I introduced in January of 1994. S. 239 targets two of the worst property rights offenders, the Endangered Species Act and the wetlands permitting program established by Section 404 of the Clean Water Act.

The Private Property Owners Bill of Rights, requires Federal agents who enter private property to gather information under either the Endangered Species Act or the wetlands permitting program to first obtain the written consent of the landowner. While it is difficult to believe that such a basic right should need to be spelled out in law, overzealous bureaucrats and environmental radicals too often mistake private resources as their own. Property owners are also guaranteed the right of access to that information, the right to dispute its accuracy, and the right of an administrative appeal from decisions made under those laws.

The enforcement of the Endangered Species Act and the wetlands provisions in the Clean Water Act is part of a growing and disturbing trend of "big-brother” intrusion into the lives and businesses of private citizens. From the northern spotted owl to the American burying beetle, the Endangered Species Act is being manipulated by extremists to stop development on public and private lands without regard to economic impact or citizen's rights.

Although the spotted owl has received most of the attention, no less threatening is the disruption caused by lesser known species. In Oklahoma, the prairie_mole cricket delayed state highway projects for months before scientists discovered that the cricket's population was not threatened. Similarly, the endangered American burying beetle forced redesign and rerouting of a major gas pipeline in southeastern Oklahoma. Although these examples do not approach the economic significance of the spotted owl, they clearly illustrate the flawed construction of the Endangered Species Act.

No less absurd are the impacts of the wetlands provisions in the Clean Water Act when inappropriately applied by government bureaucrats. The Creek Turnpike in Tulsa was endlessly delayed because the U.S. Corps of Engineers "discovered" about four and a half acres of "wetlands" in the proposed construction zone. In spite of the fact that the Turnpike Authority offered to purchase and give to the government more wetlands than the road would fill, the Corps objected. It was estimated that if all the so-called wetlands had to be bridged would raise the turnpike's cost by $14 million. In addition, each day of delay cost about $20,000. Although this issue was finally resolved, the process added unnecessary delay and costs to a much needed project.

Both the Private Property Owners Bill of Rights and the Omnibus Property Rights Act of 1995 guarantee compensation for a landowner whose property is devalued by a federal action under the Endangered Species Act or wetlands permitting program. An administrative process is established to give property owners a simple and inexpensive way to seek resolution of their takings claims. If we are to truly live up to the requirements of our Constitution we must make this commitment. I believe this provision will work both to protect landowners from uncompensated takings and to discourage government actions which would cause such takings.

Mr. Chairman, the time has come for farmers, ranchers, and other landowners to take a stand against violations of their private property rights by the federal bureaucracy. The Omnibus Property Rights Act of 1995 will help landowners take that stand.

Senator SHELBY. Mr. Chairman, I would be glad to respond to any questions, and I am sure that the Senator from Delaware has probably got a couple of hundred, but I am due over on the House side in a few minutes to testify on another matter. If you will excuse me, I will be glad to answer for the record.

Senator BIDEN. Mr. Chairman, I wouldn't want to deny the House the opportunity to hear the Senator, and I just want to know if you find that guy who found the van Gogh painting, tell him leave the house and keep the painting. He can make a lot more money. [Laughter.]

Senator SHELBY. If I find the man and the house, we will move in together. [Laughter.]

Senator THURMOND. Thank you for your testimony, Senator. We are glad to have you with us.

Senator THURMOND. We will now turn to panel III. We will ask all of these witnesses to come forward. Mr. Keith W. Eckel, President of Pennsylvania Farm Bureau, if you will take the seat on the end; Ms. Merrily Pierce, Second Vice President of Fairfax County Federation of Citizens Association; Mr. Joseph L. Sax, Counselor to the Secretary of the Interior; Mr. Jonathan H. Adler, Director of Environmental Studies, Competitive Enterprise Institute; Professor Richard G. Wilkins of BYU Law School.

We are very pleased to have all of you people with us.

We are going to allow you to take 5 minutes to make a statement, and then we will put the rest of your statement in the record, so as to give time to the members of the Committee to ask questions.

Mr. Eckel, you may proceed.

PANEL CONSISTING OF KEITH W. ECKEL, PRESIDENT, PENNSYLVANIA FARM BUREAU; MERRILY PIERCE, SECOND VICE PRESIDENT, FAIRFAX COUNTY FEDERATION OF CITIZENS ASSOCIATION, MCLEAN, VA; JOSEPH L. SAX, COUNSELOR TO THE SECRETARY OF THE INTERIOR, WASHINGTON, DC; JONATHAN H. ADLER, DIRECTOR OF ENVIRONMENTAL STUDIES, COMPETITIVE ENTERPRISE INSTITUTE, WASHINGTON, DC; AND RICHARD G. WILKINS, BRIGHAM YOUNG UNIVERSITY LAW SCHOOL, PROVO, UT

STATEMENT OF KEITH W. ECKEL

Mr. ECKEL. Mr. Chairman, my name is Keith Eckel, and I am from Clarks Summit, PA. I am a farmer in Clarks Summit, and I represent the American Farm Bureau of Federation here today. I serve on their board of directors and as a member of their executive committee.

I am involved in a vegetable and grain operation in Clarks Summit, and I would ask the Chairman that our written statement be made part of the record.

Senator THURMOND. Without objection, that will be done, and that will be the case with all of you. Your full statements will go on the record, so it is a brief presentation to 5 minutes.

Mr. ECKEL. Indeed, it is an honor to testify before the Judiciary Committee this morning. I come to you with strong concerns on behalf of farmers and ranchers as far as the infringement on private property rights occurring in America today.

I assure you, without question, that one of the main concerns of my members and my fellow farmers is the infringement on private property rights by government regulatory action.