constraints." 27 Sam Hamilton, former Fish and Wildlife Service administrator for the state of Texas explains this more fully: "The incentives are wrong here. If I have a rare metal on my property, its value goes up. But if a rare bird occupies the land, its value disappears." 28

What Sam Hamilton describes is the inevitable result of using federal land-use controls as a means of pursuing environmental protection; land-use restrictions produce land devaluations for those who are restricted. Insofar as private landowners are threatened with the potential loss of the productive use of their land without compensation by environmental statutes, they will have an incentive not to provide whatever environmental amenity that the federal government is seeking to protect. Whether this committee or the federal courts wish to recognize such landuse controls as uncompensated regulatory takings or not, this will remain the case.

CONCLUSION

It is time to recognize that property rights are important for both economic and environmental reasons, and must be protected from both government regulation and private malfeasance. Compensating landowners when they are deprived of the reasonable use of their land will not produce environmental catastrophe. Far from it. As I, and others, have argued elsewhere, in many cases it will eliminate the negative environmental incentives created by the heavy hand of existing government regulations. Properly understood, property rights do not undermine sound environmental conservation, they lie at its foundation.

Compensation to landowners is a simple matter of justice; private parties should not bear public costs. S. 605 is not a perfect bill-it falls short of ensuring that all victims of regulatory takings will receive justice but it would represent a decisive step toward ensuring justice for landowners in this country. I urge this committee and the rest of the Senate to take this step by enacting a statutory requirement for compensation for regulatory takings.

Senator THURMOND. Thank you very much. We are glad to have you with us. Mr. Wilkins?

STATEMENT OF RICHARD G. WILKINS

Mr. WILKINS. Thank you, Mr. Chairman. My name is Richard G. Wilkins, and I am a professor of law at the J. Reuben Clark Law School, Brigham Young University.

The need to provide effective statutory protection for regulatory abuse of private property rights is plain. Although the Supreme Court has attempted to enunciate and apply workable limits on governmental power under the takings clause, that effort has proven exceptionally difficult.

This difficulty has stemmed, however, not from the inability to state governing principles, but from the inability to apply those pragmatically to given cases. This bill aids in that effort.

I am somewhat surprised to hear this bill described as a radical departure from established Supreme Court precedent because, in very large measure, what this bill does is codify and clarify existing constitutional doctrine. It does so, and in my written testimony I go through and show how most of the provisions of the bill are simple and unremarkable restatements of the holdings of the leading Supreme Court cases in this area. The one area where the court does go beyond those cases is the one area where, rather than having widespread unanimity on the court, there has been widespread confusion and, in fact, inability to apply constitutional doctrine. That provision is the one that is set forth in section (a)(2)(d) of this

27 Speech by Michael Bean to the U.S. Fish and Wildlife Service Seminar, "Ecosystem Approaches to Fish and Wildlife Conservation: 'Rediscovering the land Ethic," November 3, 1994 (from video; transcript available from CEI).

28 Quoted in Betsy Carpenter, "The Best-Laid Plans," U.S. News & World Report, October 4, 1993, p. 89.

bill, which simply puts remedial teeth in an old constitutional principle that harks back to 1922, when Justice Holmes said, "Government regulation cannot go too far without violating a takings clause."

The Supreme Court, despite its success in enunciating general principles, simply has been unable to give this important principle any real content. The Supreme Court explained in 1922 that the Government can't go too far. In 1960 it said it can't force people, “*** to bear public burdens which in all justice and fairness should be borne as the people as a whole." But how you effectuate those very, vague tasks is hardly self-evident, and the Supreme Court has been unable to give any real guidance except for what guidance this bill codifies.

The Supreme Court, in addressing when government regulation goes too far, has suggested that government never goes too far unless it takes all value or physically invades property. Now many have argued, and I know that some have argued before this Committee, that this result is desirable because it gives government regulators needed flexibility. But the Supreme Court's inability to separate the near from the far has resulted in so much flexibility, that the regulatory limits of the fifth amendment have effectively disappeared. I am not the only scholar who has suggested that the Supreme Court's inability to put any content into Justice Holmes' dictum has, to a large extent, rendered the fifth amendment, essentially, meaningless.

The extreme flexibility of current doctrine is simply not advisable. Chief Justice Rehnquist noted, "Many of the provisions of the Constitution are designed to limit flexibility and freedom of government authorities, and the just compensation of the fifth amendment is one of them."

Now Senate bill 605 will ensure that the fifth amendment performs its important limiting rule by providing a simple remedial rule. Government goes too far when it takes as much as one-third of the value of property, thereby, finally putting teeth into Justice Holmes' 1922 dictum.

Now this bright-line approach has much to commend it. First, it is understandable. Second, I believe that it effectuates a rough and fair balance between public need and individual right. Any government regulation, of course, will adversely affect property rights. Justice Holmes, himself, recognized that in Mahon, when he said government could hardly go on if you have to compensate for everything. But the Supreme Court has been unable to provide any intelligible guidance because balancing the near from the far necessarily requires a court to determine whether public need outweighs, in any given case, intrusion upon private interests. That determination, I submit, is essentially and quintessentially a political decision.

Courts are ill-equipped to determine when government has gone too far because, in the context of a discrete case, they are only given one option; invalidate the action or say this particular private property owner has to bear the entire cost of the regulatory scheme.

I think that the Supreme Court is not the only protector of constitutional rights in this country. Congress, as it has done with leg

islation under the commerce clause and 14th and 15th amendments, has the ability and, indeed, the obligation to protect the constitutional principles inherent in the takings clause.

I think that this legislation does an admirable job of doing that, and I would urge its passage.

[The prepared statement of Mr. Wilkins follows:]

PREPARED STATEMENT OF RICHARD G. WILKINS

I am pleased to have the opportunity to testify in support of Senate Bill No. 605. The Bill addresses and provides redress for-one of the most troubled areas of the Supreme Court's Takings Clause jurisprudence: that is, when does government regulation go "too far"? The bill also addresses-and alleviates an unfortunate jurisdictional tangle that has developed between United States District Courts and the Court of Claims. For both of these reasons, I hope that the Bill will be passed and signed into law.

WHEN DOES GOVERNMENT REGULATION GO "TOO FAR"?

The need to provide effective statutory protection for regulatory abuse of private property rights is plain. Although the Supreme Court has attempted to enunciate and apply workable limits on governmental power under the Fifth Amendment's Taking Clause, that effort has proven exceptionally difficult. The difficulty, moreover, has stemmed-not from the Court's inability to discern governing principlesbut from its inability to apply those pragmatic principles to discrete cases. Section 204(a)(2)(D) of Senate Bill 605 effectively addresses this remedial "gap.

Section 204 of Senate Bill 605, in large measure, codifies and clarifies current constitutional doctrine. It does so by explicitly adopting already-established constitutional standards and expressly acknowledging that these standards may yet evolve. Subsection (a)(1), for example, simply restates the rule in Loretto v. Teleprompter, 458 U.S. 419 (1982).1 Subsection (a)(2)(A), in turn, codifies the rule in Nollan v. California Coastal Commission, 483 U.S. 825 (1987),2 subsection (a)(2)(B) adopts the standard enunciated in Dolan v. City of Tigard, 114 S. Ct. 2309 (1994),3 subsection (a)(2)(C) sets out the test established by Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992), and subsection (a)(2)(E) recognizes that there may be addi

1 Section 204(a)(1) provides, in pertinent part:

A property owner shall receive just compensation if * as a consequence of an action of any agency, or State agency, private property (whether all or in part) has been physically invaded *

Compare Loretto, 458 U.S. at 434 (“In short, when the 'character of the governmental action' is a permanent physical occupation of property, our cases uniformly have found a taking to the extent of the occupation, without regard to whether the action achieves an important public benefit or has only minimal economic impact on the owner") (citations omitted).

2 Section 204(a)(2)(A) provides, in pertinent part:

A property owner shall receive just compensation if * * * [government] action does not substantially advance the stated governmental interest to be achieved by the legislation or regulation on which the action is based *

Compare Nollan, 483 U.S. at 834 ("We have long recognized that land-use regulation does not effect à taking it if ‘substantially advance[s] legitimate state interests") (citations omitted). 3 Section 204(a)(2)(B) provides, in pertinent part:

A property owner shall receive just compensation if *** [government] action exacts the owner's constitutional or otherwise lawful right to use the property or a portion of such property as a condition for the granting of a permit, license, variance, or any other agency action without a rough proportionality between the stated need for the required dedication and the impact of the proposed use of the property. ***

Compare Dolan, 114 S. Ct. at 2319-2320 ("We think a term such as 'rough proportionality' best encapsulates what we hold to be the requirement of the Fifth Amendment. No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development ") (citations omitted).

*Section 204(a)(2)(C) provides, in pertinent part:

Continued

tional circumstances where "a taking has occurred within the meaning of the fifth amendment of the United States Constitution." These provisions, therefore, are unremarkable-unless, of course, one either disagrees with established Fifth Amendment jurisprudence or believes that the Supreme Court has already specified all possible applications of the Takings Clause.

The provision that I find most noteworthy in Senate Bill No. 605 is Subsection (a)(2)(D) which, as I read it, puts remedial teeth in a constitutional principle that harks back to Justice Holmes' opinion in Mahon v. Pennsylvania Coal, 260 U.S. 412 (1922). That principle is this: while government has the power to regulate despite incidental impacts on property value, government regulation may not go "too far" without violating the Takings Clause. The Supreme Court, despite its success in enunciating the general constitutional standards codified by this legislation, has been remarkably unsuccessful in giving any real content to this famous phrase.

A hypothetical illustration highlights both the tensions inherent in Justice Holmes dictum and the difficulties that have plagued the Supreme Court's efforts to enforce it. Suppose that a developer purchases a piece of property near an urban area that, for many years, has been zoned for high-density commercial development. The property, if used for construction of a high-rise office building, has a value in excess of $10 million. However, once development begins, nearby homeowners who fear that a high-rise office building will block a panoramic view of a distant mountain range-prevail upon city councilmen to enact a "mountain view" ordinance that extinguishes the previously existing zoning rights. As a result, property that once was worth $10 million comes to have little (or no) commercial value.

Some version of this hypothetical scenario is played out again and again in modern society. On the one hand is the property owner who legitimately believed that it had the right to develop and use a classic property interest in a profitable manner. On the other hand is the equally legitimate need of the public to preserve important public interests. How are these conflicting interests to be mediated?

The governing constitutional doctrine is relatively clear: government, in the course of protecting even such important interests as scenic resources, may not go "too far.” Or, as the Supreme Court somewhat more cogently explained in 1960, government may not force 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, 364 U.S. 40, 49 (1960). The result dictated by either of these formulations, however, is hardly self-evident. Granted that the government may not go "too far" in intruding upon the right of a property owner in the course of furthering even important governmental interests, what distinguishes the "far" from the "near"? Granted that government may not force some property owners to bear a disproportionate burden of the cost of protecting limited natural resources, when is that line crossed?

Supreme Court cases addressing the issue give little concrete guidance. Indeed, the Court has managed to protect property owners in only a few rather discrete categories of cases. These categories include those situations where government regulation results in a physical intrusion, prohibits all economically productive use of property, does not substantially further a legitimate governmental interest, or inappropriately exacts a property interest as a condition for a government permit. As noted above, Senate Bill No. 605, in subsections 204(a)(1), (a)(2)(A), (B), and (C), codifies these jurisprudential rules. Notes 1-4, above. Beyond these relatively clear lines, however, lies a vast area of uncertainty. It is in this area that Senate Bill 605 provides welcome clarity.

The Supreme Court has been unable to identify precisely when government action goes "too far."5 Indeed, the Court's decisions can be read as suggesting that the gov

A property owner shall receive just compensation if *** [government] action results in the property owner being deprived, either temporarily or permanently, of all or substantially all economically beneficial or productive use of the property or that part of the property affected by the action without a showing that such deprivation inheres in the title itself. * * *

Compare Lucas, 112 S. Ct. at 2899 ("Where the State seeks to sustain regulation that deprives land of all economically beneficial use, we think it may resist compensation only if the logically antecedent inquiry into the nature of the owner's estate shows that the proscribed use interests were not part of his title to begin with ") (citations omitted).

In fact, one could even argue that the Court has been unable to apply the relatively "clear" rules attributable to physical invasions and total loss of value. The clarity of the "physical invasion" and "deprivation of all value" lines is often more apparent than real. For example, determining when a "physical" invasion has occurred has proven difficult. In the development hypothetical noted above, for example, the property owner may plausibly claim that-in the course of protecting a mountain view-the government has imposed an easement limiting development on the affected property. If so, has there been a physical invasion requiring compensation? Cf. Loretto v. Teleprompter, 458 U.S. 419 (1982) (attaching cable television lines to the outside of an apartment building results in a "physical invasion" requiring compensation). The property

ernment never goes "too far" unless it physically appropriates a property interest. Some have argued that this outcome is desirable, because (among other things) it gives government regulators needed "flexibility."7 The Supreme Court's inability to effectively delineate the "far" from the "near," however, has resulted in so much "flexibility" that the limits imposed by the Takings Clause upon government regulators have effectively disappeared.8 I am not the only scholar who has suggested that the Supreme Court's inability to implement Justice Holmes'dictum has, to a large extent, rendered the protection afforded by the Fifth Amendment essentially meaningless. As another commentator has noted, the current construction of the Just Compensation Clause provides government "with such flexibility that [it can] substantially regulate or even take property with great freedom."

The extreme flexibility of current doctrine is not advisable. As Chief Justice Rehnquist has noted, "many of the provisions of the Constitution are designed to limit the flexibility and freedom of the governmental authorities, and the Just Compensation Clause of the Fifth Amendment is one of them." First Evangelical_Lutheran Church, 482 U.S. 304, 321(1987). Senate Bill 605 assures that the Just Compensation Clause will perform this vital function by providing a clear remedial rule: government goes "too far" when it "diminishes the fair market value of the affected portion of the property *** by 33 percent or more with respect to the value immediately prior to the governmental action." Section 204(a)(2)(D). The legislation, in sum, finally puts teeth into Justice Holmes' 1922 dictum.

Senate Bill No. 605's bright-line approach to resolving when government action goes "too far" has much to commend it. It is straightforward and understandable. Several of the Supreme Court's discussions of when government goes "too far" have become bogged down in essentially philosophical debates regarding the meaning and nature of property. Is property a "bundle of rights"? If so, what is the most important "stick" in that bundle the right to exclude others? Or is the most important stick, perhaps, the right to develop property rights to their full economic potential? Divisions between the Justices on such issues, as evidenced by the various opinions in Keystone Coal v. DeBenedictus, 480 U.S. 470 (1987), and Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992), give legal theoreticians and philosophers grist for learned discourse, but provide little practical help for either property owners or government regulators. This philosophical debate regarding the inherent nature of property rights, moreover, shows little sign of being resolved by the Supreme Court.16 The legislation, therefore, settles an important remedial issue by declaring that property rights are essentially economic rights.

owner, furthermore, may well argue that, because regulation has effectively destroyed the commercial value of the property, it has lost "all economic value." Cf. Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992) (regulations prohibiting residential development within coastal flood plain deprives owner of "all economic value" and require compensation). If so, the government will predictably reply that the owner has not lost "all value:" after, all, the property owner may still visit the affected property for family picnics and other outings. See e.g., Lucas, 112 S. Ct. 2886, 2908 (1992) (Blackmun, J., dissenting) (flood plain regulations did not deprive owner of "all economic value" because the property owner "can picnic, swim, camp in a tent, or live on the property in a movable trailer "). The Court has hardly been consistent in addressing (and resolving) such arguments. Compare Lucas (elimination of development rights requires compensation) with Andrus v. Allard, 444 U.S. 51(1979) (owner of archeological artifacts did not suffer a compensable taking when government regulation prohibited all sales of the artifacts; owner could still possess, view and devise the relics).

See generally Richard G. Wilkins, "The Takings Clause: A Modern Plot for an Old Constitutional Tale," 64 Notre Dame L. Rev. 1, 3 (1989) (citations and footnotes omitted):

[T]he [Supreme] Court has found a taking only in cases involving either physical dispossession or, less frequently, total destruction of some right closely related to physical dominion over property. Such cases, however, "are relatively rare." Accordingly, the vast majority of governmental actions adversely affecting property owners escape with little or no constitutional scrutiny.

"E.g., Statement of John R. Schmidt, Associate Attorney General, Before the Subcommittee on the Constitution, Committee on the Judiciary, United States House of Representatives, Concerning Takings and Related Legislation (February 10, 1995) at 3 (“the genius of the Constitution's Just Compensation clause is its flexibility").

Richard G. Wilkins, note 6, supra.

John Choon Yoo, Our Declaratory Ninth Amendment, 42 Emory L.J. 967, 1021 n.223 (1993) (summarizing Harry N. Scheiber, Property Law Exportation and Resource Allocation by Government 1789-1910, in American Law and the Constitutional Order: Historical Perspectives 13241 (1978) (discussing state law cases which parallel the federal decisions).

10 Compare the majority and dissenting opinions in Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992) (where the majority concludes that property rights are primarily economic, while the dissenters stress less tangible aspects of property ownership). See also Andrus v. Allard, 444 U.S. 51(1979) (Court concludes that federal regulation that effectively destroyed Continued