Senator BIDEN. If you will just indulge me 30 more seconds, the ability to prove that the ozone layer depletion has caused harm to a specific individual is overwhelmingly difficult to do. Yet, no one questions that depletion of the ozone layer has a fundamentally negative impact on humankind. Therefore, it is a different standard, very difficult to meet.

The CHAIRMAN. Well, maybe the Government is going to have to meet it. I mean, you know, maybe that is just the way life is because there are a lot of differences as to whether that applies or not.

Senator BIDEN. I appreciate your answer. Thank you.

The CHAIRMAN. Now, let me also just say one other thing and then we will go to Senator Grassley. As to the partial taking, the 33-percent level, the Lucas Supreme Court case left that issue up in the air and left it open, and the Federal circuit court in the Florida Rock case created a balancing test to determine what is, "partial taking." All we are trying to do is tell the Supreme Court what it is, and we think it is time that we defined that so that citizens aren't just robbed day in and day out. Somebody has to define this because the Court is not doing it, and it is probably appropriate that it doesn't do it. We have an obligation to do it, and that is what this legislation is all about.

Senator Grassley?

Senator GRASSLEY. I don't think I have any questions, Mr. Chairman, but I do want to say something at this point.

The CHAIRMAN. Sure.

Senator GRASSLEY. I have listened to a lot of discussion of this not only in this environment, but in a lot of other environments in the last year. Although I know our Constitution does not differentiate property rights from big corporations or little individualsthey are all treated the same I think there is a case trying to be made over the last couple of years on this issue by opponents of it that this is nothing but an effort to protect corporate polluters and to encourage corporate pollution.

The fact of economic life in America is that big corporations probably are as unaffected by the issues we are trying to get at in this legislation than anybody because they have the capability of passing on costs to the consumer and they have got the capability of hiring the big law firms to defend themselves when they have to defend themselves.

For the individual or the small self-employed person, a government judgment that deprives economic use of property can be a life-or-death situation because they can't pass on costs to the consumer or they can't afford the very expensive legal counsel that it takes to defend a situation or to protect rights.

I see this legislation as extremely important to people in my State because in my State over 98 percent of the land is privately owned, and I don't think there are more than two or three other States that have that high of a percentage of privately held land. So virtually every government regulation in some way affects the ability of land owners, particularly in my State, to use their property.

I think this legislation helps to relieve the regulatory burden on individuals. Simply stated, I think it strikes a balance between the

public good and the desire to protect private property rights, and think today I see the deck just extremely stacked in favor of the Government and against property owners; particularly, the smaller they are, the more so. The intimidation of a Federal bureaucrat gets individuals and small business people in this country just to knuckle under, and it shouldn't be that way.

Now, I know opponents of this bill are arguing that the Constitution already protected the rights of private property owners. But you have got to be able to make use of the courts to get this done, and I think Chief Judge Smith points out very well today that a petitioner seeking to invoke these constitutional protections faces both jurisdictional and procedural hurdles that are not very easily

overcome.

Just some CRS statistics, reporting for 1993: of 31 Federal court decisions on takings issues, only 2 were decided in favor of property owners. Litigation under the Takings Clause is extremely expensive and time-consuming to do, and hence very costly. Aggrieved property owners are effectively barred from judicial remedy due to the cost and time involved in their case.

I think the proposed legislation will clear this up by giving us a clear standard, by eliminating jurisdictional hurdles, and by expediting the process in favor of the land owner who has suffered a taking. I think the bill will force agencies to consider whether their actions affect the use of private property.

I think just this bill's impact upon the thought process and the culture of decisionmaking of our bureaucracy is the most beneficial impact. I think it is going to force some common-sense approaches to regulation writing, and just the institution of a little bit of common sense in public policymaking in America, particularly in a bureaucracy where there isn't an interaction between the people affected and the policymakers, I think would be such a good discipline to institute upon government.

This bill does not in any way turn back the clock of the gains that have been made in environment or safety legislation or a lot of other things. Critics of this legislation arguing that the Government will be forced to pay polluters to comply with environmental law and somehow awarding bad actors just can't be given paramount position when such government action doesn't really hurt these bad actors like it really impacts negatively upon the lawabiding individual, the little guy of America and the self-employed person or the ma-and-pa operations of America. I think our common law nuisance approaches to taking care of these problems are going to see that that doesn't happen. So I think, Mr. Chairman, this bill is sorely needed to bring common sense to the promulgation, and most importantly the enforcement of those regulations. Mr. Chairman, I would ask that my entire statement be included in the record.

The CHAIRMAN. It will be included in the record.
[The prepared statement of Senator Grassley follows:]

PREPARED STATEMENT OF SENATOR CHARLES E. GRASSLEY

I thank the distinguished Chairman, Senator Hatch, for introducing S. 605 the Omnibus Property Rights Act of 1995 and for calling this hearing. I am pleased to be an original cosponsor of this important piece of legislation.

This legislation is extremely important to the people of my state. In Iowa, over 98 percent of the land is privately-owned. I believe only 3 other states have a higher percentage of privately-held land. So virtually every government regulation in some way affects the ability of a landowner to use their property.

The people have grown tired of the increasing regulatory encroachment on their everyday lives. The plea I hear most often when I return to Iowa is "Get the government off our back." I believe that sentiment was the driving force behind the November 1994 elections. I also believe that my party will have a difficult time maintaining its majority status if it does not pay careful attention to this sentiment.

This bill helps relieve the regulatory burden on individuals in three important ways. First, it provides for compensation to landowners whose property is taken or devalued by 33 percent. Second, it forces agencies to analyze proposed regulations as to the likelihood that the regulation will result in a taking. And third, the bill makes it easier for aggrieved landowners to seek remedy from the government in federal court.

Simply stated, the legislation strikes a balance between the public good and the desire to protect private property rights. Currently, the deck is stacked in favor of the government and against property owners.

Opponents of the bill will argue that the Constitution already protects the rights of private property owners in the Fifth and Fourteenth Amendments. However, for the reasons pointed out in the testimony we will hear from Chief Judge Smith, a petitioner seeking to invoke these constitutional protections faces both jurisdictional and procedural hurdles that are not easily overcome. In fact, CRS reports that of 31 federal court decisions on the takings issue in 1993, only 2 were decided in favor of the property owner.

Moreover, litigation under the Takings Clause is generally more expensive and time consuming than other types of litigation because of its fact-intensive nature and lack of clear judicial standards. Thus, many aggrieved landowners are effectively barred from a judicial remedy due to the cost and time involved in trying their case. This proposed legislation sets a clear standard, eliminates jurisdictional hurdles and expedites the process in favor of the landowner who has suffered a taking.

The bill also will force agencies to consider whether their actions affect the use of private property. This requirement will result in more innovative regulations that both promote the public good and limit the infringement of the government on property rights.

This bill does not turn back the clock on the gains we have made in the last two decades in improving the environment. Critics of this legislation argue that the government will be forced to pay polluters to comply with environmental law, thus rewarding so-called "bad actors." This is simply not the case. No compensation will be paid for activity that constitutes a common law nuisance.

In closing, this bill is sorely needed to bring back some common sense to the way agencies promulgate and enforce regulations. It is also needed to give the aggrieved landowner a fighting chance against a government, that has failed to uphold the sanctity of private property rights.

The CHAIRMAN. I said that we would go to Senator Feinstein next, and then we will go to Senator Leahy.

STATEMENT OF HON. DIANNE FEINSTEIN, A. U.S. SENATOR FROM THE STATE OF CALIFORNIA

Senator FEINSTEIN. Thank you very much, Mr. Chairman. Mr. Chairman, all of my adult life I have fought for property rights. I did it as a member of an air pollution control district in the Bay area of California. I did it as a member of the Coast Commission. I did it as a member of the Bay Conservation Development Commission. I did it for 9 years as a county supervisor, and I did it for 9 years as mayor of San Francisco in turning down every single request for eminent domain that ever came before me, no matter how civically-oriented that was.

But I must say, Mr. Chairman, I believe this is a bad bill. I will fight it every way I possibly can, and I want to suggest to you why. It should be no coincidence that the National League of Cities opposes this bill. The National Conference of State Legislatures op

poses this bill and has made the statement that this bill would severely limit government's ability to meet the public's demand for a safe and clean environment. I believe this bill will do just that, and I think it has to be said and said plainly.

After a long career, I don't intend to come here and vote for a bill that pays polluters to pollute, and I believe this bill does just that. I have worked all my life to try to develop on a local level sane, common-sense solutions to real problems.

I recognize that there are individual property owners that feel aggrieved. I recognize them. I recognize government makes bad decisions. I recognize individual agents of government can do the wrong thing, but this bill is overkill. I have just got to say it, bottomline and simply, it is overkill.

Now, I would like to ask some questions. Let's go to some areas that are not on the table. Let's go to an area big in California, water, and I want to ask some questions as to what this bill does with respect to water rights. The Department of the Interior and many others point out that this bill would change the definition of property to include the right to use or the right to receive water. In my State, after years of negotiations between competing interests, the administration and the State of California recently entered into a landmark agreement concerning water quality for the San Francisco Bay delta estuary. This is two-thirds of the drinking water for the 32 million people in the State of California.

Under this agreement, certain water users agreed to have their water allocations reduced to provide increased water for the State's fish and wildlife population over the next 3 years. This was a voluntary agreement where people voluntarily surrendered some of their water rights to meet what were aggravated problems-increased salinity into the water of the bay, increased diminution of fish flows, and so on.

I believe that under the current law, the Government would not have to pay farmers or anyone else if their water supplies were reduced pursuant to this agreement. The question I want to ask is, under this bill it is my understanding that, say, Central Valley farmers who voluntarily agreed to have their water allocations reduced-under this bill, the Government would have to pay them for that. Is that a correct analysis?

Mr. SCHMIDT. Well, I am not certain if they actually voluntarily agreed to do it that that in and of itself would require compensation. If they were in any sense compelled to do it, then clearly, given the expansive definition here that includes the right to use water in the definition of property and says whenever there is a reduction in the value of any property by a third or more, or otherwise a regulatory taking, they would have to be compensated. If they actually voluntarily agreed to do it, I am not certain thatSenator FEINSTEIN. So water rights would be private property under this bill?

Mr. SCHMIDT. Yes, that is clearly correct.

Senator FEINSTEIN. So any change by government in water rights could impact this bill?

Mr. SCHMIDT. Any compelled change, right.

Senator FEINSTEIN. If this change in the agreement that was negotiated were a compelled change by government, do you have any idea of what the cost might be?

Mr. SCHMIDT. No, I don't. You know, you can come up with figures, and frankly I think you get up into the billions and then you kind of stop precise counting.

Senator FEINSTEIN. I have seen estimates of just this one instance of the cost being $1 billion, and I would like to ask if your department would take a look at that and indicate what the cost would be.

Mr. SCHMIDT. We certainly will do that. A number of the departments have been looking to try to come up with cost estimates if this bill would pass. It really is very difficult because you are into a whole range of predictions, really. So the best thing you can say is it is a huge figure and it is an unpredictable figure, but we are trying to come up with more precise figures and we will get you those.

Senator FEINSTEIN. So just so I understand correctly, any governmental change in water rights would be considered a taking and would be reimbursed under this law. Is that correct?

Mr. SCHMIDT. Well, water rights, yes, would be a form of property and government action to take away that right would be compensable under the bill.

Senator BIDEN. Would the Senator yield for an explanation on that very point?

Senator FEINSTEIN. Yes, I would be happy to, but I would like to finish.

Senator BIDEN. The key the Senator is referring to is if there is a contractual right-this is the first bill that I have ever seen that takes a contractual right-in this case, years ago the folks in California signed a contract with the government that they would get "x" amount of water. Any change in that contractual right engages this bill if it reaches the threshold this bill requires.

Mr. SCHMIDT. Yes; an involuntary change in that contractual right would engage the bill, and the contractual right itself is included within the definition of property.

Senator BIDEN. So the property is the contractual right. That is the right. It is not just that they own the property; it is that they have contracted with the Government 10 years ago, or what we did years ago when we passed legislation that was designed to help the West. We made contracts as the Government with the folks that they would get so much water; in this case, for example, water. There are other cases. That is a contract. We change that by more than a third of the value of what that contract effects, and it is not voluntary, then it is compensable.

Mr. SCHMIDT. That is correct.

Senator FEINSTEIN. Would that include basic riparian water rights?

Senator BIDEN. Not necessarily, unless there was a contract. For example, it wouldn't include basic riparian water rights. The Delaware River flows down and we can take water out of the Delaware River. There is no limitation on what we can take out-well, that is not true. The Delaware water basin does have

Senator FEINSTEIN. That is right; most do.

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