SECTION 404 In that part of this section where "An agency shall not issue rules that require uncompensated takings", isn't this the intent of the entire bill? in other words, isn't the purpose of the bill to protect against indirect/regulatory takings? The word "require" sounds like there has to be express language in the rule to this effect. Wouldn't a better choice of words be "that result in uncompensation takings"? SECTION 508 The "statute of limitations" says the owner has 90 days to file a claim "after final agency action". This language is troublesome because we do not know what is "final agency action." Where does the property owner file his claim? With the offending agency? Is this a notice of claim provision to the agency or a statute of limitations? Section 406 says you have six years to file a lawsuit. This section appears to be an administrative procedure section to file with the agency first, before you can file a lawsuit (exhaustion of administrative remedies). It's not really clear that this is the intent. In addition, isn't the binding arbitration section in conflict with Section 301? I know that this is a very quick review of the legislation, but I hope it helps and please do not hesitate to contact me if you have any questions. JUNE 28, 1995. Hon. ORRIN HATCH, Re: Comments on the Ominibus Property Rights Act Thank you for the opportunity to comment on this proposed legislation. It is badly needed and I would like to commend Senator Hatch and all those who have and will contribute to the drafting and passage of this bill. The right to property is fundamental to our liberty and must be protected to ensure our continued freedom. Government intrusion on property rights is eroding our rights and our freedom. This bill will do much toward correcting this problem. I have several suggestions and concerns that I believe should be considered. So you will understand my concerns and my perspective, I work for a large international engineering consulting firm as a water engineer and have been working in the water resources field for many years. I have had much experience with Bureau of Reclamation projects throughout the West and am currently working on a doctoral dissertation dealing with the rights and interests of water users in these projects. I am finding, both in my work as a private consultant and in my research, that the rights of water users on Reclamation projects are in many cases, being disregarded and ignored by Reclamation officials. The property rights of the water users appears to be one of the least of the concerns of many of these officials. For example, when the manager of the Midvale Irrigation District complained of how new rules and regulations were diminishing the rights held by the water users for many years on the Riverton Project in Wyoming and that it was difficult to determine how to manage the project and respond to Reclamation's requirements, the Reclamation official responded that it was rather simple. All you need to remember is one word: "compliance". That is quite a response from a federal official in the land of the free! Obviously, there must be a greater incentive and requirement for federal officials to respect the property rights of private citizens. I will first make specific comments on the language of the various sections of the Act and then will offer a suggestion for addressing an additional very important property right concern with regard to the recent use of the public trust doctrine by the courts in both water and land law. SECTION 203 In defining property, I would suggest that wording "the right to use and receive water" be expanded to read "the right to appropriate, use and receive water under federal or state law, or based upon contract". I think this would be more definitive and inclusive of water rights on Reclamation projects. SECTION 403 I suggest that the taking impact analysis include a requirement for disclosure of potential disputes and claims by property right holders including disclosure of the opposing arguments raised by the property rights holders, an objective analysis of these arguments and the potential legal costs of the government in defending the taking. If unsuccessful, the cost of the defense should be borne by the agency in its current budget. Also the exemption of trust properties from the TIA is troubling. The Supreme Court decision, Nebraska v. Wyoming (1945) as quoted later below indicates that Reclamation is a "trustee" and "carrier" for the water users. Not being a lawyer, I find a concern for what this might mean in terms property rights for Reclamation project water users. Could Reclamation use the trust exemption to avoid a TIA on Reclamation projects? SECTION 404 I applaud this section. An example of an agency's disregard of property rights and one that will result in uncompensated takings is published in the Federal Register Vol. 60, no. 63, April 3, 1995, Department of the Interior, Bureau of Reclamation, 43 CFR Parts 426 and 427, entitled "Acreage Limitation and Water Conservation Rules and Regulations". The agency's analysis of takings as reviewed under Executive Order 12630 (page 16940) is entirely inadequate, erroneous and misleading. The published analysis states (italic type for emphasis only): Because districts and individual water users hold only contractual rights to services provided by Reclamation and the proposed rule would have only a de mínimus impact on the value of any Constitutionally protected property right if such right exists, it has been determined that this proposed rule does not present a significant taking.” This statement indicates that the contractual rights of the water users are only in relation to services provided by Reclamation. This cannot be farther from the truth. The contractual rights of the water users are rights to the purchase the water rights under Reclamation and state law. The water rights are the rights to the use of the water sold by the United States for the purchase price of the cost of construction of irrigation works. To defend these statements with regard to purchase and sale of water, I quote sections 5 and 8 of the Reclamation Act of 1902. Sec. 5. [Reclamation requirements for entrymen-No water for more than 160 acres of private lands in one ownership-Residence of landowner-Receipts to reclamation fund. The entryman upon lands to be irrigated by such works shall *** pay to the Government the charges apportioned against such tract*** No right to the use of the water for land in private ownership shall be sold for a tract exceeding 160 acres to any one landowner, and no such sale shall be made to any landowner unless he be an actual bona fide resident on such land, or occupant thereof residing in the neighborhood of said land, and no such right shall permanently attach until all payments therefor are made. All moneys received from the above sources shall be paid into the reclamation fund * * * The effect this section along with sections 3 and 4 not quoted here appears to have been to authorize the Secretary to construct irrigation works and sell water to both public lands entered and settled under the homestead laws and to lands already in private ownership subject to the terms and conditions of the Act. For both public lands entered under the homestead laws and for private lands, it appears that the right to the use of the water was sold to the landowner and was to be permanently attached to the land title as a right of the land to receive water. It appears to have been a sale of water. The price of sale appears to have been the proportionate cost of the construction of the works required to provide the water. Thus, the right to the use of the water appears to be as much of a property right as that of the land itself. It appears that the patent (or title) to the land was to include the right to the use of the water on the land. The Act of August 9, 1912 modified these provisions somewhat providing for the issuance of a water right certificate in lieu of including the water right in the patent for the land. However, the fundamental intent of sale and purchase of the water right was preserved with the provision of the water right certificate. The water right certificate was required to specify that the water was appurtenant to the land. Section 8 of the Reclamation Act addresses the assignment of water rights and the conformance to state law. It reads as follows (italic type added for emphasis only): Sec. 8. [Irrigation laws of States and Territories not affected-Interstate Streams Water Rights. Nothing in this act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this act, shall proceed in conformity with such laws, and nothing herein shall in any way affect any right of any State or of the Federal Government or of any landowner, appropriator, or user of water in, to, or from any interstate stream or the waters thereof: Provided, That the right to the use of water acquired under the provisions of this act shall be appurtenant to the land irrigated and beneficial use shall be the basis, the measure, and the limit of the right. (32 Stat. 390; 43 U.S.C. 372, 383) The last portion of this law states that the right to the use of project water is acquired by the landowner and it is appurtenant, or directly connected, to the land irrigated. The House and Senate Reports for the Reclamation Act of June 17, 1902 confirm this interpretation. An excerpt from the House Report reads (House of Representatives Report No. 1468, 57th Congress, 1st Session) (italic type for emphasis only): * Section 8 recognizes State control over waters of non-navigable streams such as are used in irrigation and instructs the Secretary of the Interior in carrying out the provisions of the act to conform to such laws. It also provides that nothing in the act shall be held as changing the rule of priorities on interstate streams. In order that the water rights acquired under the provisions of the act shall be of the character most approved by centuries of irrigation practice, and such as will absolutely insure the user in his right and prevent the possibility of speculative use of water rights, the character of the right which is contemplated under the act is clearly defined to be that of appurtenance or inseparability from the lands irrigated and founded on and limited by beneficial use. Under this section uniformity of record of the rights is secured and the rules of priorities of rights are not disturbed, while the cost of maintaining the administrative machinery of water distribution is placed on users and the States; the Government is free from all expense or responsibility when projects are completed and paid for. The above discussion indicates that the principles of state water law were to govern the water rights and that the water rights would be acquired by the landowners. The character of the water rights were to absolutely insure the user in his right. The water right was made appurtenant to the land to prevent speculation. This would appear to include both private speculation and speculation by the Federal government. The appurtenance to the land appears to make the water right a property right of the land. The rights are also founded on beneficial use. It is the water users on Reclamation projects that have put the water to beneficial use; not the United States. Thus, the rights appear to belong to the water users as long as they pay their annual construction, operation and maintenance obligations and use the water beneficially. In addition, the Government is to be "free from all expense or responsibility when projects are completed and paid for." This does not square with Reclamation's claim that water users have only contracted for services from Reclamation. In Ickes v. Fox et. al., the Federal Court of Appeals (later affirmed by the U.S. Supreme Court), concluded with respect to water rights on Federal projects the following (italic type added for emphasis only): Appropriation was made not for the use of the government, but, under the Reclamation Act, for the use of the land owners; and by the terms of the law and of the contract already referred to, the water rights became the property of the land owners, wholly distinct from the property right of the government in the irrigation works. Compare Murphy v. Kerr, 296 Fed. 536, 544, 545. The government was and remained simply a carrier and distribu tor of the water (ibid.), with the right to receive the sums stipulated in the contracts as reimbursement for the cost of construction and annual charges for operation and maintenance of the works. As security therefor, it was provided that the government should have a lien upon the lands and the water-rights appurtenant thereto-a provision which in itself imports that the water-rights belong to another than the lienor, that is to say, to the land owner. This court decision indicates that the water belongs to the land owner. The importance of the above court case is discussed by the U.S. Supreme Court in Nebraska v. Wyoming (1945). The court cites the above paragraph and adds the following (italic type added for emphasis only): Individual water users contracted with the United States for the use of project water. These contracts were later assumed by the irrigation dis tricts. Irrigation districts submitted proof of beneficial use to the state authorities on behalf of the project water users. The state authorities accepted that proof and issued decrees and certificates in favor of the individual water users. The certificates named as appropriators the individual land owners. All of these steps make plain that those projects were designed, constructed and completed according to the pattern of state law as provided in the Reclamation Act. We can say here what was said in Ickes v. Fox, supra, pp. 94-94: The property right in the water right is separate and distinct from the property right in the reservoirs, ditches or canals. The water right is appurtenant to the land, the owner of which is the appropriator. The water right is acquired by perfecting an appropriation, i.e., by an actual diversion followed by an application within a reasonable time of the water to a beneficial use. Pursuant to that procedure individual landowners have become the appropriators of the water rights, the United States being the storer and the carrier. The appropriations under state law were made to the individual landowners pursuant to the procedure which Congress provided in the Reclamation Act. The rights so acquired are as definite and complete as if they were obtained by direct cession from the federal government. Thus even if we assume that the United States owned the unappropriated rights, they were acquired by the landowners in the precise manner contemplated by Congress. The rights of the United States in respect to the storage of water are recognized. So are the water rights of the landowners. To allocate those water rights to the United States would be to disregard the rights of the landowners. Thus, under this decision the water rights appear to belong to the individual landowners under constraint of beneficial use, contractual agreements, and appropriation in accordance with the Reclamation Act and State Law. They do not belong to the Federal government. It hardly appears that the water users have contracted only for the services of Reclamation as claimed by Reclamation's analysis of the potential takings of its proposed rules. Section 404 should help, prevent such erroneous analyses. Requirement of disclosure of the opposing views of property right holders and an objective analysis of these views in the TIA should also help. SECTION 508 The "statute of limitations" says the owner has 90 days to file a claim "after final agency action". What is final agency action? Where is the claim filed? Section 406 says a person has six years to file a lawsuit. How does this relate to the 90 days? The two sections appear in conflict. A clearer wording with regard to procedures for filing a claim and/or lawsuit appears needed. Public trust doctrine The promotion and subsequent use of the public trust doctrine in water and land property law has become a grave concern. The public trust doctrine would completely circumvent property rights guaranteed by the Constitution by claiming a prior public reserved right to regulate and control all land and water under the socalled "police power" to promote commerce and the general welfare. Those promoting this doctrine generally claim that we reside in a "regulatory state" and completely ignore the right of property guaranteed under the Constitution. Their logic would allow uncompensated "takings" of private property by stating that since a prior right was reserved in all land and water for the public trust, exercise of this prior public trust right does not constitute a taking. They have become influential and lower courts have begun using this doctrine in decisions.Language should be added to this bill that would dispel and address this myth of prior reserved public trust rights in land and water. The following language should hopefully make a good start in this regard: All land patents and water-right certificates heretofore or hereafter issued by the United States are hereby validated and declared to convey or have conveyed all right, title and interest of the United States in behalf of the states to the patent or water-right certificate holder without reservation except as otherwise specifically provided in such patent or water right certificate and subject to those powers specifically provided to the United States under the Constitution. It appears prudent that the public trust doctrine should be addressed while such important legislation as the Omnibus Property Rights Act is being considered. To do otherwise will leave a cloud upon property rights in that courts will remain free to invoke this doctrine in making property rights decisions. Property rights will re main uncertain and subject to infringement under the use of the public trust doctrine unless addressed by legislation clarifying the rights conveyed in land patents and water-right certificates. Again, thank you very much for the opportunity of commenting on this legislation. I wish you well in the successful passage of this bill. Sincerely, RONALD K. CHRISTENSEN, P.E., American Fork, UT. NATIONAL AUDUBON SOCIETY, Salt Lake City, UT, July 10, 1995. Senator ORRIN G. HATCH, Senate Judiciary Committee, Washington, DC. DEAR SENATOR HATCH: These comments are intended to be part of the written record for the public hearing on Private Property Rights conducted at the State Capitol in Salt Lake City, Utah on July 3, 1995. I appreciate the opportunity to comment on private property rights. Many of the comments will relate to wetlands. The interconnection between these two is particularly important to me since I have worked as Utah Wetlands Coordinator for National Audubon Society for the last four years. Also, "private landowners own more than 75 percent of the remaining wetlands in the lower 48 states (#1 Below.) There are five documents/articles that I have attached to, and are referenced throughout, this testimony. They are: 1. "The Key to Protection: Private Lands," by Gene Whitaker in National Wetlands Newsletter, dated March-April 1995. 2. "The problem: Loss of Utah's Valuable wetlands." draft dated July 11, 1991, prepared by myself from two U.S. Fish and Wildlife Service documents. 3. "The Takings Issue" and "Protecting America's Wetlands" in the National Audubon Society 1995 Congressional Guide, April 1995. 4. "Wetlands and the Constitutional Balance," by LaJuana S. Wilcher in National Wetlands Newsletter, dated March-April 1995. 5. Memo on S. 605 by John Echeverria, General Counsel for Programs, National Audubon, April 3, 1995. The following highlights much of the information contained in the five source materials noted above. (References are in parenthesis.) Utah has very little of its land base in wetlands-an estimated 1 percent compared to a national 5 percent in the lower 48 states (#2). Utah, to this point, has lost less of its wetlands than other states-30 percent compared to a national average of 50 percent in the lower 48 states (#2). Utah wetlands are of tremendous value for flood plain protection water quality and wildlife. According to the notes I have for a slide show on Utah wetlands, when the volume of the Great Salt Lake doubled from 1982 to 1986 and reached an elevation of 4,212 feet above sea level, there was over $175 million in damage. "The riverine wetlands provide a vital corridor for migratory movement of smaller birds through the arid habitats of the western states (#2)." The wetlands associated with the Great Salt Lake are of critical, international importance to waterbirds (#2). A study commissioned by National Audubon Society in April 1994 estimates that the economic activity related to wetlands generates at least $72 billion annually and almost one million jobs. Recreation, commercial trapping and fishing, flood control, and downstream water supplies are all important economic activities and savings (#3). Utah wetlands also provide numerous economic values. In losing wetlands we lose a critical resource for our future. The National Status Summary regarding wetlands concludes, "over a 200-year timespan wetland acreage has diminished to the point where environmental and even socioeconomic benefits (i.e., ground water supply and water quality, shoreline erosion, floodwater storage and trapping of sediments, and climatic changes) are now seriously threatened (#2)." Since over 75 percent of the remaining wetlands in the lower 48 states is on private lands (#1), there certainly should be mechanisms in place to help preserve this vital natural resource heritage for the sustainability of present and future generations. As Utah Wetlands Coordinator, I am aware of some of these positive approaches to work with landowners. The Wetlands Reserve Program just completed calls for |