Senator BIDEN. The answer is it probably would. The CHAIRMAN. But that is why you have compacts, and we have been able to work those things out in the West. You know, these are kinds of horror questions. You can bring up any horror questions you want. Senator BIDEN. If anybody affected by the compact says I don't like it, you have just given them a cause of action. Up to now, if one single farmer says I don't like it, he is in court. The CHAIRMAN. We don't agree they don't have a cause of action. The point is we define what that cause of action is, and for the first time in a way that people's rights can be protected. We stop this helter-skelter government control of everybody's lives. That is what is involved here. Are you through, Senator Feinstein? Senator FEINSTEIN. No, I am not, Mr. Chairman. The CHAIRMAN. OK, but we are going to have to limit the time because we have got a number of other witnesses. Senator FEINSTEIN. I am happy not to take any more time than my colleagues do, but this is a bill about which I feel strongly and I would appreciate being afforded equal time to my colleagues. The CHAIRMAN. I am happy to give you more time. The next round is going to be 5 minutes each. Senator FEINSTEIN. I thank you. I have been intrigued by the fact that the National Rifle Association is in support of this bill, and I would be curious as to how this bill would impact weapons. If you could enlighten me, I would appreciate it very much. Mr. SCHMIDT. There was a case a few years ago where a ban was imposed upon the sale of assault rifles-this is not the recent situation-and a property owner sought compensation on the grounds that that reduced the value of his property, which included an inventory of those rifles. He lost because the court said that under the current standards that was regulation designed to achieve a general public interest that was permissible. It didn't have the other kinds of consequences that would be compensable under current law. Under this bill, in that kind of situation, the person with the inventory of rifles which were declared to be illegal would presumably be entitled to compensation if there was a reduction in the value of his property by a third or more. I actually was not aware that the National Rifle Association was supporting this bill. If they are, it is possible that they view it as providing some sort of an inhibiting or deterrent effect toward any future regulation and the ability in those circumstances for them to get compensation or to prevent the regulation from going forward because the costs would be too great. That may be what they are focusing on. Senator FEINSTEIN. Let me ask you this question. I authored the assault weapon ban in the U.S. Senate last session. This ban prohibits the sale and the manufacture of assault weapons. It is prospective. Would this mean that, let's say, a manufacturer-assault weapons was a third of his take. Let's say in a gun store the sales of assaults weapons in the past were at least a third of their take. Would they have a claim of action for reimbursement against the Federal Government if this bill were to pass? Mr. SCHMIDT. I think they would if they could show that the impact of that regulation was to reduce the value of their property by at least a third. Senator FEINSTEIN. Thank you very much. Thank you, Mr. Chairman. The CHAIRMAN. Senator Leahy? Senator LEAHY. Thank you, Mr. Chairman. I must say I find what the Senator from California said to be very persuasive. I know that she has spent a great deal of time on this both as a member of the Senate and before that as chief executive of one of our country's largest and most significant cities, and I would hope that we would all pay attention to her comments. I worry because I have spent a great deal of time in this Congress really trying to uphold our Constitution. We feel that in this country we take great pride in the fact that we have a wonderful Constitution. We have only amended it 17 times since the Bill of Rights, but suddenly since the elections last year we find the need to look at almost 100 measures to amend our Constitution. Each House of Congress has been called upon to vote on constitutional amendments that would undercut majority rule. We seem to feel that what has worked well for democracy for 200 years stopped working on election day last year and now we have to make all these changes. I am not sure that we are so much better equipped to make these changes than the Founders of our country were, and I would hope that we might slow down just a tad here in the Senate and look at some of these things. S. 605, the so-called Omnibus Property Rights Act-I mean, all these things have wonderful names. You could just see the bumper stickers and the 30-second ads saying what they are, and maybe it is the MTV generation and we are not supposed to think of anything beyond the first four or five words. It is like the cover of a book which looks very nice and when you read the book it is something entirely different, and that is what happens to be here. This bill appears to be an effort to impose tremendous and unprecedented costs on taxpayers to protect our environment and our way of life and our future. This raises a great deal of concern in my own State, where we are a small State, not with a great deal of money, but we try to have a quality of life and an environment second to none. We are concerned about what that would do here in our State. I think the principal beneficiaries of the claims and lawsuits intended to be created by this bill, and there will be-I mean, it will open the flood gates on claims and lawsuits. The ones who are going to get the benefits will be the well-to-do, the landed interests, wealthy developers, and corporate interests. I realize that they contribute heavily to campaigns, but that is no reason why they should be able to write the legislation, too. Some of the people, though, who support this are the same ones who are intent on closing our courts and restricting our regulatory agencies in ways that will prevent them from protecting the health and safety of individuals. You say we will close the courts, we will close the regulatory agencies so they can't do anything to protect you, and we will get rid of any other protections by just tying you up in court. I see the taxpayers getting nailed on this. I see the deficit going up as a result of this, and in that regard, Mr. Chairman, I want to commend Associate Attorney General Schmidt. I have read his statement. I think it is an outstanding one. It explains in detail a number of the flaws in this type of legislation, and I am glad that we have something on the record that points it out because what Associate Attorney General Schmidt is talking about is real things. He has gone way beyond the rhetoric; he has gone to the reality. What I am concerned with is that we seem to be legislating by rhetoric and not legislating by reality. He speaks of real changes to improve the way our Government works, and so, Mr. Schmidt, I am delighted you took the time and I appreciate your doing that. I think the questions have been asked, Mr. Chairman, so I am not going to ask questions on this, but I would hope that everybody has listened to what he has said. This sounds great in the debating clubs, but it is going to be a lawyer's dream. Thank you. The CHAIRMAN. Well, thank you. I would like to go to the next panel, and I would hope that we could submit questions to you, Mr. Schmidt. Mr. SCHMIDT. Certainly. The CHAIRMAN. I personally appreciate your willingness to work with us to see if we can satisfy the administration on some of the language in this. Senator BIDEN. Don't leave, Mr. Schmidt. Mr. Chairman? The CHAIRMAN. Yes? Senator BIDEN. I have questions that I would like to ask of Mr. Schmidt. This is a fundamental change in the law, maybe warranted, but I hope we are not going to do here what we did on the other thing, have one day of truncated hearings on this issue The CHAIRMAN. No; I think we will have more. Senator BIDEN [continuing]. And then hear we are going to go to a markup after that. So I have some questions of Mr. Schmidt I would like to ask about zoning, if I may, on a second round. The CHAIRMAN. Could we limit the time that we take so we can get through with all the other witnesses? Senator BIDEN. I promise you, if you find any question I ask to be repetitive or not to be on point, then you say so and I will withdraw the question. The CHAIRMAN. Well, let me just limit it to one more round and we will limit the questions to 5 minutes, and I will give you my 5 minutes so you have 10. How is that? Senator BIDEN. Well, Mr. Chairman, you are the chairman and you can do what you want. The CHAIRMAN. Well, I don't want to cut off the ranking member. Senator BIDEN. Well, if you don't, then don't. The CHAIRMAN. Go ahead, go ahead. Senator BIDEN. Mr. Schmidt, let's talk about zoning. The CHAIRMAN. But we do have a lot of people here to testify. Senator BIDEN. I understand that, and I want to hear from them all. I want to ask similar questions of them. Now, right in the city of Washington, DC, there is a zoning law. It says that no one can build a building that is higher than the top of the dome of the Capitol. If I own a prime piece of real estate in the city of Washington and I have a contract and I can demonstrate that I have the financing to build a 75-story building, which exists in almost every major city in America, and I will be able to show that the 3-story building I now own on Pennsylvania Avenue is worth a whole heck of a lot less to me than the 75-story building-I will have no difficulty establishing that a third of the value of my property is affected by the zoning law that exists in Washington that says you can't build a building higher than the dome of the Capitol. Under this legislation, what would the government of the city of Washington be required to do to keep me from building a 75-story building, assuming it met every other code requirement in the law-sprinklers, safety, the whole works? The only difference is it is 75 stories and not 5 stories. Mr. SCHMIDT. Well, I think, assuming it were a new law that was being applied to you or a regulatory action, and assuming this bill covered it, then Senator BIDEN. No, that is not Mr. SCHMIDT. I mean, if it is a preexisting law that has been in place for a longtime, I am not sure Senator BIDEN. Then this law does not apply to it? Mr. SCHMIDT. Yes; I don't think this is saying that you are entitled to compensation for everything that you could go back and say you might have been able to do if an existing law were not in place. Senator BIDEN. Well, not might have been able to do. I will be able to establish I now can do it. I didn't have financing before. There is an existing law. I now come to the city council and I say I have financing and here is my financing. I have got the Bank of America in on this; they are copartners on this. I have the prospect of the following tenants. I have all the financing. I can afford it and I want to build it. Now, you have a zoning law here that tells me I can't build it. So I go to court and I say they have deprived me of a third of the value of my property-in excess of a third of the value of my property. Mr. SCHMIDT. Well, I guess the complicating factor there would be that if it was known from the beginning the city of Washington barred any building higher than the Capitol Senator BIDEN. Yes, it is known. Mr. SCHMIDT [continuing]. Presumably that would have been reflected in the value of your property. So, today, property in Washington is not valued on the basis of your ability to build a 75-story building. I don't want to argue with the hypothetical, except I think it is complicated by that factor. Senator FEINSTEIN. Senator, would you yield for a minute on this point? Senator BIDEN. Sure. Senator FEINSTEIN. Let me take the Senator's point and apply it in a slightly different situation, one that is true to life and took place during my lifetime. Let me take you to San Francisco. The zoning in the downtown area is unlimited. The board of supervisors and the mayor change the zoning. This law is in place. We changed it from unlimited height to where only four blocks in the city-this is actual-can have a 600-foot height. I own property and suddenly the law is changed, and I could have gone to unlimited height and now I can only go to 600 feet. Do I have recourse under this law? Mr. SCHMIDT. If this statute applied to the city of San Francisco-I don't want to be confusing it. This is a Federal statute, so by its current terms it wouldn't. But if it applied, that would mean everybody who held property in that area would be entitled to compensation, assuming they could show that the value of their land was reduced by a third or more, which presumably would clearly be the case in that kind of situation. Senator FEINSTEIN. So that is the impact? Senator FEINSTEIN. That is the strength of this law in terms of municipal governmental powers? Mr. SCHMIDT. If this law applied to municipal governments, but again I don't want to be confusing it. This is a law that applies to everything the Federal Government does directly or indirectly. It wouldn't apply directly to the city of San Francisco. Senator FEINSTEIN. Right; I understand. The CHAIRMAN. Even there, there are a lot of variables. There are a lot of factors that could change that, and there might be a reason why that should constitute a taking. In other words, government just can't be arbitrary and do whatever it wants to to people's property. Mr. SCHMIDT. Well, if we generally started saying that any changes in zoning laws that had an impact of more than a third on the value of property would be compensable, we frankly, I think, would bring to a halt the The CHAIRMAN. But that is not what this bill says, as you have pointed out. It only applies to the Federal Government. Mr. SCHMIDT. Well, we were talking, I think, assuming it applied to the city, but the same impact applies to everything the Federal Government does. Senator BIDEN. Let's talk about that. I thought this bill established a Federal right of action in Federal court, but it didn't require a Federal action. Mr. SCHMIDT. No; it applies to action by the Federal Government or anything which is funded by the Federal Government. The CHAIRMAN. That is right. Mr. SCHMIDT. But it doesn't, by its terms, apply to The CHAIRMAN. States and localities. Senator BIDEN. This is important because it is a big deal. It says on page 8, "private property' or 'property' means all property protected under the fifth amendment to the Constitution of the United States, any applicable Federal or State law, or this Act, and includes (A) real property, whether vested or unvested, including (i) estates in fee ***" and then it goes down and says, "(B) the right to use water or the right to receive water, including any recorded lines of such water right; (C) rents, issues, and profits of land, including minerals, timber, fodder, crops *** (D) property rights provided by, or memorialized in, a contract, except that such rights" |