OCTOBER 18, 1995 PREPARED STATEMENT OF SENATOR DIANNE FEINSTEIN Mr. Chairman, when we legislate in the area of property rights, we need to approach the responsibility with the sensitivity that the difficulty of the task deserves. Individual nights should be honored and protected. But our task also includes promoting public health, public safety, and protecting the environment. I plan to give very serious consideration to the concerns of property owners when I look at the ways our various federal statutes are structured and enforced. But I oppose this bill, because I believe that it is an extreme and costly measure that would open the floodgates of litigation and cripple the federal government in its efforts to create safer and healthier communities for all its citizens. A free-standing "takings" bill such as S. 605 represents the wrong approach to protecting the rights and interests of property owners in the United States. Many years of Supreme Court jurisprudence have shown us that takings questions should be resolved on a case-by-case basis. Landholdings are unique, statutory and regulatory programs differ in their purposes and application, and impacts on property owners vary widely. As even the most conservative Supreme Court Justices consistently have held, a balancing of several factors is required to determine when "fairness and justice" requires government compensation under the 5th Amendment. In short, "one-size-fits-all" takings legislation such as S. 605 will stimulate speculative claims, create endless litigation, and cripple federal agencies. The Clinton Administration already has begun to examine federal programs to better accommodate landowners, particularly small landowners. This Administration has made great strides in building more flexibility into the Endangered Species Act and the wetlands program of the Clean Water Act. I urge the Administration to continue on this path. If there are areas where the federal government has been overbearing, we need to study these cases. We need to gain a better understanding of the kinds of situations that give rise to valid takings claims, and to work to find solutions on a program-by-program basis. At the same time, we cannot tilt the scales entirely in favor of individual property owners-we cannot sacrifice programs that protect the health and safety of our communities. I. WHO WILL PAY FOR S. 605 The bill requires that funds for a vastly-expanded number of takings judgments should be withdrawn from individual agency appropriations. Where will this money come from? • Discretionary spending is scheduled to reach its lowest level as a percentage of GDP since World War II. The appropriations bills proposed by the current Congress would cut $441 billion from discretionary spending over the next seven years. • According to the Office of Management and Budget (OMB), "[s]ince the costs (of S. 605) would fall under PAYGO provisions of the Budget Enforcement Act, [expected costs for takings payments] could prompt a sequester of other mandatory programs, forcing automatic across-the-board cuts in medicare, veterans' readjustment benefits, various programs that provide grants to states, child support administration, farm income and price supports, agricultural export promotion, student loans, foster care and adoption assistance, and vocational rehabilitation." Legislation such as S. 605 would have the effect of limiting still further the funds available for crucial governmental services. It will involve tradeoffs, substantial tradeoffs, to the extent that I am unwilling to endorse. Furthermore, Federal takings legislation, if passed, would serve as a precedent for the enactment of similar legislation at the State and local levels. Future State or local takings legislation could seriously undermine important planning tools such as zoning laws and setback requirements. County and municipal governments, already strapped for funds, would be forced to withdraw funding for other important programs. It is no wonder that takings legislation like S. 605 is opposed by organizations such as the National League of Cities, the American Planning Association, the National Governors Association, the National Conference of State Legislatures, thirtythree State Attorneys General, the United States Conference of Mayors, the National Trust for Historic Preservation, the Consortium for Citizens with Disabilities, and the National Institute of Municipal Law Officers. II. S. 605 WOULD JEOPARDIZE PUBLIC HEALTH, SAFETY, AND ENVIRONMENTAL LAWS, AND CERTAIN U.S. MILITARY OPERATIONS I will give you some examples of the many important Federal programs that could be jeopardized by legislation such as S. 605. In a letter to this Committee, the Secretary of Agriculture listed various USDA programs that could be undermined by S. 605, including USDA controls on the movement of plants and animals to eradicate pests and diseases. In addition, because S. 605 would require USDA to pay for takings judgments out of its own appropriations, the Secretary noted that "plrograms funded as entitlements like the commodity price stabilization programs, would be open-ended sources of funding for compensation claims." The Secretary of Health and Human Services, in a letter opposing S. 605, listed the following governmental functions that could be jeopardized by S. 605: • recalls or seizures of adulterated or misbranded foods, drugs, and devices; • injunctions against manufacturing or health care facilities for creating safety hazards; • federal regulations raising the minimum quality standards for mammography facilities; • federal regulations raising the standards of nursing homes for participation in Medicare and Medicaid. Programs of the Department of Transportation (DOT) that could be threatened by S. 605 include: • Federal Aviation Administration safety initiatives, including airworthiness directives prohibiting the operation of certain types of aircraft in unsafe conditions; • Federal Highway Administration "out-of-service" orders requiring motor carriers to cease using vehicles that pose imminent hazards to safety; • DOT facility compliance orders requiring the shut-down of liquid and gas pipelines until problems have been corrected. According to the Department of Defense, S. 605 could hamper several kinds of military operations including: • Aircraft overflights; • Efforts to keep waters navigable for the Navy, including disapproval of construction of certain piers, wharves, or bridges; • Base closures. Several important Federal programs already have been challenged as takings. Although the following cases, and a range of others, have lost in the courts, cases such as these would be likely to win under S. 605: • A firearms importer challenged the Gun Control Act's provision banning the importation of assault rifles as a taking. • A restaurant franchisee claimed that requirements of the Americans With Disabilities Act to provide bathroom facilities for the disabled constituted a taking. • A group of doctors challenged as a taking a Medicare program restriction on how much participating physicians could charge their patients. III. S. 605 REPRESENTS THE WRONG APPROACH TO PROTECTING PROPERTY RIGHTS (A) Overbroad definition of "property" S. 605 defines property to include: real property, property defined by contract, including "rights to use and receive water," and "any interest understood to be property under common law." • This could mean that California's recent Bay Delta accord, which took two decades to attain, would be threatened. The accord is a landmark agreement among major California water interests that adjusts the allocation of significant quantities of water to protect the resources of the San Francisco Bay. S. 605 could also hamper efforts to clean the Kesterson Reservoir in California's Central Valley. If the bill were to become law, the Bureau of Reclamation would have to compensate farmers when it reduced the volume of subsidized irrigation water in order to remedy serious pollution resulting from irrigation return flows. S. 605 also could require the Bureau of Reclamation to compensate landowners every time it reduced water flows in times of drought. (b) Automatic "loss of value" test S. 605 would employ an automatic "diminution in value" test to determine whether a taking has occurred. The Supreme Court traditionally has decided fairness questions by balancing individual interests with community values and needs. This includes consideration of the specific property interest at issue, the regulation's nature and economic impact, the property owner's legitimate expectations, and the public interest protected by the regulation. S. 605 does not provide for balancing. Compensation would be provided solely on the basis of the economic impact of the regulatory action, without considering fairness-fairness to the community as well as the individual. If the bill's diminution in value threshold is met, compensation must be paid, regardless of the price the owner paid for the property, the expectations the owner had when acquiring property, or whether the owner is able to earn a reasonable rate of return on the property. And S. 605 would provide incentives for speculative claims. For example, a landowner with no intention to fill a wetland, or no intention to construct buildings on farmland property, could nevertheless bring a takings claim and win. (c) Low threshold for takings claims Under S. 605, a 33 percent reduction in value of any portion of the affected property would automatically trigger a taking. Because any regulation that restricted the use of property in any way would completely “take” some portion of the property, takings plaintiffs would win in nearly all cases. Years of Supreme Court decisions have measured diminution in value by looking at the owner's property as a whole rather than the “affected portion" of the property. Where is a judge to draw the line in determining what constitutes the "affected portion?" How will a judge determine whether the value of an "affected portion" has been diminished by 33 percent? A pre-determined standard such as this is simply unworkable. (d) Takings impact analysis, look-back and re-opener provisions S. 605 would require all federal agencies to prepare a "taking impact analyses" (TIA) before issuing any regulation, policy, proposed legislation, or "related agency action" that is "likely" to result in a taking. This means that a TIA would be required for any agency action that is "likely" to result in a 33 percent reduction in the value of an affected portion of property. Legal challenges to a TIA would be permitted for 6 years after submission. Government actions therefore would be tied up in court, and agencies would incur the litigation costs. S. 605 also would prohibit agencies from promulgating final rules if enforcement "could reasonably be construed" to require an uncompensated taking as defined under the bill. The bill also contains "look-back" or "re-opener" provisions, requiring agencies to review existing rules that "result in takings" under the Act. This goes beyond protecting property rights. This is a formula for agency gridlock. S. 605 would prevent agencies from doing their jobs, jobs the American people have asked them to do. (e) S. 605 would upset established Federal-State relationships and successful Federal-State partnerships The bill creates Federal liability for State actions carried out as part of Federal regulatory programs, delegated by Federal regulatory programs, or carried out by State agencies receiving Federal funds in connection with a regulatory program. In other words, S. 605 could require the Federal government to pay for State actions, even in cases where it does not approve of such actions. This will encourage the Federal government to give the States less autonomy in the future, and will run counter to the states-rights goals of the current Congress. IV. ADMINISTRATION EFFORTS TO PROTECT SMALL LANDOWNERS As I noted earlier, the Clinton Administration already has proposed and/or implemented reforms under the ESA and Section 404 of the Clean Water Act to better accommodate small landowners. The Justice Department has been working on Alternative Dispute Resolution mechanisms to save property-owning plaintiffs from cumbersome litigation. EPA's wetlands program modifications and proposals include: • a proposed, simplified administrative appeals process which would allow landowners to appeal wetlands identifications and permit denials without costly and time-consuming court battles; • a simplified wetlands identification program, and increased certainty for permit applicants; • simplified procedures by which landowners can affect up to one-half acre of nontidal wetlands for construction of single-family homes without applying for individual Section 404 permits; • simplified procedures for adding to existing structures on wetlands properties; • a streamlined Section 404 permit process; • increased State, local, and Tribal roles in protecting wetlands resources; • a simplified wetlands mitigation banking process, to allow property owners to more easily offset certain wetlands losses by restoring or enhancing other wetlands. The Department of the Interior has instituted a number of reforms to the Endangered Species Act (ESA), and has made legislative recommendations that would further improve the Act and its implementation. These include: • exemptions for small landowners from rules relating to threatened species; • increased State roles in ESA implementation; • exemptions for designated small timber interests from certain ESA regulations relating to the Northern Spotted Owl; • a “no surprises" policy for previously-approved Habitat Conservation Plans. Under this policy, property owners who agree to help protect endangered species on their property will be assured that their obligations will not be changed if new species are designated in the future; • multispecies recovery plans. Again, I urge this Administration to continue along this course. We need to find new ways to make certain Federal programs work better-more flexibly, more fairly. S. 605, however, represents an inappropriate approach to protecting the rights of property owners, and I urge my colleagues to vote against this bill. PREPARED STATEMENT OF SENATOR CONRAD BURNS Mr. Chairman, I am pleased that your Committee is having this hearing today. The 104th Congress needs to take a serious look at private property rights. The Judiciary Committee plays an important role in this debate because environmental laws and regulations often are embroiled in this issue. For too long, Washington has disregarded the Fifth Amendment to our Constitution. Laws, regulations and other actions have allowed the rights of private property owners to be abused. Now we have the opportunity to provide a consistent federal policy to encourage, support, and promote the private ownership of property and to ensure the constitutional and legal rights of private property owners. 1 believe Congress should enact legislation which reaffirms our private property rights. Compensation for a loss of property value when the federal government takes actions affecting property is essential. In addition, I believe that a takings impact analysis should be conducted prior to promulgating regulations. If these actions result in a loss of value of the property, some compensation should be required. Montanans believe that protecting private property is of utmost importance. And Congress should reinforce the government's responsibility to protect property rights. We need to help get the federal government off the backs of Montana's working men and women. Mr. Chairman, I am pleased your Committee is holding this hearing and I look forward to working with you on this matter in the future. I am surely but one more in a long chain of property rights activists who will beseech your committee with plaintive or should I say plaintiff cries for assistance as you wend your way towards passage of S-605 the property rights protection bill currently under your tutelage. I am, perhaps, unije in that I will likely be the sole Rhode Islander who would make comments on behalf of property owners supporting the concepts of S-605 and offering some brief constructive criticism long with my less effe prose on in response to arguments for or against the concepts embodied in S-605. People in Washington often joke that I am the only property rights activist in Rhode Island. mont consistently participate in the debate at a national level. Our state is relatively small and admittedly prone to the elevation of other problems over property rights, which has made it quite easy for me to stain the mantle of the state's property rights advocate with little competition. In so doing. I have faced bring labeled by other participants in this debate. Most often I am called an anti-environmentalist, some suggest I am a front for developers, a recent internet mailing list publication asserted that I am a front group for Chuck Cushman who runs the American Land Rights network out of Battle Ground, Washington. While I can comment at length about what I am, and what I am not. I would ask in large po you direct your attention on that matter to the attached article entitle "Activist with an attitude". Put on September 10 of this year by our major newspaper. The Providence Journal, it encapsulates much my philosophy, activism and the underlying motivations and incidents which lead me to be a state and national advocate on these issues. Suffice it to say, that regardless of what you believe I am now. 6 years ago I was just a back to nature yuppie minding his own business and largely ignorant of this debate. My last significant role as a activist was in fighting the Vietnam War and my political tradition was decidedly liberal. Conspiracy theorists who wish to believe that I have become a mind numbed robot answering to industrial masters must still ask themselves: "How did such an independent cuss become a corporate toady in such a shon time, and make such a complete about face in his outwardly apparent politics. Actually, it only tank one RI WISEURE. 199 Austin Farm Read Exeter RI 02822 |