I 

112TH CONGRESS 

2D SESSION H. R. 3913 

To amend the Natural Gas Act with respect to application of the right 

to exercise eminent domain in construction of pipelines for the exportation of natural gas, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 7, 2012 

Mr. DEFAZIO introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL 

To amend the Natural Gas Act with respect to application 

of the right to exercise eminent domain in construction 

of pipelines for the exportation of natural gas, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Reaffirming Constitu5 tional Property Rights Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 


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1 (1) The Fifth Amendment to the Constitution 

2 of the United States states ‘‘. . . nor shall private 

3 property be taken for public use, without just com4 pensation’’. This is a fundamental right of our citi5 zenry that should not be trampled upon. 

6 (2) Federal Courts have found the authority of 

7 the Federal Energy Regulatory Commission to grant 

8 a private company the right of eminent domain to 

9 construct pipelines constitutional because supplying 

10 energy to the Nation meets the ‘‘public use’’ test, al11 though property owners must be fairly compensated. 

12 (3) The Department of Energy currently has 

13 nine applications to export liquefied natural gas 

14 (LNG) either under review or already approved. 

15 However, a Department of Energy analysis shows 

16 that the exportation of LNG could raise the price of 

17 natural gas by almost 11 percent for households, 

18 leading to higher heating bills. The same analysis 

19 found a potential 27 percent increase in natural gas 

20 prices for industrial users, making energy intensive 

21 industries less competitive. The higher natural gas 

22 prices will also shift more electricity generation to 

23 coal burning power plants and potentially raise the 

24 price of electricity by up to 9 percent. This govern25 ment study strongly suggests that supplying natural 


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1 gas to LNG export terminals by definition does not 

2 meet the ‘‘public use’’ test. 

3 (4) In 2010, the Journal of Legal Studies pub4 lished the results of a hedonic regression model 

5 using 80,000 sales to estimate the fair market value 

6 (FMV) of condemned properties whose owners 

7 reached compensation settlements with the con8 demner, New York City, between 1990 and 2002. 

9 More than 50 percent of these condemnees were 

10 compensated with less than fair market value. The 

11 average difference between settlements and fair mar12 ket value was 23 percent. This study suggests that 

13 current eminent domain compensation rules may not 

14 ensure ‘‘just compensation’’. 

15 SEC. 3. AMENDMENTS TO THE NATURAL GAS ACT. 

16 (a) LIMITATION ON USE OF EMINENT DOMAIN FOR

17 EXPORTS.—Section 7 of the Natural Gas Act (15 U.S.C. 

18 717f) is amended by adding at the end the following new 

19 subsection: 

20 ‘‘(i) Notwithstanding subsection (h), a holder of a 

21 certificate of public convenience and necessity may not ex22 ercise the right of eminent domain with respect to a pipe23 line to be constructed for the purpose of transporting nat24 ural gas to an LNG terminal for export to a foreign coun25 try from the United States.’’. 


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•HR 3913 IH

1 (b) LIMITATION ON CONVERTING IMPORT TERMINAL

2 TO EXPORT TERMINAL.—Section 3 of the Natural Gas 

3 Act (15 U.S.C. 717b) is amended by adding at the end 

4 the following new subsection: 

5 ‘‘(g) The Commission may not issue an order under 

6 this section authorizing exportation of any natural gas 

7 from the United States to a foreign country from an LNG 

8 terminal if such LNG terminal uses for such exportation 

9 any pipeline constructed for the purpose of transporting 

10 natural gas to such LNG terminal and for which a holder 

11 of a certificate of public convenience and necessity has ex12 ercised the right of eminent domain pursuant to section 

13 7(h) of this Act after January 1, 2012.’’. 

Æ 


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