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KELO V. CITY OF NEW LONDON U.S. SUPREME COURT DECISION AND

STRENGTHENING THE OWNERSHIP

OF PRIVATE PROPERTY ACT OF 2005

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

ON

H.R. 3405

SEPTEMBER 7, 2005

Serial No. 109–15

(

Printed for the use of the Committee on Agriculture

www.agriculture.house.gov

COMMITTEE ON AGRICULTURE

BOB GOODLATTE, Virginia, Chairman

JOHN A. BOEHNER, Ohio,

Vice Chairman

RICHARD W. POMBO, California

TERRY EVERETT, Alabama

FRANK D. LUCAS, Oklahoma

JERRY MORAN, Kansas

WILLIAM L. JENKINS, Tennessee

GIL GUTKNECHT, Minnesota

ROBIN HAYES, North Carolina

TIMOTHY V. JOHNSON, Illinois

TOM OSBORNE, Nebraska

MIKE PENCE, Indiana

SAM GRAVES, Missouri

JO BONNER, Alabama

MIKE ROGERS, Alabama

STEVE KING, Iowa

MARILYN N. MUSGRAVE, Colorado

RANDY NEUGEBAUER, Texas

CHARLES W. BOUSTANY, JR., LOUISIANA

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

JOHN R. ‘‘RANDY’’ KUHL, JR., New York

VIRGINIA FOXX, North Carolina

K. MICHAEL CONAWAY, Texas

JEFF FORTENBERRY, Nebraska

——— ———

COLLIN C. PETERSON, Minnesota,

Ranking Minority Member

TIM HOLDEN, Pennsylvania

MIKE MCINTYRE, North Carolina

BOB ETHERIDGE, North Carolina

JOE BACA, California

ED CASE, Hawaii

DENNIS A. CARDOZA, California

DAVID SCOTT, Georgia

JIM MARSHALL, Georgia

STEPHANIE HERSETH, South Dakota

G.K. BUTTERFIELD, North Carolina

HENRY CUELLAR, Texas

CHARLIE MELANCON, Louisiana

JIM COSTA, California

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

EARL POMEROY, North Dakota

LEONARD L. BOSWELL, Iowa

RICK LARSEN, Washington

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

PROFESSIONAL STAFF

WILLIAM E. O’CONNER, JR., Staff Director

KEVIN J. KRAMP, Chief Counsel

JOHN HAUGEN, Communications Director

ROBERT L. LAREW, Minority Staff Director

(II)

(III)

C O N T E N T S

Page

H.R. 3405, To prohibit the provision of Federal economic development assistance for any State or locality that uses the power of eminent domain

power to obtain property for private commercial development or that fails

to pay relocation costs to persons displaced by use of the power of eminent

domain for economic development purposes. ..................................................... 4

Davis, Hon. Lincoln, a Representative in Congress from the State of Tennessee, prepared statement ................................................................................. 18

Goodlatte, Hon. Bob, a Representative in Congress from the Commonwealth

of Virginia, opening statement ............................................................................ 1

Herseth, Hon. Stephanie, a Representative in Congress from the State of

South Dakota, opening statement ...................................................................... 17

Peterson, Hon. Collin C., a Representative in Congress from the State of

Minnesota, opening statement ............................................................................ 15

Pombo, Hon. Richard W., a Representative in Congress from the State of

California .............................................................................................................. 16

Salazar, Hon. John T., a Representative in Congress from the State of Colorado, prepared statement .................................................................................... 19

WITNESSES

Bartolomucci, Christopher, partner, Hogan & Hartson L.L.P., Washington,

DC .......................................................................................................................... 24

Prepared statement .......................................................................................... 66

Berliner, Dana, senior attorney, Institute for Justice, Washington, DC ............ 44

Prepared statement .......................................................................................... 76

Bonilla, Hon. Henry, a Representative in Congress from the State of Texas .... 19

Prepared statement .......................................................................................... 21

Hopkins, Alva J. III, chairman, government affairs committee, Forest Landowners Association, Inc., Atlanta, GA ................................................................ 28

Prepared statement .......................................................................................... 136

Howell, Hon. William J., speaker, House of Delegates, Virginia General Assembly, on behalf of the American Legislative Exchange Council, Washington, DC .................................................................................................................. 45

Prepared statement .......................................................................................... 138

Pilon, Roger, founder and director, Center for Constitutional Studies, CATO

Institute, Washington, DC .................................................................................. 48

Prepared statement .......................................................................................... 110

Stallman, Bob, president, American Farm Bureau, Washington, DC ................. 22

Prepared statement .......................................................................................... 135

Turley, Jonathan, professor, public interest law, the George Washington University Law School, Washington, DC ................................................................. 50

Prepared statement .......................................................................................... 81

Waters, Hon. Maxine, a Representative in Congress from the State of California .......................................................................................................................... 25

SUBMITTED MATERIAL

Stevens, Hon. John Paul, Associate Justice, U.S. Supreme Court, speech

to the Clark County Bar Association, August 2005, submitted by Ms.

Herseth ................................................................................................................. 118

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KELO V. CITY OF NEW LONDON U.S. SUPREME COURT DECISION AND STRENGTHENING THE OWNERSHIP OF PRIVATE PROPERTY ACT OF 2005

WEDNESDAY, SEPTEMBER 7, 2005

HOUSE OF REPRESENTATIVES,

COMMITTEE ON AGRICULTURE,

Washington, DC.

The committee met, pursuant to call, at 10:00 a.m., in room 1300

of the Longworth House Office Building, Hon. Bob Goodlatte (chairman of the committee) presiding.

Members present: Representatives Pombo, Lucas, Moran, Jenkins, Gutknecht, Hayes, Johnson, Osborne, King, Musgrave,

Neugebauer, Schwarz, Kuhl, Foxx, Fortenberry, Peterson, Holden,

Etheridge, Baca, Cardoza, Scott, Herseth, Cuellar, Costa, Salazar,

Barrow, Pomeroy, Boswell, Larsen, and Chandler.

Staff present: Ben Anderson, Bill Imbergamo, Kevin Kramp,

Pamilyn Miller, Tyler Wegmeyer, Callista Gingrich, clerk; and

Andy Baker.

OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH

OF VIRGINIA

The CHAIRMAN. Good morning. This hearing of the House Committee on Agriculture to review the Kelo v. City of New London decision of the U.S. Supreme Court and H.R. 3405, the Strengthening

of Ownership of Private Property Act of 2005 will come to order.

Today we will examine the potential effects that the recent Supreme Court decision will have for private property owners. Private

ownership of property is vital to our freedom and our prosperity

and is one of the most fundamental principles embedded in our

Constitution. One need only look so far as the aftermath of Hurricane Katrina to see the importance of private property rights to the

American people.

Not only will the protection of private property rights be crucial

to the reconstruction of New Orleans, but also these rights are so

central to our core values, that citizens are battling harsh conditions and even the risk of disease, to return to their homes to survey the damage and begin the rebuilding process. The Founders realized the fundamental importance of property rights when they

codified the takings clause of the fifth amendment to the Constitution which require that private property shall not be taken for public use without just compensation.

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This clause created two conditions to the Government taking private property, that the subsequent use of property is for the public

and that the Government give the property owners just compensation. However, the Supreme Court’s recent 5 to 4 decision in Kelo

v. City of New London is a step in the opposite direction. This controversial ruling expands the ability of State and local governments

to exercise eminent domain powers to seize property under the

guise of ‘‘economic development’’ when the ‘‘public use’’ is as incidental as generating tax revenues or creating jobs, even in situations where the government takes property from one private individual and gives it to another private entity.

By defining public use so expansively, the Court essentially

erased any protection for private property as understood by the

founders of our Nation. Justice O’Connor, in her dissent wrote,

Today the Court abandons this long held basic limitation on Government power.

Under the banner of economic development, all private property is now vulnerable

to being taken and transferred to another private owner so long as it might be upgraded.

To reason as the Court does, that the incidental public benefits

resulting from the subsequent ordinary use of private property

render economic development takings ‘‘for public use’’ is to wash

out any distinction between private and public use of property and

thereby effectively to delete the words ‘‘for public use’’ from the

takings clause of the fifth amendment. In the wake of this decision,

State and local governments can use eminent domain powers to

take the property of any individual for nearly any reason. Cities

may now bulldoze private citizens’ homes, farms and small businesses to make way for shopping malls, hotels or other developments.

In order to create a strong disincentive to prevent State and local

governments from using these broad eminent domain powers, I am

pleased to be a chief cosponsor of H.R. 3405, The STOPP Act. This

legislation mandates that if a State or local government uses eminent domain for economic development and takes land from one

private entity to give to another, then that State or locality will not

be eligible to receive Federal funding for any projects receiving

Federal economic development assistance. This legislation would

also eliminate Federal economic development funding for a government if it fails to provide the relocation costs of persons displaced

by the use of eminent domain power for economic development purposes.

The STOPP Act contains a very powerful economic disincentive

and while the goal of the legislation is to prevent abusive exercises

of eminent domain powers, we must also be careful that it does not

discourage appropriate uses of that power which can be acceptable

when truly used for public uses, such as new roads, schools and

similar uses. During our third panel today, we will examine, among

other topics, how best to ensure that we do not discourage these

appropriate uses. No one should have to live in fear of the government snatching up their home, farm or business and I am committed to ensuring that our rights are protected as the founders intended. Thank you and I look forward to hearing from our expert

witnesses today.

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At this point I would ask unanimous consent to include a copy

of H.R. 3405 into the record.

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The CHAIRMAN. It is my pleasure to recognize the ranking member of the committee, the gentleman from Minnesota, Mr. Peterson.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

Mr. PETERSON. Thank you, Mr. Chairman, and I would like to

thank you and Congressman Bonilla and Congresswoman Stephanie Herseth and others for their leadership on this issue and for

holding the briefing yesterday and the hearing today to address the

very timely and pressing issue of eminent domain.

This hearing comes at a time when people living in New Orleans,

rural Louisiana, Mississippi and Alabama, we have been seeing on

television, have been staying with their flooded or destroyed property rather than evacuate and I understand now they are trying to

have a mandatory evacuation of people and I think they are going

to find out that people don’t want to leave and I think it just shows

how strongly people feel about their property, their houses, their

businesses. In my area, we went though this in 1997. I had three

towns that were under water, just like New Orleans has been and

we had a heck of a time getting people to leave, even though they

were sometimes in imminent danger.

So I think this demonstrates why this issue is such a strongly

felt issue in a lot of the country and why it is, I think, a timely

and pressing issue. In the Kelo case, the Supreme Court decided

that the use of eminent domain could be upheld when a State or

local government was acting only to increase its tax base. This

Court’s decision, as I understand it, was a departure from the previous Supreme Court decision in Berman v. Parker that limited the

transfer of private property to another private entity only if the

property was part of a blighted area that presented a public safety

hazard. Neither of these cases is perfect and neither assures a fair

outcome for property owners. I think it is important for the government, at all levels, to ensure that property rights are respected as

the Constitution requires.

House bill 3405, which I am proud to cosponsor, encourages

State and local governments to make better decisions and if they

don’t make the right kind of decisions, they are going to be put in

a lot of jeopardy in terms of not being able to get any kind of help

from the programs that have been established by the Federal Government. And although this bill is, I think, not perfect, either, because we have some definitional issues, I think, to work through,

I think we will work through those as we move to the mark up of

this bill and hopefully, we can pass this bill into law so that we

make sure that the jurisdictions out there make the right kind of

decisions as far as private property owners are concerned and I

again commend you and everybody else that has been involved in

this effort and look forward to the hearing and also to the mark

up of this bill. Thank you.

The CHAIRMAN. I thank the gentleman and I thank him for his

support of this legislation and for his interest in, and I look forward to working with him on this definitional issues that he raised

as we move the legislation toward a mark up. And now it is my

pleasure to recognize the gentleman from California, Mr. Pombo,

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chairman of the House Resources Committee and chairman of the

Private Property Owners Caucus. Mr. Pombo.

OPENING STATEMENT OF HON. RICHARD W. POMBO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. POMBO. Thank you, Mr. Chairman. First of all, I would like

to thank you and the ranking member for holding this hearing in

a timely manner. I thank the gentleman from Texas, Mr. Bonilla,

and Ms. Herseth for taking the lead on this legislation. Congress

has an inherent responsibility to not only uphold the Constitution,

but also to interpret the Constitution and to look at what our responsibility is as Members of Congress.

What this legislation does is it reflects what was an extremely

broad bipartisan response to a decision that came from the Supreme Court. You saw Members of Congress who joined together

to support this legislation unlike anything I have seen on a broad

policy issue. About the only time you see this diversity in Members

of Congress supporting legislation is usually on something that is

congratulating someone or naming a post office. It is not normal

that you have this broad of support for a policy bill that has been

drafted by these two individuals and I think the response that you

got out of Congress was because we believe that this was the wrong

decision to make.

Private property is the backbone of our economic system. If you

take away the right of an individual to own and use and enjoy

their private property, you take away any incentive that exists in

a free market system for people to achieve and to work and to do

more than what they normally would to survive day to day. That

is the purpose that private ownership serves in our economic system.

When the Supreme Court made the decision that it was OK for

a city or a county or a municipality to take private property from

one individual and give it to another, they are, in essence, destroying that protection in our Constitution. It is Congress’s responsibility to ensure that that protection is there. The Bill of Rights of the

Constitution was designed to protect the individual. Our Founding

Fathers knew that once people figured out that they could vote to

take away from someone else to benefit themselves, that people

would react in that way and begin to do it, so they came up with

the Bill of Rights, the first 10 amendments to the Constitution,

which was designed to protect the individual, designed to protect

each and every one of us from what may be in the public interest

or public good as this decision came down.

As the chairman said, I think all of us support the idea of using

eminent domain for legitimate public purposes; roads and bridges

and schools and libraries and parks and things that eminent domain has been used for, for years. When our Founding Fathers

drafted the Bill of Rights, the only real public use of land was for

military bases, roads and post offices. Outside of that, there was

no legitimate public use for land. No one imagined that we would

be taking homes and businesses away from people and turning

them into other private uses. What this legislation is designed to

do is to protect those individuals.

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I am glad that Mr. Bonilla jumped out extremely early on this

right after the decision came out and began to work on legislation,

worked it extremely hard with Ms. Herseth to get a number of

Members on here. I believe this is timely, it is something that we

should move to mark up very quickly and get to the House floor.

This is a practice that is expanding since the Supreme Court decision has come down. We have seen a number of cases throughout

the country where municipalities are beginning to use eminent domain in this way because they see the opportunity because of the

Supreme Court decision. I would encourage the chairman to, after

this hearing, to schedule mark-up on this and move it as quickly

as we possibly can. I yield back.

The CHAIRMAN. I thank the gentleman for that support and encouragement, and it is now my pleasure to recognize the lead

Democratic cosponsor of the legislation, the congresswoman from

South Dakota, Ms. Herseth.

OPENING STATEMENT OF HON. STEPHANIE HERSETH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH

DAKOTA

Ms. HERSETH. Thank you and let me thank you, Mr. Chairman

and Ranking Member Peterson for holding this hearing today, as

well as Agriculture Appropriations Subcommittee Chairman, Henry

Bonilla, for his important and esteemed leadership on this important issue. I would also like to thank all of my colleagues, most notably, Congressman Pombo, chairman of the House Resources Committee, on which I also serve, who, as you know, has been a leader

on the issue of protecting private property rights for many years,

and others who have joined together in a truly bipartisan way to

address the potentially disastrous consequences of the Supreme

Court’s Kelo decision through their support of this good, commonsense legislation. In the short time since its introduction, the

STOPP Act has garnered broad bipartisan support exactly for that

reason, its common sense.

The Supreme Court decision in Kelo v. New London dealt a serious blow to the fundament rights of property owners. This ruling

allows governments to take private property from one landowner

and give it to another private individual, so long as some economic

development justification is given. In short, it means that governments can take your property and give it to someone else. I think

this is a dangerous precedent that requires congressional action

and thankfully, I am not alone. I have heard outrage about the Supreme Court’s Kelo decision from a broad spectrum of South Dakotans, from our largest communities to countless family farms and

ranchers for good reason.

The use of eminent domain by the city of New London was ‘‘unwise as a matter of policy.’’ Those aren’t my words, they are the

words of Justice John Paul Stevens, the author of the Kelo decision.

In a speech before the Clark County Bar Association in Las Vegas

last month, which I will submit for the record, Justice Stevens confessed that he thought the decision in Kelo was wrong as a matter

of policy, although correct as a matter of law. In that speech, Justice Stevens indicated the Kelo decision ‘‘compelled the result that

he would have opposed if he were a legislator,’’ and importantly,

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signaled his expectation that the political process is up to the task

of addressing such policy concerns.

So here we are today. As demanded by our constituents and anticipated by the decision’s author, we have introduced a piece of

legislation that addresses these policy concerns by discouraging

State and local governments from arbitrarily taking land from private land owners and giving it to another private party. I am

pleased to be able to help craft a bipartisan solution. I felt compelled to take a lead in the process and was thankful for the opportunity to work closely with Chairman Bonilla because of the people

I represent and my roots on my family’s farm in South Dakota. In

South Dakota, our rural population’s livelihood is deeply tied to the

land. Whether on the farm or in town, their economic livelihoods

are also tied to land and they should not be at the whim of a government that decides to take that livelihood away just to give it to

someone else who the government decides would deliver more in

tax revenues.

While the Kelo decision is now the law of the land, this piece of

legislation sends a strong message that many of us here today and

hopefully, the entire Congress, agree that we must do what is constitutionally permissible to prevent the most egregious use of the

takings power to enrich one private party at the expense of another. While Congress can’t overturn the Supreme Court, we can

provide carrots on sticks to prevent local governments from unfairly taking private property from land owners.

The bills diverse supporters are Republicans and Democrats from

across the country. I am proud to be the lead Democrat on this bill,

joining my colleagues from around the country in fighting for the

rights of private property owners. I want to thank Chairman Goodlatte, in particular, for his work in ensuring a quick hearing on the

bill and on the Supreme Court decision. As we all know, due to recent events, and as Mr. Peterson noted, we have new and evolving

challenges before us in the Congress, but this remains a priority

as we work together to meet other challenges, as well. Thank you,

Mr. Chairman. I yield back.

The CHAIRMAN. I thank the gentlewoman. Without objection, all

additional opening statements will be made a part of the record.

[The speech of Justice Stevens appears at the conclusion of the

hearing. The prepared statements of Mr. Salazar and Mr. Davis

follow:]

PREPARED STATEMENT OF HON. LINCOLN DAVIS, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF TENNESSEE

I’d like to thank Chairman Goodlatte and Ranking Member Peterson for having

this hearing today on the Kelo v. City of New London U.S. Supreme Court decision

and H.R. 3405, the Strengthening the Ownership or Private Property (STOPP) Act

of 2005.

Like many of my constituents in Tennessee’s Fourth Congressional District, I was

extremely disappointed in the Supreme Court’s 5–4 ruling that State and local governments can use eminent domain for revitalization projects. I believe that forcibly

shifting land from one private owner to another, even with fair compensation, favors

the most powerful and influential in society and leaves the poorest amongst us with

little protection. Now, a major corporation could take a family farm or house away

from its rightful owners if the local government believes the new business will create greater tax revenues, and thus be more beneficial for the public. I feel this is

an extremely broad interpretation of the fifth amendment to the Constitution, which

prohibits the taking of property by the Government except for ‘‘public use.’’

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That being said, I do not think Congress should make the mistake of trying to

prevent the enforcement of a broad, sweeping Supreme Court decision with broad,

sweeping Federal legislation until we put that legislation under proper scrutiny.

While we must ensure the rights of private property owners, we also must ensure

the ability of State and local governments to use Federal programs to improve the

infrastructure of their communities and the livelihood of their constituents. I look

forward to hearing the testimony of our distinguished witnesses and learning more

about Representative Bonilla’s legislation.

PREPARED STATEMENT OF HON. JOHN T. SALAZAR, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF COLORADO

• Good morning and thank you Mr. Chairman for the opportunity to speak briefly

this morning. • In my district, private property rights are sacred.

• I was very upset with the Supreme Court ruling that local governments can

abuse their powers of eminent domain. • No one can deny that economic development is critical, but I can think of few

instances where it should be done at the expense of private property rights. • My constituents do not want the government telling them they have to move

out of their house so a strip mall can be built. • Now I understand there are legitimate uses of eminent dominant, uses that are

in the public’s best interest. • Examples include building roads and schools, but I am tired of hearing about

people losing their homes in the interest of so-called economic development. • The Kelo decision, in my view, is a gross misinterpretation of the takings clause

of the fifth amendment. • I agree with Mr. Pombo, if government will not stand up for the rights of property owners, who will? • I fear this is the beginning of a dangerous trend towards more and more government intervention in the lives of citizens and their individual rights and liberties. • I support efforts to take back the rights of property owners in this country.

• Again, I thank the chairman for the time to speak.

The CHAIRMAN. We will turn now to our first panel. Before we

do that, I would like to recognize another Member of Congress, who

is in the hearing room, and that is Congresswoman Thelma Drake

of Virginia. Congresswoman Drake has been a leader on this issue

and has been very supportive of this legislative effort, as well, and

she had legislation in the Virginia House of Delegates when she

served there, very recently, and you will be glad to know that one

of our witnesses today is Speaker Howell, just a few feet down from

you. And I will turn to our first panel of witnesses and I think we

will be joined shortly by Congresswoman Waters.

But first I would like to recognize the author of the legislation,

and our colleague from Texas, Congressman Henry Bonilla, who

has, as it has been noted, is the chairman of the House Agriculture

Appropriations Subcommittee. Congressman Bonilla, your leadership on this issue is much appreciated and we welcome your comments.

STATEMENT OF HON. HENRY BONILLA, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS

Mr. BONILLA. Thank you, Mr. Chairman. I ask unanimous consent to enter my written statement into the record.

Mr. Chairman, this could be the most important piece of legislation that the Congress passes this year and I thank you from the

bottom of my heart for your leadership or for the leadership of

members of this committee for taking an aggressive approach as

the members of the committee with jurisdiction over this bill.

As has been outlined here, I am not going to get into a lot of the

specifics, because I think the history of what got us to this point

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and what we are trying to do has been outlined very clearly in

some of the opening statements; but this is something that resulted, as mentioned, due to the Supreme Court ruling, the Kelo

decision. It created an outrage across this country, whether you

live in a rural community or in an urban area. The fear has now

put, is now in the hearts of many Americans that they could lose

their property if a government decides that for private gain, they

want to take it.

This is a ruling that again, I think, would not only shock, but

surprise a lot of Americans, because of the great history we have

on property rights in this country. When you travel to other parts

of the world, you don’t hear stories about people who grow up in

a neighborhood and try to attain the European Dream or the Asian

Dream or the Russian Dream. The American Dream is unique in

this world and part of the American Dream is to own your own

property, something that no one can take from you, no matter

what. Mr. Peterson makes a good point, that during this crisis in

Louisiana, the symbolism of people who do not want to leave their

property is a strong message that I think is part of the undercurrent of what we are seeing as a result of this crisis.

Ms. Herseth is correct about the outrage and the concern that

people are expressing across the country as a result of the Kelo decision, and Mr. Pombo has been a leader since the first day he

stepped into the Capitol here, back in January 1993 as a new

Member of Congress, knows the significance of property rights to

all Americans, again, regardless of where they live and regardless

of their socio-economic status.

So I am thrilled to death that we have, again, as Mr. Pombo

pointed out, an unprecedented number of cosponsors on this bill

that come from every corner of this country politically. Stark liberals and hard-core conservatives standing shoulder to shoulder to

protect property rights, of values in this country. Mr. Chairman, we

may not be able to control the Supreme Court, but this Congress

controls the money, and this bill is about shutting off the money

for any local community that undertakes a private property taking

for private gain and it also deals with States if they become involved in it, as well. But, of course, protecting, as you outlined, the

right of local governments and State governments to take property

for public gain, for airports, for bridges, roads, schools, has been

outlined by members of this committee.

So we don’t touch the traditional eminent domain clauses that

have been used in this country for generations that have been, indeed, for the greater good, what we are simply saying is that you

can’t do it for private gain and if you choose to do it anyway, you

lose all Federal money. There are competing bills out there dealing

with this issue, that deal with Federal funds. We feel, I feel very

strongly, the cosponsors of this bill feel very strongly that this bill

eliminates any possibility of a local government using a shell game

to hide certain funds in one bank account and saying that they are

using it for completely separate projects and then going ahead and

proceeding to take property for private gain using another fund. So

this shuts it down, period, and I would think that if this law were

implemented, that there would not be, that we would put an end,

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once and for all, to any government with any idea of taking property for private gain.

Again, I want to be brief in my opening remarks and leave plenty

of time for the witnesses who are going to follow, very important

witnesses, Mr. Chairman, that you have lined up today that will

lend some expertise and perspective to this piece of legislation.

PREPARED STATEMENT OF HON. HENRY BONILLA, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF TEXAS

In July 2004, the Supreme Court was petitioned to hear one of the most important property rights cases ever.

Earlier that year the Connecticut Supreme Court ruled that even if there is nothing wrong with your home or business, church or synagogue, or even your whole

neighborhood or community, that government can still use eminent domain to take

your property and transfer it to someone else for their private gain.

This ruling placed in jeopardy the very essence of the American way of life: that

someone can start with nothing, build a family, a home, a business, and work to

make his community better. This dream is directly threatened by the fear that while

you work to create the American Dream, it may be taken away should government

decide that another individual could create greater tax revenue. This fear is real

and every individual who owns real property knows that homes generate less tax

revenue than businesses and small businesses generate less tax revenue than larger

ones.

The issue before the Court was brutally simple: does government enjoy protection

under the Constitution to take property from one private party in order to give it

to another private party for the purpose of increasing tax revenue and income? Kelo

v. New London presented this question to the Court in no uncertain terms.The constitution of every State, as well as that of the United States, requires that private

property only be taken for ‘‘public use,’’ such as transportation or public functions,

not for private or commercial economic gain. The use of eminent domain authority

to increase tax revenue is an abuse of the intent of ‘‘public use.’’ Such takings are

arguably the most outrageous and broad action possible by government against its

own citizens.

Not only does this decision put in jeopardy the ownership of property in our Nation, it places ethical government in the crosshairs of those which who would seek

to manipulate the system for their personal gain. Those with deep pockets and questionable intentions now have both the legal means and profit motive to sway local

officials to do their bidding.

The Court’s ruling in favor of New London creates a precedent that will hang like

a stone around the neck of the average citizen, the small businessman, the common

man. This stone will weigh down the rights of Americans trying to make a success

of themselves through the sweat of their own brow.

Many feel that their voices can not, and will not, be heard on this issue. As Members of Congress, it is our job to make sure that this stone is shattered and those

voices are not only heard, but pushed to the forefront.

Several of our colleagues have answered this call and introduced pieces of legislation which we think could make a positive impact on the situation. However, these

measures apply only to specific projects which have Federal funding attached to

their completion. While this is a great effort the fact is it does not go far enough.

These measures have a loophole which localities may try to exploit. Each of these

pieces of legislation take actions against specific projects in which the power of eminent domain is abused. The funding ‘‘shell-game’’ that would follow any Federal action would see localities moving local and private funds into projects which are

questionable all the while continuing to receive Federal funding for other projects

related to other economic development.

In order to address this issue, I, along with several of my colleagues here today,

introduced the Strengthening the Ownership of Private Property, or STOPP Act.

This bill confronts this issue head on with legislation to stop this practice in its

tracks. This legislation would take a two-fold approach in preventing State and local

entities from wrongly taking private property.

The first step is to make local governments follow the same guidelines imposed

upon the Federal Government by the Uniform Relocation Act in instances where

eminent domain powers are abused. This measure provides that the Federal Government must not only provide fair compensation for the property taken, but also

cover the costs of relocation for any business or home which must move.

22

Currently, local entities don’t have this restriction and are only subject to this law

if there are Federal funds used for the project.The second, and more substantial

step, would be to withhold any Federal economic development funds to localities

which choose to take property for private commercial development. This measure

would not make it illegal for entities to continue their practices, but would make

them think twice by forgoing any Federal funding for any project should they proceed. Under the other measures which have been introduced, local entities could use

private or local funding when pursuing eminent domain of this type, however, under

our bill they would have to think twice before pursuing this practice.

We think this bill strongly discourages governmental entities from moving forward with trading citizens dreams for taxes. The STOPP Act is the least we can

do, a measure with teeth, a measure for average citizens, a bill to correct a far

reaching decision with horrific consequences. I commend Chairman Goodlatte and

Ranking Member Peterson for their interest in moving forward quickly on this important legislation. I also commend Chairman Pombo for his never-ending fight for

the private property owners of our great Nation. I would also like to thank my lead

cosponsor Representative Herseth for her strong advocacy on behalf of those who

may be adversely impacted by this decision. Last I would like to thank my colleagues from every end of the political and ideological spectrum who have come together to endorse and support this piece of legislation to protect the American property owner.

The CHAIRMAN. Thank you, Chairman Bonilla. We very much appreciate your comments and we will look forward to the hearing

today on your legislation and moving it through this committee as

quickly as possible. We do not traditionally ask questions of Members of Congress and since Congresswoman Waters is not yet here,

we will move on to the next panel and we will make a place at the

table for her, so when she does arrive, we will give her an opportunity to make her statement, but thank you, Chairman, very

much, for your contribution today.

We would now like to invite our second panel to the witness

table. I would like to welcome our second panel of witnesses. Mr.

Bob Stallman, president of the American Farm Bureau of Washington, DC; Mr. Christopher Bartolomucci, who is a partner of Hogan

and Hartson law firm here in Washington, DC, and Mr. Alva Hopkins, chairman of the Government Affairs Committee of the Forest

Landowners Association. I would like to welcome all of you, remind

you that your full statement will be made a part of the record and

ask you to limit your comments to 5 minutes. And we will start

with Mr. Stallman. Welcome.

STATEMENT OF BOB STALLMAN, PRESIDENT, AMERICAN

FARM BUREAU

Mr. STALLMAN. Thank you, Mr. Chairman. I am a licensed cattle

producer from Texas, as well as president of the American Farm

Bureau Federation. I appreciate the opportunity to be here before

this committee today to discuss the potentially devastating effect

on agriculture of the recent Kelo decision. We commend this committee for holding hearings on this matter so promptly. The Kelo

decision has struck a raw nerve around the country. We are gratified that so many Members of Congress have introduced and cosponsored bills in such a short time.

We fully support the efforts that have been taken thus far and

we will work diligently with this committee and others to pass legislation to encourage States to limit their use of eminent domain

to truly public uses. Farmers and ranchers understand that circumstances can arise in which their land could be acquired for a

legitimate public use. We cannot support the rationale of Kelo,

23

however, in which private property can effectively be taken for the

profit of other private parties.

The difference between legitimate uses of eminent domain and

what is so objectionable in Kelo is the difference between building

firehouses or factories, or the difference between courthouses or

condominiums. After Kelo, no property is secure. Any property can

be seized and transferred to the highest bidder. Mr. Chairman, I

appreciate your reference to Justice O’Connor’s dissent. I would

like to add one other part in her dissent in which she said, ‘‘The

specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz Carlton, any

home with a shopping center, or any farm with a factory.’’

Agricultural lands are particularly vulnerable. The fair market

value of agricultural land is less than residential or commercial

property, making a condemnation of agricultural land less costly.

While agricultural lands are vital to the Nation because they feed

our people, they do not generate as much property tax revenue as

homes or offices. As a result, they become very susceptible to being

taken for any of these other uses. Finally, municipalities generally

grow outward, into farming and rural areas. There is nothing to

stop farms that have been in families for generations from being

taken for industrial developments, shopping malls or housing developments.

Reaction from our members to Kelo has been swift and overwhelming. Farmers and ranchers from across the country are asking us to help them keep their property. The American Farm Bureau Federation has initiated the ‘‘Stop Taking Our Property Campaign,’’ or STOP, for short. This campaign is designed to educate

our members and the public about the impacts of the Kelo decision

and to provide materials to help State Farm Bureaus address the

issue in their respective States. As part of the campaign, we have

developed an education brochure, model State legislation and a

Web page for interested people.

One key element to our campaign is to promote passage of H.R.

3405 or similar legislation. Since eminent domain is a creature of

State law, substantive changes must be made at that level. Getting

50 State legislatures to act, however, is an uncertain and lengthy

process. That is why Federal legislation is also necessary. Congress

has the authority and the responsibility to determine how our tax

dollars are spent. Using Federal funds to help municipalities take

from one private party and give to another adds insult to injury to

those who work hard for themselves and their families.

You can, by passing this kind of legislation, ensure that State

and local governments do not use a person’s own tax dollars to dispossess them or other private interests. All of the Federal bills introduced thus far take this approach. The differences among them

are the degree to which such funding is withheld. While we support

all the approaches taken in these bills, H.R. 3405 seems to offer the

most effective deterrent to abuses of eminent domain.

In closing, Mr. Chairman, the American Farm Bureau Federation strongly supports swift congressional action or legislation to

withhold Federal funding to States and local governments that use

eminent domain to take property from one private entity and

transfer it to another for economic development purposes. Thank

24

you for the opportunity to be here today and I will be pleased to

answer any questions you and other members of the committee

may have.

[The prepared statement of Mr. Stallman appears at the conclusion of the hearing.]

The CHAIRMAN. Thank you, Mr. Stallman, and we are now

pleased to welcome Mr. Bartolomucci.

STATEMENT OF CHRISTOPHER BARTOLOMUCCI, PARTNER,

HOGAN & HARTSON, L.L.P.

Mr. BARTOLOMUCCI. Well, thank you for inviting me to testify on

the STOPP Act. I represented the Property Rights Foundation of

America in connection with the filing of a friend of the court brief

in the Kelo case and I believe this committed should be commended

for giving its attention to the very important matter of economic

development taking. The takings clause of the Constitution permits

the taking of private property for public use so long as just compensation is paid. In Kelo, the Supreme Court held that the use of

eminent domain power by the city of New London, Connecticut for

a planned economic development was a permissible taking for public use. Kelo raises a very important principle of takings law. The

Supreme Court has always described as both unjust and unconstitutional the Government’s transfer of property from one private

party to another private party for the latter’s personal benefit. ‘‘It

is against all reason and justice,’’ wrote Justice Chase in his famous opinion in Calder v. Bull, ‘‘for the Government to take the

property of Person A and give it to Person B for B’s personal benefit.’’

Justice Story said this about the ‘‘no A to B’’ principle, ‘‘We know

of no case in which a legislative act to transfer the property of A

to B without his consent, has ever been held a constitutional exercise of legislative power. On the contrary, it has been constantly resisted as inconsistent with just principles by every judicial tribunal

in which it has been attempted to be enforced.’’

For its part, the Kelo court did not reject the ‘‘no A to B’’ principle. On the contrary, the Court said that it has long been accepted that the sovereign may not take the property of A for the sole

purpose of transferring it to another private party, B, even though

A is paid just compensation. But the Kelo court saw no violation

of the ‘‘no A to B’’ principle. The Court cited the fact that when the

city adopted its development plan, the city did know the identity

of the private developer who would get the land in question, thus

the Court said that it is ‘‘difficult to accuse the government of having taken A’s property to benefit the private interests of B when

the identity of B was unknown.’’

That may be true, but it is also difficult to deny that what the

city of New London is doing comes uncomfortably close to violating

the ‘‘no A to B’’ principle. The city’s plan involves taking private

property from its current owners and giving that property to a forprofit private developer, essentially free of charge. The city is not

planning to open the condemned land to be used by the general

public. Furthermore, no direct, immediate and certain public benefit will be realized by the city’s plan. Instead, the city’s plan is

based on a forecast or prediction that developing the property will

25

produce economic benefits that will trickle down to the public at

large over the long term.

Before I conclude, I would like to offer a few comments on the

drafting of the bill. The bill’s prohibition on Federal assistance is

triggered when a State or a unit of local government pursues a forbidden taking, but eminent domain power is sometimes delegated

to non-governmental bodies. For example, in Kelo, the condemnation proceedings were initiated by the New London Development

Corporation, a private nonprofit entity, thus the committee may

want to clarify whether the bill applies in the case of eminent domain power delegated to private corporations.

Also, Federal assistance is prohibited under the bill only when

ownership of property is transferred. It is not clear whether the bill

would apply to transfers of property interests stopping just short

of fee title. In Kelo, negotiations were underway to lease parcels for 99 years to a private developer who would pay only $1 per year in

rent.

Third, the committee may wish to clarify whether the bill would

encompass a taking for the purpose of ameliorating blighted areas.

In the case of Berman v. Parker, the Supreme Court upheld a redevelopment plan with respect to a blighted area of Washington, DC.

If the committee wants to continue to permit the use of eminent

domain as a response to blight, it may want to say so expressly in

the bill. Mr. Chairman, thank you again for inviting me to testify.

[The prepared statement of Mr. Bartolomucci appears at the conclusion of the hearing.]

The CHAIRMAN. I thank you. We have now been joined by Congresswoman Maxine Waters, who is another principal cosponsor of

the legislation and we will interrupt this panel to allow Ms. Waters

to offer her testimony. We are very appreciative of your participation today and of your leadership on this issue. Welcome, Ms. Waters.

STATEMENT OF HON. MAXINE WATERS, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA

Ms. WATERS. Thank you very much, Mr. Chairman and the rest

of my colleagues who have taken the time to focus the Congress on

this very important issue, eminent domain and its new expanded

definition. I really do appreciate the fact that we are taking this

issue head-on. I am Congresswoman Maxine Waters representing

the 35th Congressional District, which encompasses parts of Los

Angeles and the cities of Hawthorne, Inglewood, Lawndale and

Westchester in California.

I am here today not as a new opponent of the taking of private

property for private use, rather, I see this hearing as a continuation of the work that some dedicated public policy makers on the

local, State and Federal level have been engaged in for a very long

time.

Upon each reading I become increasingly more shocked and dismayed when considering the potential impact of the ill conceived

decision in Kelo v. New London. This decision, which defies the intent of eminent domain and

logic, concludes that the Constitution grants no protections for private property owners against developers and development plans.

26

This expansion of the definition of eminent domain is a slap in the

face to private property owners and private property advocates all

throughout the country. Never in all of my years of public policy

making and advocacy would I have believed that the Supreme

Court of the United States would condone the taking of private

property for the purposes of so-called ‘‘economic development.’’

I have always been cautious of the use of eminent domain for

public purposes and adamantly opposed to the taking of private

property for private use. Even in cases when it was done under the

guise of the public good, we have realized that public good sometimes is circumstantial, at best.

Those of us who stand with private property owners understand

that there is a delicate balance within communities that is often

disturbed or destroyed in eminent domain cases. For years I have

been involved in the fight against municipalities and developers

and so-called community reinvestment corporations that seek to

abuse eminent domain by taking private land for public use and

even for private use.

On one occasion in my district, the Los Angeles Unified School

District threatened to use eminent domain to build a new school.

And although I recognized the need for more schools in the area,

I could not stand by and watch both a public park and many homes

be taken, homes with historic value, be taken and destroyed and

hundreds of lives altered. I was compelled to heed the call of the

community, which stood in clear and concise opposition to this

project. I was particularly struck, in this instance, because I

thought that the public park was dedicated for park use and perpetuity and I discovered that nothing is sacred when those determined to use eminent domain for whatever purposes and to talk

about the use of it, to build the school, certainly sounded like motherhood and apple pie.

But when I took a very close look at that community, I really

could identify other areas where they could build schools, areas

that they were not attempting to package, areas that they had not

sought, but rather, they decided where they wanted to put the

school, they were going to take this open space and there wasn’t

much open space in this community, and the houses along what we

call South Park Walk that were really historic properties.

And as we anticipated, LAUSD, the Los Angeles Unified School

District, was certainly able to find an alternative location to build

a school, therefore satisfying both the needs of the community and

their own. We organized. We organized the people in the community, we went to the school board, we went on two occasions. We

opened up the park and canvassed the whole area, brought people

together and we made a tremendous impact on that decision and

this is but one of the occasions where I have been involved in opposing the use of eminent domain and even then, it was supposedly

for public use.

I could describe some other instances where I have been involved

with the expansion of freeways, et cetera, et cetera, but bottom line

is this; to me, private property is sacred. To those people who work

very hard, who save money or even have inherited property, I

think that the government should protect the right to property

ownership and protect against that being taken away by the govVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
27

ernment. And to have the Supreme Court decision literally fly in

the face of the kind of values that I think we all hold about the

ownership of our homes and our land is quite unsettling.

I have been working with several people from various jurisdictions; one is from Orange County, a supervisor in the Orange

County area and people are looking at us and saying what is it

that brings liberal Maxine Waters together with this conservative

supervisor out of Orange County? Well, you are right. You don’t see

that very often, but on this issue I think that you are going to see

a lot of it because I don’t care what your political orientation is,

I think that we all basically share a basic value of the right to ownership of our land and our homes.

I wanted to just share with you a couple of cases that are being

tracked by one of the groups that we are working with. In Cypress,

parishioners in the racially diverse Cottonwood Christian Church

raised $2.5 million to purchase nearby vacant property to facilitate

the expansion of their new sanctuary, education and childcare facility. In 2002, the City of Cypress Redevelopment Agency used eminent domain to take the property to turn it over to Costco. And this

was a church.

In Oakland, John Revelli owned an independent auto repair shop

that had been in the family for 55 years. In 2005, the City of Oakland Redevelopment Agency used eminent domain to take his business property for transfer to a private developer.

In Garden Grove, California, Bel-isle’s was a local 24-hour independent one-of-a-kind family-owned restaurant, established in

1958. In 1998, it was taken by eminent domain to transfer to a private developer. An Outback Steakhouse now stands on the site.

Long Beach, private property was taken by eminent domain to

benefit Wells Fargo Bank’s new site at the Los Alto Shopping Center. On and on and on. I could just cite many of these cases that

are documented, but I am not going to take up your time. I appreciate the ability to be here with you today to share this testimony

and I think it is very important for me to say that not only have

I introduced legislation, but I am supporting all legislation that

would stop any entity from the taking of private property. And I

think that we can join hands in a way that perhaps we don’t often

do and I look forward to the work that we are going to have to do

and I want you to know that I am very, very appreciative of Congressman Bonilla and H.R. 3405 and I stand behind it with everything that I can muster. Thank you very much.

The CHAIRMAN. Thank you, Congresswoman Waters. Congresswoman Waters and I are both members of the House Judiciary

Committee, which will also be addressing this issue, but you are

very welcome here in the very bipartisan House Agriculture committee today. And we welcome your comments with open arms and

hearts and thank you for your support of Congressman Bonilla and

Congresswoman Herseth’s legislation.

I also very much appreciate your noting that this does cover the

political spectrum, but it also covers the economic spectrum and

quite frankly, you are correct in noting that it is smaller businesses

and lower income people whose property may be most at risk because it is the property that may be taken and increase the tax

value the most, but that person’s home is their castle, just like anyVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
28

body else finds their home to be precious and so we join you in that

observation.

It is not the practice of the committee to direct questions to

Members of Congress, so at this time we will thank and excuse

you, but we do very much appreciate your contribution.

Ms. WATERS. Thank you very much.

The CHAIRMAN. We will now return to panel II with the final witness on the panel, Mr. Alva Hopkins. Mr. Hopkins, welcome.

STATEMENT OF ALVA HOPKINS, CHAIRMAN, GOVERNMENT

AFFAIRS COMMITTEE, FOREST LANDOWNERS ASSOCIATION

Mr. HOPKINS. Thank you. Chairman Goodlatte, Ranking Member

Peterson, members of the committee, I want to thank you for the

opportunity to appear before you today to speak on the implications

of the Kelo decision. More specifically, the implications and opportunities non-industrial private forest landowners see for statute refinement and clarification in the wake of that decision.

I am Alva Hopkins, III. I am a forest landowner from Folkston,

Georgia and a board member and chair of the Governmental Affairs Committee of the Forest Landowners Associations. In the Kelo

decision, the Supreme Court has taken the words ‘‘public use’’ and

replaced it with their language ‘‘public purpose.’’ As forest landowners, the management of our forest land confers numerous benefits on the public. Some of these benefits include producing millions

of tons of oxygen, sequestering carbon, filtering air and water, providing fish and wildlife habitat, including that for threatened and

endangered species, improving the aesthetic beauty of the natural

landscape and providing the opportunity for recreation, just to

name a few.

Under the Kelo case, a government entity can condemn thousands of acres of forest land, not only to convey it to another private landowner who will put it to a higher use, but to one who

wishes to create a park. Perhaps this park even joins a residential

development of this same private landowner. And perhaps this new

park would enhance the residential development and meet the public purpose requirement while providing the above listed benefits to

the public.

Forest and farmland is considered low-end use property as compared to commercial property with regard to the creation of tax

revenue and jobs. Therefore, farm and timberland would never

withstand an eminent domain attack by any governmental entity,

wherein the new private landowner will create a new job or build

a structure on the property that will increase the tax base.

As a forest landowner, the ability to manage a long-term investment strategy is vital to the future of our industry. This long-term

investment for landowners has up front cost, up front investment

cost, together with annual taxes and other management costs, with

the first return on the property often occurring some 12 to 18 years

later with possible final return in 25 to 35 years. For a landowner

to make this type of investment and commitment, private property

rights must be fully protected.

When the Constitution was framed by our Founding Fathers, it

was their intent to protect private property except when absolutely

necessary for public use. Public use was intended for such things

29

as roads, hospitals and the furtherance of government functions.

We have seen in this country the cost and erosion of private property rights through a number of sources. Property is not a singular

concept. It is not a matter of title, but whole bundle of rights. Property law recognizes these bundle rights, such as you can sell property, you can lease it, you can hunt, hunting rights. And however

our taking law is based on the idea that the entire bundle must

be taken before you get any compensation. But take away any one

of these rights and you reduce the value of the property to the

owner. This all or nothing view enables the government, through

the use of regulation that can actually squeeze the value out of

property a little at a time and allows for them to escape from any

compensation to be paid the owner.

Many laws whose intentions are good, such as the Clean Water

Act, Endangered Species Act, and the unintended consequences of

the magnificent success we have had with the Conservation Reserve Program, include disincentives for forest investment. As

these disincentives build, many forest landowners are changing

their investment strategy and selling their properties to place their

capital in other types of investment. As can be seen by the some

of the examples above, these partial takings can be as serious a

problem as a full taking, especially when the partial taking first occurs. The owner may subsequently be paid jus compensation for

the full taking, however, that just compensation is considerably

less than it would have been had it not been for the previously occurring partial taking.

As previously mentioned, well-intended legislation can have unintended consequences. Private landowners and the businesses associated with them are in favor of saving at-risk species, preserving

clean water and conserving our natural heritage. We know that societal goals and private property rights can be compatible. When

the society, as a whole, benefits, then society, as a whole, must pay

the bill.

As a result of the Kelo decision, almost any piece of property is

now subject to condemnation. Most government entities view

forestland as one of the lowest uses of property and almost any

other use would be considered a higher and better use, producing

more taxes and potential jobs. The takings clause of the fifth

amendment of the Constitution was intended to reflect a limitation

on eminent domain, not an unrestricted grant of power, virtually

any and every piece of property subject to eminent domain.

The intent of my testimony to you here today has been to try to

focus on the adverse impact of the Kelo decision of forest landowners, as well as briefly touch on several other private property

issues. These problems have been collectively labeled the South’s

invisible forest health problem. I hope that this committee will address the private property rights issues that I focused upon today

and restore private property rights back to their constitutionally intended place. Mr. Chairman, this concludes my remarks. Thank

you.

[The prepared statement of Mr. Hopkins appears at the conclusion of the hearing.]

The CHAIRMAN. Thank you, Mr. Hopkins. I would like to begin

the questioning by asking all three members of this panel if they

30

believe that it is appropriate for the Federal Government to act to

preserve these basic private property rights. Many of the State legislatures are undertaking action now to reexamine their State laws

with regard to this issue, but many here in the Congress, including

myself, believe that we have a sworn duty to uphold the U.S. Constitution and we think the Supreme Court decision may be contrary to the language on the face of the fifth amendment, and I

would like to know what each of you think about the involvement

of the Federal Government in attempting to curtail what we regard

as an abuse. Mr. Stallman, we will start with you.

Mr. STALLMAN. Well, Mr. Chairman, we certainly concur with

your assessment. The Congress does hold the power of the purse

strings, even though you don’t get to interpret the Constitution as

the Supreme Court does, you certainly are charged with upholding,

I think, what Americans believe our Constitution says and using,

moving forward with legislation to restrict the use of public funds

in these instances seems to me a very effective way of going about

that.

The CHAIRMAN. Mr. Bartolomucci.

Mr. BARTOLOMUCCI. I believe that Federal action is also entirely

appropriate. The Congress has rightly defended other sorts of individual rights and liberties, including civil rights and property

rights are a species of rights protected by the Constitution and it

is appropriate for this body to take action to protect them. With regard to the mechanism used in the bill, I think that it is a lawful

means to attach conditions to the spending of Federal monies. So

I think the committee has chosen a legally permissible avenue for

pursuing its objective.

The CHAIRMAN. Thank you. Mr. Hopkins.

Mr. HOPKINS. Yes, I think it is very appropriate. We are going

to need some definition that we all can understand and not wind

up with 50 potential different definitions of public use for public

purpose and I think that that is what this bill does, it intends to

put a definition and try to get this definition back to where it was

originally intended some 200 and plus years ago.

The CHAIRMAN. Thank you. Let me ask you all, in addition to

that, now that we are in agreement on some Federal Government

involvement, do you agree with the general approach of the STOPP

Act? Congressman Bonilla has noted that this legislation has teeth,

it cuts off virtually all Federal funds to a community that abuses

the eminent domain power as defined in the legislation, so it has

some very severe consequences. I think it will be very effective. I

wonder what you think, Mr. Stallman?

Mr. STALLMAN. Well, absolutely. As I referenced, there has been

a lot of other bills passed attempting to do the same thing, but

3405 really, we believe, has the most teeth and does stop the ability of governments to do this fund shifting of, a game that could

be played with less effective legislation, so we think H.R. 3405 is

the best vehicle to move forward with to help stop this kind of

abuse.

The CHAIRMAN. Thank you. Mr. Bartolomucci.

Mr. BARTOLOMUCCI. I would agree with the likely effectiveness of

the bill and I would also add that the bill is fair because it puts

States to a choice. If they want to receive the Federal funds, they

31

will have to accept these conditions and if the conditions are unacceptable to them, they will simply not receive the money.

The CHAIRMAN. Thank you. Mr. Hopkins.

Mr. HOPKINS. Yes, I just basically concur with both of the other

gentlemen.

The CHAIRMAN. Thank you. Mr. Stallman, have you seen an increasing willingness on the part of State and local governments to

expand the use of eminent domain powers to obtain agricultural

lands for private economic development purposes?

Mr. STALLMAN. We see that tension at the urban, kind of, rule

interface all the time. To us, this Kelo ruling really opened that

door and made it a lot more likely that local governmental entities

would use the ruling in Kelo to even more aggressively take over

agricultural land in that interface. We have anecdotal stories from

all across the country of instance where there has been eminent domain proceedings. We have heard, although I don’t know that they

actually implemented it, that local governments were waiting on

the Kelo decision in the hopes that it would come down as it did

before moving forward.

I am proud of the State of Texas, I guess, being a resident there,

but trying to address this issue quickly so their State legislature

was in session and we certainly hope that other State legislatures,

really move forward to fundamentally restrict the use of eminent

domain. What Congress is doing is extremely important, though, in

the interim, to have a universal national kind of policy in place to

prohibit use of funds for implementing the Kelo decision. We think

that will be effective in stopping these local entities from taking agricultural land.

The CHAIRMAN. Mr. Hopkins, I assume that forestlands are also

similarly at risk. Would you care to comment on that?

Mr. HOPKINS. Yes, Mr. Chairman, I know right now in California, I think it is called the Onaway Ranch, some 17,000 acres, they

are trying to acquire that now. That is, I don’t think that is for a

business or that is for a new Costco. That would be a great deal

of farmland being usurped by, in that case, a county. We are seeing

this at the urban interface, as was just previously mentioned. In

the rural part of our State, we don’t have very much development

going on, so it is not as critical as there, but around, at least in

Georgia, around the Atlanta area, we are losing 54 acres a day of

forestland in the metropolitan Atlanta area and it is a very, very

serious issue with regard to our forest land up there.

The CHAIRMAN. Thank you very much. My time is expired. I now

recognize the gentleman from Minnesota.

Mr. PETERSON. Thank you, Mr. Chairman. I want to get down in

the weeds a little bit here and as I mentioned earlier, back in 1997

I had three towns under water. Mr. Pomeroy shared in that unpleasant experience and we had a lot of experience with the fallout

of all of that, which is going to come now in these areas that have

been affected by the hurricane. It is a very difficult situation, it is

very controversial. You are seeing some of that already, with people

not wanting to evacuate.

It gets worse when you have to make the kind of decisions that,

frankly, FEMA requires and other people, in order for you to get

money to rebuild. We were forced to move a lot of houses that were

32

some of the prime real estate. People didn’t want to move. We need

to start thinking if the experience that we went through is any indication, I am not sure, under the rules that they operate in FEMA

in the core, that they can even rebuild New Orleans without some

of kind of waiver because it is in the flood plain.

But all of that aside, what I am concerned about is you think

there is anything in this bill that would get in the way of rebuilding that area? I think that is one of the things we have to be concerned about because my staff has looked at this and there is, I

don’t know, I am not a lawyer, but it just looks to me like we may,

we might get ourselves in a situation where we tie the hands of the

State and local officials in those communities so that they can’t rebuild and I don’t know if anybody wants to do that. Do you have

any thoughts Mr. Bartolomucci.

Mr. BARTOLOMUCCI. Well, it seems to me that the New Orleans

relief effort will entail, in very large part, the giving of funds and

resources to individual property owners so that they can rebuild

their property. That is different than taking their lands from them.

Mr. PETERSON. Well, but the problem is that there are going to

be property owners that are going to be required to move. Not only

Louisiana, but in Mississippi. There is going to be an issue of

whether they can rebuild those houses on the coast and people are

going to, I am going to tell you, people are going to want to rebuild.

They are going to fight their local governments. You are going to

have some people that are wealthy that are involved in this, you

are going to have some people that are poor. In New Orleans, I

have been to those projects down there, and they are going to hire

lawyers and sue people over this and what I am concerned is that

we be careful here that we don’t give them another tool to stop

what maybe needs to be done. Now, this is very controversial, it

is very complicated and it is going to be a hell of a mess, let me

tell you. I have been through this. And I am just concerned that

we don’t do something here that is going to make it more difficult.

We have already got enough problems down there the way it is.

Mr. BARTOLOMUCCI. Well, the bill would apply to a taking for a

particular purpose, a taking for economic development. But the Supreme Court has recognized that some government actions with respect to property don’t constitute a taking, at all. For example, if

the property, as it is currently, is a public nuisance, that land can

be taken to abate the nuisance and that kind of an action is not

even a taking for which just compensation would be required. So

if you are talking about property where it is in a serious nuisance

condition or there is a risk of disease, I think you could analyze

whether this bill would come into play at all in the case of such

a nuisance-type property.

Mr. PETERSON. So you don’t think it will be a problem, is that

what I am hearing?

Mr. BARTOLOMUCCI. No, I think it is legitimate to ask that question. It deserves further study, but my sense would be that this bill

would not pose an obstacle or that certainly not insurmountable obstacles.

Mr. PETERSON. I think I just would encourage all of us working

on this to be careful here because under these rules, if you build

up your house high enough, you can rebuild it. If you don’t, you

33

can’t. You could get into a situation where somebody might have

the means to be able to spend the extra money to build this thing

higher, somebody else might not. I just think this is a thorny thicket and I just would like us to try to work through that with people

that are experienced in this, including people on my staff, Mr.

Pomeroy’s staff that have gone through this because it is a lot more

complicated and controversial than people realize and in about a

year or two, they are going to find out, unfortunately, the problems,

so thank you.

The CHAIRMAN. I thank the gentleman and we certainly will be

examining the legislation and with some careful draftsmanship

make sure we avoid those types of problems. The chair now recognizes the gentleman from California, Mr. Pombo.

Mr. POMBO. Thank you and following-up on Mr. Peterson’s comments and his question. There are public nuisance laws, public

health and safety laws that are designed to protect the public, as

a whole, that are outside of eminent domain powers, but when you

deal with eminent domain, I think that the purpose of the legislation is to stop them from being able to take it. That is what this

is all about.

If someone does not want to sell their home, we, as Members of

Congress, should be protecting them and protecting those private

property rights so that they don’t have to sell their home. That is

the purpose of doing this. One of the issues that we deal with is

that well, they are compensated. They are paid the fair market

value for their home, their ranch, their business. The fair market

value of my home is what I am willing to sell it for and what somebody is willing to pay me for it. It is not what some appraiser who

works for the city decides my home is worth. And I would like to

direct that to Mr. Stallman in that in dealing with eminent domain

powers and being able to take someone’s farm, what is someone’s

farm really worth?

Mr. STALLMAN. Well, you have highlighted probably one of the

biggest issues we have with eminent domain. Even if it is for public

use, as we would define it, fair market value, in the minds of the

landowner whose land is being taken under eminent domain, I

don’t know of a single case where it has been reached in the mind

of that landowner.

And it does get down to a lot of, and I am going to characterize

them as games that are played by entities that want to use eminent domain, public entities, in terms of what they can, they know

what the legal costs are in terms of going to court and trying to

fight eminent domain proceeding. They use appraisal techniques,

which I think are suspect in terms of coming up with that fair market value that you have talked about that is far from the fair market value in the eyes of the landowner.

So that is sort of administration of eminent domain, if it is being

used for, I guess, what we would construe as a legitimate public

purpose as opposed to this legislation, which is just trying to restrict the use of eminent domain to take the property to be used

for some other private purpose. But eminent domain and how it is

implemented by the States and the processes and the laws that go

with that, it varies from State to State, but in general, it rarely,

if ever, gets true fair market value in the mind of the landowner

34

to that landowner when he is subject to it, so that is a problem.

That is probably a little separate problem because it really is the

administration of eminent domain, but it is definitely a problem.

Mr. POMBO. Mr. Bartolomucci, the Constitution allows eminent

domain for a public use and in that the process has been established that a fair market value would be established to protect the

public and to protect the individual, that appraisal system that we

deal with at the local level. But when you are dealing with taking

land for a road or for a school or a park or what has been determined to be a legitimate public use, that process is put in place to

protect both sides of the equation there.

When you are taking land to be used by another private individual, then you have a completely different set of circumstances that

should come to play. Mr. Hopkins pointed out the case in California, a 17,000 acre ranch that is being taken by eminent domain.

That landowner, the price of that land, if you can’t do what you

want to do on that land based on that price, then you should look

somewhere else and that is how the private free market system

works. When you start taking land by eminent domain from private individual to give it to another, then the government comes

in and sets the price. Isn’t that one of the big problems with using

it for private economic development?

Mr. BARTOLOMUCCI. Well, whenever property is taken for public

use, the Constitution requires that just compensation be paid and

you are absolutely correct that the standard is fair market value.

A court or other body will sit and try to figure out what the price

would be in the open market, but fair market value can never capture emotional and sentimental value. For example, in the Kelo

case, one of the landowners had lived in her house and has lived

in her house her entire life. She will be paid fair market value,

they will pull out the calculator to decide how much money she

should get for her house, but she won’t be compensated for a lifetime of memories and experience in that house.

So I think fair market value, in this context doesn’t represent

complete value and certainly, if the economic development project

in the New London area turns out to be very successful, she won’t

capture any of that upside, so perhaps one thing that the Congress

should look into going forward is what the proper measure of just

compensation ought to be in various categories in takings cases.

Mr. POMBO. Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. The congresswoman from

South Dakota, Ms. Herseth, is recognized.

Ms. HERSETH. Thank you, Mr. Chairman. Mr. Hopkins, there is

substantial amount of privately owned land in the Black Hills of

South Dakota and Wyoming and as more affluent people become

interested in the beauty of our forest lands, we sometimes see conflicts between the longtime landowners in that area, many of whom

aren’t particularly affluent, and the developers. And tourism is certainly a big part of the Black Hills of South Dakota, but while important to the economy, so are the rights who have been there for

years and feel tied to the mountains and the forests.

In your opinion, and you have addressed this some in your opening statement, do you anticipate instances in which private developers may seek to convince local governments to seize private land

35

so they can subdivide it or put into higher cost use and what pressures do you see on local governments and States when it comes

to forest landowners in light of this decision? And then I guess

what I am asking is how do you think the Kelo decision, I mean,

do you think that it is going usher in a new era of development

in private forest land?

Mr. HOPKINS. I think it certainly opens the door for that. It allows any governmental entity to decide where they want to place

a subdivision and work with a developer in placing it there regardless of the rights of the prior owner. In our area of the country, our

forestland is still valued somewhat low in terms of dollars per acre.

In areas where it is developing more rapidly, as the price is going

up, forced conversion is taking place and of course, that is not, we

are not here to address that, but that is an issue that is going on

there.

But we are concerned, one of our biggest concerns is that without

some known right, some protected right that we have to go out and

make an investment that is required now to get land back in forestation and then sit for 15 or 20 years before you get one dime

out of it, although annually, you have cost; you have the taxes, you

have management cost and not know in 10 or 15 years down the

road if I am even going to get my value out of that, because it may

get condemned before it gets worth more in value, and now it has

little to no value from a fair market value standpoint, and I have

lost it all. To make that commitment from a forest landowner, it

is imperative that we know we can’t have our property taken and

handed to other developers.

Ms. HERSETH. Thank you. Mr. Stallman, as you know, South Dakota is a rural district and South Dakota has been lucky not to

have a serious and egregious eminent domain incident like the one

in the Kelo decision, but farmers are rightfully concerned about

what the decision means for them and you have addressed that in

some of the answers to other questions, but I was hoping you could

talk a little bit about what you see is the most serious threat facing

agricultural landowners.

I have heard Mr. Peterson and you address the rural/urban

interface in light of suburban sprawl, but I want to hear your assessment on the threat facing rural landowners and farmers who

live miles from metropolitan areas. And you may or may not address this, but one of my particular concerns in the increasing

amount of land in South Dakota that is being purchased by out of

State residents for purposes of hunting.

Mr. STALLMAN. Well, we have that on the Gulf Coast of Texas,

too, for duck and goose hunting, as a matter of fact, and we see

a lot of that. Our focus is on private property rights and so if you

truly believe in private property rights, those individuals that are

fortunate enough to maybe have more money that come out to the

countryside and who a willing buyer/willing seller negotiation decide that they can pay to buy land for whatever purpose they want

to use it for and that seller is willing to do it that is a private property transaction between two willing parties.

Are there impacts of that depending on how they use the land

to the agricultural infrastructure, maybe reduction in agricultural

production, maybe changing in property values, in some instances,

36

if they come out and build a fine hunting lodge that ups the local

property values? All those kind of things are secondary effects on

the other, say, traditional landowners have lived in the area, but

if you truly believe in private property rights, I don’t see that we

can really sit back and restrict those willing buyer/willing seller

transactions.

Ms. HERSETH. Absolutely. I mention that only because of the concern here, for example, in South Dakota, we, in my opinion, underfund education. We don’t have personal income tax, which I think

is a good thing, but with property taxes in these sparsely populate

areas, there is increasingly a desire to find more revenue, and my

concern is one that when you have agricultural land far removed

from metropolitan areas, but yet that are seeing the kind of development that is between two willing parties, buyers/sellers, which I

have no problem with, because I do think that you get fair market

value there in terms of the buyer is willing to buy at a price some

that reflects what he or she wants out of that land, and we all recognize what some of the secondary effects are on that.

But my concern is local governmental bodies that recognize that

kind of development taking place, seeing that raise the value of

that particular piece of land and what that means, I mean, we

have to get at the heart of the concern of some of your members

in the Farm Bureau and the folks in South Dakota that are miles

away from a metropolitan area and explain to folks why it is that

they are so concerned about the Supreme Court’s Kelo decision.

Mr. STALLMAN. I was in Oklahoma talking to a legislative task

force about this issue a couple weeks ago and one of the questions

that was asked was, is similar to this in that what do you do with

a community if their only recourse is once they see the potential

for development and raising a tax base and the community would

go away otherwise if they didn’t take some action, say, under Kelo, i.e. should you take some property to be sure you can maintain the

local economic infrastructure of that town to help promote these

other kinds of, increasing the tax base, if you will.

My response is the community should be cautious of this because

if they are going to implement a Kelo decision at the hopes of grabbing future tax revenues and use property for development for

other purposes, say, than agriculture and take property, why would

an investor want to come in and invest money in a community that

showed a propensity to take property to start with?

And yes, I think there will be a temptation under Kelo for these

local communities in these areas to look at all other possibilities of

trying to increase tax revenues and that is the real danger in the

Kelo decision and that is why absent any Government funding

issues which this Congress hopes we will address, it is going to be

up to State legislatures to put boundaries around the use of that

eminent domain, and that is what we are encouraging our States

to do.

The CHAIRMAN. Thank you. The gentleman from Michigan, Mr.

Schwarz, is recognized.

Mr. SCHWARZ. As a mayor of a pretty good size midwestern city

a few years ago, I was involved in some takings which I believe

were beneficial for the city, had to do with enlarging the airport,

a pretty good size taking, so I am not unfamiliar with what goes

37

on and unfamiliar with the consternation it causes with property

owners, all of whom, in this case were well compensated.

My question that I would ask this counselor, to Mr.

Bartolomucci, within the context of H.R. 3405, what is a legal or

a proper or a just or a beneficial taking and as in appurtenance to

that, is there language in the bill or does the bill provide, specifically, that takings can be made, or assume that takings can be

made by quasi-governmental organizations? You talked about economic development authorities. In the State of Michigan we have

things called tax incremental finance authorities, which are essentially the same thing, but could you address a legal standpoint,

what is a legal taking within the context of H.R. 3405 and do you

believe that it is appropriate for nonprofits, which are affiliated

with, but not actually Government organizations, to engage in

takings?

Mr. BARTOLOMUCCI. H.R. 3405 would apply to takings for the

purpose of economic development. I do not read that as applying

to traditional types of takings, for example, to take property in

order to build a road or a school or a hospital or to extend an airport. I think, as I read it, the scope of the legislation is designed

for the Kelo situation, in which property is being taken with the

idea that we will give it to another private entity who will hopefully employ more people and there will be additional tax revenues

and that will trickle down and benefit the public, as a whole. I

think that is the kind of taking that is being targeted here.

As to the second part of your question about quasi-governmental

organizations, I believe the bill would apply to a State or a local

government or an agency thereof, the question I have, in my mind,

is whether it would apply to a corporation that, or a public utility

that is delegated the power of eminent domain. I can see that a

court might decide that a development corporation, which is incorporated as a private entity, would not be considered an agency, so

I think some attention ought to be paid to the definition and clarify

exactly what entities would come under the bill.

Mr. SCHWARZ. Are there instances—I am not aware of any, but

just one State and one city that I am familiar with, are there instances where private entities have been delegated the authority to

do a taking, to make a taking?

Mr. BARTOLOMUCCI. That was true in the Kelo case, itself. The

taking was affected by something called the New London Development Corporation.

Mr. SCHWARZ. Is that not quasi-governmental?

Mr. BARTOLOMUCCI. Well, it is established by the government,

but the Supreme Court opinion described it as a private corporation, so I don’t know whether you would call that a government

agency or not. That is the kind of question that a court would have

to ponder. If you wanted to capture those sorts of takings, I think

the definition could be tweaked to say any corporation to which

government eminent domain power is delegated.

Mr. SCHWARZ. Should that point of law not be spelled out specifically in the legislation?

Mr. BARTOLOMUCCI. I think it would be beneficial to clarify it,

yes.

Mr. SCHWARZ. Thank you, sir. Thank you, Mr. Chairman.

38

The CHAIRMAN. Thank you. The gentleman from North Dakota,

Mr. Pomeroy, is recognized.

Mr. POMEROY. Mr. Chairman, thank you for this very interesting

hearing. I am concerned about the Kelo case. I am also, as we talk

about it, a little worried about the prospect for inadvertent consequence by legislation that might be undoing more than the Kelo

case. One of my first assignments after the first year of law school

was looking up fee owners for a rural water line.

In the end we were able to get, I think, almost every easement

we were seeking on a voluntary basis, but there was the prospect

of eminent domain for gaps that were critically needed for purposes

of the line for the benefit of the greater rural community. The ultimate easement is to the benefit of the rural water association, I

suppose. Would this, in any way, Mr. Bartolomucci, be swept up in

this?

Mr. BARTOLOMUCCI. I think, if you are talking about a governmental need in order to take property to put down, say a gas line

or some sort of power line that benefits the public, as a whole, I

don’t think that kind of taking would be affected by this bill.

Mr. POMEROY. Couldn’t argue that that was, in the end, something about developing the economic base of the area, therefore illegal under the act?

Mr. BARTOLOMUCCI. Well, I think a taking like that certainly

may have an economic development effect, but I wouldn’t call that

a taking for the purpose of economic development. I would call that

a taking for the purpose of bringing power or water or whatever

is being carried to the public.

Mr. POMEROY. I am also interested in the concluding portion of

your testimony where you note that we ought to think about clarifying the application of this to the Berman case. Now, I can see a

situation where on the edge of town in a commercial zone you have

a fallen shopping mall with the one thriving entity being the city’s

porn shop, not city owned porn shop, private porn shop, and the desire to knock this whole thing down, build a Sennex station. Now,

as I understand the act, you couldn’t use USDA rural development

money in that instance, in any eminent domain way that might involve a reluctant porn shop owner and the effort of the community

to get control of that property, is that correct?

Mr. BARTOLOMUCCI. Here is where I was driving at in those comments. The Berman v. Parker case dealt with the development of

an area that was deemed to be blighted.

Mr. POMEROY. OK, let us not, because my time is short, under

the hypothetical I just spun you, what would be the implication of

the law you are proposing?

Mr. BARTOLOMUCCI. If the purpose is to alleviate a blight or

something like that, it is not clear to me that the bill would cover

it because that would not be economic development, per se, it is

more targeted at a social problem. The point in my testimony was

if the community wishes to permit takings to alleviate blight, perhaps they would want to make that express. I don’t believe the Berman decision is controversial in the way that Kelo is.

Mr. POMEROY. Berman has, apparently since 1954, although

blight seems to be a very fine line. Obviously, we don’t want, in addressing the legitimate concern raised by the Kelo case, we don’t

39

want to give a loophole you can drive a truck through saying well,

if you say it is not about economic development, but it is about

blight eradication, fine. So how do you come up with language

like——

Mr. BARTOLOMUCCI. It is a line drawing problem.

Mr. POMEROY. Has there been case law supporting a finding of

a porn shop as blight?

Mr. BARTOLOMUCCI. I am not aware of any, but I haven’t researched it.

Mr. POMEROY. I am not, either. I mean, my problem is I want

to protect the kind of rural land taking on the edge of these growing urban areas that has been under discussion, no question about

it, but I don’t want this to be the porn shop owners’ relief act and

I don’t really understand how, under the hypothetical I spun out,

you could use rural development monies for purposes of getting

that Sennex station up there in place of the porn shop.

Mr. BARTOLOMUCCI. It is not clear to me, either, that you could

do that.

Mr. POMEROY. I yield back.

The CHAIRMAN. I thank the gentleman. The gentlewoman from

Colorado, Mrs. Musgrave, is recognized.

Mrs. MUSGRAVE. Thank you, Mr. Chairman.

The beautiful fourth district in Colorado has mountains, has

Estes Park, Colorado. It has some of the prime agricultural land

in the United States that is very close to the front range where

there is a great deal of growth. In one of my counties, Weld County, we have the highest growth rate in the Nation and there is

some farmland right in there. So this issue is of great interest to

me.

There is also a group of wealthy individuals in Colorado that

would like to build a toll road, a private road, and have a mile wide

strip along with the road going through some rather distressed

rural community. So boy, if this doesn’t hit home, I don’t know

what does and I would like to echo my colleague’s comments on

quasi-government entities and private entities abusing the eminent

domain powers. What is for the public good? That is just the question we always have when eminent domain comes up.

But this is huge in Colorado. It is very encouraging to me when

the liberals and the conservatives sit down at the table and come

together and call something an outrage that is truly an outrage.

And I just would like to, again, stress the fact. Some of our rural

folks have land along the South Platte River. Can’t you just see a

beautiful hunting lodge come and boy, there they go. And again,

the agricultural land along the front range, it is so vulnerable. And

I am all for private property rights, always have been. That is the

basis of capitalism. Mr. Stallman, a willing seller, a willing buyer,

we know all those things. But when you have these pressures that

people face, it is a whole different deal.

What would you encourage, Mr. Stallman, are farmers and

ranchers to do? There are 5,000 people in a county out there sometimes. What would you encourage them to do with their local government, with their county commissioners, to address this issue

with their State legislators?

40

Mr. STALLMAN. Well, we have, as a reference, have developed

model legislation for State legislatures to look at to basically restrict the definition of public use. Now, specifically restricted, and

specifically state that it cannot be used for economic development

or for tax revenue purpose, those kind of things, to really put some

tight boundaries around it.

The larger issue of, let us call it farmland preservation, if you

will, is really beyond the scope of this narrow discussion about eminent domain and how it can be used to take property and then use,

again, that property be given to another private entity for use other

than what we normally construe as public use.

But in areas that are subject to a lot of growth pressure and development, I mean, we have seen over the country development of

voluntary farmland preservation efforts, where development rights

can be sold that allow farmland, and this is, once again, between

willing buyer and willing seller, where farm families are willing to

sell their development rights to meet the needs of society, where

they want to maintain the farm viewscape or farming on that

urban/rural, urban interface, where there is a lot of development

pressure. So there are ways to handle that if that desire for society

is to preserve that farmland and not have it developed. But once

again, that really needs to be on a willing seller/willing buyer

basis, and generally it has to have some kind of program where

funds are used and transferred from the public to that individual

to protect it from development.

So those kind of efforts are out there and they are being done,

but the key for this hearing and this legislation is just to be sure

that local governments don’t have the authority under eminent domain to take that property from an unwilling landowner and then

give it to another entity to do things outside what we construe as

public use.

Mrs. MUSGRAVE. Thank you. Just one other comment. When I

think about these quasi-government entities, people have been appointed to these boards and commissions, but they operate on our

tax dollars. So here you have a situation where citizens are funding

these boards and commissions, and then they might have the authority to take their property. That is especially offense to me.

And, Mr. Chairman, I want to thank you for conducting this

hearing today. There are many hot issues out there such as immigration and of course, now the hurricane and the devastation, but

the private property rights issue has struck a cord with citizens all

across the political spectrum, and I applaud you for holding this

hearing.

The CHAIRMAN. I thank the gentlewoman.

The gentleman from California, Mr. Costa, is recognized.

Mr. COSTA. Thank you very much, Mr. Chairman. I too join with

those Members who have this morning stated their support, historically, for private property rights. It is, I think, a fundamental

part of our U.S. Constitution, and certainly I think is a critical aspect of what we do here to ensure that we can continue to protect

those rights. I have also, over the years, when I was in the California legislature, carried legislation that has protected, offered opportunities to protect California farmland from urban sprawl.

41

So having said that, I would like to follow specifically, and I don’t

know, maybe Mr. Bartolomucci may be the gentleman who might

best respond to this, or those with, maybe, previous experience in

these kinds of transactions. It is kind of a follow-up of Congress

Member Schwarz question earlier.

I have worked with entities, nonprofits, that have been engaged

in efforts, or parkways and others, where there have been efforts

throughout the community to provide public improvements, in

which there was broad support, and where the term of art that was

used, where there was a friendly condemnation effort that took

place, in essence, there was negotiations, there was willingness to

work on it, there was an agreement on the price, but nonetheless

there are tax benefits, I am told, under a number of those circumstances, when there is, in essence, an agreement, but they still

want to proceed with the condemnation process.

How would you legislation specifically impact those instances, if

you could tell me? And maybe this is better a question for the third

panel.

Mr. BARTOLOMUCCI. Yes. I haven’t had any personal experience

with that kind of a situation where, in effect, you have a willing

buyer and seller, but yet they want it to go through the eminent

domain mechanism. As I read the bill, there would be no carve out

for that kind of situation. If it is a use of eminent domain ‘‘for economic development,’’ the bill would apply. Perhaps Mr. Stallman or

Mr. Hopkins would have——

Mr. STALLMAN. I am not aware of those kind of situations. I

haven’t seen examples of them, particularly. This legislation would

prevent those local entities from using eminent domain, and it

doesn’t really specify whether it is voluntary. I have a little trouble

understanding the tax implications, as to what those might be. I

suppose there could be some that could cause people to want to go

through that process, but it has been my experience that agricultural landowners generally don’t want any part of the process.

Mr. COSTA. No. I think, generally speaking, this is in cases

where the area has been encroached over a period of time, and it

has made past farming practices difficult at best, and they have

reached a point where they have decided that they want to take

the value of their land because of its increased value, and retire

and use the money for other purposes, or to maybe farm in other

areas. But there have been tax benefits that have been associated

with that process, and I am interested in obviously seeing what impact that would have.

Mr. Chairman, I would like to reserve that time to ask that question to the next panel, where we might get the legal interpretations.

The CHAIRMAN. Yes, we would definitely recognize you for questions of the next panel as well.

Mr. COSTA. Thank you.

The CHAIRMAN. I thank the gentleman.

The gentleman from Minnesota, Mr. Gutknecht, is recognized.

Mr. GUTKNECHT. Thank you, Mr. Chairman, and I want to thank

Chairman Bonilla and you and Representative Herseth and others

for cosponsoring this bill. I really don’t have a question so much to

42

the panel. I want to thank them for coming today, and I am really

happy that we are having this hearing.

I am pleased to be a cosponsor of this bill. The Kelo decision, in

my opinion, was one of the worse rulings by the Supreme Court,

in my memory, for a whole variety of reasons. And I think the testimony today has made even clearer that Congress can use the

power of the purse to reinforce what I believe to be the clear meaning of the takings clause embodied in the fifth amendment. Eminent domain should be used only rarely and only for public purpose. And let me just say, as a former real estate broker and auctioneer, this is, when you think about the implications of the Kelo

ruling, it is in some respects a bonanza for developers, because it

opens all kinds of doors, and it is a way that you can leverage land

that you can acquire now through eminent domain for $3,000 an

acre and immediately turn it into land that is worth at least

$10,000 an acre. That is just in my immediate area, and I think

those numbers are probably conservative.

The thing that I know about the auction business is this: there

is a buyer for almost everything at a price. I think President

Reagan said best, that markets are more powerful than armies. Ultimately, markets will work much better. Ultimately, there is a

buyer at a price for anything. There is a seller at a price for anything. What this does is it artificially substitutes the wisdom of

some local officials for the wisdom of the marketplace and the wisdom of that buyer and seller, and it is a huge miscarriage of justice. Congress doesn’t do a very good job at recovering the fumbles

of our courts, but this is one where it seems to me we have a moral

responsibility to do all we can to recover this fumble, because it

opens up a Pandora’s Box that I don’t think anyone can really

imagine at this time.

So again, thank you to Chairman Bonilla and to the other sponsors of this bill. This is something that Congress needs to move

ahead posthaste.

The CHAIRMAN. I thank the gentleman.

The gentleman from Iowa, Mr. King, is recognized.

Mr. KING. Thank you, Mr. Chairman. I very much appreciate

this hearing, too, and my history in politics got started on property

rights issues. But as I sit here and I look at this bill and I listen

to the testimony that is here, and you are aware there are a couple

of other bills out there that address this situation.

The thing that is absent in our National discussion is, and I am

not proposing this, but I suggest this for discussion purposes. The

thing that is absent is a suggestion on amending our Constitution

to restrain the Supreme Court from diminishing our property

rights that we have this protection of for over 200 years. And I

think the reason that that has not been part of our discussion, one

is the level of difficulty, and the other one is the near impossibility

of contriving language that could speak more clearly to this property rights issue than the fifth amendment actually does or did.

And I notice, Mr. Hopkins, in your testimony, your written testimony, you reflect actually the dissenting opinion of Justice O’Connor, whom I gratefully agreed with on this case, finally agreed with

on a case, that she said that had struck the language for public use

43

from the fifth amendment. And in fact, I made that same statement on the floor before I was aware that that wasn’t her opinion.

Can you suggest language, at least for the intellectual exercise,

that might be tight enough that the Supreme Court can’t find a

way around it to get to their desired result?

Mr. HOPKINS. I don’t know that I could do it today. I would be

glad to get back with you with some language. I don’t know whether we need to put governmental use. I don’t know what terms we

need to put in. What frightens our forest landowners is that so

much of what we do for free is for the public, is public purpose, or

public use, but not public purpose. I mean, public purpose, not public use. We produce oxygen, we produce recreation, wildlife. All the

things that we do, all it takes is one entity to come in and say, we

decided we are going to take that 2,000 acres because we are going

to provide that, and here is a better caretaker of that property than

you have been doing. They are going to manage it different than

you have been doing it so these things will be even better, and we

have lost the right to have it. And that is what I think is what

really concerns us, is that we just opened Pandora’s Box. But the

actual language, I agree with you. To me it was very simple. I don’t

know how it ever got so convoluted, to go from public use to public

purpose to public policy or whatever the next term they wish to

use.

Mr. KING. Well, Mr. Hopkins, then I would suggest this followup question to this, that I think we also should be examining is,

if we can’t conceivably write an amendment to the Constitution

that would restrain an activist court, how can we ensure that anything that we pass that is designed to restrain an activist court will

be upheld as constitutional when it should go before the Supreme

Court?

Mr. HOPKINS. The constitutional amendment, although, as difficult as it may be, may in fact be the mechanism that we have to

ultimately resort to, particularly if this law gets interpreted, very

public purpose oriented, as they have the Constitution.

Mr. KING. I am looking Mr. Stallman. Do you have a response

you would like to add?

Mr. STALLMAN. I guess the words in the Constitution, to me, are

fairly plain. I don’t have language that would probably be better

than that. Our problem obviously has been the interpretation process over the years. What we have done with our model legislation,

and this is statutory language, it is not constitutional language, to

encourage the States to put these boundaries around eminent domain on public use, and we are very specific in our model language.

I won’t read it all, but basically it says what public use is and

should be and what it is not. And the is not includes economic development and raising tax revenue. So that is one way of addressing it, but your challenge of finding better words for our Constitution I think is a big one to overcome. It is not so much the words,

it is the way they have been interpreted.

Mr. KING. I thank you and I thank all the panelists for their testimony, and the chairman, I would yield back.

The CHAIRMAN. I thank the gentleman from Iowa for his questions, and I want to thank all the members of this panel for an excellent presentation. We have gotten to some of the core issues. Mr.

44

Bartolomucci, in particular, I want to hold the record open for an

opportunity for Members to submit additional questions to you,

particularly on the issue raised by the gentleman from North Dakota, with regard to blight. We are going to make absolutely sure

that we carefully address drawing the line as clearly as possible between public and private eminent domain powers, and we want to

get that right. So we are going to address that question with the

next panel. So at this time I will thank all of you and we will now

go to the third panel.

I am going to have to step out in just a moment, and I will ask

Chairman Pombo to take the chair. But before we do so, I would

like to welcome our third panel: Ms. Dana Berliner, who is a senior

attorney with the Institute for Justice of Washington, DC; the Honorable Bill Howell, speaker of the Virginia House of Delegates, on

behalf of the American Legislative Exchange Council; Dr. Roger

Pilon, founder and director of the Center for Constitutional Studies,

with the CATO Institute of Washington, DC; and Mr. Jonathan

Turley, professor of public interest law, with the George Washington University School of Law here in Washington.

We will begin with Ms. Berliner. I will remind all the members

of the panel that their full statement will be made a part of the

record, and ask you to limit your comments to 5 minutes. Ms. Berliner, I know of your deep involvement in this issue, including the

arguments before the U.S. Supreme Court, so we are particularly

interested in hearing your testimony, and you may begin.

STATEMENT OF DANA BERLINER, SENIOR ATTORNEY,

INSTITUTE FOR JUSTICE

Ms. BERLINER. Thank you. Thank you, Mr. Chairman, and thank

you for inviting me to be on this committee.

I represented the owners in the Kelo case and have represented

owners across the country in fighting the use of eminent domain

to take their homes or businesses for private development projects.

I got into this originally when we represented a homeowner whose

house was being taken in Atlantic City for Donald Trump. And at

the time, I thought that this was a very unusual event and something peculiar. What I discovered over the course of several years

is that, unfortunately, it is extremely common for eminent domain

to be used to take property for private development.

The Kelo case was the culmination of years of litigation on this

issue. And what happened was that 15 homes are being taken for

a private development project, and they are being taken by a purely private non-profit development corporation. The idea is that they

will put in something or another, probably some office buildings,

and office buildings produce more taxes than homes and more jobs

than homes, and that is a good enough reason to take these homes

away from the owners that are living there.

After the decision, as you all know, there was a wave of outrage

across the United States, and I think surprised many people just

how angry the citizenry was about what had happened. At the

same time, we are seeing condemnation actions being filed and city

officials saying, great, now that this has been decided, we can start

proceeding forward in taking property for private development.

And this is only going to continue unless legislative action is taken.

45

One thing I also discovered is that Federal, many of these

projects do, in fact, use Federal funds. The Kelo case itself had $2

million of Federal funding from the Economic Development Authority. There was a case in St. Louis, Missouri, where affordable housing was condemned for expensive housing, using in part Housing

and Urban Development money. There are cases, there is a case

where a church was condemned for a private development project,

again using Federal money. And these are happening all over the

country.

It is well within the power of this Congress to restrict the use

of Federal money for economic development, and I would urge this

body to take a look at that. The approach being used by this bill

I think is a very good one, because it restricts, not just the funds

for that particular project, which, of course, they could make up

some way, but it restricts economic development funding, if eminent domain is used improperly, and that is definitely the way to

go.

I have a number of specific suggestions about the language of the

bill, which I am happy to talk about more. The most important of

these is that there needs to be a better definition of economic development, I think, in order to make the statute hold. I agree with

Mr. Bartolomucci, that the language needs to be changed to ownership or control by private parties. There is a way to address the

issue that Mr. Costa was asking about, about when people want to

be condemned, and there a couple of other things.

But what I just want to finish with is, this is an enormous problem all across the country, and people are justifiably very concerned about it. Eminent domain is being used to take prime real

estate for private development projects. That is one of the main

ways that it is being used now. And Justice O’Connor pointed out

that this puts the specter of condemnation over all property; it does

and it is within the power of this body to stop that or to substantially reduce it, and I very much hope that you will. Thank you.

[The prepared statement of Ms. Berliner appears at the conclusion of the hearing.]

Mr. POMBO [presiding]. Thank you. Mr. Howell.

STATEMENT OF HON. WILLIAM HOWELL, SPEAKER, HOUSE OF

DELEGATES, VIRGINIA GENERAL ASSEMBLY

Mr. HOWELL. Thank you, Mr. Chairman. My name is Bill Howell.

I am speaker of the Virginia House of Delegates, and I am also a

member of the board of directors of the American Legislative Exchange Council. The American Legislative Exchange Council is the

Nation’s largest bipartisan individual membership organization of

State legislators, with over 2,400 legislator members from all 50

States, as well as 97 members who are serving in Congress. It is

my pleasure to appear before you today and to present testimony

regarding H.R. 3405 and the eminent domain issue.

The Supreme Court’s decision in the Kelo v. New London case

was very disappointing to those of us who believe in the value of

private property. By expansively defining public use to mean any

legislative purpose that is legitimate and not irrational, the Supreme Court has effectively written the public use limitation out of

the fifth amendment. To quote once again from Justice O’Connor’s

46

dissent: ‘‘To reason as the Court does, that the incidental public

benefits resulting from the subsequent ordinary use of private

property render economic development takings for public use, is to

wash out any distinction between private and public use of property, and thereby effectively to delete the words ’for public use’

from the takings clause of the fifth amendment.’’

While the Supreme Court failed to protect private property

rights, they did acknowledge the proper role of the States. The

Court stated that nothing in our opinion precludes any State from

placing further restrictions on its exercise of the taking power. The

American Legislative Exchange Council applauds the Supreme

Court for recognizing that States do have the authority to further

protect private property rights in the States.

As a result of the Kelo decision, many States are acting to better

protect private property rights. Alabama and Texas have passed

laws that will help limit eminent domain abuse, and dozens of

States will take up legislation to protect their citizens from eminent domain abuse, once the new legislative sessions begin in January. It is heartening to see that when one branch of government

fails to protect the rights of citizens, another level of government

can step in to help protect important rights.

Without a doubt, the most important function of the government

at any level is to protect the lives, liberty, and property of its citizens. This was a fundamental reason for the adoption of the Constitution, and should remain a fundamental purpose of government

today. The Federal Government was created to play a special role

in the protection of Americans. It protects Americans from foreign

threats, and helps State and local police protect Americans against

criminals inside the country. The Federal Government is also empowered to protect Americans from overzealous State and local governments.

The Founding Fathers realized the checks and balances were

needed to restrain the excesses of overzealous governments. As

James Madison explained in the Federalist 51,

In the compound republic of America, the power surrendered by the people is first

divided between two distinct governments,

the State and Federal Governments,

and then the portion allotted to each subdivided among distinct and separate departments, executive, legislative, and judicial. Hence a double security arises to the

rights of the people. The different governments will control each other, at the same

time that each will be controlled by itself.

These distinct levels of government and division within State and

Federal Government allow for multiple opportunities to protect the

rights of people.

With eminent domain and the recent Supreme Court decision in

Kelo, the Supreme Court has not adequately protected individual

property rights. In light of this decision, States around the country

are moving to protect property rights. However, there remains a

Federal role in providing increased protection for the people. The

goal of the STOPP Act is commendable, in that it seeks to restrict

Federal money from being spent on projects that use eminent domain to take property from one private party and transfer it to another private party. There is no reason the Federal Government

should engage or promote such transfers. State and local governVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
47

ments may have the prerogatives to conduct such transfers, but the

Federal Government should not encourage and finance them.

Last month, the American Legislative Exchange Council approved a resolution on eminent domain. The State legislators felt

it was important to make a strong statement against eminent domain abuse. As noted earlier, in the Kelo decision, the Supreme

Court stated, nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings powers.

ALEC’s resolutions calls on the State and Federal Governments to

protect private property rights against unreasonable use of eminent

domain. In addition, it calls on each State to enact protections to

protect private property. ALEC does not support the taking of property from private parties and transferring it to other private parties as part of our economic development schemes.

The members of ALEC at both the State and Federal levels share

a common commitment to the Jeffersonian principles of individual

liberty, limited government, and free markets. Thomas Jefferson

wrote, on April 6, 1816, that the protection of private property

rights is the first principle of association to guarantee to everyone

of a free exercise of its industry and the fruits acquired by it. He

also stated that the true foundation of republican government is

the equal right of every citizen in his person and property and in

their management. As Thomas Jefferson understood, although

some politicians at the local level have forgotten, nothing is ours

which another may deprive us of.

The fight to protect individual property rights needs to happen

at every level of government. In Virginia we will closely examine

this issue in the upcoming legislative session. In other States, State

legislators will work hard to curb the potential for eminent domain

abuses in their States. We thank the committee for holding this

hearing and urge Congress to continue its efforts in fighting the

abuses of eminent domain.

Chairman Goodlatte and members of the committee, I am honored to testify here. ALEC and I look forward to working with you

in the days and months ahead to curb eminent domain abuse and

protect private property rights. Thank you and I would be pleased

to answer questions that you might have.

[The prepared statement of Mr. Howell appears at the conclusion

of the hearing.]

The CHAIRMAN [presiding]. Thank you, Speaker Howell. I apologize for being out of the room when you began your testimony, so

I will take the opportunity now to welcome you. You do an outstanding job for our Commonwealth of Virginia, and it is a pleasure

to work with you on this issue as well. And now we will hear from

Dr. Pilon.

STATEMENT OF ROGER PILON, FOUNDER AND DIRECTOR,

CENTER FOR CONSTITUTIONAL STUDIES, CATO INSTITUTE

Mr. PILON. Thank you very much, Mr. Chairman, and I want to

begin by joining the other witnesses in condemning the Court’s decision in the Kelo case. But rather than just say more about that,

because a lot has already been said, I want to focus on what I take

to be the reason why the Courts have failed over the past 100 years

or so to give us a properly worked out theory of property, and it

48

is because they have not grasped the theory of the matter. So I

want to concentrate my remarks on the theory of the matter, because it is something that this committee is going to have to come

to grips with, if it is going to craft the legislation that will do the

job that it wants to do.

And I would begin that by noting that there are two great powers of government, the police power and the eminent domain

power, and it is crucial to relate those powers in such a way that

they are related as the framers understood them to be related

when they drafted the Constitution. The police power is the basic

power of government to secure our rights, to put it in Lockean

terms, which the Declaration of Independence is rooted in, and it

is the power we all have in the state of nature to secure our rights,

which we give up to government when we create government in the

first place. The eminent domain power by contrast was known as

the despotic power, because no one had it in the state of nature,

no one could take someone else’s property no matter how worthy

his ends, even if he did give him just compensation.

And so what you have got is an essentially illegitimate power,

this power of eminent domain, which enjoys whatever legitimacy it

does simply from the fact that the founding generation gave it to

government in the beginning, and secondly it is what economists

call Pareto, superior, that is to say, at least one person is made better off by its exercise, namely, the public, and no one is made worse

off, provided the owner is given just compensation, which, of

course, is something that this committee really ought to attend to

as well.

Now let me put the two powers together in the following way,

and I will do it in four steps. First of all, when government condemns a use that is illegitimate to begin with as, say, preventing

a nuisance, then no compensation is due the owner because the

owner had no right to do that to begin with. That is done under

the police power. However, if you exercise eminent domain to condemn a use, while keeping the property in the hands of the owner,

then you have what is called a regulatory taking, and here is

where so much of the abuse is taking place across the country

today. Governments condemn uses, often stripping the land of a

great deal of its value, but because the title remains in the hands

of the owner, the government gets out from under having to pay

compensation. The public gets its goods free because they are off

the books, so to speak. This regulatory takings issue is not before

the committee today, but I would urge the committee, Mr. Chairman, to look into this because it is crying out for redress; the

courts have not done so.

The third area is where the government through a regulation reduces the value of property but takes nothing. If it closes a military

base, for example, and the values of property decline, the owner is

not entitled to compensation because nothing that was owned by

the owner was taken. The value is not something he owns. He

owns the property.

Finally we come to eminent domain in its fullest sense, where

the property is condemned, transferred to another owner and the

compensation is paid, provided the transfer is done for a public use.

And so let me now list four areas in which the effort to use emiVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
49

nent domain in its fuller sense is rationalized. The first is where

transfer is from private to public, and that is the kind that is usually unobjectionable, when you want to build a road, a school, a

fort, what have you.

The second category is when transfer takes place from private to

private, as in the case of network industries or such things as railroads, common carriers and the like, and this is rationalized under

the eminent domain public use standard, because the use that the

property is subsequently put to is enjoyed by all members of the

public, and it is often in a situation in which you have rates of return regulated as you do in railroads and the like. So this, even

though it involves a transfer from private to private, is justified

under the eminent domain power because of the holdout problems,

the difficulties of assembling large parcels and so on and so forth.

A third category and a fourth category, however, is where the

problems arise. These are the third category, being blight reduction

under something like the Berman decision, and the fourth category,

the economic development condemnations that we see as in the

New London case. These are straight-out transfers from private to

private and not done with the idea of being rationalized as the second category is under the public use standard. And this is where

all the problems arise.

Now, what can you do to address this? Well, you can stop doing

it to begin with. I mean, it is a little ironic that this is being conducted in the legislative branch because it is in the legislative, the

political branches that this problem begins at the outset, by your

authorizing, you and States authorizing agencies to do the very

taking that you are now here condemning. So the STOPP bill could

be reduced to a simple word, stop doing what you are doing.

Let me now just very quickly address some of the provisions of

the bill. The first thing that strikes me about the bill is, it is addressed to States and localities. How about starting by cleaning up

your own house? The Federal Government is involved in a fair

measure of condemnations for development purposes itself, not to

the extent remotely that the States and localities are, but it seems

to me that the bill ought to be addressed to Federal agencies as

well.

Secondly, it seems to me that it is unclear as to who this is directed to. If I were to write this bill, I would start out by addressing this to the heads of Federal agencies, and I would recast it by

saying, heads of Federal agencies shall not disperse funds to State

and local programs, unless those programs certify that they are

acting consistent with the provisions of the takings clause.

The third thing I would note is that there seems to be some concern of this 2(b)(2) section, as to whether it is even necessary. It

seems to me that everything that is addressed under 2(b)(1) will be

addressed under 2(b)(2), and so it is redundant.

The next point I would make, and this is the most crucial point,

it is one that Dana raised as well, the definition of economic development needs much greater work. You have got to spell that out

in detail, invoking, for example, the four categories that I spoke of

just a moment ago, because otherwise you will capture too much.

You will capture the kinds of transfers for common carriers, netVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
50

work industries and so forth, for which we want eminent domain

to be available.

Finally, I would note, there is a further irony here, in that you

are trying to restore constitutional protections in a bill which deals

with programs which are themselves inherently unconstitutional

under the spending power, but that is an issue for another day. It

pertains to the rise of the welfare state in the post-New Deal 37–

38 court. I would conclude simply by saying, the South Dakota, the

Dole issue, it seems to me not to be a pressing one for this committee. I think the decision was wrongly decided, but under the four

criteria that are set forth in South Dakota v. Dole, perhaps only

one is problematic and that is the one where the second category,

where you have got to make clear what the requirements are upon

the States, and it seems to me that in addressing the definition of

economic development, you can address that problem. But as the

bill currently stands, it would not satisfy that prong of the Dole v.

South Dakota test. And with that I will conclude.

[The prepared statement of Mr. Pilon appears at the conclusion

of the hearing.]

The CHAIRMAN. Thank you, Dr. Pilon. Very interesting and we

will come back with questions in a moment, but first we want to

hear from Professor Turley. Welcome.

STATEMENT OF JONATHAN TURLEY, PROFESSOR OF PUBLIC

INTEREST LAW, THE GEORGE WASHINGTON UNIVERSITY

LAW SCHOOL

Mr. TURLEY. Thank you very much, Mr. Chairman. It is an honor

to appear here before the members of this committee.

As we all know, there is a firestorm of controversy of the Supreme Court case, which I also believe was wrongly decided, even

though I have argued in the past, in academic pieces, for the expansion of public use. In some context, I thought this decision was

facially wrong, and I don’t see how the Court came to its conclusion, which required it to negate portions of the takings clause, to

effectively make them nonexistent. The clause makes a reference to

public use. We interpret constitutional amendments so that words

mean something. And in this case, the public use reference didn’t

even amount to a speed bump for the Court on its way of effectively

negating the protections of the clause.

What is ironic, the Supreme Court in some ways did what it

often wants to do, it united the country. The country seems entirely

united in opposition to its decision. Over 90 percent of Americans

oppose it. And this is a circumstance where the plain meaning of

this amendment, which was so lost on the Supreme Court, is well

understood by citizens. But this is more than just a case of the opportunistic use of eminent domain by a small town. The takings

clause means more than that. It is a self-defining moment. It defines not just our Government, it defines us.

When we formed this republic, the framers spoke clearly as to

the connection between private property rights and individual

rights. This is not a question of property rights alone. The framers

were clear. They took these ideas from Locke and from Blackstone,

that I put into my written testimony, that you cannot protect rights

51

without protecting property. Indeed, Blackstone said not even the

general good is enough to deprive people of property.

What is involved in the takings clause was the main concern of

James Madison, and that is the dysfunctional effect of factions. The

entire constitutional system is designed to resist the effect of factions. This is the scourge of every prior system of government. It

was indeed the greatest vulnerability identified by James Madison

in developing our system of government. The takings clause is one

of the critical protections against factional interests, and the decision in Kelo strips it of that necessary protection.

The takings clause itself I will not get into because, quite frankly, I consider it to be abundantly clear. You might debate what

public use means, but it is clear what it does not mean. It does not

mean private use. And ultimately this decision read it in a way,

that reduces the amendment simply to a guarantee of compensation. When you do that, when you adopt that permissive interpretation, you get the abuses that we are seeing across the country. I

have listed many of those abuses from actual cases in my testimony. My favorite moment in constitutional sports was the condemnation of a Walgreens in Cincinnati to build a Nordstrom department store, and then they turned around and condemned a

CVS to relocate the Walgreens, and then condemned other businesses to relocate the CVS. If that isn’t a bloody nightmare for

someone like James Madison, I don’t know what would be.

The clear indication here is that the Constitution is to give barriers, to give lines, for politicians who frankly cannot be left to

their own devises. When you give someone the authority to use

eminent domain, with only a requirement of compensation, it will

be used. This is the type of power that followed the theory of gas

in a closed space. If you expand the space, the gas will fill it. And

I promise you, after this decision, there is going to be an absolute

rush to use eminent domain and simply compete people at market

value, which is often significantly less than what they turn down

from private developers.

How did we get to this point? I am not too sure. We started out

pretty darn well. If you read the thoughts of the framers and read

the early cases of the Supreme Court. In cases like Calder v. Bull,

they clearly got it. They knew what public use meant, and they insisted that it cannot involve the transfer of private property to another private individual. Things started to go wrong in the early

1900’s, when the Supreme Court started to loosen up the definition.

And the minute it did, the minute it abandoned that bright line

rule, it was inevitable that we would find ourselves here today.

Gradually the Court adopted, as it affirmed in its last decision,

that public use can mean public purpose. And once you are there,

there is really no going back.

Now, in terms of how we rectify this situation, this bill is a good

start, but it dramatically needs to be rewritten. There are various

areas of this bill that needs attention. I will name just a few. One

is the obvious meaning of economic development in section 2, which

we all agree needs to be rewritten, and you have to deal with the

issue of blight and whether you will allow for condemnations for

blight or negative externalities, such as increased crime, drug use,

et cetera, that might come from abandoned houses. It also seems

52

to suggest that economic development will be self-defined by the

municipality. They are not going to call it economic development

the minute you pass this bill. They are going to call it something

else and you need to have a definition that would encompass that.

It is not clear what unit of Government means in section 2, other

than the State. That needs to be closely defined. It is not clear

what the time line is under 2(b)(1). If they have ever used eminent

domain, does that mean they are barred from Federal contracts? Is

there a year designation or requirement that you want to put in?

It is also not clear why you have section 2(b)(2), since 2(b)(1) would

effectively guarantee compensation.

Two broader notes, before I realize I am out of time, that I wish

to note. One is whether the committee members want to consider

the use of private attorneys general. In a case like this, I have no

faith in government. I have more faith in citizens bringing these

issues vigorously to the government. And so there is a question of

whether you want a provision for private attorney generals so that

they don’t have to convince the government agencies to do the right

thing.

Finally, you may want to consider a debarment section analogy,

that instead of waiting for the Federal agency to go to the city on

an issue of development, to allow citizens to go to a designated

agency to get a municipality classified as abusing this provision.

That would effectively, to use an analogous term, debar the jurisdiction from development funds. That would be a much more effective means, because it would put the issue before the State starts

to move around projects and get around a definition. It would allow

an agency to make a decision that this municipality is in clear violation of the law.

I am way over my time, and so I will thank you again, and I

would be more than willing to answer any questions you may have.

[The prepared statement of Mr. Turley appears at the conclusion

of the hearing.]

The CHAIRMAN. Thank you, Professor Turley.

As has been made very clear, the goal of this legislation is to discourage inappropriate uses of eminent domain powers, while not

discouraging appropriate uses of that power for the more traditional public uses, like the construction of highways, public schools,

power lines, other utility projects, et cetera.

I think both Professor Turley and Dr. Pilon have made it clear

that they think we need to further define the term economic development purpose. There are, however, different ways to go about it,

and I think I heard two different ways from the two of you. Dr.

Pilon seemed to suggest a list of the appropriate uses, and that

that might be a basis for excluding all other uses. Professor Turley

noted that we could carefully define out economic, private economic

development purpose that are not appropriate and leave those out.

We do want to get this right, so I am going to ask each of you to

tell me where you would draw that line. And, Ms. Berliner, we will

start with you. Who is right or neither one of them?

Ms. BERLINER. Well actually, honestly, I think it can be done either way. I think that you can outline what you mean by economic

development and say it is private commercial development, with a

couple exceptions, and I would use, like, common carriers or priVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
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vate, I mean, really common carriers, which include railroads and

other types of things. I mean, that would work and you could make

any other necessary exceptions, but I think that is probably the

easiest way to do it. It is probably easier to simply say, can’t condemn for private commercial development than it is to define public use. But I think either one would work and would be doable,

but the most important thing is just to have it be clear that eminent domain cannot be used for private commercial development,

rather than using the vaguer term, economic development.

The CHAIRMAN. Thank you. Speaker Howell?

Mr. HOWELL. Mr. Chairman, that is probably a little beyond my

pay grade, the specific language. We have a commission in Virginia

that is looking at the Virginia law right now. As you probably remember, the Virginia Constitution states that the general assembly

has the right to define public use, and we are in the process of coming up with a definition now and we will introduce legislation in

January to accomplish that.

The CHAIRMAN. Well, if you made some progress in that regard,

we would welcome any insights that that commission might share

with you. If you would share them with us, it might be helpful to

us as well.

Dr. Pilon, do you want to elaborate on your comments any further? How would you guide us? How would you respond to Professor Turley’s?

Mr. PILON. Well, I would respond to your question first, by reminding the committee of how difficult their task is. The courts

have a relatively easier job, and they have botched it. You have a

harder job, and so the odds of your botching it are greater. The reason the courts have an easier job is because they have a case or

controversy before them with the facts spelled out. You are trying

to draft this in the abstract, aren’t you? And you are trying to cover

all and only those cases that should be covered. That is a Herculean task to do through legislation. The most you are going to be

able to do is give some broad guidelines, and once again it is going

to fall to the Court to have to apply this statute that you eventually pass to the cases or controversies before it, in light of the facts

that are at issue in that case or controversy.

So with that caveat and that reminder of how difficult it is going

to be, I would suggest that you start out by saying in your language that the, excuse me, the eminent domain power was known

for a good reason as the despotic power, because that gets it right

from the start, and it allows you to establish a presumption against

its use. One always wants to have transfers of property to be done

voluntarily, if possible. Eminent domain is the last resort, and so

the presumption is against its use. And then you spell out why it

can be used.

First of all, private to public, nobody has any problem with that,

the road, the school kind of case. The problem comes up when it

is private to private. That is where you raise the question, is this

for a public use? Then you want to spell out what the public use

is that is going to justify transferring the property from one private

person to another. And you can spell it out with respect to the suggestions I made, common carrier, network industry, such as a telephone line, a cable line and so on and so forth. These are the clasVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
54

sic kinds of cases. There will be a few other odd cases that came

up in the 19th and 20th centuries, early on, the grist mill cases,

the mining cases and so forth. But by and large, that should end

it right there.

When you get into blight reduction, now you are dealing with the

question of whether you are dealing with the police power or with

the eminent domain power. If it is a nuisance, that falls under the

police power. The municipality can condemn that nuisance and use,

and it doesn’t have to pay the owner anything. It doesn’t have to

resort to transferring title to end blight from the owner to some

other owner. That is a misuse of the eminent domain power. Just

end the blight by condemning it, by getting an order doing so, and

leave the title where it rests.

And then, finally, we have got this general catchall category, economic development, and it seems to me, that should never be justified. And of course, you folks have been behind all of that, because

where does most of this come from, urban renewal projects

throughout the last half-century. This is the source of so much of

this eminent domain abuse. And so what you need to do is stop

funding these kinds of things.

The CHAIRMAN. Professor Turley, I agree with the assessment of

Dr. Pilon, in terms of the difficulty of coming up with the bright

line test that we need to have here, but it is very important that

we do so, because, as has been noted by many people here, two

things, one, this bill really does have teeth. If you are going to see

all of your transportation dollars, education dollars, agricultural

development farm program dollars, housing dollars cut off for your

community, that is a pretty strong hammer. On the other hand, we

do not want to discourage communities from using the eminent domain power for those truly legitimate public purposes that we have

all described here. And so getting that line right for those who are

going to come up close to it but not want to go over it so that they

do not stunt economic development for truly public purposes, sets

the task, I think, pretty clearly for us in terms of how we want to

draw this line. So I wondered if you would respond to Dr. Pilon’s

comments.

Mr. PILON. Could I make one quick point?

The CHAIRMAN. Sure.

Mr. PILON. You have already used the term public purpose several times. The Constitution says public use, and it is not slip over

from public use to public purpose, because all of these have a ‘‘public purpose.’’ I mean, the Kelo case involved public purposes and

that was just the problem.

The CHAIRMAN. Point well taken.

Mr. TURLEY. I actually think you could come up with a definition.

Congress is forced continually to draw such lines. This, I think, is

not necessarily more difficult than many other lines that Congress

has drawn in the past. It is just that it has to be done very, very

carefully, and I think everyone appreciates that.

I actually believe that you want to do both. You want to first try

to define what is being prohibited as clearly as possible, and then

to specifically exclude certain things that you are not trying to prohibit. And so if you look at the more successful congressional defiVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
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nitions, they have both affirmative definitions and then negative

exclusions to help hone that definition down.

Now, it seems to me that you want to start out by saying it is

not your intent to deal with property that sometimes is put under

the general rubric of blight by mistake. I think blight condemnations have in the past been problematic. If you take a look at Berman, you can pretty much declare whole parts of a city to be

blighted, and that is exactly what cities have done, and so you

want to avoid that. You want to allow cities to condemn property

that has been abandoned, and I think that is the type of property

that we see in terms of the classic nuisance definitions. So you

want to have in your definition the exclusion of classic nuisance

condemnations and actions. I don’t think the committee should go

too far in the blight area, because the way this would normally

work is that if you have property that is truly a blight issue, truly

exposing negative externalities to the city, the city should hit the

property with a series of sanctions. Either the property owner will

be forced to sell the property, or if they don’t pay the sanctions,

then it goes to a sheriff’s sale. So the city has lots of ways to do

it, without using this type of eminent domain as the hammer. So

I don’t believe that blight has to be a major provision here, because

I truly believe it handled in other ways. So you want to exclude

classic nuisance issues and abandoned property issues. You want

to clearly define it, however, that you cannot use eminent domain

for the purposes of the expansion of a tax base or expansion of employment.

Now, of course, officials will act like rational actors and come up

with other rationales, but it is not as easy as it may seem to come

up with other rationales. If you have got someone like Ms. Kelo,

you can’t exactly analogize her to a shooting done in the urban city.

You have to come up with some rational reason why her home is

being taken, and that is not as easy as it seems. So you want to

specifically say it cannot be used for expansion of tax revenue or

employment, and then you hone it down by excluding certain

things, like utilities, like city service condemnations that are needed across property and those types of issues. I think it can be done,

but you will use both techniques, I think, in terms of the definition.

The CHAIRMAN. Thank you. I welcome that.

The gentlewoman from South Dakota is recognized.

Ms. HERSETH. Thank you, Mr. Chairman, and I appreciate all of

the testimony today, and some of your comments already on the

issue of blight that has caused urban common concern or question

raised by some of my colleagues as we have discussed this bill, and

most likely we will be submitting additional questions to all of you

as we continue to find ways to craft this language, utilizing, most

likely, both techniques as you have described, Professor Turley.

Ms. Berliner, if I could start with you. I know you have had disagreements with individuals such as Professor Jonathan Adler

from Case Western Reserve, and frequent commentator on property

rights issues over the propriety of the decision in Kelo. So I am curious as to what you would say to someone who, like Professor

Adler or Justice Stevens, for that matter, who believes the decision

was right on the merits but wrong on the policy. And just so you

know my opinion, I think our legislation is perfectly consistent with

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individuals who feel the case was decided correctly as well as those

who agree with you and think otherwise. But can you comment a

little on how a legislative response to the situation presented by

Kelo is not simply trying to overrule the Supreme Court’s decision,

but more an effort to discourage States and local governments from

exercising their powers?

Ms. BERLINER. Thank you. Yes. Well, the Supreme Court said

that taking property for private development does not violate the

Federal Constitution. Any kind of statute that this body creates is

not going to say, under the U.S. Constitution, you may no longer

do this. What it is going to say, is it is going, as this bill does,

using the spending power to limit how much it is done. So I mean,

there are many things which one might be able to do but ought not

to do, and this is that kind of situation. The Supreme Court has

said, hey, we aren’t going to stop you, but that doesn’t mean that

any local government has to do eminent domain for private development, and it certainly doesn’t mean that Congress has to fund

eminent domain for private development. I am also happy to address blight, if that is something you are interested in, or I can do

it later.

Ms. HERSETH. And Speaker Howell is going to share with us, as

Chairman Goodlatte requested, some of the findings of the commission of the State of Virginia, but why don’t we get your thoughts

on that and then I will pose one additional question to the panel.

Ms. BERLINER. I think that blight is in certain ways a red herring, because there is not some kind of really rigid barrier between

economic development condemnations and blight condemnations. In

fact, many State blight statutes define an area as blighted if it is

not living up to its economic potential. So they actually incorporate

economic development technically into their blight statute. We had

a case in Ohio where a beautiful single-family neighborhood was

designated as blighted because the single-family homes didn’t have

three bedrooms, two full bathrooms, and a two-car attached garage.

So I think it is, I am not joking, I think it is important that the

kind of definition that you use does not allow anything that any

municipality calls blighted to become a valid condemnation that

can receive Federal funding. It is important to have a definition

that doesn’t rely on the terms, economic development and blight,

but instead limits the use of eminent domain for private commercial development unless, as Professor Turley said, a couple different things are happening and some of them could be abandoned

property. I actually have a list of what those sorts of things might

be, where a property really is in such bad shape that it could be

harmful to the public. But I urge this committee not to allow blight

to become a backdoor to exactly the kind of condemnations you are

trying to prohibit.

Ms. HERSETH. So do you agree with Professor Turley, that blight

doesn’t have to be a major provision of the bill, or am I understanding what you are saying is that we need to more aggressively address this issue in how municipalities are using eminent domain in

areas of what they perceive to be blight? I mean, I do think we

need some clarification here on how we go about addressing it. Do

we leave it to other laws or do we go a step further in what we

are trying to stop here, based on what communities, whether they

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be in California, and it sounds like it happens quite frequently, or

other areas of the country where they are using blight in a way

that is unfair to private property owners?

Ms. BERLINER. Well, I guess I agree with Professor Turley. What

I would do is define economic development in a more general way,

the use of eminent domain for private commercial development

that increases the tax base or something like that. Have a couple

exceptions for things like common carriers and network carriers,

transportation networks, things like that, and perhaps also an exception for abandoned property and property unfit for human habitation or us, and leave it at that so that it is not necessary to start

talking a great deal about blight, but just when you are creating

your list of exceptions have whatever exception you want to make.

But I would urge that the exception not say any property that’s

been designated blighted under any statute.

Ms. HERSETH. I will yield back.

The CHAIRMAN. The gentleman from California.

Mr. POMBO. Thank you. Ms. Berliner, you are talking about the

definition of blight and the way that that has been used, I think,

really gets to the heart of the matter. And in terms of should eminent domain be used at any time for a private to private sale, and

using the power of government to step in and take land away from,

or a home away from, an individual in order to give that to, sell

that to another individual. I happen to believe that it should not

be used, and there is no overriding public purpose that that would

come in. Dr. Pilon talks about the Constitution says public use, and

that is what we need to get back to in terms of eminent domain,

is the only purpose of eminent domain is for a public use. It is not

for a public purpose, and that is a decision that Congress and this

committee has to decide in coming up with definitions as to what

exactly we mean with this legislation, because the chairman is correct, in that this does have teeth to it. There is definitely consequences that will come out of this. And I think that the question

I have for you and for the other members of this panel is, is there

really any purpose, public use, where eminent domain could be

used to take land away from a private individual and sell it to another private individual? That should be a private sale. There is no

reason for the government to step in and use its power to take land

away from a private individual. There is no economic development,

there is no blight, there is nothing that I see that would make that

a legitimate use of eminent domain power and quite frankly, I

don’t believe it is in the Constitution to allow eminent domain to

be used for that purpose anywhere in the Constitution.

Ms. BERLINER. Well, in the case of something like a railroad or

a public utility, you are dealing with something that actually is

used by the public. Although it is owned by a private body, it is

used by the public and it is used by the public, what is called as

of right, meaning that the public utility has to provide electricity

to everyone. It can’t just say I am only providing it to, those guys.

So that is how those kinds of uses were originally held to be public

uses, because they really literally were used by the public as of

right.

When you get into some of these other categories, like blight, I

think that is debatable, but one thing that could be done is there

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might be a circumstance where the government is condemning

property, not for transfer, but for some other reason, like it is uninhabitable, and after it has been condemned, they have to do

something with it. But I totally agree with you.

Mr. POMBO. I think Dr. Pilon, I believe it was him that addressed

that, or maybe it was Professor Turley. They had talked about,

when it comes to health and safety issues, there are other laws.

You can step in and make improvements to that piece of property

to bring it up in terms of public health and safety, and if the person who owns it, if it is an abandoned piece of property and they

don’t pay, it can go to a sheriff’s sale or a sale, in order to pay for

that. I mean, that is something completely different than what they

do in California in terms of what is called blighted. I have a neighborhood just outside of my district that has just been declared

blighted. It is a neighborhood of $700,000-plus homes, and the city

declared them blighted in order to take that and do economic development and do a strip mall, and they are anything but blighted.

But under the California code, under our section of California, they

are not at their best, highest public, or best and highest use of that

land as determined by five people who sit on the city council, and

that is the way blighted is being used. I don’t see any reason that

we should step in and make that possible under Federal law. I

think we should be able to do everything we can.

And I am going to turn to Dr. Pilon in a minute, but I would just

say that when it comes to restricting money, there is nothing in the

Constitution that says you have to wear a helmet when you ride

a motorcycle. There is nothing in the Constitution that says that

you have to wear a seatbelt when you drive your car. There is

nothing in the Constitution that says you have to have a blood alcohol content at a certain point in order to enforce drunk driving

laws. And yet we tie transportation dollars to all of those things,

just because we decided we thought it was a good idea and we

wanted to force States to do it. In this case, what we are saying

is, we don’t want you to use eminent domain to take private property away from somebody and give it to somebody else, so we are

going to take away your money if you do it, and if you want to do

it anyway, fine, but you are not going to get the Federal money.

We do this all the time. And for people to try to interject that this

is somehow different because we are talking about private property, they are wrong. Dr. Pilon?

Mr. PILON. Yes, this is the carrot approach, of course, and it is

perfectly within your power to do so. Now, you have raised two discreet issues here and let me take them one at a time. The most

recent one was the blight issue, once again, and you are right,

there are other powers. There is the police power. You can enjoin

the use that creates the blight. What goes on in the blight cases

so often, and probably in this case that you have talked about in

your own district, is that, either a municipality has a lot Federal

money on its hands that it needs to spend or wants to spend, or

some developer sees an opportunity, goes to the municipality, and

rather than try to buy the property voluntarily from the owners,

instead tries to get it on the cheap by having the municipality condemn it, and therefore he only has to pay fair market value rather

59

than what the owner would be willing to give up the property for.

So that is what is really going on with these kinds of blight areas.

Indeed, in the case that Dana mentioned, 60 Minutes did a spot

on it and lo and behold, the mayor of this town, who was promoting

this eminent domain use, found that her own home fell under the

criteria for blighted and she was quite struck by that when it was

brought to her attention. It was one of those delicious 60 Minutes

got you moments.

In any event, to go back to the other point that you are raising,

because this, it seems to me it needs to be clarified, and that is the

issue of transfer. You suggested it should never be anything but

transfer from private to public under the public use. That is going

too far and I will tell you why. It would deprive us of an opportunity of the following sort. The eminent domain power is meant

to strike a balance. So on the one hand, the person forced to give

up his property is not made worse off, provided he gets just compensation. We can’t use him for the public good. But on the other

hand, so the public isn’t taken advantage of by the holdout problem, that is to say, you are trying to assemble the parcels for the

railroad and the one person who hasn’t sold yet demands a million

times what the property would fetch on the market, and there you

are. You are left either paying a million more than it is worth, a

million times more than it is worth, or you go without the railroad.

This is the classic holdout problem, and it is to address that that

we have this second category I have referred to.

Now, you are absolutely right. One should not resort to eminent

domain unless it is absolutely necessary. To give you an example,

when Disney assembled parcels of land to create Disney World in

Florida, they did it very quietly by buying up property here and

there with dummy corporations and so on and so forth, until they

had assembled enough land. They didn’t do it by invoking local use

of eminent domain by a private party. The railroads are different.

The Southern Pacific used eminent domain as given by the government. The Northern Pacific did not. They bought it fair and square

the right way, so to speak, without eminent domain. Maybe it was

because there were fewer people in the north to buy the land from

than there were in the South, but I won’t get into the history of

that.

But the problem you face, if you limit it simply to private to public transfers, is that you rob yourself of the ability to take advantage of the efficiencies of the market. Do you want your electricity

and power, and even water in the west, and other kinds, railroads

and so forth, delivered only by public entities? Oftentimes we want

this to be in the hands of private entities who can deliver this service far much more efficiently, but they can’t get off the ground with

laying the cable or whatever the case may be, unless they are

given, they are authorized to exercise private eminent domain for

that purpose. And so it is for that reason that this second category

exists, private to private, but open to the public in a nondiscriminatory way and often with rates of return regulated.

Mr. TURLEY. Could I make one comment? On the blight issue, I

want to make one sort of cautionary note. On the blight issue, and

when I said that the Federal law should not spend much time on

blight, what I meant is that I don’t believe that you should be worVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
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ried about excluding blight from those prohibited acts; that I would

not adopt a very broad definition of a blight exception, if you were

going to give any exception of blight, because I do not believe that

eminent domain is needed to deal with blight issues on the State

of local level.

But I also want to note, this law would be easier, from a constitutional standpoint, if you were simply barring funds for specific

Federal projects; that is, if the law said you cannot have money for

project A if any of the land has been subject to eminent domain,

and here is our prohibitions. Clearly you want to go beyond that

and I understand that, because that will allow municipalities to essentially hide the ball, get your money in project A while they are

engaging in eminent domain in project B, and in reality they are

shifting money so the money that they get from you, they can actually use by displacement, the money they have, to condemn property in project B.

But as you broaden it, as you say, look, we just want you to stop

using eminent domain. We want to force you to change your conduct. Then you get into States rights issues. And so part of the

need to define this narrowly is that even in South Dakota v. Dole, the Court said you can’t engage in things that would be coercive.

You are not going to be allowed to micromanage a State. The Supreme Court just said that a State can use eminent domain in this

way. What we have to be cautious is in our zeal to try to make this

cat walk backwards after the decision. We have to be cautious that

we are not micromanaging by simply saying we are to try to make

sure you can’t use eminent domain, because we can trigger one of

the conditions under Dole that the Court has decided previously.

The CHAIRMAN. Thank you very much. We will do a second round

of questions, because I think you have got all of us very interested

in what you have to say here. And I want to follow up directly on

what you just mentioned, Professor Turley. Do you think the bill,

as it is drafted, complies with South Dakota v. Dole, which sets the

standard for the circumstances under which some of the examples

that Congressman Pombo cited for the Federal Government threatening and in some instances actually cutting off funds to States or

localities that do not take certain actions that the Federal Government wants them to? Is it in compliance or do we need to tighten

up the economic development purpose or economic development

definition that is in the bill?

Mr. TURLEY. Well, this is a good start. We are just not there yet

in terms of language. This is a natural point to start your legislation as we try to narrow it down. The clear purpose of the law, I

think, is a worthy one and with some tweaking we can get by Dole.

As I mentioned in my testimony, the first condition of South Dakota v. Dole, I think, that you meet are the general welfare requirement. The Court gives great deference to that point, that the Court

has even said, of its own rule, that it is virtually impossible for

Congress to violate.

The second requirement is the one that I am most concerned

with and that is, whatever you do, the Supreme Court has said you

have to make sure that the States know what it is that they are

getting into, because the analogy here is to a contract. You are

going to the State and saying, if you want Federal funds, you are

61

going to have to do X. The Supreme Court has said, you better be

clear what X is, if you are going to hold them to that contract, and

that requires clarity. And in that second condition, I think we need

to do some tweaking and some changes to add clarity and get rid

of these ambiguities.

The third condition is that it has to be related to a specific articulated Federal interest. That I don’t see as a major problem. The

fourth is that there can’t be a constitutional bar to the grant of

Federal funds. Here you would be telling the State, you can’t use

eminent domain power that the Court has said you have. But I still

don’t believe that would be a constitutional bar. As the Congressman noted, if you look at the other things that you have conditioned, I don’t see the distinction with what has already been approved as conditional funding.

The final point is that issue of coercion. As we broaden this out

to say we are here to stop the abuse of eminent domain, you do get

into a question of coercion and a slight question of federalism. To

what extent are you telling the States what they can do to their

citizens? Because you are going to have State officials who come

forward and say, look, if we want to be the Pirates of Penzance and

run through the streets taking property, they can throw us out of

office, but it is not for you to stop it. I personally think that you

can get over that barrier as well, but it is there where this narrow

crafting is going to be necessary. So the end result is yes, I think

you can draft this to get around South Dakota v. Dole, or I should

say to comply with it. It is just that we have to be careful in some

of our language.

The CHAIRMAN. Dr. Pilon?

Mr. PILON. Yes, on just this last point. The coercion in South Dakota v. Dole had to do with a portion of the funds that were denied

and that was, I think, 3 percent or 5 percent. And I don’t think you

are going to be anywhere near close to that. What the Court did

say in South Dakota v. Dole is that you cannot compel the State

to do something that is unconstitutional. There we have, like, to

create a State religion, for example. So besides that, this is not coercion, this is just saying to the State, look, if you want the money,

here is what you can’t do. You are free to do it, it is just that you

won’t get the money. So that is not coercion.

The CHAIRMAN. Speaker Howell, I am sure you have confronted

that issue as a State legislator, where the Federal Government

wants to compel you to do something. And I know, in Virginia, we

have some negative reactions to that sometime. Here, as Dr. Pilon

said, we are not compelling you to do something, we are simply

saying, if you do it, I am going to take the money away. It is a lot

of money. What do you think?

Mr. HOWELL. I think you will get their attention. We have had

several attempts to pass legislation that would require, or make

the open containers in automobiles illegal under our DUI statute,

and they have the threat of losing Federal transportation money by

not doing that. We still haven’t seen fit to enact that law. We think

we have very good DUI laws in Virginia and we think that the

open container feature is flawed. And so we have made that conscious decision. We will let the Federal Government keep $8 or $10

million, whatever it is. And actually they still give us the money.

62

They just call it public safety and we just have to shift money

around.

But I think what you are talking about under this act, the money

is pretty significant. We probably wouldn’t be able to shift it

around as easily, and you will get the States’ attention. What I

would hope is that, and I know, again, the American Legislative

Exchange Council is very involved in this, that the States will take

action. And I know, in Virginia, we are going to pass legislation,

and we will probably try and put it in our State constitution, to

prohibit these types of Kelo decisions, and the challenge is going to

be to get in the language so that we don’t throw the baby out with

the bath water, but we accomplish what we are trying to do.

The CHAIRMAN. That momentum seems to have come from this

very Supreme Court decision, because I know, in previous sessions

of the general assembly, there have been efforts to address this, as

I mentioned earlier, with former Delegate Drake and her efforts

and so on, there is a lot more momentum behind that at the State

level now.

Mr. HOWELL. That is exactly right. We had legislation in the

2005 session that would have continued what Congresswoman

Drake had introduced when she was in the House of Delegates, and

we carried it over because of the pending Supreme Court decision.

We are reluctant to enact legislation if there is a major court case

on that issue being decided. Now that the decision has been announced and it is probably contrary to what we would have thought

they would have ruled, we will be able to take—we will be able to

address the situation.

The CHAIRMAN. Thank you. Ms. Berliner, are we OK with South

Dakota v. Dole or do you have some suggestions for us as well?

Ms. BERLINER. You are OK on coercion; they are basically, as

long as they can do it with their own funds or with private funds.

It is not going to be consider coercion. There have even been cases

where a State was going to lose 75 percent of its education budget

if it didn’t do something or another, 60 percent, 75 percent. There

is another that is 95 percent of Federal highway funds they were

going to lose. If that significant a threat is held to be noncoercive,

I think you are not going to have a problem on that. What you will

have a problem with, as Professor Turley talked about, is the requirement that it be unambiguous. The way that it is written now,

because there is no definition of economic development, a city is not

going to know what it is and is not allowed to do. And that is the

only part of South Dakota v. Dole that any court has ever used to

strike something down under the Spending Clause. There has been

no program that failed anything else except for the unambiguous

requirement. So that is something that you do have to outline so

that a city can look at it and say, hey, we can’t do this or we are

going to lose our economic development funding. We better stop.

That does need to be satisfied and I think, by defining economic development, you can do that.

The CHAIRMAN. And to add to that, do you agree with Professor

Turley’s approach, that we should both carefully define what public

use is, in terms of the affirmative steps outlined by Dr. Pilon, as

well as the things that are disallowed as being private economic development purposes?

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Ms. BERLINER. I think it will help to do that.

The CHAIRMAN. Help with eliminate the ambiguity.

Ms. BERLINER. You are not going, yes, you are not going to be

able to actually list every single type of thing, so it is going to have

to be conceptual, like common carrier as opposed to listing every

type of common carrier in existence. But I think the more information that is there, the clearer it is going to be. If it indicates that

Congress’ intention is to allow condemnations for these kind of

public utilities and transportation networks and information networks, but not to allow these other things, the more of that you

have, the clearer it is going to be and the stronger it is going to

be, frankly.

The CHAIRMAN. Thank you.

I believe Congresswoman Herseth has some additional questions

as well.

Ms. HERSETH. Well, let us just follow up here quickly. I think,

if you could clarify, both Ms. Berliner and Professor Turley, under

South Dakota v. Dole, have we ever had a case in which the noncoercive requirement has been met, or has it always been on the

ambiguity, a lack of ambiguity requirement? Has there ever been,

have we found anything that has been coercive and therefore in

violation of South Dakota v. Dole?

Mr. TURLEY. Shall I go first? No, the coercion factor is sort of a

live torpedo in the water. The Court mentioned it. It has never hit

anything significant. Of course, this is the pre-Roberts court. You

never know what is going to happen, but I would agree absolutely

with Ms. Berliner, that the primary issue that you have to be concerned with is the definitional stuff.

Ms. HERSETH. OK. So if that is our primary concern, I agree with

you that it is. I think we all recognize the need to fine tune how

we have drafted this. Let me pose the question to all of you. Do

you think it would be useful to use the Court’s own language, as

they have basically adopted a broader and more natural interpretation of public use to mean to mean public purpose, to say what we

deem not to be covered by this bill is traditional public use, and

we have talked about some of those, the common carriers, the utilities, versus, and use the terminology of public purpose to include

economic? I mean, should we break it down that way? So do you

think that would take us a step closer under the constitutional

scrutiny here, what the Supreme Court may ultimately scrutinize

in our legislation, to have made that same divide between public

use and a public purpose, or essentially, us make the divide rather

than them taking public use and drawing it out to public purpose?

Mr. PILON. If it were me, I would not use the language of the

Court, which has gotten us here today. I would rather start from

scratch. And what you are trying to do is get yourself out from

under the Court. If you craft this correctly, you will never get to

court, because you will just be in a position whereby you will withhold funds if they don’t meet your criteria, the States. What are

they going to do? What are grounds, what grounds would be available to them to bring you into court? I can think of none. We are

not in a New York case, 1992, or a Prince case, 1996, or that Congress ordered a State to take title to nuclear material in a New

York case, or dragooned Federal officials in Montana and Arizona,

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or State officials, to carry out portions of the Brady bill. We are

just in a case where carrots are involved, not sticks. And so if you

draft this correctly, the State will have no ground on which to raise

a case or a controversy.

Ms. BERLINER. My response would be that if you were drafting

a constitutional amendment, that that would work very well; that

one, for example, could add to the fifth amendment, public purpose

and public benefit are not public use, and that would work probably pretty nicely in a constitutional amendment. I think it is going

to be harder to use that in a statute, because then there will be

a way to do it. If it is something you really want to do, there has

got to be a way to do it. But it is going to come closer to the line

of trying to make a constitutional definition that contradicts what

the Supreme Court said, and obviously you can’t do that, although

you can withhold the money. So I think, if you really wanted in

there, it is possible, but it raises problems to try to contradict the

Court’s interpretation of public use.

Mr. TURLEY. Well, I think that ultimately we will end up in the

same place. I think there may indeed be some slight overlap in

terms of what the Court was talking about. The most important

thing for your purposes is, as you narrow the definition through exclusions, that you just have to deal circumstances that are not infinite. I mean, this is not in my view that difficult of a drafting problem. But you just want to avoid issues, for example, as you say, if

you use economic development and you are prohibiting, for example, the economic development and use of condemnation for expansion of employment or a tax base, you want to make sure that cities can still use condemnation to get access to those areas.

So for example, if your district was developing—the municipality

was developing an industrial park, and that is a perfectly good use

and they were doing it the right way, they were buying the property, brining in partners from the corporate world, but they had to

get services there, electricity, utilities and roads, you want to make

sure that no one can say, well, hold it. You are condemning my

property so that you can facilitate bad economic development. And

so that is art under the law. And those are things that we can deal

with, I think, pretty easily by just tweaking the language to make

it clear that those access issues are not part of economic development bars.

The CHAIRMAN. The gentleman from California is recognized.

Mr. POMBO. Thank you, Mr. Chairman. And I have a number of

additional questions, and I will just submit those in writing.

One question I do want to ask Professor Turley, though, is, when

you talk about States rights and whether or not this is a States

rights issue, the Constitution lays out the protection of private

property, and no person shall be deprived of life, liberty, and property, nor shall property be taken for public use, without just compensation. That is our protection on private property. If a State

were to adopt a law that was contradictory to that protection that

is in the Constitution, then it is not a States rights issue, they are

adopting a law in that State which contradicts the Constitution,

which is the overriding law of the land, is that not accurate?

Mr. TURLEY. Well, it is accurate to a point. If you and I were on

the Court, and god knows, it would be a better world if we were.

65

Mr. POMBO. It may be to you. I don’t know.

Mr. TURLEY. But if we were on the Court, then we would clearly

establish what you just said. The problem is, the United States Supreme Court has just said that that is not what the Constitution

means. And so the U.S. Supreme Court has said that, indeed,

States have the authority to do this, and that is where the problem

lies. You are going to have States come and say, look, the Court

said that this is part of our inherent powers. And what you are

saying is that we can’t use the full panoply of our powers as defined by the Constitution as interpreted by the Supreme Court.

And we both agree that the Supreme Court was wrong in that interpretation, but that is where the States right issue can be raised.

Mr. POMBO. All right. Well, I appreciate you clearing that up,

and the additional questions I have I will submit in writing. I

would say, Mr. Chairman, that I think a lot of the information that

we got from this hearing will be very helpful in moving forward

with a markup of this bill, because I think we got some good, some

real good ideas for what we need to do. So thank you.

The CHAIRMAN. Well, I thank everyone on this panel. This has

been a very, very, very helpful discussion. We had already concluded amongst ourselves that there were some additional definitional issues that need to be addressed in the legislation. Your

guidance today will definitely be utilized by the committee staff

and the members staffs who will contribute towards making some

additional changes to the legislation, which we intend to do and to

move the legislation forward quickly, because we think that this

cries out for a response, particularly while the public is as focused

on this issue and quite frankly, demanding a response from our

State legislatures and from the Congress.

So I thank you all again, and we will be in contact with you as

we move forward with the legislation, and we will, as Congressman

Pombo suggested, submit some questions to you in writing to further pick your brains on the issue. Thank you again.

Mr. TURLEY. Thank you.

The CHAIRMAN. Without objection, the record of today’s hearing

will remain open for 10 days to receive additional material and

supplementary written responses from witnesses to any question

posed by a member of the panel.

This hearing of the House Committee on Agriculture is adjourned.

[Whereupon, at 1:06 p.m., the committee was adjourned.]

[Material submitted inclusion follows:]

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STATEMENT OF BOB STALLMAN

My name is Bob Stallman, and I am a cattle and rice producer from Texas. I also

serve as president of the American Farm Bureau Federation. I appreciate the opportunity to be here today to discuss the potentially devastating effect on agriculture

of the recent Kelo decision. We commend the committee for holding hearings on this

important matter so promptly.

The Kelo decision has struck a raw nerve around the country. Through the hearing you are having today and through the introduction of H.R. 3405 and similar

bills, Members of Congress are reacting to this decision, evaluating its impact and

assessing the most appropriate legislative response. We are gratified by the number

of cosponsors who have signed on to various bills in such a short time. We fully support the efforts that have been taken thus far, and we will work diligently with this

committee and others to pass legislation to encourage States to limit their use of

eminent domain to truly public uses.

Like all citizens, farmers and ranchers understand that circumstances can sometimes arise in which their land can be acquired for a legitimate public use. We cannot support the underlying philosophy of Kelo, however, in which private property

can effectively be taken by the public for the profit of other private parties. The difference between legitimate uses of eminent domain and what is so objectionable in

Kelo is the difference between building firehouses or factories, between courthouses

or condominiums.

After Kelo, no property is secure. Any property can be seized and transferred to

the highest bidder. As Justice O’Connor said in her stinging dissent: ‘‘The specter

of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz Carlton, any home with a shopping center, or any

farm with a factory.’’

Agricultural lands are particularly vulnerable to these types of actions. The fair

market value of agricultural land is less than residential or commercial property,

making a condemnation of agricultural land less costly. While agricultural lands are

vital to the Nation because they feed our people, they do not generate as much property tax revenue as homes or offices or nearly any other use. As a result, they become very susceptible to being taken for any of these other uses. Finally, municipalities generally grow outward, into farms and rural areas. There is nothing to stop

farms that have been in families for generations from being taken for industrial developments, shopping malls or housing developments.

It is already happening. In one such case, Bristol, Connecticut, has condemned a

Christmas tree farm and two homes for a future industrial park.

We are understandably concerned about the possible effects of Kelo on farm and

ranchlands across the country. Reaction from our members has been swift and overwhelming. Farmers and ranchers from across the country are asking us to help

them keep their property.

American Farm Bureau Federation has initiated the ‘‘Stop Taking Our Property

Campaign’’ or STOP. This campaign is designed to educate the public about the impacts of the Kelo decision and to provide materials to help State Farm Bureaus address the issue. As part of the campaign, we have developed an educational brochure and web page for those interested in the issue.

There are several components to our campaign. One element focuses on encouraging State Farm Bureaus to seek changes to State laws to prohibit the use of eminent domain for private economic development. We have developed model State legislation and supporting documents to help effectuate those changes.

Another key element to our campaign is to encourage and promote passage of

H.R. 3405 or similar legislation. Since eminent domain is a creature of State law,

substantive statutory change must be made at that level. Getting 50 State legislatures to act, however, is an uncertain and lengthy process. In addition, states interested in maximizing revenues may be reluctant to take action that might deny their

municipalities the opportunity for increased property taxes. We believe, however,

that most Americans fundamentally disagree with the proposition that increased

property taxes provide an excuse for taking one person’s property and giving it to

another.

That is why Federal legislation is necessary. Eminent domain is defined by State

law, not Congress. But Congress has the authority and the responsibility to determine how our tax dollars are spent and not spent. Using Federal funds to help municipalities take from the poor and give to the rich adds insult to injury to those

who work hard for themselves and their families. As elected officials, you can heed

the outrage of your constituents to the Kelo decision by ensuring that States and

local governments cannot use a person’s own Federal tax dollars to dispossess them

for the benefit of another private entity.

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All of the Federal bills introduced thus far take this approach. The difference

among them is the degree to which such funding is withheld. H.R. 3083, introduced

by Rep. Rehberg and H.R. 3087, introduced by Rep. Gingrey, prohibit any exercise

of eminent domain for economic development that uses Federal funds. H.R. 3135,

introduced by Chairman Sensenbrenner, prohibits a State or municipality from

using eminent domain for economic development if Federal funds would in any way

be used for the project. H.R. 3405, introduced by Reps. Bonilla and Herseth and

which is the subject of this hearing, would deny all Federal economic development

assistance to a State if there was any use of eminent domain for economic development that transferred private property from one private entity to another.

While we support all these approaches, the provisions of H.R. 3405 seem to offer

the most effective deterrent to abuses of the right of eminent domain. By withholding all Federal economic development funding from States where Kelo-type eminent

domain is being used, regardless of whether it is used in a project that uses those

funds or not, H.R. 3405 offers the greatest disincentive for States to continue using

eminent domain for private economic development. By not tying the funds to any

particular project, H.R. 3405 also closes a potential loophole in which Federal funds

might merely be replaced by other funds in projects that use eminent domain for

private economic development.

Even though a slim majority of the Supreme Court upheld the Connecticut law

in question, that does not mean it is good policy—nor that all the justices who

upheld it think so. Justice Stevens, who wrote the majority opinion in Kelo, seems

to disagree with the State law he upheld. In a recent address to the Clark County

(Nevada) Bar Association, he said, ‘‘I was convinced that the law compelled a result

that I would have opposed if I were a legislator.’’

Mr. Chairman, the American Farm Bureau Federation strongly supports swift

congressional action on legislation to withhold Federal funding to States and local

governments that use eminent domain to take property from one private entity and

transfer it to another for economic develop purposes. We support H.R. 3405. We applaud the work that you and other Members of Congress are doing to address this

critical issue, and we want to work with you to assure expeditious consideration of

this matter by the full House of Representatives.

Thank you for the opportunity to be here today. I will be pleased to answer any

questions you and other members of the committee might have.

STATEMENT OF ALVA J. HOPKINS, III

‘‘The rights of persons, and the rights of property, are the objects, for the protection

of which Government was instituted.’’

—James Madison, speech at the Virginia Convention, 1829

Chairman Goodlatte, Ranking Member Peterson, members of the committee,

thank you for the opportunity to appear before you today to speak on the implications of the Supreme Court decision, Kelo v. New London. More specifically, the implications and opportunities non-industrial private forest landowners see for statue

refinement and clarification in the wake of that decision. Many of you have spent

a lot of time on this issue and we in the forestry community appreciate it.

I am Alva J. Hopkins, III, a forest landowner from Folkston, GA, and a board

member and Chair of the Governmental Affairs Committee of the Forest Landowners Association. I received a Juris Doctorate Degree from Mercer University and

practiced law for 11 years, closing my practice in 1989 to manage timberlands

owned by several families, including my own.

I don’t know of any U.S. Supreme Court decision that had a more devastating effect on private property rights than Kelo v. City of New London. The fifth amendment of the United States Constitution provides in part ‘‘nor shall private property

be taken for public use without just compensation.’’ The Supreme Court has taken

the words ‘‘public use’’ and replaced it with their new language ‘‘public purpose.’’

What’s next? Public benefit? Justice O’Connor states in the dissenting opinion that

the court is expanding the meaning of the word public use. She states the decision

‘‘holds that the sovereign may take private property currently put to ordinary private use and give it over for new, ordinary private use, so that new use is predicated

to generate some secondary benefit for the public—such as increased tax revenue,

more jobs, maybe even aesthetic pleasure. But nearly any lawful use of real private

property can be said to generate some incidental benefit to the public thus if predicated (or even guaranteed) positive side effects are enough to render transfer from

one private party to another constitutional, then the words ‘‘for public use’’ do not

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realistically exclude any takings, and thus do not exert any constraint on imminent

domain power.’’ Dissenting opinion, Kelo v. City of New London. As forest landowners, the management of our forestland confers numerous benefits on the public. Some of these benefits include producing millions of tons of oxygen; sequestering carbon; filtering air and water; providing fish and wildlife habitat,

including that for threatened and endangered species; improving the aesthetic beauty of the natural landscape; and providing opportunities for recreation and solitude,

just to name a few. Under the Kelo case, a governmental entity can come in and

condemn thousands of acres of forestland, not only to convey it to another private

landowner who will put it to a ‘‘higher use,’’ but to one who wishes to create a park.

Perhaps this park even joins a residential development of this same private landowner, and perhaps the new park would enhance the residential development, and

meet the public purpose requirement by providing many of the above-listed benefits

to the public. Legislation is desperately needed to strengthen private property rights

back to the originally intended constitutional level and put a halt to their continued

deterioration.

Forest and farmland would be considered low-end use property as compared to

commercial property with regard to the creation of tax revenue and jobs. Therefore,

farm and timberland would never withstand an eminent domain attack by any governmental entity wherein the new private landowner will create a new job or build

a structure on the property that will increase the tax base.

At the time our country was founded, the inalienable right for individual citizens

to own and manage property was set with the cornerstone of our new democracy.

Without a commitment to this fundamental freedom, the United States of America

would have simply accepted the tradition of powerful landowners and continued indentured servitude in this new nation, or a socialist government such as Russia or

China, and we would now live and work under a set of rules of law from which our

ancestors sought freedom. Are the freedoms that this country was founded on and

so many brave men and women have died to protect in real danger? If so what can

be done to protect our rights?

For a forest landowner, the ability to manage on a long-term investment strategy

is vital to the future of the industry. This long-term investment for landowners has

up-front investment costs, together with annual taxes and other management costs,

with the first return on the property occurring usually in 12 to 18 years with possible liquidation of the initial investment in 25 to 35 years. For landowners to make

this type of commitment, private property rights must be fully protected.

When the constitution was framed by our Founding Fathers, it was their intent

to protect private property, except when absolutely necessary for public use. Public

use was intended for such things as roads, hospitals, and furtherance of government

functions. It was never intended to provide a system for preference of one private

landowner over another. Unfortunately, with the urbanization of America and the

corresponding disconnect many citizens and their delegates have with the land, we

see a reduction in respect and understanding that this basic right holds in the structural essence of our nation. Most persons don’t understand the commitment that a

forest landowner makes when he/she plants a tree, knowing full well that he/she

may not live long enough to see it harvested.

We have seen in this country the constant erosion of private property rights

through a number of sources. Property is not a singular concept. It is not just a matter of title, but of a whole ‘‘bundle of rights.’’ Property law recognizes these bundle

rights and likens property to a bundle of sticks, any one of which could be bought,

sold, rendered, or bequeathed other than through a taking. Our rights include the

right to acquire property, dispose of property, exclude others the right against trespass, the right to quiet enjoyment, use rental, and most importantly, the right to

active use so long as it does not hinder the rights of others in turn to enjoy the

use of their property. In contrast, our ‘‘taking laws’’ are based on the idea that the

entire bundle must be taken before the government must pay compensation. But,

take away any one of these rights and you reduce the value of the property to the

owner. This all or nothing view enables government to curtail land uses through

regulation that can actually squeeze the value out of the property a little at a time,

and allows an escape from any compensation to be paid to the owner.

Many laws whose intentions are good, such as the Clean Water Act, the Endangered Species Act, and the unintended consequences of the magnificent success of

tree-planting through the Conservation Reserve Program, include disincentives for

forestland investment. As these disincentives build, many forest landowners are

changing their investment strategy and selling their properties to place their capital

in other types of investments. We have learned that the currently over 10 million

forest landowners in the United States who own property for a number of different

reasons (i.e., recreational investment, annual income production, hunting and fishVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00140 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
138

ing), the vast majority will sooner or later harvest some of the timber on their property. As can be seen by some of the examples above, these partial takings can be

as serious a problem as a full taking, especially when the partial taking first occurs.

The owner may subsequently be paid ‘‘just compensation’’ for the full taking, however, that just compensation is considerably less than it would have been had it not

been for the previously occurring partial taking.

The members of this committee have shown in the recent past, with the passage

of the Healthy Forest Restoration Act, and are showing here today, by having hearings with regard to the impact of the Kelo decision, that private property rights are

vital to the continued freedom of this country. Soon you will also have the opportunity to address this issue with the reauthorization of the Endangered Species Act.

Here today, we have the opportunity to re-establish the primacy of private property

rights in the United States. The Kelo decision has brought front and center the

issue of private property rights. Now is the time to include in this legislation language that will truly strengthen the ownership of private property. If a governmental entity prevented an individual from using a portion of their home and even

further required them to maintain that portion of the home they could no longer

use, would this constitute a taking? Of course, it would only be a partial taking and

as such the individual would receive no compensation since they would be allowed

to use the remainder of their home. As is easily seen, in this little example, this

simply is wrong. Compensation should be required whether the government makes

a full or partial taking.

As previously mentioned, well-intended legislation—such as the Endangered Species Act, the Clean Water Act, and others—can have unintended consequences, examples of which restrict the use of property deemed critical to survival of listed

plants and animals, or to promote and protect clean water or similar high-minded

endeavors. All of these are well-intended laws that seek to remedy serious problems

facing our country. Private landowners and the businesses associated with them are

in favor of saving at-risk species, preserving clean water, and conserving our natural heritage. We know that societal goals and private property rights can certainly

be compatible, but if society as a whole benefits, then society as a whole must pay

the bill. Sadly, Congress and the Courts have eroded private property rights in a

misguided approach to secure public benefits. However, during this same time, little

attention has been given to the cost/benefit of these actions, and those most affected

by the subject regulations have seldom been a part of the process. In the future,

regulations that are not cost-beneficial must be rethought, and the fundamental rule

of law that rights cannot be taken without compensation reaffirmed. In the Kelo

case we have a narrow-majority opinion (5–4) that has simply gone too far. As Justice O’Connor so aptly stated, ‘‘Nothing is to prevent the state from replacing any

Motel 6 with a Ritz Carlton, any home with a shopping mall, or any farm with a

factory. As a result of the Kelo decision, almost any piece of property is now subject

to condemnation.’’ Most governmental entities view forestland as one of the lowest

uses of property, and almost any other use would be considered a higher and better

use producing more taxes and potential jobs. The taking clause of the fifth amendment of the Constitution was intended to reflect a limitation on eminent domain,

not a carte blanc grant of power rendering virtually any and every piece of private

property subject to eminent domain.

The intent of my testimony to you here today has been to try to focus on the adverse impact of the Kelo decision on forest landowners as well as briefly touch on

several other private property issues. These problems have been collectively labeled

the South’s invisible forest health problem. There can be no better time than the

present to enact the Strengthening the Ownership of Private Property Act of 2005.

I hope that this committee will address the private property rights issues that I

have focused upon today and restore private property rights back to their constitutionally-intended place. Mr. Chairman, this concludes my remarks. I would be glad

to respond to any questions that any member of the committee may have.

STATEMENT OF WILLIAM J. HOWELL

Good morning Chairman Goodlatte, Ranking Member Peterson and members of

the committee:

My name is Bill Howell, I am speaker of the Virginia House of Delegates and a

member of the board of directors of the American Legislative Exchange Council.

The American Legislative Exchange Council (ALEC) is the Nation’s largest bipartisan, individual membership organization of State legislators with over 2,400 legislator members from all 50 States and 97 members in the Congress. It is my pleasVerDate 11-SEP-98 11:17 Oct 14, 2005 Jkt 000000 PO 00000 Frm 00141 Fmt 6633 Sfmt 6633 F:\DOCS\109-15 HAGRI PsN: HAGRI
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1 Kelo v. New London, 125 S.Ct. 2655, 2667 (2005).

2 Id. at 2671.

3 Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 241 (2005).

4 Kelo. at 2668.

ure to appear before you to present testimony regarding H.R. 3405 and eminent domain issues.

Kelo v. New London

The Supreme Court’s decision in Kelo v. New London was very disappointing to

those of us who believe in the value of private property. The Fifth Amendment

states that ‘‘private property [shall not] be taken for public use, without just compensation.’’ By expansively defining ‘‘public use’’ to mean any legislative purpose

that is legitimate and not irrational,1

The Supreme Court has effectively written the ‘‘public use’’ limitation out of the

fifth amendment. As Justice O’Connor eloquently wrote in her dissent:

Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might

be upgraded—i.e., given to an owner who will use it in a way that the legislature

deems more beneficial to the public—in the process. To reason, as the Court does,

that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings ‘‘for public use’’ is to wash out

any distinction between private and public use of property—and thereby effectively

to delete the words ′′for public use′′ from the takings clause of the fifth amendment. 2

The Supreme Court could have limited the definition of ‘‘public use’’ instead of defining ‘‘public use’’ to mean anything ‘‘rationally related to a conceivable public purpose. 3

For example, the Supreme Court could have limited ‘‘public use’’ to public ownership and control by the State, a unit of local government, a school district. Or the

Supreme Court could have limited ‘‘public use’’ to uses that are the more traditional

functions of government such as construction or maintenance of public buildings,

roads, schools, hospitals, railroads, reservoirs, or utilities. While the Supreme Court

failed to protect private property rights, they acknowledged the proper role of the

States. The Court stated, ‘‘that nothing in our opinion precludes any State from

placing further restrictions on its exercise of the takings power.4

The American Legislative Exchange Council applauds the Supreme Court for recognizing that States have the authority to further protect private property rights

in the States.As a result of the Kelo decision, many States are acting to better protect private property rights. Alabama and Texas have passed laws that will help

limit eminent domain abuse and dozens of States will take up legislation to protect

their citizens from eminent domain abuse once the new legislative sessions start in

January. It is heartening to see that when one branch of government fails to protect

the rights of citizens, another level of government can step in to help protect important rights.

FEDERAL ROLE IN THE PROTECTION OF PRIVATE PROPERTY RIGHTS

Without doubt, the most important function of government at any level is to protect the lives, liberty, and property of its citizens. This was a fundamental reason

for the adoption of the Constitution and should remain a fundamental purpose of

government today.

The Federal Government was created to play a special role in the protection of

Americans. It protects Americans from foreign threats and helps State and local police forces protect Americans against criminals inside the country. The Federal Government is also empowered to protect Americans from overzealous State and local

governments.

The Founding Fathers realized that checks and balances were needed to restrain

the excesses of overzealous government. As James Madison explained in Federalist

51:

In the compound republic of America, the power surrendered by the people is

first divided between two distinct governments [the State and Federal Governments], and then the portion allotted to each subdivided among distinct and separate departments [the executive, legislative, and judicial]. Hence a double security

arises to the rights of the people. The different governments will control each other,

at the same time that each will be controlled by itself.

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5 Thomas Jefferson to Samuel Kercheval (1816).

These distinct levels of governments and divisions within State and Federal Government allow for multiple opportunities to protect the rights of the people. With

eminent domain, (and the recent Supreme Court decision in Kelo v. New London),

the Supreme Court has not adequately protected individual property rights. In light

of this decision, States around the country are moving to protect property rights.

However, there remains a Federal role in providing increased protection for the people.

H.R. 3405, STRENGTHENING THE OWNERSHIP OF PRIVATE PROPERTY (STOPP) ACT

The goal of the STOPP Act is commendable in that it seeks to restrict Federal

money from being spent on projects that use eminent domain to take property from

one private party and transfer it to another private party. There is no reason the

Federal Government should engage or promote such transfers. States and local governments may have the prerogative to conduct such transfers, but the Federal Government should not encourage and finance them.

Congress has broad authority under its spending power to provide for the ‘‘general

welfare of the United States.’’ U.S. Constitution, article I section 8 clause 1. As the

Supreme Court held in South Dakota v. Dole, 483 U.S. 203 (1987), States have the

power to attach conditions to the receipt of Federal funds. The STOPP Act does not

regulate State and local governments’’ eminent domain authority, it merely conditions the receipt of Federal funds on States not abusing eminent domain authority.

This is well within Congress’ powers and is laudable because it helps protect the

rights of private citizens from the excesses of State and local governments.

AMERICAN LEGISLATIVE EXCHANGE COUNCIL RESOLUTION ON EMINENT DOMAIN

Last month, the American Legislative Exchange Council (ALEC) approved a resolution on eminent domain. The State legislators felt it was important to make a

strong statement against eminent domain abuse. As noted earlier, in the Kelo decision, the Supreme Court stated, ‘‘nothing in our opinion precludes any State from

placing further restrictions on its exercise of the takings power.’’ ALEC’s resolution

calls for State and Federal Governments to protect private property rights against

unreasonable use of eminent domain. In addition, it calls on each State to enact protections to protect private property. ALEC does not support the taking of property

from private parties and transferring it to other private parties as part of economic

development schemes. This is antithetical to our country’s foundational principles.

As James Madison stated, ‘‘Government is instituted to protect property of every

sort; as well that which lies in the various rights of individuals, as that which the

term particularly expresses. This being the end of government, which impartially secures to every man, whatever is his own.’’

EMINENT DOMAIN IN VIRGINIA

In Virginia we will examine curbing eminent domain abuse in two ways. The first

task for the General Assembly is to define ‘‘public uses.’’ article I, section 11 of the

Constitution of Virginia states:

That no person shall be deprived of his life, liberty, or property without due

process of law; that the General Assembly shall not pass any law . . . whereby private property shall be taken or damaged for public uses, without just compensation,

the term ‘‘public uses’’ to be defined by the General Assembly.

The General Assembly will take a hard look at what should be considered a ‘‘public use.’’ While some may decide that a transfer of property through eminent domain

from one private party to another is an appropriate ‘‘public use,’’ I disagree.

Upon defining ‘‘public uses,’’ we will seek to enshrine a definition of ‘‘public use’’

in the Commonwealth’s Constitution. Of course, this will take time, but it is critical

to better protect the private property rights of the citizens of the Commonwealth.

The members of ALEC, at both the State and Federal levels, share a common

commitment to the Jeffersonian principles of individual liberty, limited government,

and free markets. Thomas Jefferson wrote on April 6, 1816 that the protection of

private property rights is ‘‘the first principle of association, the guarantee to everyone of a free exercise of his industry, and the fruits acquired by it.’’ He also stated

that ‘‘The true foundation of republican government is the equal right of every citizen in his person and property and in their management. 5

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6 Thomas Jefferson to Maria Cosway (1786).

As Thomas Jefferson understood, although some politicians at the local level have

forgotten, ‘‘Nothing is ours, which another may deprive us of.6

The fight to protect individual property rights needs to happen at every level of

government. In Virginia we will closely examine this issue in the upcoming legislative session. In other States, State legislators will work hard to curb the potential

for eminent domain abuses in their States. We thank the committee for holding this

hearing and urge Congress to continue its efforts in fighting the abuses of eminent

domain.

Chairman Goodlatte, Representative Peterson, members of the committee, I am

honored to testify here. ALEC and I look forward to working with you in the days

and months ahead to curb eminent domain abuse and protect private property

rights.

Thank you. I would be pleased to answer any questions you might have.

AMERICAN LEGISLATIVE EXCHANGE COUNCIL

A RESOLUTION

(1) Whereas; the protection of homes, small businesses, and other private property

rights against Government seizures and other unreasonable Government interference is a fundamental principle and core comrnimen1 of our Nation’s Founders;

and

(2) Whereas; as Thomas Jefferson wrote on April] 6, 1816, the protection of such

rights is ‘‘the first principle of association, the guarantee to every one of a free exercise of his industry, and the fruits acquired by it’’; and

(3) Whereas; the fifth amendment of the U.S. Constitution specifically provides

that ‘‘private property’’ shall not ‘‘be taken for public use without just compensation’’; and

(4) Whereas; the fifth amendment thus provides an essential guarantee of liberty

against the abuse of the power of eminent domain, by permitting Government to

seize private property only ‘‘for public use’’; and

(5) Whereas; on June 23, 2005, the U.S. Supreme Court issued its decision in Kelo v. City of New London, No. 04108; and

(6) Whereas; as the Court acknowledged, ‘‘it has long been accepted that the sovereign may not take the property of A for the sole purpose of transferring it to another private party B’’, and that under the fifth amendment, the power of eminent

domain may be used only ‘‘for public use’’; and

(7) Whereas; the Court nevertheless held, by a 5-4 vote, that Government may

seize the home, small business, or other private property of one owner, and transfer

that same property to another private owner, simply by concluding that such a

transfer would benefit the community through increased economic development; and

(8) Whereas; the Court’s decision in Kelo is alarming because, as Justice O’Connor

accurately noted in her dissenting opinion, joined by the Chief Justice and Justices

Scalia and Thomas, the Court has ‘‘effectively... delete[d] the words ’for public use’

from the takings clause of the fifth amendment’’ and thereby ‘‘refus[ed] to enforce

properly the Federal Constitution’’; and

(9) Whereas; under the Court’s decision in Kelo, Justice O’Connor warns, ‘‘[t]he

specter of condemnation hangs over all property. Nothing is to prevent the State

from replacing any Motel 6 with a Ritz-Canton, any home with a shopping mall, or

any farm with a factory’’; and

(10) Whereas; Justice O’Connor further warns that, under the Courts decision in

Kelo, ‘‘[a]ny property may now be taken for the benefit of another private party’’,

and ‘‘the fallout from this decision will not be random. The beneficiaries are likely

to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the Government now has license to transfer property from those with fewer resources to

those with more. The Founders cannot have intended this perverse result’’; and

(11) Whereas; as an amicus brief filed by the NAACP, AARP, and other organizations noted, ‘‘[a]bsent a true public use requirement the takings power will be employed more frequently. The takings that result will disproportionately affect and

harm the economically disadvantaged and, in particular, racial and ethnic minorities and the elderly’’; and

(12) Whereas; it is appropriate for this State to take action, consistent with its

powers under the Constitution, to restore the vital protections of the fifth amendment and to protect homes, small businesses, and other private property rights

against unreasonable government use of the power of eminent domain; and

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(13) Whereas; it is appropriate for States to take action to voluntarily limit their

own power of eminent domain. As the Court in Kelo noted, ‘‘nothing in our opinion

precludes any State from placing further restrictions on its exercise of the takings

power’’.

(14) Be it Resolved that the American Legislative Exchange Council recommends

each State protect private property in accordance with the fifth amendment.

Æ