```

[House Report 113-357]
[From the U.S. Government Publishing Office]

113th Congress  }                                            {   Report
  2d Session    }        HOUSE OF REPRESENTATIVES            {  113-357

=======================================================================

 
             PRIVATE PROPERTY RIGHTS PROTECTION ACT OF 2013 

                                _______
                                

 February 25, 2014.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Goodlatte, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1944]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 1944) to protect private property rights, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page

Purpose and Summary..............................................     2

Background and Need for the Legislation..........................     2

Hearings.........................................................    13

Committee Consideration..........................................    13

Committee Votes..................................................    13

Committee Oversight Findings.....................................    14

New Budget Authority and Tax Expenditures........................    14

Congressional Budget Office Cost Estimate........................    14

Duplication of Federal Programs..................................    16

Disclosure of Directed Rule Makings..............................    16

Performance Goals and Objectives.................................    16

Advisory on Earmarks.............................................    16

Section-by-Section Analysis......................................    16

Dissenting Views.................................................    20

                          Purpose and Summary

    The Private Property Rights Protection Act preserves the 
constitutional protections for private property jeopardized by 
the Supreme Court's decision in Kelo v. City of New London.\1\ 
It does this by conditioning state and local governments' 
receipt of Federal economic development funds on their 
restraint from using eminent domain to transfer private 
property from one private owner to another for the purpose of 
economic development. If a state, or political subdivision of a 
state, uses its eminent domain power to take property for 
private economic development, the state is ineligible to 
receive Federal economic development funds for 2 fiscal years 
following a judicial determination that the law has been 
violated. Additionally, the bill prohibits the Federal 
Government from using eminent domain for economic development 
purposes. The bill's provisions are enforceable through a 
private right of action or through an action brought by the 
Attorney General of the United States.
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    \1\545 U.S. 469 (2005).
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                Background and Need for the Legislation

    The Fifth Amendment to the U.S. Constitution, made 
applicable to the states through the 14th Amendment, provides 
that ``private property [shall not] be taken for public use, 
without just compensation.''\2\ In other words, the Fifth 
Amendment imposes two distinct conditions on the exercise of 
the power of eminent domain: (1) that the taking must be for 
``public use,'' and (2) that the owner must be paid ``just 
compensation.'' As Justice O'Connor has explained, although the 
Takings Clause presumes that governments are given the 
authority to take property without an owner's consent, ``the 
just compensation requirement spreads the cost of condemnations 
and thus `prevents the public from loading upon one individual 
more than his just share of the burdens of government.'''\3\ 
And, ``the public use requirement, in turn, imposes a more 
basic limitation, circumscribing the very scope of the eminent 
domain power: Government may compel an individual to forfeit 
her property for the public's use, but not for the benefit of 
another private person.''\4\
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    \2\Additionally, as the Takings Clause is a prohibition, not an 
express grant of power, the use of eminent domain is further restricted 
by other limits on government power. For instance, the Federal 
Government may only exercise its power of eminent domain if it is 
necessary and proper for the execution of one of its enumerated powers. 
United States v. Morrison, 529 U.S. 598, 607 (2000) (``Every law 
enacted by Congress must be based on one or more of its powers 
enumerated in the Constitution.'').
    \3\Kelo, 545 U.S. at 497 (O'Connor, J., dissenting) (quoting 
Monongahela Nav. Co. v. United States, 148 U.S. 312, 325 (1893)).
    \4\Kelo, 545 U.S. at 497 (O'Connor, J., dissenting).
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    Unfortunately, the Kelo decision effectively ``delete[d] 
the words `for public use' from the Takings Clause of the Fifth 
Amendment''\5\ and thereby jeopardized the property rights of 
all Americans. The decision has been resoundingly criticized 
from all quarters. Indeed, in the wake of Kelo, a resolution 
expressing grave disapproval of the Court's decision was 
approved by the House of Representatives on June 30, 2005, by a 
vote of 365-33.\6\ Moreover, public opinion polling showed that 
Americans from across racial, ethnic, partisan, and gender 
lines condemned the decision.\7\ Disapproval of Kelo was 
expressed by 77% of men, 84% of women, 82% of whites, 72% of 
African-Americans, and 80% of Hispanics. The decision was also 
opposed by 79% of Democrats, 85% of Republicans, and 83% of 
Independents. Furthermore, advocacy groups ranging from the 
NAACP to the Libertarian Party and from the AARP to the 
American Farm Bureau Federation stood in opposition to the 
Court's decision.
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    \5\Id. at 494.
    \6\H. Res. 340, 109th Cong.
    \7\Two national polls conducted in the fall of 2005 showed that 81% 
and 95% of respondents were opposed to Kelo. American Farm Bureau 
Federation Survey, Oct. 29-Nov. 2, 2005, Zogby International (showing 
95 percent of respondents disagreed with the Court's ruling in Kelo); 
The Saint Index Poll, Oct.-Nov. 2005, Center for Economic and Civic 
Opinion at the University of Massachusetts/Lowell (showing 81 percent 
of respondents disagreed with the ruling).
---------------------------------------------------------------------------
    On November 3, 2005, this widespread condemnation of the 
Kelo decision led 157 Democrats to join 218 of their Republican 
colleagues in the House to pass the Private Property Rights 
Protection Act, by a 376 to 38 vote margin.\8\ Last Congress, 
by voice vote, the House once again passed this legislation. 
Regrettably, the Senate has failed to act on this important 
legislation. H.R. 1944 provides Congress with another chance to 
enact these important reforms and prevent eminent domain abuse 
by ending Federal monetary support for takings of property for 
private economic development.
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    \8\H.R. 4128, 109th Cong.

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A. Property Rights Are Fundamental Rights

    The protection of ownership of private property lies at the 
foundation of American government. ``The conviction that 
private property was essential for self-government and 
political liberty was long a central tenet of Anglo-American 
constitutionalism.''\9\ According to John Locke, whose writings 
were widely read and quoted in the latter half of the 
eighteenth century and highly influential with the Framers, 
``[t]he great and chief end . . . of Mens uniting into 
Commonwealths, and putting themselves under Government, is the 
Preserving of their Property.''\10\ The Framers, who inherited 
this tradition, ``were motivated in large part by the desire to 
establish safeguards for property. They felt that property 
rights and liberty were indissolubly linked.''\11\
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    \9\James W. Ely, Jr., ```Poor Relation' Once More: The Supreme 
Court and the Vanishing Rights of Property Owners,'' 2005 CATO Sup. Ct. 
Rev. 39, 40 (2005).
    \10\John Locke, Second Treatise Sec. 124 (emphasis added). ``It is 
very clear that the founders shared Locke's and Blackstone's affection 
for private property, which is why they inserted the eminent domain 
provision in the Bill of Rights.'' Richard A. Epstein, Takings: Private 
Property and the Power of Eminent Domain 29 (1985); see also James W. 
Ely, Jr., ``The Constitution and Economic Liberty,'' 35 Harv. J. L. & 
Pub. Pol'y 27, 29-30 (2012) (``John Locke and the Whig emphasis on the 
rights of property owners profoundly influenced the founding 
generation.'').
    \11\Ely, supra note 9, at 40.
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    James Madison asserted at the Constitutional Convention 
that ``the primary objects of civil society are the security of 
property and public safety''\12\ and, in the Federalist Papers, 
that ``[g]overnment is instituted no less for the protection of 
property than of . . . individuals.''\13\ Thus, Madison 
believed that a government ``which [even] indirectly violates 
[individuals'] property in their actual possessions, is not a 
pattern for the United States.''\14\ Indeed, according to John 
Adams, ``[p]roperty must be secured or liberty cannot 
exist.''\15\ Accordingly, although the word ``property'' does 
not appear in the Preamble of the Constitution,
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    \12\1 The Records of the Federal Convention of 1787 at 147 (Max 
Farrand ed., 1937).
    \13\The Federalist No. 54 (James Madison); see also James Madison, 
``Speech in the Virginia Constitutional Convention,'' reprinted in 
James Madison: Writings 824 (Jack N. Rakove ed., 1999) (``[T]he rights 
of persons, and the rights of property are the objects, for the 
protection of which Government was instituted. These rights cannot well 
be separated.'').
    \14\James Madison, Property (1792), reprinted in James 
Madison:Writings 515 (Jack N. Rakove ed., 1999).
    \15\6 John Adams, The Works of John Adams 280 (Charles Francis 
Adams, ed. 1850); see also Arthur Lee, ``An Appeal to the Justice and 
Interests of the People of Great Britain,'' in The Present Dispute with 
America 14 (4th ed. 1775) (``The right of property is the guardian of 
every other right, and to deprive a people of this, is in fact to 
deprive them of their liberty.'').

        The Federalist Papers make it very clear that each 
        objective enumerated in the Preamble involved, in part, 
        the protection of the citizen's property rights. In 
        fact, using the Madisonian conception that property 
        includes all of the fundamental aspects of the 
        integrity of the human person, life, liberty and 
        property, the whole preamble is about protecting the 
        citizens rights in property and property in rights.\16\
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    \16\Hon. Loren A. Smith, ``Life, Liberty, & Whose Property?: An 
Essay on Property Rights,'' 30 U. Rich. L. Rev. 1055, 1056 (1996).

    The early Supreme Court recognized Americans' fundamental 
right to private property. In 1795, in an opinion authored by 
Justice William Paterson, who was a delegate to the 
Constitutional Convention, the Supreme Court declared, 
``possessing property, and having it protected, is one of the 
natural, inherent, and unalienable rights of man. . . . The 
preservation of property then is the primary object of the 
social compact.''\17\ Because, as Justice Story would later 
explain, ``government can scarcely be deemed to be free, where 
the rights of property are left solely dependent upon the will 
of a legislative body, without any restraint. The fundamental 
maxims of a free government seem to require, that the rights of 
personal liberty and private property should be held 
sacred.''\18\
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    \17\Vanhorne's Lessee v. Dorrance, 2 U.S. 304, 310 (1795).
    \18\Wilkinson v. Leland, 27 U.S. (2 Pet.) 627, 657 (1829).
---------------------------------------------------------------------------
    More recent Supreme Court opinions continue to acknowledge 
the fundamental nature of property rights, recognizing that 
``[i]ndividual freedom finds tangible expression in property 
rights.''\19\ And that the ``right to enjoy property without 
unlawful deprivation . . . is, in truth a personal right. . . . 
In fact, a fundamental interdependence exists between the 
personal right to liberty and the personal right in property. 
Neither could have meaning without the other.
---------------------------------------------------------------------------
    \19\United States v. James Daniel Good Real Property, 510 U.S. 43, 
61 (1993)
---------------------------------------------------------------------------
    That rights in property are basic civil rights has long 
been recognized.''\20\
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    \20\Lynch v. Household Finance, 405 U.S. 538, 552 (1972).
---------------------------------------------------------------------------
    The sanctity and centrality of private property rights are 
thus ingrained in our constitutional design. Therefore, it is 
no accident that the Bill of Rights contains several 
interrelated rights, in addition to the Takings Clause, a fair 
reading of which anchors a variety of personal liberties on the 
protection of property rights: the prohibition on infringing 
people's right to keep and bear arms (Second Amendment); the 
prohibition on quartering soldiers on private property (Third 
Amendment); the prohibition on unreasonable searches and 
seizures of property (Fourth Amendment); the prohibition on 
depriving any person of life, liberty, or property without due 
process of law (Fifth Amendment); the right to trial by jury 
for controversies exceeding twenty dollars (Seventh Amendment); 
and the prohibition of excessive bails and fines (Eighth 
Amendment).\21\
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    \21\See Bernard H. Siegan, Property and Freedom 20-21 (1997).

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B. Public Use and Kelo v. City of New London

    Prior to Kelo, it was generally understood that the public 
use requirement ``embodied the Framers' understanding that 
property is a natural, fundamental right, prohibiting the 
government from `tak[ing] property from A. and giv[ing] it to 
B.''\22\ As Justice Story observed, ``[w]e 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 in any state in the union.''\23\ 
Similarly, the distinguished jurist Thomas M. Cooley, in his 
landmark 1868 treatise, asserted, ``[t]he public use implies a 
possession, occupation, and enjoyment of the land by the 
public, or public agencies; and there could be no protection 
whatever to private property, if the right of government to 
seize and appropriate it could exist for any other use.''\24\ 
Moreover, the Supreme Court, in 1872, declared that ``[t]he 
right of eminent domain nowhere justifies taking property for a 
private use.''\25\ Thus, although the public use requirement 
has traditionally allowed property to be taken for unambiguous 
public uses, such as for roads, schools, and courthouses, prior 
to Kelo it had been interpreted to prohibit the use of eminent 
domain for private-to-private transfers of property.
---------------------------------------------------------------------------
    \22\Kelo, 545 U.S. at 510-11 (Thomas, J. dissenting) (quoting 
Calder v. Bull, 3 U.S. (3 Dall.) 386, 388 (1798)).
    \23\Wilkinson, 27 U.S. (2 Pet.) at 658.
    \24\Thomas M. Cooley, A Treatise on the Constitutional Limitations 
Which Rest Upon the Legislative Power of the States of the American 
Union 531 (1868).
    \25\Olcott v. The Supervisors, 83 U.S. (15 Wall.) 678, 694 (1872).
---------------------------------------------------------------------------
    Under pre-Kelo Supreme Court precedent, there were 
generally three categories of takings that complied with the 
public use requirement. First, it was clear that a government 
could take land from its owner without his consent and transfer 
it to public ownership for use as a public road, a public 
hospital, or a military base.\26\ Second, Supreme Court 
precedent recognized that a government could take private 
property from an owner without his consent and transfer it to 
private parties, referred to as common carriers, who would then 
make the property available for the general public's use, such 
as with a railroad, a public utility, or a stadium.\27\ Third, 
and more controversially, the Supreme Court had interpreted the 
public use requirement to permit a government to take private 
property even though the property was subsequently put to 
private use in two cases in which the previous use of the 
property was determined to be harmful to the general 
public.\28\
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    \26\See, e.g., Old Dominion Land Co. v. United States, 269 U.S. 55 
(1925); Rindge Co. v. County of Los Angeles, 262 U.S. 700 (1923).
    \27\See, e.g., National Railroad Passenger Corporation v. Boston & 
Maine Corp., 503 U.S. 407 (1992); Mt. Vernon-Woodberry Cotton Duck Co. 
v. Alabama Interstate Power Co., 240 U.S. 30 (1916).
    \28\Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984); 
Berman v. Parker, 348 U.S. 26 (1954).
---------------------------------------------------------------------------
    The Supreme Court's decision in Kelo greatly weakened the 
public use requirement by adding a fourth category to this list 
by upholding the use of eminent domain to take an individual's 
private property and give it to another for purely private 
economic development purposes. As the Court described the 
reason for the City's taking of private property in Kelo: ``the 
pharmaceutical company Pfizer Inc. announced that it would 
build a $300 million research facility on a site immediately 
adjacent to Fort Trumbull; local planners hoped that Pfizer 
would draw new business to the area, thereby serving as a 
catalyst to the area's rejuvenation.''\29\ The Supreme Court 
held that the properties taken by the City were ``[not] 
blighted or otherwise in poor condition; rather, they were 
condemned only because they happen to be located in the 
development area.''\30\ In fact, the Court refused to even look 
at the question of whether the area in question was in economic 
distress: ``[the City's] determination that the area was 
sufficiently distressed to justify a program of economic 
rejuvenation is entitled to our deference.'' \31\ Thus, because 
the takings were part of ``a `carefully considered' development 
plan,''\32\ they were upheld as constitutional.
---------------------------------------------------------------------------
    \29\Kelo, 545 U.S. at 473.
    \30\Id. at 475.
    \31\Id. at 483.
    \32\Id. at 478.
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    In reaching its determination that economic development 
constitutes a public use, the Court ripped the words ``public 
use'' right out of the Constitution. The Court determined that 
the words ``public use'' are synonymous with ``public purpose'' 
such that the Court was able to pronounce that ``[t]he 
disposition of this case therefore turns on the question of 
whether the City's development plan serves a public 
purpose.''\33\
---------------------------------------------------------------------------
    \33\Id. at 480 (emphasis added).

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C. The Dissenting Opinions in Kelo

    Justice O'Connor, joined by Chief Justice Rehnquist and 
Justices Scalia and Thomas, and Justice Thomas in a separate 
dissent, vehemently criticized the majority opinion. In the 
words of Justice O'Connor, the majority opinion pronounced that 
``[u]nder 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.''\34\ In other words, 
according to Justice O'Connor, ``the sovereign may take private 
property currently put to ordinary private use, and give it 
over for new, ordinary private use, so long as the new use is 
predicted to generate some secondary benefit for the public--
such as increased tax revenue, more jobs, maybe even esthetic 
pleasure.''\35\ However, ``[t]he Constitution's text . . . 
suggests that the Takings Clause authorizes the taking of 
property only if the public has a right to employ it, not if 
the public realizes any conceivable benefit from the 
taking.''\36\
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    \34\Id. at 494 (O'Connor, J., dissenting).
    \35\Id. at 501.
    \36\Id. at 510 (Thomas, J., dissenting).
---------------------------------------------------------------------------
    Justice Thomas decried that not only did the Kelo majority 
opinion ignore the original understanding of the public use 
requirement, but its holding that the courts should defer to 
the legislature's judgment as to what constitutes a public use 
was a far cry from the lack of deference given to legislatures 
when other constitutional rights are at issue:

        We would not defer to a legislature's determination of 
        the various circumstances that establish, for example, 
        when a search of a home would be reasonable, or when a 
        convicted double-murderer may be shackled during a 
        sentencing proceeding without on-the-record findings, 
        or when state law creates a property interest protected 
        by the Due Process Clause . . . . The Court has 
        elsewhere recognized ``the overriding respect for the 
        sanctity of the home that has been embedded in our 
        traditions since the origins of the Republic,'' when 
        the issue is only whether the government may search a 
        home. Yet today the Court tells us that we are not to 
        ``second-guess the City's considered judgments,'' when 
        the issue is, instead, whether the government may take 
        the infinitely more intrusive step of tearing down 
        petitioners' homes. Something has gone seriously awry 
        with this Court's interpretation of the Constitution. 
        Though citizens are safe from the government in their 
        homes, the homes themselves are not.\37\
---------------------------------------------------------------------------
    \37\Id. at 518 (Thomas, J., dissenting) (citations omitted).

    As Justice O'Connor pointed out, ``were the political 
branches the sole arbiters of the public-private distinction, 
the Public Use Clause would amount to little more than 
hortatory fluff.''\38\ Moreover, as is discussed in the next 
section, the dissenting opinions predicted that the effects of 
allowing takings for private economic development would fall 
most harshly on people of lower economic means, minorities, 
houses of worship, and farmers.
---------------------------------------------------------------------------
    \38\Id. at 497 (O'Connor, J., dissenting).

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D. LEminent Domain Abuse Disproportionately Affects the Most Vulnerable

    The Kelo decision opened the door for virtually any 
property to be taken by eminent domain for economic development 
purposes. As Justices O'Connor and Thomas observed in their 
dissenting opinions in Kelo, eminent domain abuse falls 
disproportionately on the poor, minorities, and other groups 
that are likely to be politically weak. Thus, the beneficiaries 
of the Kelo decision, Justice O'Connor asserted, 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.''\39\
---------------------------------------------------------------------------
    \39\Id. at 505.
---------------------------------------------------------------------------
    After Kelo, ``[n]othing 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.''\40\ In fact, 
according to a study conducted by the Institute for Justice,
---------------------------------------------------------------------------
    \40\Id. at 503.

        Eminent domain project areas include a significantly 
        greater percentage of minority residents (58%) compared 
        to their surrounding communities (45%). Median incomes 
        in project areas are significantly less ($18,935.71) 
        than the surrounding communities ($23,113.46), and a 
        significantly greater percentage of those in project 
        areas (25%) live at or below poverty levels compared to 
        surrounding cities (16%). . . . Taken together, more 
        residents in areas targeted by eminent domain--as 
        compared to those in surrounding communities--are 
        ethnic or racial minorities, have completed 
        significantly less education, live on significantly 
        less income, and significantly more of them live at or 
        below the Federal poverty line.\41\
---------------------------------------------------------------------------
    \41\Dick M. Carpenter II & John K. Ross, Victimizing the Vulnerable 
at 6 (2007).

    Other recent studies show that areas populated by the poor 
and minorities are far more likely to be targeted for 
condemnation than other neighborhoods.\42\ These studies 
confirm Justice Thomas's strong statement in dissent that,
---------------------------------------------------------------------------
    \42\See, e.g., Dick Carpenter & John Ross, Empire State Eminent 
Domain: Robin Hood in Reverse (2010) (describing extensive use of 
eminent domain New York, especially against poor and minority 
neighborhoods); Dick Carpenter & John Ross, ``Testing O'Connor and 
Thomas: Does The Use Of Eminent Domain Target Poor And Minority 
Communities?,'' 46 Urban Studies 2447 (2009).

        Allowing the government to take property solely for 
        public purposes is bad enough, but extending the 
        concept of public purpose to encompass any economically 
        beneficial goal guarantees that these losses will fall 
        disproportionately on poor communities. Those 
        communities are not only systematically less likely to 
        put their lands to the highest and best social use, but 
        are also the least politically powerful. If ever there 
        were justification for intrusive judicial review of 
        constitutional provisions that protect ``discrete and 
        insular minorities,'' surely that principle would apply 
        with great force to the powerless groups and 
        individuals the Public Use Clause protects. The 
        deferential standard this Court has adopted for the 
        Public Use Clause is therefore deeply perverse. It 
        encourages those citizens with disproportionate 
        influence and power in the political process, including 
        large corporations and development firms, to victimize 
        the weak.\43\
---------------------------------------------------------------------------
    \43\Kelo, 545 U.S. at 521-22 (Thomas, J., dissenting).

    The studies also confirm the concerns raised by the 
National Association for the Advancement of Colored People, the 
American Association for Retired Persons, and other non-profit 
organizations in their amicus brief to the Supreme Court in the 
---------------------------------------------------------------------------
Kelo case:

        Elimination of the requirement that any taking be for a 
        true public use will disproportionately harm racial and 
        ethnic minorities, the elderly, and the economically 
        underprivileged. These groups are not just affected 
        more often by the exercise of eminent domain power, but 
        they are affected differently and more profoundly. 
        Expansion of eminent domain to allow the government or 
        its designated delegate to take property simply by 
        asserting that it can put the property to a higher use 
        will systematically sanction transfers from those with 
        less resources to those with more. This will place the 
        burden of economic development on those least able to 
        bear it, exacting economic, psychic, political and 
        social costs. . . .
          The history of eminent domain is rife with abuse 
        specifically targeting minority neighborhoods. Indeed, 
        the displacement of African-Americans and urban renewal 
        projects were so intertwined that ``urban renewal'' was 
        often referred to as ``Negro removal.'' . . .
          Well-cared-for properties owned by minority and 
        elderly residents have repeatedly been taken so that 
        private enterprises could construct superstores, 
        casinos, hotels, and office parks.\44\
---------------------------------------------------------------------------
    \44\Brief of Amici Curiae National Association for the Advancement 
of Colored People, AARP, Hispanic Alliance of Atlantic County, Inc., 
Citizens in Action, Cramer Hill Resident Association, Inc., and the 
Southern Christian Leadership Conference in Support of Petitioners, 
2004 WL 2811057 at *3-*9.

    Eminent domain abuse also tends to affect religious groups 
and their houses of worship and farmers and ranchers 
disproportionately. Houses of worship and other religious 
institutions are, by their very nature, non-profit and almost 
universally tax-exempt. These fundamental characteristics of 
religious institutions render their property vulnerable to 
being taken under the rationale approved by the Supreme Court 
in favor of for-profit, tax-generating businesses. As the 
Becket Fund for Religious Liberty wrote in its amicus brief in 
the Kelo case, ``[r]eligious institutions will always be 
targets for eminent domain actions under a scheme that 
disfavors non-profit, tax-exempt property owners and replaces 
them with for-profit, tax-generating businesses. Such a result 
is particularly ironic, because religious institutions are 
generally exempted from taxes precisely because they are deemed 
to be `beneficial and stabilizing influences in community 
life.'''\45\
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    \45\Brief of Amicus Curiae the Becket Fund for Religious Liberty, 
2004 WL 2787141 at *3 (quoting Walz v. Comm'r, 397 U.S. 664, 673 
(1970)).
---------------------------------------------------------------------------
    Moreover, many other charitable organizations will face 
similar threats because of their tax-exempt status. Indeed, 
several charitable organizations have faced condemnation 
threats in recent years to satisfy municipal appetite for more 
tax revenue.\46\
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    \46\Brief of Amicus Curiae the Becket Fund for Religious Liberty, 
2004 WL 278714l, at *11 n.22 (citing Sue Britt, ``Moose Lodge Set for 
Court Fight; Group to Fight Home Depot Land Takeover,'' Belleville 
News-Democrat (Missouri), April 1, 2002, at 1B (Moose Lodge faced 
condemnation in order to bring a Home Depot to the city); April 
McClellan-Copeland, Hudson, ``American Legion Closer on Hall; City 
Wants Building to Demolish for Project,'' Plain Dealer (Cleveland), 
March 8, 2003, at B3 (American Legion property faced condemnation to 
make way for small upscale shops, restaurants, and offices); Todd 
Wright, ``Frenchtown Leaders Want Shelter to Move; Roadblock to 
Revitalization?,'' Tallahassee Democrat, July 13, 2003, at Al 
(describing threatened condemnation of homeless shelter to clear the 
way for business development); Joseph P. Smith, ``Vote on Land 
Confiscation,'' Daily Journal (Illinois), October 6, 2004, at 1A 
(detailing threatened condemnation of a Goodwill thrift store in order 
to build a shopping center)).
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    In addition, according to the American Farmland Trust, 
``[w]ith so much farmland on the urban edge and near cities 
still in steep decline, ex-urban towns could be tempted by [the 
Kelo] ruling to make farmland available for subdivisions.''\47\ 
As the American Farm Bureau Federation has pointed out, ``[a]s 
valuable as that land is to our members and to the rest of the 
country, however, it will often be the case that more intense 
development by other private individuals or entities for other 
private purposes would yield greater tax revenue to local 
government.''\48\ Thus, the Kelo decision threatens American 
farmers and ranchers ``with the loss of productive farm and 
ranch land solely to allow someone else to put it to a 
different private use.''\49\ American farmers and ranchers need 
their private property rights protected ``if they are to find 
economically feasible ways to use their land and remain in the 
agriculture business--the business of feeding the American 
populace.''\50\
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    \47\American Farmland Trust Policy Update (July 6, 2005).
    \48\Brief Amici Curiae of the American Farm Bureau Federation et 
al., 2004 WL 2787138, at *2-*4.
    \49\Id.
    \50\Id.

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E. LPost-Kelo State-level Eminent Domain Reform Is Insufficient

    The Kelo decision generated a massive public backlash that 
led most states to enact some sort of eminent domain 
reform.\51\ Some have argued that these state-level reforms 
have greatly diminished the problem of eminent domain abuse 
and, therefore, legislation at the Federal level, such as the 
Private Property Rights Protection Act, is unnecessary. 
However, as one eminent domain scholar has observed:
---------------------------------------------------------------------------
    \51\As a result of public backlash, 43 states enacted legislation 
intended to curb economic development takings in the years after the 
Kelo decision.

          Unfortunately, the majority of the new reform laws 
        are likely to be ineffective, imposing few or no 
        meaningful constraints on the use of eminent domain. 
        Many of them forbid takings that transfer property to 
        private parties for ``economic development,'' but allow 
        virtually identical condemnations to continue under 
        other names. For example, numerous states continue to 
        allow ``blight'' condemnations under definitions of 
        blight so broad that virtually any area qualifies.
          Many of the states that have enacted ineffective 
        post-Kelo reforms or no reforms at all are among those 
        that make the most extensive use of eminent domain for 
        the benefit of private interests. They include such 
        large states as California, New York, New Jersey, and 
        Texas.\52\
---------------------------------------------------------------------------
    \52\The Civil Rights Implications of Eminent Domain Abuse: Hearing 
Before the U.S. Commission on Civil Rights (2011) (statement of Ilya 
Somin); see also James W. Ely, Jr., Post-Kelo Reform: Is the Glass 
Half-Full or Half-Empty?, 17 Sup. Ct. Econ. Rev. 127 (2009).

    What is more, most state eminent domain reform measures 
were enacted as regular legislation--they were not embedded 
into state constitutions. Eminent domain reforms that are not 
enshrined into state constitutions will always be subject to 
repeal or exception at the whim of state legislators. For 
example, recent legislation in Alabama rolled back one of the 
first state post-Kelo eminent domain reform laws. According to 
testimony received by the Subcommittee on the Constitution, 
``[i]n the wake of national outrage after the Court's decision, 
[Alabama] was one of the first to enact a corrective reform 
which, at least on paper, greatly limited eminent domain for 
private purposes. Only last month, however, our state reversed 
course and gutted a key element of this reform.''\53\ The new 
Alabama law ``expressly allows the deployment of eminent domain 
to benefit the automotive industry and other private 
interests.''\54\
---------------------------------------------------------------------------
    \53\H.R. 1944, the ``Private Property Rights Protection Act'': 
Hearing Before the Subcomm. on the Constitution and Civil Justice of 
the H. Comm. on the Judiciary, 113th Cong. (2013) (testimony of David 
Beito, Professor, University of Alabama).
    \54\Id.
---------------------------------------------------------------------------
    In short, despite state-level reforms, ``eminent domain 
abuse is still a problem, and Federal money continues to 
support the use of eminent domain for private commercial 
development.''\55\ Accordingly, Federal eminent domain 
legislation, like the Private Property Rights Protection Act, 
is still needed to curb abusive economic development takings.
---------------------------------------------------------------------------
    \55\Id. (statement of Scott Bullock, Senior Attorney, Institute for 
Justice).

---------------------------------------------------------------------------
F. Private Property Rights Protection Act

    The Private Property Rights Protection Act protects 
property owners by restricting the ability of state and local 
governments to take private property for economic development 
purposes if they elect to receive Federal economic development 
funds. Specifically, section 2(a) of the bill provides that:

        No State or political subdivision of a State shall 
        exercise its power of eminent domain, or allow the 
        exercise of such power by any person or entity to which 
        such power has been delegated, over property to be used 
        for economic development or over property that is 
        subsequently used for economic development, if that 
        State received Federal economic development funds 
        during any fiscal year in which it does so.

    If a state or political subdivision of a state uses its 
eminent domain power to transfer private property to other 
private parties for economic development, that state or 
political subdivision is ineligible to receive Federal economic 
development funds for 2 fiscal years following a judicial 
determination that law has been violated:

        A violation of subsection (a) by a State or political 
        subdivision shall render such State or political 
        subdivision ineligible for any Federal economic 
        development funds for a period of 2 fiscal years 
        following a final judgment on the merits by a court of 
        competent jurisdiction that such subsection has been 
        violated. . . .

In order to encourage state and local governments to return 
private property that is taken for economic development to the 
former private landowner, section 2(c) terminates the 
ineligibility period if the offending state or local government 
returns all real property the taking of which the courts 
determine violated section 2(a).
    In addition, section 3 prohibits the Federal Government 
from exercising its eminent domain power for economic 
development purposes.
    Because previous congressional efforts to restrict the 
ability of federal, state, and local governments from using 
certain Federal funds for economic development takings proved 
largely ineffective,\56\ the bill provides for a private right 
of action and an action by the Attorney General of the United 
States to enforce the bill's provisions. The private right of 
action provides that:
---------------------------------------------------------------------------
    \56\See Section 726 of the Transportation, Treasury, Housing and 
Urban Development, the Judiciary, and independent Agencies 
Appropriations Act of 2006 (Pub. L. No. 109-115) (prohibiting the use 
of funds made available by that Act for projects that seek to use the 
power of eminent domain, unless eminent domain is employed only for a 
public use); Statement of Scott Bullock, supra note 53 (``Congress's 
previous efforts to restrict the use of certain Federal funds for 
eminent domain . . . have unfortunately been ineffective.'').

        Any (1) owner of private property whose property is 
        subject to eminent domain who suffers injury as a 
        result of a violation of any provision of this Act with 
        respect to that property, or (2) any tenant of property 
        that is subject to eminent domain who suffers injury as 
        a result of a violation of any provision of this Act 
        with respect to that property, may bring an action to 
        enforce any provision of this Act in the appropriate 
---------------------------------------------------------------------------
        Federal or State court.

Similarly, the Attorney General enforcement provision provides 
that if the Federal Government or a state or local government 
fails to cure a violation of the Act within 90 days of being 
notified of the violation, the ``Attorney General will bring an 
action to enforce the Act unless the property owner or tenant 
who reported the violation has already brought an action to 
enforce the Act.''
    As the bill is intended to preserve the property rights 
protections jeopardized by the Supreme Court's decision in 
Kelo, its definition of ``economic development'' continues to 
allow the types of takings that have traditionally been 
considered public uses. Traditional public uses include those 
in which the condemned land is actually ``used'' by the public, 
such as for a public road, school, or military base. The bill 
also includes express exceptions for the transfer of property 
to common carriers and public utilities, and for related things 
like pipelines, and makes reasonable exceptions for the taking 
of land that is being used in a way that constitutes an 
immediate threat to public health and safety. Additionally, the 
bill makes exceptions for: the incidental use of a public 
property by a private entity, such as a retail establishment on 
the ground floor in a public property; the acquisition of 
abandoned property; and for clearing defective chains of title 
in which no one can be said to really own the property in the 
first place. However, while the bill does contain reasonable 
definitions and exceptions, it also includes a rule of 
construction that provides that its provisions shall be 
construed in favor of a broad protection of private property 
rights, to the maximum extent permitted by the terms of the 
bill and the Constitution.
    Although the Private Property Rights Protection Act does 
not directly overturn Kelo, it should help eliminate economic 
development takings in those states and political subdivisions 
that elect to receive Federal economic development funds. 
Congress's power to condition the use of Federal funds extends 
to prohibiting states and localities from receiving any Federal 
economic development funds for a specified period of time if 
such entities abuse their power of eminent domain, even if only 
state and local funds are used in that abuse of power. Such a 
broader prohibition is an appropriate use of Congress's 
spending power, as the Supreme Court has made clear that 
``Congress may attach conditions on the receipt of Federal 
funds . . . to further broad policy objectives by conditioning 
receipt of Federal moneys upon compliance by the recipient with 
Federal statutory and administrative directives.''\57\
---------------------------------------------------------------------------
    \57\South Dakota v. Dole, 483 U.S. 203, 206 (1987) (upholding as 
constitutional legislation in which Congress provided that a state 
would lose 5% of its Federal transportation funds unless states 
mandated a drinking age of 21) (internal quotations omitted).
---------------------------------------------------------------------------
    Congress may attach such conditions to the receipt of 
Federal funds provided they are ``in pursuit of `the general 
welfare,''' related ``to the Federal interest in particular 
national projects or programs,'' and that they are 
``unambiguous.''\58\ The Act does nothing more than use 
Congress's ``spending power to create incentives for States to 
act in accordance with''\59\ the pre-Kelo understanding of 
``public use.'' And the fact that the Act's condition on 
Federal spending applies beyond economic development projects 
that are directly funded by Federal money is simply an 
acknowledgement that ``[m]oney is fungible.''\60\
---------------------------------------------------------------------------
    \58\Id. at 207-208.
    \59\Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2602 
(2012).
    \60\Sabri v. United States, 541 U.S. 600, 606 (2004).
---------------------------------------------------------------------------
    The bill denies states or localities that abuse eminent 
domain all Federal economic development funds for a period of 2 
years. There is a clear connection between the Federal funds 
that would be denied and the abuse Congress is intending to 
prevent: states or localities that have abused their eminent 
domain power by using ``economic development'' as an improper 
rationale for a taking should not be trusted with Federal 
taxpayer funds for other ``economic development'' projects that 
could themselves result in abusive takings of private property.
    Furthermore, to ensure that any conditioning of the use of 
Federal funds is unambiguous, the bill includes a 
``notification'' section that requires the Attorney General to 
compile a list of the Federal laws under which Federal economic 
development funds are distributed and communicate such list to 
each state and also make it available on the Internet. This 
will put states and localities on notice that if they choose to 
receive any Federal funds under the listed Federal laws, they 
must refrain from abusing their power of eminent domain or risk 
losing such funds for a period of 2 years. Moreover, if a 
locality abuses its eminent domain powers, only the locality, 
and not the whole state, would lose its economic development 
funds.
    Finally, the bill includes a provision providing that the 
Act does not become effective until the start of the first 
fiscal year following its enactment in order to provide states 
and localities with sufficient lead time within which to come 
into compliance with the Act, and the Act's prohibitions do not 
apply to any project for which condemnation proceedings have 
been initiated prior to the date of enactment.

                                Hearings

    The Committee's Subcommittee on the Constitution and Civil 
Justice held a hearing on H.R. 1944, on April 18, 2013. 
Testimony was received from Susette Kelo, the lead plaintiff in 
Kelo v. City of New London; David Beito, Professor, University 
of Alabama, and Chair, Alabama State Advisory Committee of the 
U.S. Commission on Civil Rights; Julia Trigg Crawford, farm 
owner and manager, Sumner, Texas; and Scott Bullock, Senior 
Attorney, Institute for Justice.

                        Committee Consideration

    On June 4, 2013, the Subcommittee on the Constitution and 
Civil Justice met in open session and ordered the bill H.R. 
1944 favorably reported, without amendment, by a vote of 5 to 
3, a quorum being present. On June 12, 2013, the Committee met 
in open session and ordered the bill H.R. 1944 favorably 
reported, without amendment, by voice vote, a quorum being 
present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that there 
were no recorded votes during the Committee's consideration of 
H.R. 1944.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 1944, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 27, 2013.
Hon. Bob Goodlatte, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1944, the 
``Private Property Rights Protection Act of 2013.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Daniel 
Hoople (for Federal costs) and Melissa Merrell (for state and 
local impact), who can be reached at 226-2800.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member

       H.R. 1944--Private Property Rights Protection Act of 2013.

      As ordered reported by the House Committee on the Judiciary 
                           on June 27, 2013.

    H.R. 1944 would deny Federal economic development 
assistance to state or local governments that exercise the 
power of eminent domain for economic development purposes or to 
take property from a tax-exempt entity, such as a religious or 
nonprofit organization. (Eminent domain is the right to take 
private property for public use.) The bill also would prohibit 
Federal agencies from engaging in such practices. Private 
property owners would be given the right to bring legal actions 
seeking enforcement of those provisions, and the bill would 
waive states' Constitutional immunity to such suits. Finally, 
H.R. 1944 would require the Attorney General to notify states 
and the public of how the legislation would affect individuals' 
property rights and to report to the Congress each year on 
private rights of action brought against state and local 
governments.
    The Federal Government provides economic development 
assistance to state and local governments through several 
programs, including the Community Development Block Grant 
Program, the Social Services Block Grant Program, Economic 
Development Administration Grants, Department of Agriculture 
grants and loans, and grants made by the regional commissions. 
CBO estimates that expenditures from those major programs 
totaled more than $7 billion in 2012 (although, depending on 
how the term is interpreted, some of those expenditures may not 
meet the definition of economic development under the bill).
    CBO expects that few state and local governments would 
receive reduced Federal assistance because the use of eminent 
domain for the purposes targeted by the bill would be 
infrequent. Therefore, CBO estimates that implementing this 
legislation would have no significant net effect on those 
expenditures to state and local governments over the next 5 
years. We estimate that additional reporting by the Attorney 
General would cost less than $500,000 over the next 5 years, 
assuming appropriation of the necessary amounts. Enacting H.R. 
1944 would not affect direct spending or revenues; therefore, 
pay-as-you-go procedures do not apply.
    H.R. 1944 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA), 
but it would impose significant new conditions on the receipt 
of Federal economic development assistance by state and local 
governments. (Such conditions are not considered mandates under 
UMRA.) Because the bill's provisions would apply to a large 
pool of funds, the bill effectively would restrict the use of 
eminent domain by state and local governments and would limit 
the ability of local governments to manage land use in their 
jurisdictions. Further, state and local governments could incur 
significant legal expenses to respond to private legal actions 
authorized by the bill.
    Many states have amended their constitutions or enacted 
laws to directly or indirectly prohibit the use of eminent 
domain for economic development purposes. Furthermore, the bill 
would provide several exceptions, including takings for public 
use, for public rights of way, for utilities, to acquire 
abandoned property, and to remove immediate threats to public 
health and safety. While data on eminent domain is difficult to 
obtain at the national level, evidence suggests that its use 
solely for economic development purposes is minimal compared to 
other purposes, such as public infrastructure projects (which 
would be allowed under the bill without penalty). Finally, CBO 
expects that most state and local governments would not risk 
the loss of Federal economic development assistance by 
exercising the use of eminent domain in situations described by 
the bill.
    State or local governments found to have exercised the 
power of eminent domain targeted by the bill would be 
ineligible for Federal economic development assistance for 2 
years. In those cases, CBO expects that property would be 
returned or replaced (which would reinstate eligibility) or 
that assistance would instead be provided to other eligible 
entities. Any change in the pace of spending would be 
insignificant, CBO estimates.
    The CBO staff contacts for this estimate are Daniel Hoople 
(for Federal costs) and Melissa Merrell (for state and local 
impact). The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                    Duplication of Federal Programs

    No provision of H.R. 1944 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 1944 specifically directs 
to be completed no specific rule makings within the meaning of 
5 U.S.C. Sec. 551.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
1944, will preserve and protect private property rights.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 1944 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
Section 1. Short title.
    Section 1 provides for the short title of the legislation, 
the ``Private Property Rights Protection Act of 2013.''
Section 2. Prohibition on eminent domain abuse by States.
    Subsection (a) prohibits States and political subdivisions 
of States (and any entity to which they have delegated the 
power of eminent domain) from exercising the power of eminent 
domain over property that is intended to be used for economic 
development or is subsequently used for economic development, 
if that State or political subdivision receives Federal 
economic development funds during any fiscal year in which it 
the property is so used or intended to be used.
    Subsection (b) provides that a violation of subsection (a) 
by a State or political subdivision shall render such State or 
political subdivision ineligible for any Federal economic 
development funds for a period of 2 fiscal years following a 
final judgment on the merits by a court of competent 
jurisdiction that such subsection has been violated. Moreover, 
any Federal agency charged with distributing those funds shall 
withhold them for such 2-year period, and any such funds 
distributed to such State or political subdivision shall be 
returned or reimbursed by such State or political subdivision 
to the appropriate Federal agency or authority of the Federal 
Government, or component thereof.
    Subsection (c) provides that a State or political 
subdivision can regain its eligibility to receive Federal 
economic development funds if such State or political 
subdivision returns all real property the taking of which was 
found by a court to have constituted a violation of subsection 
(a) and replaces any other property destroyed and repairs any 
other property damaged as a result of such violation.
Section 3. Prohibition on eminent domain abuse by the Federal 
        Government.
    Section 3 provides that neither the Federal Government nor 
any authority of the Federal Government shall exercise its 
power of eminent domain for economic development purposes.
Section 4. Private right of action.
    Subsection (a) provides that any owner of private property 
who suffers injury as a result of a violation of any provision 
of this Act may bring an action to enforce any provision of 
this Act in the appropriate Federal or State court. 
Additionally, this subsection provides that a property owner 
claiming a violation of this Act may seek relief through a 
preliminary injunction or a temporary restraining order.
    Subsection (b) provides a 7-year statute of limitations 
from the conclusion of condemnation proceedings for actions 
brought pursuant to this Act.
    Subsection (c) provides that in any action or proceeding 
under this Act, the court shall allow a prevailing plaintiff a 
reasonable attorneys' fee as part of the costs, and include 
expert fees as part of the attorneys' fee.
Section 5. Reporting of Violations to Attorney General.
    Section 5 provides that owners and tenants may report 
violations of the Act to the Attorney General and that the 
Attorney General shall investigate reports of such violations. 
Additionally, it provides that the Attorney General shall 
notify the Federal agency or state or local government of an 
alleged violation and give the applicable governmental unit 90 
days to show that it is either not in violation or that it has 
cured the violation. If after 90 days the Attorney General 
determines that the applicable governmental unit is still 
violating the Act or has not cured its violation, then the 
Attorney General is to bring suit to enforce the Act unless the 
owner or tenant has already brought such suit.
Section 6. Notification by Attorney General.
    Subsection (a) provides that not later than 30 days after 
the enactment of this Act, the Attorney General shall provide 
to the chief executive officer of each State the text of this 
Act and a description of the rights of property owners under 
this Act. It also provides that not later than 120 days after 
the enactment of this Act, the Attorney General shall compile a 
list of the Federal laws under which Federal economic 
development funds are distributed. Such list and any successive 
revisions of such list shall be communicated by the Attorney 
General to the chief executive officer of each State and also 
made available on the Internet website maintained by the United 
States Department of Justice.
    Subsection (b) provides that not later than 30 days after 
the enactment of this Act, the Attorney General shall publish 
in the Federal Register and make available on the Internet 
website maintained by the United States Department of Justice a 
notice containing the text of this Act and a description of the 
rights of property owners under this Act.
Section 7. Reports.
    Subsection (a) provides that not later than 1 year after 
the date of enactment of this Act, and every subsequent year 
thereafter, the Attorney General shall transmit a report 
identifying States or political subdivisions that have used 
eminent domain in violation of this Act to the Chairman and 
Ranking Member of the Committee on the Judiciary of the House 
of Representatives and to the Chairman and Ranking Member of 
the Committee on the Judiciary of the Senate.
    Subsection (b) requires each state and local authority that 
is subject to a private right of action under this Act to 
report to the Attorney General any information the Attorney 
General needs to make the report required by subsection (a).
Section 8. Sense of Congress regarding rural America.
    Section 8 contains findings and a Sense of Congress that 
the use of eminent domain for the purpose of economic 
development is a threat to agricultural and other property in 
rural America and that the Congress has a duty to protect the 
property rights of rural Americans.
Section 9. Sense of Congress.
    Section 9 states that it is the sense of the Congress that 
it is the policy of the United States to encourage, support, 
and promote the private ownership of property and to ensure 
that the constitutional and other legal rights of private 
property owners are protected by the Federal Government.
Section 10. Religious and Nonprofit Organizations.
    Section 10 provides that no state or political subdivision 
of a state shall exercise its power of eminent domain over 
property of a religious or other nonprofit organization by 
reason of the nonprofit or tax-exempt status of such 
organization if that state or political subdivision receives 
Federal economic development funds.
Section 11. Report by Federal Agencies on Regulations and Procedures 
        Relating to Eminent Domain.
    Section 11 provides that each Executive department and 
agency shall review all rules, regulations, and procedures and 
report to the Attorney General on the activities of that 
department or agency to bring its rules, regulations, and 
procedures into compliance with this Act.
Section 12. Sense of Congress.
    Section 12 provides that it is the sense of Congress that 
any and all precautions shall be taken by the government to 
avoid the unfair or unreasonable taking of property away from 
survivors of Hurricane Katrina for economic development 
purposes or for the private use of others.
Section 13. Disproportionate Impact.
    Section 13 requires the Attorney General to use reasonable 
efforts to locate former owners and tenants of a property that 
is taken in violation of the Act, if the violation has a 
disproportionate impact on the poor or minorities.
Section 14. Definitions.
    Section 14 contains the following definitions of terms used 
in the Act. The term ``economic development'' means taking 
private property, without the consent of the owner, and 
conveying or leasing such property from one private person or 
entity to another private person or entity for commercial 
enterprise carried on for profit, or to increase tax revenue, 
tax base, employment, or general economic health, except that 
such term shall not include (A) conveying private property to 
public ownership, such as for a road, hospital, or military 
base, or to an entity, such as a common carrier, that makes the 
property available for use by the general public as of right, 
such as a railroad, or public facility, or for use as a right 
of way, aqueduct, pipeline, or similar use; (B) removing 
harmful uses of land provided such uses constitute an immediate 
threat to public health and safety; (C) leasing property to a 
private person or entity that occupies an incidental part of 
public property or a public facility, such as a retail 
establishment on the ground floor of a public building; (D) 
acquiring abandoned property; (E) clearing defective chains of 
title; and (F) taking private property for use by a public 
utility.
    The term ``Federal economic development funds'' means any 
Federal funds distributed to or through States or political 
subdivisions of States under Federal laws designed to improve 
or increase the size of the economies of States or political 
subdivisions of States.
    The term ``State'' means each of the several States, the 
District of Columbia, the Commonwealth of Puerto Rico, or any 
other territory or possession of the United States.
Section 15. Limitation on Statutory Construction.
    Section 15 provides that noting in the Act may be construed 
to supersede, limit, or otherwise affect any provision of the 
Uniform Relocation Assistance and Real Property Acquisition 
Policies Act.
Section 16. Broad construction.
    Section 16 provides that the Act shall be construed in 
favor of a broad protection of private property rights, to the 
maximum extent permitted by the terms of the Act and the 
Constitution.
Section 17. Severability and effective date.
    Subsection (a) provides for a severability clause. 
Subsection (b) provides that the Act shall take effect upon the 
first day of the first fiscal year that begins after the date 
of the enactment, but shall not apply to any project for which 
condemnation proceedings have been initiated prior to the date 
of enactment.

                            Dissenting Views

    H.R. 1944, the ``Private Property Rights Protection Act,'' 
has the laudable purpose of preventing the abuse of the power 
of eminent domain to benefit a private party at the expense of 
another private party. It does so, however, by imposing vague 
and inconsistent restrictions on state and local governments. 
As a result, jurisdictions will be unable to determine in 
advance what is prohibited, and, therefore, how to avoid the 
bill's disastrous financial penalties.
    H.R. 1944 falls short of its purpose by being both over- 
and under-inclusive. It would allow takings that have 
historically been abused to the detriment of property owners 
and vulnerable communities, while also potentially blocking 
worthwhile projects with clear public purposes and public 
benefits. The bill provides no remedy for an aggrieved property 
owner or tenant and offers no mechanism to prevent a prohibited 
taking from occurring. Instead, the legislation sets up a 
system where, if the property owner or tenant prevails, the 
jurisdiction would be subject to crushing penalties, while the 
aggrieved property owner would get nothing.
    For these reasons, and those set out below, we respectfully 
dissent, and urge the House to reject this dangerously flawed 
legislation.

                       DESCRIPTION AND BACKGROUND

    H.R. 1944, the ``Private Property Rights Implementation Act 
of 2011,'' would restrict the use of eminent domain by states 
or political subdivisions. It would prohibit states and 
political subdivisions from exercising eminent domain for 
``economic development'' if the jurisdiction receives Federal 
economic development funds during any fiscal year in which the 
property is used or intended to be used for economic 
development purposes. Persons whose property has been taken in 
violation of the Act, or tenants of that property, would have 
the right to sue the jurisdiction for temporary injunctive 
relief for a period of 7 years following the completion of the 
taking. A violation of the Act would result in the state or 
political subdivision's ineligibility for any Federal economic 
development funds for 2 fiscal years following a final ruling 
on the merits. A jurisdiction could cure the violation by 
returning the real property that was unlawfully taken, 
replacing any property that was destroyed, and repairing any 
damage.
    A detailed section-by-section of the bill's substantive 
provisions follows:
    Sec. 1. Short Title. This section designates the short 
title of the bill as the ``Private Property Rights Protection 
Act of 2013.''
    Sec. 2. Prohibition on Eminent Domain Abuse By States. This 
section prohibits states and political subdivisions from 
exercising eminent domain for economic development within 7 
years of the exercise of eminent domain if Federal economic 
development funds are received during any fiscal year in which 
the property is so used or intended to be used. A violation, if 
found by a court of competent jurisdiction, will result in a 
state or political subdivision's ineligibility for any Federal 
economic development funds for 2 fiscal years following a final 
ruling on the merits. The appropriate Federal agency will 
withhold the funds, and if a violation occurs after funds have 
been distributed, a state or political subdivision will have to 
reimburse the appropriate Federal agency. States and political 
subdivisions will not be ineligible for funds if a prohibited 
taking is cured by returning the real property that was 
unlawfully taken, replacing any property that was destroyed, 
and repairing any damage. A state must also pay applicable 
penalties and interest to retain eligibility.
    Sec. 3 Prohibition on Eminent Domain Abuse By the Federal 
Government. This section prohibits the Federal Government from 
exercising eminent domain for economic development.
    Sec. 4. Private Right of Action. This section provides any 
private property owner or tenant who has suffered an injury as 
a result of a violation of this Act with a private right of 
action in the appropriate state or Federal court. A private 
property owner or tenant has 7 years following a state or 
political jurisdiction's taking of his or her property and 
using it in violation of this Act to bring an action. 
Prevailing plaintiffs shall be entitled to reasonable 
attorney's fees. Costs, and expert fees are included as part of 
the attorney's fees. This section also waives a state's 11th 
Amendment immunity from suit in Federal court.
    Sec. 5. This section provides that a property owner or 
tenant who suffers an injury as a result may report the 
violation to the Attorney General (AG). The AG shall conduct an 
investigation. If the AG finds a violation, the AG must notify 
the governmental entity of the finding of a violation. The 
governmental entity will have 90 to demonstrate that no 
violation has occurred, or to cure the violation by returning 
the property, rebuilding any property destroyed, and repairing 
any property damaged. If not, the AG ``will bring an action'' 
unless the property owner or tenant has already brought an 
action.
    The AG may only bring an action in the 7-year period 
beginning at the conclusion of the condemnation proceeding if, 
during that time, the property is used for economic 
development.
    Sec. 6. Notification By Attorney General. This section 
gives the Attorney General the responsibility for providing 
states with the text of this Act and a description of the 
rights of property owners under this Act no later than 30 days 
after the Act's enactment.
    The Attorney General is also responsible for compiling an 
annual list of the Federal laws under which Federal economic 
funds are distributed and providing that list to states and 
posting that list on the DOJ website no later than 120 days 
after the Act's enactment. Finally, the Attorney General is 
responsible for publishing a notice containing the text of this 
Act and a description of rights of property owners under this 
Act in the Federal Register and on the DOJ website no later 
than 30 days after the date of the Act's enactment.
    Sec. 7. Reports. This section requires the Attorney General 
to provide an annual report to the House and Senate Judiciary 
Committees identifying states or political subdivisions that 
have used eminent domain in violation of this Act. The report 
will identify all private actions brought as a result of a 
state or political subdivision's violation of this Act. The 
report will also identify all states or political subdivisions 
that have lost Federal economic development funds as a result 
of a violation of this Act, as well as describe the type and 
amount of Federal economic development funds lost in each state 
or political subdivision and the Agency that is responsible for 
withholding such funds. The report will also identify the 
percentage of minority residents compared to the surrounding 
nonminority residents and the median incomes of those impacted 
by a violation of the Act. The report will also identify 
violations reported to the AG, and actions brought by the AG. 
Finally, the report will discuss all instances in which a state 
or political subdivision has cured a violation of the Act. 
States and localities are also required to report to the AG 
such information with respect to such state or locality as the 
AG needs to make the report.
    Sec. 8. This section expresses the sense of the Congress 
that Congress should protect the property rights of Americans, 
including those who reside in rural areas.
    Sec. 9. This section expresses the sense of the Congress to 
encourage and promote the private ownership of property and to 
ensure that the constitutional and other legal rights of 
private property owners are protected by the Federal 
Government.
    Sec. 10. Religious and Nonprofit Organizations. This 
section prohibits the states, localities, and the Federal 
Government from exercising the power of eminent domain over 
property of a religious or other nonprofit organization by 
reason of the nonprofit or tax-exempt status of such 
organization.
    This section also specifies that a violation of its 
prohibitions would render the jurisdiction ineligible for any 
Federal economic development funds for a period of 2 fiscal 
years following a final judgment on the merits by a court of 
competent jurisdiction that such subsection has been violated.
    Sec. 11. Report by Federal Agencies on Regulations and 
Procedures Relating to Eminent Domain. This section requires 
the head of each Executive department and agency to review all 
rules, regulations, and procedures and report to the Attorney 
General on the activities of that department or agency to bring 
its rules, regulations, and procedures into compliance with the 
Act.
    Sec. 12. Sense of the Congress. This section expresses the 
Sense of the Congress that all precautions shall be taken by 
the government to avoid the unfair or unreasonable taking of 
property away from survivors of Hurricane Katrina.
    Sec. 13. Disproportionate Impact. This section provides 
that, if a court determines that a violation of the Act has 
occurred, and that the violation has had a disproportionately 
high impact on the poor or minorities, the Attorney General 
shall use reasonable efforts to locate and inform former owners 
and tenants of the violation and any remedies they may have.
    Sec. 14. Definitions. This section defines the term 
``economic development'' for the purposes of identifying which 
exercises of eminent domain are prohibited under the Act.
    The term ``economic development'' means the taking of 
private property without the owner's consent and conveying or 
leasing that private property from one private owner to another 
private owner for commercial enterprise carried on for profit, 
or to increase tax revenue, tax base, employment, or general 
economic health.
    Several types of takings are explicitly excluded from the 
definition of ``economic development.''
    --The conveying of private property for public ownership, 
such as for a road, hospital, or military base.
    --Conveying private property to an entity, such as a common 
carrier, that makes the property available for use by the 
general public as of right, such as a railroad, public utility, 
or public facility.
    --For use as a road or other right of way or means, open to 
the public for transportation, whether free or by toll.
    --For use as an aqueduct, flood control facility, pipeline, 
or similar use.
    --Removing harmful uses of land provided such uses 
constitute an immediate threat to public health and safety.
    --Leasing property to a private person or entity that 
occupies an incidental part of public property or a public 
facility, such as a retail establishment on the ground floor of 
a public building.
    --Acquiring abandoned property.
    --Clearing defective chains of title.
    --Taking private property for use by a public utility, 
including a utility providing electric, natural gas, 
telecommunications, water, and wastewater services, either 
directly to the public or indirectly through provision of such 
services at the wholesale level for resale to the public.
    --Redeveloping of a brownfield site as defined in the Small 
Business Liability Relief and Brownfields Revitalization Act.
    This section also defines the term ``federal economic 
development funds'' as funds administered to improve or 
increase a state or political subdivision's economy.
    A ``State'' includes states, the District of Columbia, the 
Commonwealth of Puerto Rico, and any other territory or 
possession of the United States.
    Sec. 15. Limitation on Statutory Construction. This section 
provides that nothing in this Act may be construed to 
supercede, limit or otherwise affect any provision of the 
Uniform Relocation Assistance and Real Property Acquisition 
Policies Act of 1970.
    Sec. 16. Broad Construction. This section requires that the 
Act be construed in favor of a broad protection of private 
property rights.
    Sec. 17. Severability and Effective Date. The section 
provides that the provisions of this Act shall be severable. 
This section also provides that this Act shall take effect upon 
the start of the first fiscal year following the enactment of 
this Act, but that the Act will not apply to any projects for 
which condemnation proceedings have been initiated prior to the 
date of enactment.

                        CONCERNS WITH H.R. 1944

 I. LTHE PENALTY WILL FINANCIALLY CRIPPLE STATE AND LOCAL GOVERNMENTS 
                AND PROVIDE NO RELIEF TO PROPERTY OWNERS

A. The bill's penalties could bankrupt states and localities
            1. LLoss of economic development funds for 2 years would 
                    devastate state and local budgets
    States and localities currently rely of Federal funding for 
a significant portion of their budgets. Much of this could be 
deemed ``federal economic development funds.'' Should the 
penalty actually be imposed on a jurisdiction, the loss in 
funding could easily render that jurisdiction insolvent, with 
catastrophic results.
    The bill does not identify which funds qualify as ``federal 
economic development funds.'' Rather, it requires the Attorney 
General to ``compile a list of the Federal laws under which 
Federal economic development funds are distributed.''\1\
---------------------------------------------------------------------------
    \1\H.R. 1944 Sec. 6(a)(2).
---------------------------------------------------------------------------
    According to the Congressional Budget Office,

        The Federal Government provides economic development 
        assistance to state and local governments through 
        several programs, including the Community Development 
        Block Grant Program, the Social Services Block Grant 
        Program, Economic Development Administration Grants, 
        Department of Agriculture grants and loans, and grants 
        made by the regional commissions. CBO estimates that 
        expenditures from those major programs totaled more 
        than $7 billion in 2012 (although, depending on how the 
        term is interpreted, some of those expenditures may not 
        meet the definition of economic development under the 
        bill).\2\
---------------------------------------------------------------------------
    \2\Congressional Budget Office, Cost Estimate for H.R. 1944, the 
``Private Property Rights Protection Act of 2013, as ordered reported 
by the House Committee on the Judiciary on June 
12, 2013,'' (June 12, 2013) available at: http://cbo.gov/sites/default/
files/cbofiles/attachments/hr1944.pdf.

    The Government Accountability Office, however, has 
testified about the difficulty of determining what qualifies as 
---------------------------------------------------------------------------
an ``economic development program:''

        Absent a common definition for economic development, we 
        had previously developed a list of nine activities most 
        often associated with economic development. These 
        activities include planning and development strategies 
        for job creation and retention, development, developing 
        new markets for existing products, building 
        infrastructure by constructing roads to attract 
        industry to undeveloped areas, and establishing 
        business incubators to provide facilities for new 
        business operations.\3\
---------------------------------------------------------------------------
    \3\Economic Development: Efficiency and Effectiveness of Fragmented 
Programs Are Unclear: Hearing Before the Subcomm. on Economic 
Development, Public Building, and Emergency Management of the H. Comm. 
on Transportation and Infrastructure, 112th Cong. (2011) (prepared 
statement of William B. Shear, Director, Financial Markets and 
Community Investment, Government Accountability Office).

For example, the U.S. Census Bureau reports that state and 
local governments received $63.9 billion from the Department of 
Transportation for fiscal year 2010, $30.3 billion of which was 
from the Highway Trust Fund.\4\
---------------------------------------------------------------------------
    \4\United States Census Bureau, Federal Aid to States for Fiscal 
Year 2010 at viii (Sept. 2011).
---------------------------------------------------------------------------
    States received more than $7 billion in Community 
Development Block Grants and $66 million for Empowerment Zones 
and other economic development from the Department of Housing 
and Urban Development.\5\ States received more than $5 billion 
in capital programs from the Department of Housing and Urban 
Development.\6\
---------------------------------------------------------------------------
    \5\Id. at 10.
    \6\Id. at 11.
---------------------------------------------------------------------------
    These are only a few examples of Federal funding that could 
be considered economic development funding.\7\ Whatever the 
actual total a state might receive, the loss of such funding 
for 2 years (or the requirement that a jurisdiction repay such 
funds) would necessarily be economically devastating.
---------------------------------------------------------------------------
    \7\This statutory vagueness may nullify the bill's application to 
states and localities. The Supreme Court has long held that ``Congress 
has broad power to set the terms on which it disburses Federal money to 
the States, but when Congress attaches conditions to a State's 
acceptance of Federal funds, the conditions must be set out 
`unambiguously.' `[L]egislation enacted pursuant to the spending power 
is much in the nature of a contract,' and therefore, to be bound by 
`federally imposed conditions,' recipients of Federal funds must accept 
them `voluntarily and knowingly.' States cannot knowingly accept 
conditions of which they are `unaware' or which they are `unable to 
ascertain.''' Arlington Cent. School Dist. Bd. of Educ. v. Murphy, 548 
U.S. 291, 296 (2006) (quoting Pennhurst State School and Hospital v. 
Halderman, 451 U.S. 1 (1981)) (citations omitted).
---------------------------------------------------------------------------
            2. LEven if a jurisdiction never exercised the power of 
                    eminent domain for any reason, the effect on its 
                    borrowing power would still be catastrophic
    In light of the bill's potential to bankrupt a 
jurisdiction, its ability to float bonds would be severely 
impaired. A reasonable bond underwriter would never be 
confident that a jurisdiction would not, at some future point 
during the life of the bond, engage in a prohibited taking, or 
convert a property taken by eminent domain to a prohibited use. 
Because the concomitant penalties would necessarily affect the 
ability of the jurisdiction to repay the bond, a prudent 
underwriter would have to take this possibility into account 
and charge a substantial risk premium to protect investors. 
Moreover, a political subdivision would also be at risk that 
the state or county on which it is dependent for funding and 
services might incur the penalties, or that these units of 
government would face increased borrowing costs limiting their 
ability to aid a subdivision. As a result, even where the 
current administration foreswears the use of eminent domain, 
lenders would still have to lend as if the penalties might be 
imposed by the action of a future administration.
B. LThe bill is purely punitive, and fails to provide relief to 
        aggrieved property owners
    While the penalties imposed on states and localities by 
H.R. 1944 are substantial, it will not permit the plaintiff to 
stop the taking before it happens and it will not compensate 
the plaintiff other than what is already authorized under 
applicable law. The only relief available is a ``preliminary 
injunction or a temporary restraining order.''\8\ In fact, the 
property owner or tenant may only bring an action ``following 
the conclusion of any condemnation proceedings condemning the 
property of such property owner or tenant.''\9\ A prevailing 
plaintiff may also recover costs, including reasonable 
attorney's fees, and expert fees.\10\ As a result, the bill 
would give a prevailing plaintiff only the satisfaction of 
having bankrupted the community.
---------------------------------------------------------------------------
    \8\H.R. 1944 Sec. 4(a).
    \9\H.R. 1933 Sec. 4(b) (emphasis added).
    \10\H.R. 1944 Sec. 4(c).
---------------------------------------------------------------------------
    During the markup, Representative Jerrold Nadler (D-NY) 
offered an amendment that would have allowed an owner or tenant 
to bring an action as soon as the condemnation commenced, 
rather than having to wait until ``the property is used for 
economic development following the conclusion of any 
condemnation proceedings condemning the property of such 
property owner or tenant.''\11\ Instead of the penalty, which 
would bankrupt the jurisdiction, the Nadler amendment would 
have allowed the plaintiff to obtain ``equitable relief and 
compensatory damages.''\12\ Unlike the underlying bill, the 
amendment would have prevented an unlawful taking and provided 
both permanent injunctive relief and any applicable damages. 
The amendment was rejected by voice vote.
---------------------------------------------------------------------------
    \11\H.R. 1944 Sec. 4(b).
    \12\Amendment to H.R. 1944 offered by Rep. Jerrold Nadler.
---------------------------------------------------------------------------

   II. LTHE PROHIBITIONS IN H.R. 1944 ARE VAGUE, AND WOULD PROHIBIT 
TRADITIONAL USES OF EMINENT DOMAIN, AS WELL AS PERMIT TAKINGS THAT, IN 
                  THE PAST, HAVE BEEN SUBJECT TO ABUSE

    Abuses of the eminent domain power have not been confined 
to economic development projects of the kind prohibited by this 
legislation. In fact, some of the greatest abuses cited by 
critics of the Kelo decision have come about in the context of 
public works, such as highways and other projects explicitly 
permitted by this legislation. These projects have often had a 
disproportionate impact on low-income and minority communities. 
As Robert Caro in his seminal work on urban political power, 
The Power Broker, observed:

        [D]uring the 7 years since the end of World War II, 
        there had been evicted from their homes in New York 
        City for public works . . . some 170,000 persons. . . . 
        If the number of persons evicted for public works was 
        eye-opening, so were certain of their characteristics. 
        Their color for example. A remarkably high percentage 
        of them were [African American] or Puerto Rican. 
        Remarkably few of them were white. Although the 1950 
        census found that only 12 percent of the city's 
        population was nonwhite, at least 37 percent of the 
        evictees . . . and probably far more were nonwhite.\13\
---------------------------------------------------------------------------
    \13\Robert Caro, The Power Broker 967-8 (1974).

Because the definition of a prohibited taking for economic 
development purposes explicitly exempts these types of public 
works, H.R. 1944 would allow many of these past abuses to 
continue with no restrictions.\14\
---------------------------------------------------------------------------
    \14\H.R. 1944 Sec. 14(1)(A)(I) permits ``conveying private property 
to public ownership, such as for a road, hospital, airport, or military 
base.''
---------------------------------------------------------------------------
    H.R. 1944 would also permit many projects where private 
property is taken and conveyed to another private party. For 
example, pipelines are exempt from the bill's prohibitions,\15\ 
including the controversial Keystone Pipeline, which is planned 
to extend from Montana to Texas.\16\ The company has already 
begun seeking to secure land along the right of way using 
eminent domain, even though the project has not yet received 
the necessary permits.\17\
---------------------------------------------------------------------------
    \15\H.R. 1944 Sec. 14(1)(A)(iv).
    \16\According to the company website:

      The proposed Keystone Gulf Coast Expansion Project is an 
      approximate 2,673-kilometre (1,661-mile), 36-inch crude oil 
      pipeline that would begin at Hardisty, Alberta and extend 
      southeast through Saskatchewan, Montana, South Dakota and 
      Nebraska. It would incorporate a portion of the Keystone 
      Pipeline (Phase II) through Nebraska and Kansas to serve 
      markets at Cushing, Oklahoma before continuing through 
      Oklahoma to a delivery point near existing terminals in 
      Nederland, Texas to serve the Port Arthur, Texas 
---------------------------------------------------------------------------
      marketplace.

TransCanada Working with State of Nebraska and Department of State to 
Finalize New Route for Keystone XL through Nebraska, available at: 
http://www.transcanada.com/keystone.html (last visited Feb. 12, 2012).
---------------------------------------------------------------------------
    \17\Leslie Kaufman & Dan Frosch, Eminent Domain Fight Has a 
Canadian Twist, N.Y. TIMES, Oct. 17, 2011, available at http://
www.nytimes.com/2011/10/18/us/transcanada-in-eminent-domain-fight-over-
pipeline.html?pagewanted=all.
---------------------------------------------------------------------------
    In testimony before the Subcommittee on the Constitution 
and Civil Justice, Julia Trigg Crawford, the third generation 
manager of her family farm in Sumner, Texas, whose land was 
taken for the Keystone XL Pipeline, explained why the 
extraordinary power of eminent domain should not be used for a 
project of this type.\18\
---------------------------------------------------------------------------
    \18\Hearing on H.R. ___, the ``Private Property Rights Protection 
Act,''before the Subcomm. on the Const. and Civil Justice of the H. 
Comm. on the Judiciary, 113th Cong. (Apr. 18, 2013) (prepared testimony 
of Julia Trigg Crawford).

        First, we don't believe a foreign corporation should 
        have more of a right to our land than we do. . . . We 
        don't want them horizontally drilling under the Bois 
        d'Arc Creek where we have State-given water rights. We 
        irrigate 400 acres of crop land from this creek, and 
        the pipeline would be just a couple hundred yards 
        upstream from our pumps. Any leak from that pipeline 
        would contaminate our equipment, and then our crops in 
        minutes. . . . When we politely asked them to seek a 
        way around us, TransCanada could have slightly altered 
        their route and traversed that neighboring land 
        differently, avoiding our property altogether. But 
        instead they just pulled out the club of eminent 
        domain.\19\
---------------------------------------------------------------------------
    \19\Id. at 1 (emphasis added).

Ranking Member John Conyers, Jr. (D-MI), offered an amendment 
that would have added pipelines carrying tar sands to the list 
of takings prohibited by the bill. It was rejected by a voice 
vote.
    The bill would also permit the use of eminent domain to 
seize private property and give it to a private developer for 
the purpose of constructing a sports stadium or shopping 
mall.\20\
---------------------------------------------------------------------------
    \20\The bill would allow the exercise of eminent domain ``conveying 
private property. . . . to an entity, such as a common carrier, that 
makes the property available to the general public as of right, such as 
a railroad or public facility.'' H.R. 1944 Sec. 14(1)(A)(ii). Stadia 
and shopping malls are open to the public. Unlike a railroad, no 
admission is charged to the general public to enter a shopping mall.
---------------------------------------------------------------------------
    Localities have long used eminent domain to build stadia, 
including the city of Arlington, Texas, which exercised eminent 
domain to facilitate the construction of the stadium for the 
Texas Rangers in which George W. Bush was, at the time, a part 
owner.\21\
---------------------------------------------------------------------------
    \21\Frank James, Texas Sports Plan Means Homes Will Have to Go: 
Some Feel Drop-kicked by Eminent Domain, Invoked to Obtain Land for a 
New Cowboys Stadium, CHICAGO TRIB., July 18, 2005, available at http://
articles.chicagotribune.com/2005-07-18/news/0507180187X1X
eminent-domain-private-property-property-rights.
---------------------------------------------------------------------------

             III. H.R. 1944 IS AN ASSAULT ON STATES' RIGHTS

    Using the leverage of a catastrophic cut in Federal aid, 
this bill would usurp a power traditionally exercised by 
states. The Congressional Budget Office has observed,

        [H.R. 1944] would impose significant new conditions on 
        the receipt of Federal economic development assistance 
        by state and local governments. . . . Because the 
        bill's provisions would apply to a large pool of funds, 
        the bill effectively would restrict the use of eminent 
        domain by state and local governments and would limit 
        the ability of local governments to manage land use in 
        their jurisdictions. . . . CBO expects that most state 
        and local governments would not risk the loss of 
        Federal economic development assistance by exercising 
        the use of eminent domain in situations described by 
        the bill.\22\
---------------------------------------------------------------------------
    \22\CBO, supra note 2.

This unprecedented intrusion of the Federal Government into 
land use decisions is unnecessary. Since the Kelo decision, 
approximately 43 states have enacted some sort of legislation 
in response.\23\ At least three state supreme courts have read 
the public purpose prong of their states' constitutions more 
narrowly than the Supreme Court has read the Takings Clause in 
the U.S. Constitution.\24\
---------------------------------------------------------------------------
    \23\Ilya Somin, The Limits of Backlash: Assessing the Political 
Response to Kelo, 93 Minn. L. Rev. 2100, 2101 (2009).
    \24\Norwood v. Horney, 853 N.E.2d 1115 (Ohio 2006) (public use 
requirement in state constitution not met by economic development 
purpose); Board of County Comm'rs v. Lowery, 136 P.3d 639, 651 (Okla. 
2006) (because state constitution places stricter limits on eminent 
domain than the Federal constitution, the state could not condemn 
easement for water pipelines to service private electric-generation 
plant, as that would be a taking for private use); Benson v. South 
Dakota, 710 N.W.2d 131, 146 (S.D. 2006) (dictum that state constitution 
does not recognize ``public benefit'' category and permits taking only 
for ``use by the public'').
---------------------------------------------------------------------------
    Testifying before the Constitution Subcommittee, Professor 
John Echeverria of Vermont Law School explained that the 
legislation is unnecessary because nearly every state had 
enacted legislation in response to the Kelo decision. In his 
testimony, he provided a review of the form that response has 
taken. He explained the importance of the use of eminent domain 
for public purposes, as contemplated by the Constitution, and 
urged that the Federal Government should not substitute its 
judgment for that of the states.\25\
---------------------------------------------------------------------------
    \25\Private Property Rights Protection Act of 2011: Hearing on H.R. 
1433 Before the Subcomm. on the Const. of the H. Comm. on the 
Judiciary, 112th Cong. (2012) at 32, n. 1. (testimony of Professor John 
Echeverria).
---------------------------------------------------------------------------
    While some may have believed, in the wake of the Kelo 
decision, that Federal action was necessary, at this point, 
states have responded, and Congress should not substitute its 
judgment for that of the states.
    This bill also exceeds the constraints that the Supreme 
Court has placed on the exercise of Congress' spending clause 
powers. There is no nexus between the funds received and the 
action the proponents hope to regulate with this legislation.
    Most recently, the Supreme Court greatly constrained 
Congress' powers to regulate state conduct by attaching 
conditions to the receipt of Federal funds. In its decision in 
National Federation of Independent Business v. Sebelius,\26\ 
striking down the Medicaid expansion in the Affordable Care 
Act, the Court observed,
---------------------------------------------------------------------------
    \26\132 S.Ct. 2566 (2012).

        We have upheld Congress's authority to condition the 
        receipt of funds on the States' complying with 
        restrictions on the use of those funds, because that is 
        the means by which Congress ensures that the funds are 
        spent according to its view of the ``General Welfare.'' 
        Conditions that do not here govern the use of the 
        funds, however, cannot be justified on that basis. 
        When, for example, such conditions take the form of 
        threats to terminate other significant independent 
        grants, the conditions are properly viewed as a means 
        of pressuring the States to accept policy changes.\27\
---------------------------------------------------------------------------
    \27\Id. at 2603-4.

In the case of this legislation, the project affected by the 
bill need not have received economic development funds at all. 
Even the agency undertaking the project need not have received 
any Federal economic development funds to trigger the bill's 
restrictions. The jurisdiction need only have received any 
Federal economic development funds for any purpose no matter 
how unrelated to the project itself, even if the jurisdiction 
received only a de minimus amount of such funds. The connection 
between the receipt of funds and the prohibited activity is 
simply too tenuous, if it exists at all, to satisfy the Court's 
restriction in Sibelius.

          IV. THE PROPONENTS OF H.R. 1944 HAVE MISINTERPRETED 
                           THE KELO DECISION

    In Kelo, the Supreme Court held that the municipality's use 
of eminent domain to implement its redevelopment plan aimed at 
invigorating a depressed area was a ``public use'' within the 
meaning of the takings clause of the Fifth Amendment to the 
Constitution, even though some of the property would be turned 
over from private homeowners and business owners to private 
developers.\28\
---------------------------------------------------------------------------
    \28\545 U.S. at 474 (2005).
---------------------------------------------------------------------------
    The majority opinion was grounded in a century of Supreme 
Court precedent holding that ``public use'' must be read 
broadly to mean ``for a public purpose.''\29\
---------------------------------------------------------------------------
    \29\See, e.g., Hawaii Housing Authority v. Midkiff, 467 U.S. 229 
(1984) (state's purpose of eliminating social and economic evils of a 
land oligopoly a public purpose); Berman v. Parker, 348 U.S. 26 (1954) 
(elimination of blight a public purpose); Fallbrook Irrigation Dist. v. 
Bradley, 164 U.S. 112 (1896) (irrigation of arid land a public 
purpose).
---------------------------------------------------------------------------
    As early as 1916, the Supreme Court held that ``public 
use,'' within the meaning of the Takings Clause, included ``for 
a public purpose.'' As Justice Holmes wrote for the Court,

        [T]o gather the streams from waste and to draw from 
        them energy, labor without brains, and so to save 
        mankind from toil that it can be spared, is to supply 
        what, next to intellect, is the very foundation of all 
        our achievements and all our welfare. If that purpose 
        is not public, we should be at a loss to say what is. 
        The inadequacy of use by the general public as a 
        universal test is established.\30\
---------------------------------------------------------------------------
    \30\Mt. Vernon-Woodberry Cotton Duck Co. v. Alabama Interstate 
Power Co. 240 U.S. 30, 32 (1916) (Delegation of state power of eminent 
domain to power company for the purpose of building a dam a public use 
within the meaning of the Takings Clause).

In declining to rule that economic development does not qualify 
as a ``public use,'' the Court in Kelo nonetheless noted some 
limitations. ``[T]he City would no doubt be forbidden from 
taking petitioners' land for the purpose of conferring a 
private benefit on a particular private party . . . Nor would 
the City be allowed to take property under the mere pretext of 
a public purpose, when its actual purpose was to bestow a 
private benefit.''\31\
---------------------------------------------------------------------------
    \31\545 U.S. at 477-8.
---------------------------------------------------------------------------
    The Court also noted that the taking by New London was 
``executed pursuant to a `carefully considered' development 
plan.''\32\
---------------------------------------------------------------------------
    \32\Id. at 478.
---------------------------------------------------------------------------
    The Kelo dissenters and the proponents of H.R. 1944, 
however, argue that even a broad reading of ``public use'' does 
not extend to private-to-private transfers solely to improve 
the tax base and create jobs.\33\ For example, the dissent 
observed that the ``most natural reading of the Clause is that 
it allows the government to take property only if the 
government owns, or the public has a legal right to use, the 
property, as opposed to taking it for any public purpose or 
necessity whatsoever.''\34\
---------------------------------------------------------------------------
    \33\545 U.S. at 506 (O'Connor, J., dissenting).
    \34\Id. at 508 (Thomas, J., dissenting).
---------------------------------------------------------------------------
    As Justice Thomas explained:

        Allowing the government to take property solely for 
        public purposes is bad enough, but extending the 
        concept of public purpose to encompass any economically 
        beneficial goal guarantees that these losses will fall 
        disproportionately on poor communities. Those 
        communities are not only systematically less likely to 
        put their lands to the highest and best use, but are 
        also the least politically powerful. If ever there were 
        justification for intrusive judicial review of 
        constitutional provisions that protect ``discrete and 
        insular minorities,'' surely that principle would apply 
        with great force to the powerless groups and 
        individuals the Public Use Clause protects.\35\
---------------------------------------------------------------------------
    \35\Id. at 521 (citations omitted).

What the Kelo dissenters and the proponents of H.R. 1944 fail 
to acknowledge, however, is that the majority decision 
specifically excluded ``extending the concept of public purpose 
to encompass any economically beneficial goal,''\36\ and, more 
specifically stated that ``the City would no doubt be forbidden 
from taking petitioners' land for the purpose of conferring a 
private benefit on a particular private party.''\37\
---------------------------------------------------------------------------
    \36\Id.
    \37\Id. at 478.
---------------------------------------------------------------------------
    Whatever the Kelo decision may stand for, it most certainly 
does not resemble the overwrought descriptions of it permitting 
the ``State [to] replac[e] any Motel 6 with a Ritz-Carlton, any 
home with a shopping mall, or any farm with a factory.''\38\
---------------------------------------------------------------------------
    \38\Id. at 503.
---------------------------------------------------------------------------

                               CONCLUSION

    The Constitution recognizes that the power of eminent 
domain is subject to abuse and must be exercised with great 
care. We recognize that the courts have an important role in 
determining whether that power has been exercised for a 
genuinely public purpose rather than a mere pretext to confer a 
private benefit on another private party. The states have 
responded to the Kelo decision in the intervening years by 
narrowing their own powers, and the powers of their 
subdivisions, to take property, and we do not believe that 
Congress should now substitute its own judgment for that of the 
states.
    Even if we were to consider the restrictions in this 
legislation to be appropriate, the ruinous penalties imposed by 
the bill would be disastrous for state and local finances and 
provide no actual benefit to aggrieved homeowners and tenants.
    For these reasons, and those stated above, we respectfully 
dissent, and urge our colleagues to reject this harmful 
legislation.

                                   John Conyers, Jr.
                                   Jerrold Nadler.
                                   Robert C. ``Bobby'' Scott.
                                   Melvin L. Watt.

                                  
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