79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–859 

PRIVATE PROPERTY RIGHTS PROTECTION ACT OF 2017 

JULY 23, 2018.—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. 1689] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 1689) to protect private property rights, having considered 

the same, report favorably thereon without amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1 

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

Hearings ................................................................................................................... 11 

Committee Consideration ........................................................................................ 11 

Committee Votes ...................................................................................................... 11 

Committee Oversight Findings ............................................................................... 11 

New Budget Authority and Tax Expenditures ...................................................... 11 

Congressional Budget Office Cost Estimate .......................................................... 12 

Duplication of Federal Programs ............................................................................ 13 

Disclosure of Directed Rule Makings ..................................................................... 14 

Performance Goals and Objectives ......................................................................... 14 

Advisory on Earmarks ............................................................................................. 14 

Section-by-Section Analysis .................................................................................... 14 

Dissenting Views ..................................................................................................... 17 

Purpose and Summary 

H.R. 1689, the Private Property Rights Protection Act, will help 

eliminate abusive economic development takings in those states 

2 

1 545 U.S. 469 (2005). 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). 5 Id. at 494. 

6 H. Res. 340, 109th Cong. 

and political subdivisions that elect to receive federal economic development funds. 

Background and Need for the Legislation 

H.R. 1689 is bipartisan legislation introduced by Representatives 

Jim Sensenbrenner (R–WI) and Maxine Waters (D–CA) that will 

help preserve the constitutional protections for private property 

jeopardized by the Supreme Court’s decision in Kelo v. City of New 

London.1 The bill does this statutorily by conditioning state and 

local governments’ receipt of federal economic development funds 

on their agreement to refrain 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 two 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. 

The Fifth Amendment to the U.S. Constitution, made applicable 

to the states through the Fourteenth Amendment, provides that 

‘‘private property [shall not] be taken for public use, without just 

compensation.’’ 2 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

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, 

3 

7Two 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). 8 H.R. 4128, 109th Cong. 

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 § 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. 12 1 The Records of the Federal Convention of 1787 at 147 (Max Farrand ed., 1937). 13The 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 

Continued 

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. 

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 In subsequent Congresses, 

the legislation has passed the House by voice vote (in the 112th 

Congress) and by a vote of 353–65 (in the 113th Congress). 

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 supported 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

James Madison said 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 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 AcVerDate Sep 11 2014 02:37 Jul 30, 2018 Jkt 079006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR859.XXX HR859
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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.’’). 16 Hon. Loren A. Smith, ‘‘Life, Liberty, & Whose Property?: An Essay on Property Rights,’’ 30 

U. Rich. L. Rev. 1055, 1056 (1996). 17 Vanhorne’s Lessee v. Dorrance, 2 U.S. 304, 310 (1795). 18Wilkinson v. Leland, 27 U.S. (2 Pet.) 627, 657 (1829). 19 United States v. James Daniel Good Real Property, 510 U.S. 43, 61 (1993) 20Lynch v. Household Finance, 405 U.S. 538, 552 (1972). 21See Bernard H. Siegan, Property and Freedom 20–21 (1997). 

cordingly, although the word ‘‘property’’ does not appear in the Preamble of the Constitution, 

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

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 mand. . . . 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

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. That rights in property are basic civil rights has 

long been recognized.’’ 20

The sanctity and centrality of private property rights are part of 

our constitutional design. The Bill of Rights, too, 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

5 

22 Kelo, 545 U.S. at 510–11 (Thomas, J. dissenting) (quoting Calder v. Bull, 3 U.S. (3 Dall.) 

386, 388 (1798)). 23Wilkinson, 27 U.S. (2 Pet.) at 658. 24Thomas M. Cooley, A Treatise on the Constitutional Limitations Which Rest Upon the Legislative Power of the States of the American Union 531 (1868). 25Olcott v. The Supervisors, 83 U.S. (15 Wall.) 678, 694 (1872). 26See, 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). 27See, 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). 

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. 

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

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, thereVerDate Sep 11 2014 02:37 Jul 30, 2018 Jkt 079006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR859.XXX HR859
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29 Kelo, 545 U.S. at 473. 30 Id. at 475. 31 Id. at 483. 32 Id. at 478. 33 Id. at 480 (emphasis added). 34 Id. at 494 (O’Connor, J., dissenting). 35 Id. at 501. 36 Id. at 510 (Thomas, J., dissenting). 

by 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. 

In reaching its determination that economic development constitutes a public use, the Court essentially read the words ‘‘public 

use’’ 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

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

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

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 

7 

37 Id. at 518 (citations omitted). 38 Id. at 497 (O’Connor, J., dissenting). 39 Id. at 505. 40 Id. at 503. 

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

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 the allowing takings for private economic development would fall most harshly on people of lower economic means, 

minorities, houses of worship, and farmers. 

EMINENT 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, eminent domain abuse falls disproportionately on the 

poor, minorities, and other groups that are likely to be politically 

weak. The beneficiaries of the Kelo decision, Justice O’Connor 

wrote, 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

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, 

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 signifiVerDate Sep 11 2014 02:37 Jul 30, 2018 Jkt 079006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR859.XXX HR859
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41Dick M. Carpenter II & John K. Ross, Victimizing the Vulnerable at 6 (2007). 42See, e.g., Dick Carpenter & John Ross, Empire State Eminent Domain: Robin Hood in Re- verse (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). 43 Kelo, 545 U.S. at 521–22 (Thomas, J., dissenting). 

cantly less income, and significantly more of them live at 

or below the federal poverty line.41

Other 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: 

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

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 

9 

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. 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)). 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)). 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. 

enterprises could construct superstores, casinos, hotels, 

and office parks.44

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

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

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

10 

51 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) (statement of Scott Bullock, Senior Attorney, Institute for Justice). 52South 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). 53 Id. at 207–208. 54 Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2602 (2012). 55 545 U.S. 469 (2005). 56Sabri v. United States, 541 U.S. 600, 606 (2004). 

POST-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. 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, many such state-level efforts have 

been riddled with exceptions to their application that greatly limit 

their effectiveness. Furthermore, Congress has an obligation to directly protect federal taxpayer dollars to further economic development in states and localities that abuse eminent domain. 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.’’ 51 Accordingly, federal 

eminent domain legislation, like the Private Property Rights Protection Act, is still needed to curb abusive economic development 

takings. 

CONGRESS’S POWER TO CONDITION FEDERAL 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.’’ 52

Congress may attach such conditions to the receipt of federal 

funds provided they are related ‘‘to the federal interest in particular national projects or programs’’ and they are ‘‘unambiguous.’’ 53 The Act does nothing more than use Congress’s ‘‘spending 

power to create incentives for States to act in accordance with’’ 54

the understanding of ‘‘public use’’ in the Constitution prior to the 

Supreme Court’s notorious decision in Kelo v. City of New London,55 which allowed the government to take private property from 

one person simply to give it to another person or corporation. 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.’’ 56

The bill denies states or localities that abuse eminent domain all 

federal economic development funds for a period of two years. 

There is a clear connection between the Federal funds that would 

be denied and the abuse Congress is intending to prevent: states 

11 

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 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 two years. Moreover, 

if a locality abuses its eminent domain powers, only the locality, 

and not the whole state, would lose its economic development 

funds. 

Hearings 

The Committee’s Subcommittee on the Constitution and Civil 

Justice held 1 day of hearings on H.R. 1689 on March 30, 2017. 

Testimony was received from Jeffrey Redfern, Attorney, Institute 

for Justice; Tina Barnes, a client of the Institute for Justice in 

Charlestown, Indiana; and William Buzbee, Professor of Law at the 

Georgetown University Law Center, with additional material submitted by other interested individual and organizations. 

Committee Consideration 

On April 25, 2018, the Committee met in open session and ordered the bill (H.R. 1689) 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. 

1689. 

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. 

12 

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. 1689, 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 8, 2018. 

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 of H.R. 1689, the Private Property 

Rights Protection Act of 2017. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Robert Reese and 

Janani Shankaran, who can be reached at 226–2860. 

Sincerely, 

KEITH HALL. 

Enclosure. 

cc: Honorable Jerrold Nadler 

Ranking Member 

H.R. 1689—Private Property Rights Protection Act of 2017 

As ordered reported by the House Committee on the Judiciary on 

April 25, 2018 

H.R. 1689 would deny federal economic development assistance 

to state or local governments that exercise the power of eminent 

domain for economic development purposes. (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. 

The bill would require the Department of Justice (DOJ) 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. Based on the costs of similar tasks, CBO estimates that additional reporting by the DOJ would cost less than $500,000; such 

spending would be subject to the availability of appropriated funds. 

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 several regional commissions. CBO estimates that 

expenditures from those major programs totaled about $8.5 billion 

in 2017 (although, depending on how the term is interpreted, some 

13 

of those expenditures may not meet the definition of economic development under 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. 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). 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. As a result, CBO estimates 

that implementing the bill would have no significant net effect on 

those expenditures—which stem from both discretionary sources 

(such as the Community Development Block Grant Program) and 

mandatory sources (such as the Social Services Block Grant Program)—to state and local governments over the next five years. 

Enacting H.R. 1689 also could affect direct spending by agencies 

that are not funded through annual appropriations; therefore, payas-you-go procedures apply. The bill would require federal agencies 

to report to the DOJ on how to bring existing regulations and procedures related to eminent domain into compliance with the bill. 

However, CBO estimates that the effects would be insignificant. 

Enacting the bill would not affect revenues. 

CBO estimates that enacting H.R. 1689 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2029. 

H.R. 1689 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 for receiving federal assistance are not considered mandates under UMRA.) Because the conditions 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. However, CBO cannot predict the magnitude, likelihood, or timing of such effects. 

The CBO staff contacts for this estimate are Robert Reese and 

Janani Shankaran (for federal costs) and Andrew Laughlin (for 

mandates). The estimate was reviewed by H. Samuel Papenfuss, 

Deputy Assistant Director for Budget Analysis. 

Duplication of Federal Programs 

No provision of H.R. 1689 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. 

14 

Disclosure of Directed Rule Makings 

The Committee finds that H.R. 1689 contains no directed rule 

making within the meaning of 5 U.S.C. 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. 1689 is designed 

to condition the use of federal funds in a way that limits eminent 

domain abuse by State and local governments. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 1689 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 sets forth the short title of the 

bill as the Private Property Rights Protection Act. 

Sec. 2. Prohibition on Eminent Domain Abuse by States. 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 within 7 years after that exercise, if that State 

received Federal economic development funds during any 

fiscal year in which the property is so used or intended to 

be used. 

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 two 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). 

15 

57See 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.’’). 

Sec. 3. Prohibition of Eminent Domain Abuse by the Federal Government. Section 3 prohibits the federal government from exercising its eminent domain power for economic development purposes. 

Sec. 4. Private Right of Action. 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,57 this section 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: 

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. 

Sec. 5. Reporting of Violations to Attorney General. Similarly, the 

Attorney General enforcement provision in this section 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.’’ 

Sec. 6. Notification by Attorney General. Section 6 provides measures for notification to States and political subdivisions regarding 

their obligations under the Act, and to the public regarding their 

rights under the Act. 

Sec. 7. Reports. Section 7 provides that the Attorney General 

shall make public reports regarding violations of the Act. 

Sec. 8. Sense of Congress Regarding Rural America. Section 8 

provides a Sense of Congress regarding the vulnerability or rural 

lands to eminent domain abuse. 

Sec. 9. Sense of Congress. Section 9 provides a Sense of Congress 

regarding the policy of the United States to promote private property ownership and its protection. 

Sec. 10. Religious and Nonprofit Organizations. Section 10 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 of a religious or other nonprofit organization by reason of the nonprofit or tax-exempt status of such organization, or 

any quality related thereto, if that State or political subdivision receives Federal economic development funds during any fiscal year 

in which it does so. The same prohibition applies to the Federal 

government. 

16 

Sec. 11. Report by Federal Agencies on Regulations and Procedures Relating to Eminent Domain. Section 11 provides that not 

later than 180 days after the date of the enactment of this Act, the 

head of 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. 

Sec. 12. Sense of Congress. Section 12 provides a Sense of Congress regarding Hurricane Katrina, and its principles would apply 

to other natural disasters as well. 

Sec. 13. Disproportionate Impact. Section 13 provides that if a 

court determines that a violation of this Act has occurred, and that 

the violation has a disproportionately high impact on the poor or 

minorities, the Attorney General shall use reasonable efforts to locate former owners and tenants and inform them of the violation 

and any remedies they may have. 

Sec. 14. Definitions. Section 14 provides various definitions and 

exceptions for terms used in 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. 

Sec. 15. Limitation on Statutory Construction. Section 15 provides that nothing in this Act may be construed to supersede, limit, 

or otherwise affect any provision of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (which establishes minimum standards for federally funded programs and 

projects that require the acquisition of real property or displace 

persons from their homes, businesses, or farms). 

Sec. 16. Broad Construction. Section 16 provides that this Act 

shall be construed in favor of a broad protection of private property 

rights, to the maximum extent permitted by the terms of this Act 

and the Constitution. 

Sec. 17. Severability and Effective Date. Section 17 provides that 

the provisions of this Act are severable, and if any provision of this 

Act, or any application thereof, is found unconstitutional, that finding shall not affect any provision or application of the Act not so 

adjudicated. It also provides the Act shall take effect upon the first 

day of the first fiscal year that begins after the date of the enactVerDate Sep 11 2014 02:37 Jul 30, 2018 Jkt 079006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR859.XXX HR859
17 

ment of this Act, but shall not apply to any project for which condemnation proceedings have been initiated prior to the date of enactment. 

Dissenting Views 

Dissenting Views for H.R. 1689. The ‘‘Private Property Rights 

Protection Act of 2017’’ 

While H.R. 1689, the ‘‘Private Property Rights Protection Act of 

2017,’’ has the laudable goal of preventing the abuse of the eminent 

domain power by states and localities to benefit a private party at 

the expense of another private party, it is nonetheless a flawed and 

potentially unconstitutional bill. The bill would prohibit states and 

localities that receive broadly-defined ‘‘federal economic development funds’’ from using the power of eminent domain for the purpose of ‘‘economic development,’’ which it defines as the taking and 

conveyance of private property from one private owner to another 

for certain public purposes. The bill would also authorize property 

owners and tenants injured by a violation of this prohibition to sue 

the state or local government within seven years after the conclusion of condemnation proceedings. States and localities that fail to 

comply with this prohibition would lose all federal economic development funds for two fiscal years after a final ruling in such a lawsuit that the prohibition had been violated. 

The loss of economic development funds for two fiscal years 

would devastate state and local budgets. Many states and localities 

depend on federal funding for a significant portion of their budgets, 

much of which 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. Moreover, by withholding such a broad 

array of funds, H.R. 1689’s penalty is overly punitive because it 

would punish an entire state or local community for the government’s action in one eminent domain matter. Even the mere threat 

that this penalty could be imposed would have a devastating effect 

on governments’ ability to raise funding by floating bonds. 

Further yet, H.R. 1689 violates federalism principles and may be 

unconstitutional. In particular, the bill imposes conditions on federal funding that may have too attenuated a relationship to any 

federal interest in how the funds are spent. Also, the threatened 

penalty is so draconian that it may amount to unconstitutional coercion of the states by the federal government. Additionally, H.R. 

1689 provides no adequate 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. Finally, most states have amended their laws 

since 2005 to curtail the use of eminent domain for economic development, obviating the need for this legislation. 

For these reasons, and those set out below, we respectfully dissent, and urge the House to reject this dangerously flawed legislation. 

18 

DESCRIPTION

H.R. 1689 would restrict the use of eminent domain by states or 

their political subdivisions. Specifically, it would prohibit states 

and their 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. 

The bill defines ‘‘economic development’’ as 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.’’ Notably, the bill explicitly excludes certain private-to-private conveyances from this definition, including those used for the building of 

roads, aqueducts, pipelines, and public utilities, or for property 

taken to remove harmful land uses or abandoned property. 

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 seven 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 two fiscal years following a 

final ruling on the merits. The bill defines ‘‘federal economic development funds’’ to mean ‘‘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.’’ 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. 

CONCERNS WITH H.R. 1689

I. THE PENALTY IMPOSED BY H.R. 1689 COULD FINANCIALLY CRIPPLE

STATES AND LOCALITIES, AND WOULD PUNISH ENTIRE COMMUNITIES

FOR THE GOVERNMENT’S ACTIONS

A. The loss of economic development funds for two years would devastate state and local budgets 

The loss of economic development funds for two fiscal years 

would devastate state and local budgets. The legislation defines 

‘‘federal economic development funds’’ very broadly to mean 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.’’ Many states and localities depend on federal funding for 

a significant portion of their budgets, much of which 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. 

Notably, H.R. 1689 fails to identify which funds qualify as ‘‘federal economic development funds.’’ According to one estimate, federal discretionary and mandatory spending in the form of grants 

accounts for approximately 22 percent of spending by state and 

19 

1 Iris J. Lav & Michael Leachman, At Risk: Federal Grants to State and Local Governments, 

Center on Budget and Policy Priorities (Mar. 13, 2017). 2 Robert Jay Dilger, Federal Grants to State and Local Governments: A Historical Perspective 

on Contemporary Issues, Congressional Research Service Report. R40638 (May 7, 2018). The 

Congressional Budget Office estimates that the legislation could impact $8.5 billion in federal 

funds in fiscal year 2017. H.R. 1689, the Private Property Rights Protection Act of 2017, Cost 

Estimate, Congressional Budget Office, at 1 (June 8, 2018). This illustrates one of the fundamental problems with the bill, namely, that its vague terminology and therefore applicability 

are nearly impossible to predict. 

local governments.1 While healthcare is the single largest category 

of grants to state and local governments by federal outlays, transportation, education/training/employment, and community and regional development grants account for federal grant outlays in the 

approximate amount of $160 billion.2 Many of these grant programs would likely fall under H.R. 1689’s expansive definition of 

‘‘federal economic development funds.’’ Depending on the state or 

locality, the withheld funds could represent a significant percentage of budgetary spending. Moreover, these grants also often provide critical development capital in economically depressed and 

chronically underserved communities, through such programs as 

Community Block Development grants and United States Department of Agriculture (USDA) Rural Development programs. Given 

the broad potential scope of ‘‘federal economic development funds,’’ 

the loss of such funds could potentially cause states and localities 

to become insolvent. 

Moreover, by withholding such a broad array of funds, H.R. 

1689’s penalty is overly punitive because it would punish an entire 

state or local community for the government’s action in one eminent domain matter. Under the legislation, any use of eminent domain power for economic development purposes would trigger a 

penalty that withholds all federal economic development funds for 

that state or locality, not just funds associated with the prohibited 

taking. The loss of these funds could create dire economic consequences for individuals and communities who have no connection 

whatsoever to the government’s exercise of eminent domain. 

Private property ownership is an important right, but enforcing 

H.R. 1689’s penalty would create an extreme and unjust scenario. 

Not only is the total loss of a state or localities federal economic 

development funds a disproportionate response to the harm done to 

the individuals, it punishes innocent individuals and communities 

for their government’s actions. 

B. The potential loss of all federal economic development funds 

would have a devastating effect even on jurisdictions that never 

exercised their eminent domain power 

H.R. 1689’s penalty provision could further harm innocent individuals and communities by impairing the ability of states and municipalities to raise money by issuing bonds. 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 

20 

3 132 S. Ct. 2566, 2603–04 (2012). 

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. In this additional way, H.R. 1689’s penalty provision 

could harm completely innocent individuals and communities. 

II. H.R. 1689’S HEAVY-HANDED PENALTY IS POTENTIALLY UNCONSTITUTIONAL AS IT VIOLATES CONSTRAINTS ON CONGRESSIONAL SPENDING POWERS GROUNDED IN PRESERVING FEDERALISM

H.R. 1689 likely exceeds the constraints the Constitution places 

on Congress’ exercise of its spending clause powers. As the Supreme Court explained in National Federation of Independent Business v. Sebelius, a decision which, among other things, struck down 

the Medicaid expansion of the Affordable Care Act: 

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.3

Here, there is no necessary connection between the federal economic development funds received and the eminent domain actions 

H.R. 1689 proponents intend to regulate. Any use of eminent domain power by the state or its localities can trigger the penalty imposed by this bill regardless of whether the project that is the beneficiary of the taking received federal economic development funds. 

The government or private entity undertaking the project need not 

have received any funds to trigger the bill’s penalties. Instead, the 

jurisdiction that exercised the eminent domain power 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 minimis amount of such funds. In short, 

the condition on the receipt of federal economic development funds 

is not related to the federal government interests in governing the 

use of such funds. The connection between the receipt of the funds 

and the prohibited use of eminent domain power is simply too tenuous, if it exists at all, to satisfy the Court’s test in Sebelius. 

Furthermore, as the Court noted in Sebelius, conditional federal 

spending can constitute unconstitutional coercion if it threatens 

states with too great of a loss. Here, H.R. 1689’s threatened loss 

of all federal economic development funds may be so draconian as 

to be unconstitutionally coercive. 

These constraints on federal spending power serve an important 

function in our constitutional scheme. Under our federal system, 

the states and the federal government are equal sovereigns. It is 

undisputed, however, that the federal government’s considerable fiVerDate Sep 11 2014 02:37 Jul 30, 2018 Jkt 079006 PO 00000 Frm 00020 Fmt 6659 Sfmt 6602 E:\HR\OC\HR859.XXX HR859
21 

4The Private Property Rights Protection Act: Hearing on H.R. 1689 before the Subcomm. on 

the Constitution and Civil Justice of the H. Comm. on the Judiciary, 115th Cong. 11 (2017) (testimony of Prof. William Buzbee). 5 545 U.S. 469 (2005). 

6The Private Property Rights Protection Act: Hearing on H.R. 1689 before the Subcomm. on 

the Constitution and Civil Justice, H. Comm. on the Judiciary, 115th Cong. (2017) (written testimony of Prof. William Buzbee). 

nancial resources could be used to undermine state sovereignty 

were it allowed to attach oppressive conditions to the receipt of federal funds to coerce states into adopting federal views in a potentially broad spectrum of public policies. Moreover, the Constitution 

does not permit Congress to attach even reasonable conditions to 

federal funds if they are unrelated to the use of those funds because unrelated conditions by definition do not serve the federal 

government’s interest in overseeing how the funds are spent. 

In fact, the federal interest in regulating a state’s use of eminent 

domain powers appears to be minimal. At a hearing on this legislation before the Subcommittee on the Constitution and Civil Justice, 

Minority witness Professor William Buzbee of Georgetown University Law Center noted that the federal government has no special 

expertise in eminent domain abuse, a problem which creates no 

cross-border harms and which does not demand the federal government to set standards to prevent ‘‘regulatory races to the bottom.’’ 4

Moreover, he noted that in the wake of the Supreme Court’s decision in Kelo v. City of New London,5 which upheld the constitutionality of a city’s use of eminent domain to transfer property from 

one private owner to another for the purpose of economic development, more than 40 states have enacted provisions to prohibit or 

restrict eminent domain use for such a purpose. He also testified 

that regulation of land use in the eminent domain context is highly 

dependent on local conditions, stating: ‘‘Who knows state and local 

conditions and needs best? Again, not Congress. The diversity of 

circumstances and different political cultures and aspirations found 

in different states and localities would normally weigh strongly 

against uniform federal regulation.’’ 6

H.R. 1689’s condition on the receipt of federal funds is both oppressive and unrelated to Congress’ interest in determining how 

federal funds should be spent. The fact that the condition is attached to enact a ‘‘federal’’ policy on the appropriate, lawful exercise of a state’s eminent domain power—a power closely associated 

with the concept of sovereignty—emphasizes its suspect constitutionality. 

III. H.R. 1689 DOES NOT ADEQUATELY PROTECT PROPERTY OWNERS

While the penalties that H.R. 1689 imposes on states and localities are extreme, the protections this bill offers to individual property owners are minimal and ineffective. H.R 1689 does not permit 

a property owner to stop an offending taking before it occurs. Rather, a property owner may commence suit under this legislation’s 

private right of action provision only after the conclusion of any 

condemnation proceedings concerning the property at issue. Furthermore, the bill does not provide for any compensation for the 

plaintiff beyond what is already authorized under applicable law. 

At the Committee’s markup of H.R. 1689, Ranking Member 

Jerrold Nadler (D–NY) offered an amendment striking the bill’s 

draconian penalty provision and replacing it with one that would 

22 

7 ROBERT CARO, THE POWER BROKER 967–68 (Vintage Books 1974). 8 H.R. 1689, 115th Cong. § 14(1)(A)(ii) (2017). 

9 50 State Report Card: Tracking Eminent Domain Reform Legislation since Kelo, Castle Coalition (last accessed May, 8 2018) available at http://castlecoalition.org/50-state-report-card. 

permit an aggrieved party to seek an injunction to block a taking 

before it occurs. This amendment would have allowed a party to 

prevent the harm, rather than force the party to wait until after 

the damage is done, and inflict a penalty designed to wreak financial ruin on the entire community. The Committee, however, rejected this amendment. 

In addition to failing to give aggrieved property owners an adequate remedy, H.R. 1689 also does nothing to prevent ‘‘traditional’’ 

abuses of the eminent domain power. Abuse of eminent domain 

powers did not begin with and was never 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 which are explicitly permitted by this legislation. Robert Caro, in his seminal work on urban political power, 

The Power Broker, observed: 

[D]uring the seven 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.7

These public projects have often had a disproportionate impact 

on low-income and minority communities. Nevertheless, the bill’s 

definition of a prohibited taking for economic development purposes 

explicitly exempts these types of public works. Thus, H.R. 1689 

fails to curb many of these past abuses. 

Finally, H.R. 1689 also fails to prevent the use of eminent domain to seize private property and give it to a private developer for 

economic development purposes. The legislation would permit 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.’’ 8 Arguably, then, a state or locality could still convey private land from one private party to another private party for the 

purpose of constructing a sports stadium or shopping mall as both 

are facilities open to public use. 

CONCLUSION

H.R. 1689’s heavy-handed approach to preventing eminent domain abuse punishes faultless communities for the government’s 

wrongdoing, while failing to provide adequate protections and remedies for individual property owners. In the 13 years since the Kelo 

decision, more than 40 states have enacted legislation to curtail the 

use of eminent domain for economic development purposes.9 ConVerDate Sep 11 2014 02:37 Jul 30, 2018 Jkt 079006 PO 00000 Frm 00022 Fmt 6659 Sfmt 6602 E:\HR\OC\HR859.XXX HR859
23 

gress should not belatedly substitute its judgment for that of state 

legislatures by enacting this flawed and deeply harmful legislation. 

For these reasons we urge our colleagues to oppose H.R. 1689. 

MR. NADLER. 

MS. LOFGREN. 

MR. JOHNSON, JR. 

MR. RASKIN. 

MS. JAYAPAL. 

Æ