The just compensation clause of the Fifth Amendment states “nor shall private property be taken for public use, without just compensation.” Initially, this clause applied to the government’s exercise of its power of eminent domain. In eminent domain cases, the government invokes its eminent domain power by filing a condemnation action in court against a property owner to establish that the taking is for a public use or purpose, such as the construction of a road or school, and to have the amount of just compensation due the property owner determined by the court. In such cases, the government takes title to the property, providing the owner just compensation based on the fair market value of the property at the time of taking. In later years, Supreme Court decisions established that regulatory takings are subject to the just compensation clause as well. In contrast to the direct taking associated with eminent domain, regulatory takings arise from the consequences of government regulatory actions that affect private property. In these cases, the government does not take action to condemn the property or offer compensation. Instead, the government effectively takes the property by denying or limiting the owner’s planned use of the property, referred to as an inverse taking. An owner claiming that a government action has effected a taking and that compensation is owed must initiate suit against the government to obtain any compensation due.The court awards just compensation to the owner upon concluding that a taking has occurred. In 1987, concerned with the number of pending regulatory takings lawsuits and with court decisions seen as increasing the exposure of the federal government to liability for such takings, the President’s Task Force on Regulatory Relief began drafting an executive order to direct executive branch agencies to more carefully consider the takings implications of their proposed regulations or other actions. According to a former Assistant Attorney General, this order was needed to protect public funds by minimizing government intrusion upon private property rights and to budget for the payment of just compensation when such intrusions were inevitable. The President issued this order, EO 12630, on March 15, 1988. According to the EO, actions subject to its provisions include regulations, proposed regulations, proposed legislation, comments on proposed legislation, or other policy statements that, if implemented or enacted, could cause a taking of private property. Such actions may include rules and regulations that propose or implement licensing, permitting, or other conditions, requirements or limitations on private property use. The EO also enumerates agency actions that are not subject to the order, including the exercise of the power of eminent domain and law enforcement actions involving seizure, for violations of law, of property for forfeiture, or as evidence in criminal proceedings. Among other things, the EO requires the U.S. Attorney General to issue guidelines to help agencies evaluate the takings implications of their proposed actions, and, as necessary, to update these guidelines to reflect fundamental changes in takings case law resulting from U.S. Supreme Court decisions. The Attorney General issued these guidelines on June 30, 1988, to establish a basic, uniform framework for federal agencies to use in their internal evaluations of the takings implications of administrative, regulatory, and legislative policies and actions. In addition, the guidelines discuss agency responsibilities for implementing the EO and the process for preparing agency-specific supplemental guidelines. The Attorney General’s guidelines provide that agencies should assess the takings implications of their proposed actions to determine their potential for a compensable taking and that decision makers should consider other viable alternatives, when available, to meet statutorily required objectives while minimizing the potential impact on the public treasury. In cases where alternatives are not available, the potential takings implications are to be noted, such as in a notice of proposed rulemaking. The guidelines also state that takings implication assessments are internal, predecisional management aids and that they are not subject to judicial review. In addition, the form and manner of these assessments are left up to each agency. The guidelines also include an appendix that provides detailed information regarding some of the case law surrounding consideration of whether a taking has occurred and the extent of any potential just compensation claim. For example, the appendix discusses the Penn Central Transportation Co. v. City of New Yorkcase in which the Supreme Court set out a list of three “influential factors” for determining whether an alleged regulatory taking should be compensated: (1) the economic impact of the government action, (2) the extent to which the government action interfered with reasonable investment-backed expectations, and (3) the “character” of the government action. However, the appendix provides a caveat that it is not intended to be an exhaustive account of relevant case law, adding that the consideration of the potential takings of an action as well as the applicable case law will normally require close consultation between agency program personnel and agency counsel. In addition to requiring guidelines, the EO requires OMB to ensure that the policies of executive branch agencies are consistent with the EO’s principles, criteria, and requirements. For example, for proposed regulatory actions subject to OMB review, agencies are required to include a discussion summarizing the potential takings implications of these actions in their submissions to OMB. The EO also requires OMB to ensure that all takings awards levied against the agencies are properly accounted for in agencies’ budget submissions. Despite the existence of the EO, some Members of Congress hold the view that the enforcement of the just compensation clause with respect to regulatory takings is inadequate and that statutory measures are needed to reduce the infringement on private property rights resulting from government regulation and to ensure compensation in the event of such infringement. For example, a variety of legislation has been proposed in Congress over the past 10 years to achieve those goals. In general, according to a study prepared by the Congressional Budget Office, these bills included measures that would (1) increase the requirements for analysis and reporting that federal agencies must meet before making decisions that could restrict the uses of private property, (2) relax the procedural requirements that must be satisfied before a federal court will hear the merits of a takings claim, and (3) require that the budget of an agency whose action triggers a regulatory compensation claim be the source of any compensation awarded. Although property rights advocates have supported these legislative initiatives, others, including some environmental groups, have questioned the need for legislation and voiced the view that the consideration of the takings potential of an agency action should not impede the government’s ability to protect the environment or provide other societal benefits. Justice has not updated the general guidelines that it issued pursuant to the EO in June 1988 for evaluating the risk of and avoiding regulatory takings, but it has issued supplemental guidelines for three of the four agencies. Officials at Justice and two of the four agencies said that changes in takings case law related to Supreme Court decisions made since 1988 have not been significant enough to warrant a revision of the general guidelines. Justice officials also noted that because the guidelines provide a general framework for agencies to follow in implementing the EO, they do not require frequent revision. However, Interior and Agriculture officials said that it would be helpful to their staffs if Justice updated a summary of the key aspects of relevant case law contained in an appendix to the guidelines to reflect significant developments in the past 15 years. Similarly, some law professors and representatives of property rights groups noted that the body of relevant case law has evolved significantly over the past 15 years, requiring an update to the guidelines. Regarding supplemental guidelines, Justice has issued these guidelines for three of the four agencies, but has not done so for Agriculture. According to Justice and Agriculture officials, Agriculture’s supplemental guidelines went through several drafts in the early 1990s, but were never completed because the two agencies disagreed on issues such as how to assess the takings implications of changes in grazing and special use permits. However, Justice and Agriculture officials told us that Agriculture’s compliance with the EO has not been encumbered by the agency’s lack of supplemental guidelines. Agency officials and other experts differ on the need to update the Attorney General’s guidelines to reflect changes in regulatory takings case law since 1988. Justice officials said the guidelines have not been updated since 1988 because there have been no fundamental changes in regulatory takings case law, the EO’s criterion for an update. They said that the guidelines, as written, still cover the main issues in determining the risk of a regulatory taking and that subsequent Supreme Court decisions have not substantially changed this analysis. For example, these officials said the three-factor test outlined in the 1978 Penn Central case remains the most important guidance for analyzing the potential for a taking that is subject to just compensation. Justice officials also emphasized that the guidelines address only a general framework for agencies’ evaluations of the takings implications of their proposed actions and thus are not intended to be an up-to-date, comprehensive primer on all possible considerations. The guidelines state that the individual agencies must still conduct their own evaluations, including necessary legal research, when assessing the takings potential of a proposed regulation or action. Two of the four agencies supported Justice’s position that the guidelines do not need to be updated. Officials at the other two agencies expressed the view that an appendix to the guidelines that summarizes key regulatory takings case law should be updated. Regarding agencies that supported Justice’s position, Corps of Engineers staff indicated that based on their review of relevant Supreme Court decisions since 1988, there has been no fundamental change in the criteria for assessing potential takings and thus no update to the Attorney General’s guidelines is necessary. Similarly, EPA staff said that some of the takings cases decided since 1988 gave the appearance that the Court was changing the three-pronged test set out in the Penn Central decision. However, these officials noted that more recent cases have returned to the Penn Central test, thereby removing the need for updating the Attorney General’s guidelines. In contrast, officials at Interior and Agriculture said that it would be helpful if Justice updated the summary of key takings cases contained in an appendix to the guidelines to reflect significant developments in case law over the past 15 years.