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109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-262

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



 
             PRIVATE PROPERTY RIGHTS PROTECTION ACT OF 2005

                                _______
                                

October 31, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 4128]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 4128) to protect private property rights, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     4
Background.......................................................     4
Hearings.........................................................    13
Committee Consideration..........................................    13
Vote of the Committee............................................    14
Committee Oversight Findings.....................................    18
New Budget Authority and Tax Expenditures........................    18
Congressional Budget Office Cost Estimate........................    18
Performance Goals and Objectives.................................    19
Constitutional Authority Statement...............................    19
Section-by-Section Analysis and Discussion.......................    19
Changes in Existing Law Made by the Bill, as Reported............    22
Additional and Dissenting Views..................................    23

                             THE AMENDMENT

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Private Property Rights Protection Act 
of 2005''.

SEC. 2. PROHIBITION ON EMINENT DOMAIN ABUSE BY STATES.

  (a) In General.--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 or 
political subdivision receives Federal economic development funds 
during any fiscal year in which it does so.
  (b) Ineligibility for Federal Funds.--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, and 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.
  (c) Opportunity to Cure Violation.--A State or political subdivision 
shall not be ineligible for any Federal economic development funds 
under subsection (b) if such State or political subdivision returns all 
real property the taking of which was found by a court of competent 
jurisdiction 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.

SEC. 3. PROHIBITION ON EMINENT DOMAIN ABUSE BY THE FEDERAL GOVERNMENT.

  The Federal Government or any authority of the Federal Government 
shall not exercise its power of eminent domain to be used for economic 
development.

SEC. 4. PRIVATE RIGHT OF ACTION.

  (a) Cause of Action.--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, and a State shall not be immune under the 
eleventh amendment to the Constitution of the United States from any 
such action in a Federal or State court of competent jurisdiction. Any 
such property owner may also seek any appropriate relief through a 
preliminary injunction or a temporary restraining order.
  (b) Limitation on Bringing Action.--An action brought under this Act 
may be brought if the property is used for economic development 
following the conclusion of any condemnation proceedings condemning the 
private property of such property owner, but shall not be brought later 
than seven years following the conclusion of any such proceedings and 
the subsequent use of such condemned property for economic development.
  (c) Attorneys' Fee and Other Costs.--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.

SEC. 5. NOTIFICATION BY ATTORNEY GENERAL.

  (a) Notification to States and Political Subdivisions.--
          (1) 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.
          (2) 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. 
        The Attorney General shall compile annual revisions of such 
        list as necessary. 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 for use by the public and by the 
        authorities in each State and political subdivisions of each 
        State empowered to take private property and convert it to 
        public use subject to just compensation for the taking.
  (b) Notification to Property Owners.--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.

SEC. 6. REPORT.

  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. The report shall--
          (1) identify all private rights of action brought as a result 
        of a State's or political subdivision's violation of this Act;
          (2) 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;
          (3) discuss all instances in which a State or political 
        subdivision has cured a violation as described in section 2(c) 
        of this Act.

SEC. 7. SENSE OF CONGRESS REGARDING RURAL AMERICA.

  (a) Findings.--The Congress finds the following:
          (1) The founders realized the fundamental importance of 
        property rights when they codified the Takings Clause of the 
        Fifth Amendment to the Constitution, which requires that 
        private property shall not be taken ``for public use, without 
        just compensation''.
          (2) Rural lands are unique in that they are not traditionally 
        considered high tax revenue-generating properties for state and 
        local governments. In addition, farmland and forest land owners 
        need to have long-term certainty regarding their property 
        rights in order to make the investment decisions to commit land 
        to these uses.
          (3) Ownership rights in rural land are fundamental building 
        blocks for our Nation's agriculture industry, which continues 
        to be one of the most important economic sectors of our 
        economy.
          (4) In the wake of the Supreme Court's decision in Kelo v. 
        City of New London, abuse of eminent domain is a threat to the 
        property rights of all private property owners, including rural 
        land owners.
  (b) Sense of Congress.--It is the 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 
should protect the property rights of Americans, including those who 
reside in rural areas. Property rights are central to liberty in this 
country and to our economy. The use of eminent domain to take farmland 
and other rural property for economic development threatens liberty, 
rural economies, and the economy of the United States. Americans should 
not have to fear the government's taking their homes, farms, or 
businesses to give to other persons. Governments should not abuse the 
power of eminent domain to force rural property owners from their land 
in order to develop rural land into industrial and commercial property. 
Congress has a duty to protect the property rights of rural Americans 
in the face of eminent domain abuse.

SEC. 8. DEFINITIONS.

  In this Act the following definitions apply:
          (1) Economic development.--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.
          (2) Federal economic development funds.--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.
          (3) State.--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.

SEC. 9. SEVERABILITY AND EFFECTIVE DATE.

  (a) Severability.--The provisions of this Act are severable. 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.
  (b) Effective Date.--This Act shall take effect upon the first day of 
the first fiscal year that begins after the date of the enactment of 
this Act, but shall not apply to any project for which condemnation 
proceedings have been initiated prior to the date of enactment.

SEC. 10. SENSE OF CONGRESS.

  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.

SEC. 11. BROAD CONSTRUCTION.

  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.

                          PURPOSE AND SUMMARY

    The purpose of H.R. 4128, the ``Private Property Rights 
Protection Act of 2005,'' is to preserve the rights granted to 
our Nation's citizens under the Fifth Amendment of the 
Constitution and jeopardized by the Supreme Court decision in 
Kelo v. City of New London.

                               BACKGROUND

The fundamental importance of private property rights

    The protection of private property rights lies at the 
foundation of American government. As James Madison wrote in 
the Federalist Papers, ``[G]overnment is instituted no less for 
the protection of property than of the persons of 
individuals.'' \1\
---------------------------------------------------------------------------
    \1\ The Federalist No. 54, at 370 (Jacob E. Cooke ed., 1961) (James 
Madison) see also James Madison, Property, National Gazette (Mar. 27, 
1792), reprinted in 14 The Papers of James Madison 266 (Robert Rutland, 
et al. eds., 1983) (``Government is instituted to protect property of 
every sort * * * This being the end of government, that alone is a just 
government, which impartially secures to every man, whatever is his 
own.'').
---------------------------------------------------------------------------
    In 1795, the Supreme Court clearly articulated our 
citizens' fundamental right to private property under the 
Constitution when it declared: ``possessing property, and 
having it protected, is one of the natural, inherent, and 
unalienable rights of man.  * * *'' \2\ And as Justice Story 
explained years later, ``That 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.'' \3\
---------------------------------------------------------------------------
    \2\ Vanhorne's Lessee v. Dorrance, 2 U.S. 304, 310 (1795).
    \3\ Wilkinson v. Leland, 27 U.S. (2 Pet.) 627, 657 (1829).
---------------------------------------------------------------------------
    President Abraham Lincoln often spoke of how at the heart 
of the evil practice of slavery was a denial of property 
rights: ``It is the same tyrannical principle,'' he said. ``It 
is the same spirit that says, `You work and toil and earn 
bread, and I'll eat it.' '' \4\
---------------------------------------------------------------------------
    \4\ Seventh Lincoln-Douglas debate, 15 October 1858; speech at 
Springfield, 26 June 1857; in Abraham Lincoln, Collected Works, ed. Roy 
P. Basler (New Brunswick: Rutgers University Press, 1953), 3:315; 
2:405.
---------------------------------------------------------------------------
    More recently, the Supreme Court again rightly stated that 
``[t]he 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.'' \5\ The sanctity and 
centrality of private property rights are thus ingrained in our 
constitutional design.
---------------------------------------------------------------------------
    \5\ Lynch v. Household Fin. Corp., 405 U.S. 538, 552 (1972).
---------------------------------------------------------------------------

The Supreme Court's Kelo decision

    Notwithstanding this long history of the protection of 
private property rights, on June 23, 2005, the Supreme Court 
held in Kelo v. City of New London,\6\ that ``economic 
development'' was a ``public use'' under the Fifth Amendment's 
Takings Clause, which provides that ``nor shall private 
property be taken for public use without just compensation.'' 
\7\ As the Court described the motivation for the Government's 
taking of private property: ``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.'' \8\ 
The Supreme Court held that these properties ``were condemned 
only because they happen to be located in the development 
area,'' and that the taking was constitutional because it 
``would be executed pursuant to a `carefully considered' 
development plan.'' \9\
---------------------------------------------------------------------------
    \6\ 125 S.Ct. 2655 (2005).
    \7\ U.S. Const., Amend. V (emphasis added).
    \8\ Id. at 2659.
    \9\ Id. at 2660-61.
---------------------------------------------------------------------------
    Justice O'Connor's dissenting opinion correctly summarized 
the terrifying import of the Supreme Court's decision, stating 
that ``To reason, as the Court does, that the incidental public 
benefits resulting from the subsequent ordinary use of private 
property render economic development takings `for public use' 
is to wash out any distinction between private and public use 
of property--and thereby effectively to delete the words `for 
public use' from the Takings Clause of the Fifth Amendment.'' 
\10\
---------------------------------------------------------------------------
    \10\ Id. at 2671 (O'Connor, J., dissenting).
---------------------------------------------------------------------------
    The importance of the Takings Clause and its protection of 
property rights is that it ``provid[es] safeguards against 
excessive, unpredictable, or unfair use of the government's 
eminent domain power--particularly against those owners who, 
for whatever reasons, may be unable to protect themselves in 
the political process against the majority's will. * * * The 
public use requirement * * * 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. This requirement promotes fairness as well as 
security.'' \11\
---------------------------------------------------------------------------
    \11\ Id. at 2672.
---------------------------------------------------------------------------
    As the dissent points out, as a result of the majority's 
decision, ``The specter of condemnation hangs over all 
property. Nothing is to prevent the State from replacing any 
Motel 6 with a Ritz-Carlton, any home with a shopping mall, or 
any farm with a factory. * * * Today nearly all real property 
is susceptible to condemnation on the Court's theory. * * * Any 
property may now be taken for the benefit of another private 
party, but the fallout from this decision will not be random. 
The beneficiaries are likely to be those citizens with 
disproportionate influence and power in the political process, 
including large corporations and development firms. As for the 
victims, the government now has license to transfer property 
from those with fewer resources to those with more. The 
Founders cannot have intended this perverse result.'' \12\
---------------------------------------------------------------------------
    \12\ Id. at 2676.
---------------------------------------------------------------------------

The Supreme Court's Kelo decision threatens the most vulnerable

    Private business development can and does regularly occur 
without an eminent domain proceeding. Economic development of 
private property can take place without force, through 
voluntary negotiation. When the agreements regarding economic 
development cannot be reached, then economic development of 
private property can only occur for public purposes. Local 
governments have many different kinds of incentive, zoning, and 
code enforcement tools to promote economic development. The 
Kelo Court's endorsement of the Government's raw taking of 
entire tracts of private property from one private person to 
give to another private person who can put the land to some 
imagined more valuable use threatens to enshrine into law, in 
lieu of the free market a bureaucratic ``command and control'' 
of the economy long thought to have been relegated to the 
dustbin of history.\13\
---------------------------------------------------------------------------
    \13\ As the National Association of Home Builders has stated, ``In 
Kelo, the Supreme Court ruled that government entities can condemn any 
property in the name of `economic development.' NAHB believes that it 
is proper to use eminent domain when the project is for public use, but 
it should not be used to transfer private property to another private 
owner for the purpose of `upgrading' the land * * * Kelo substantially 
weakens the rights of private land owners--the government can now take, 
for nearly any reason, your land, subject to just compensation. This 
decision has rightfully alarmed many Americans.'' Letter from National 
Association of Home Builders to Members of Congress (June 30, 2005).
---------------------------------------------------------------------------

African-Americans and the elderly

    The National Association for the Advancement of Colored 
People (``NAACP'') and the American Association of Retired 
Persons (``AARP'') stated in their amicus brief to the Supreme 
Court in the Kelo case that:

    [The] holding that government may take property from a 
private citizen for the purpose of giving it to another private 
party purely for ``economic development'' is both inconsistent 
with the language of the Constitution and dangerous. 
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.\14\
---------------------------------------------------------------------------
    \14\ 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-*4.
---------------------------------------------------------------------------
    To hold that the public use requirement is satisfied 
wherever there are potential economic benefits to be realized 
is to render the public use requirement meaningless.\15\
---------------------------------------------------------------------------
    \15\ 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 *6.
---------------------------------------------------------------------------
    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 remova1.'' \16\
---------------------------------------------------------------------------
    \16\ 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 *7.
---------------------------------------------------------------------------
    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. For example, four siblings in their seventies and 
eighties were forced to leave their homes and Christmas tree 
farm to enable the city of Bristol, Connecticut to erect an 
industrial park.\17\ Several African-American families in 
Canton, Mississippi were similarly forced to leave the homes 
they had lived in for over sixty years to clear land for a 
Nissan automobile plant.\18\
---------------------------------------------------------------------------
    \17\ 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 *7.
    \18\ 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 *9 (citing Bugryn v. City of Bristol, 774 A.2d 1042 
(Conn. App. Ct. 2001), appeal denied, 776 A.2d 1143 (Conn. 2001), cert. 
denied, 534 U.S. 1019, 122 S. Ct. 544 (2001); David Firestone, ``Black 
Families Resist Mississippi Land Push,'' The New York Times (September 
10, 2001) at A20).

    Eminent domain abuse has a history of disproportionately 
impacting the minority community. For example, of all the 
families displaced by urban renewal from 1949 through 1963, 63 
percent of those whose race was known were nonwhite.\19\ 
Racially changing neighborhoods that lacked institutional and 
political power were selected as blighted areas and designated 
for redevelopment through urban renewal programs.\20\ ``The 
purpose behind the designation of certain areas as blighted was 
clear. Renewal advocates believed that the blighted land could 
be put to a `higher use' under the right circumstances.'' \21\ 
As a result, ``across the nation, inner city neighborhoods were 
designated as blighted, properties condemned, and land turned 
over to private properties.'' \22\
---------------------------------------------------------------------------
    \19\ See B. Frieden & L. Sagalayn, Downtown, Inc. How America 
Rebuilds Cities 28 (1989).
    \20\ See Wendell E. Pritchett, The ``Public Menace'' of Blight: 
Urban Renewal and the Private Uses of Eminent Domain, 21 Yale L. & 
Pol'y Rev. 1, 6 (2003).
    \21\ Id. at 21.
    \22\ Id. at 47.
---------------------------------------------------------------------------
    In 1981, urban planners in Detroit, Michigan, uprooted the 
largely lower-income and elderly Poletown neighborhood for the 
benefit of the General Motors Corporation.\23\ The Poletown 
condemnation became so notorious that the 1981 decision by the 
Michigan Supreme Court that upheld it was overturned by that 
same court just last year.\24\ In San Jose, California, ninety-
five percent of the properties targeted for economic 
redevelopment are Hispanic or Asian-owned, even though only 
thirty percent of businesses are owned by minorities.\25\
---------------------------------------------------------------------------
    \23\ See J. Wylie, Poletown: Community Betrayed 58 (1989).
    \24\ See County of Wayne v. Hathcock, 684 N.W.2d 765, 786 (Mich. 
2004) (overruling Poletown v. Detroit, 304 N.W.2d 455 (Mich. 1981), in 
which the court upheld Detroit's condemnation of the homes of 
approximately 3,438 persons, most of whom were elderly, retired, 
Polish-American immigrants, to build a General Motors plant).
    \25\ See Derek Werner, Note: The Public Use Clause, Common Sense 
and Takings, 10 B.U. Pub. Int. L.J. 335, 350 (2001).
---------------------------------------------------------------------------
    Martin Luther King III, a former president of the Southern 
Christian Leadership Conference, has said that ``eminent domain 
should only be used for true public projects, not to take from 
one private owner to give to another wealthier private owner.'' 
\26\
---------------------------------------------------------------------------
    \26\ Letter from Martin Luther King III, President of the Southern 
Christian Leadership Council, to The Fort Trumbull Homeowners in New 
London, Connecticut (December 2, 2002).
---------------------------------------------------------------------------

Houses of worship

    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 singularly vulnerable to 
being taken under the rationale approved by the Supreme Court 
in favor of for-profit, tax-generating businesses. In addition, 
many other charitable organizations will face similar threats 
because of their tax-exempt status.\27\
---------------------------------------------------------------------------
    \27\See, e.g., 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 A1 (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).
---------------------------------------------------------------------------
    The Becket Fund for Religious Liberty wrote in their amicus 
brief in the Kelo case:

    To affirm this broad expansion of eminent domain power [as 
the Supreme Court did] is to grant municipalities a special 
license to invade the autonomy of and take the property of 
religious institutions. 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 singularly 
vulnerable to being taken under the rationale approved by the 
[Supreme Court]. Religious 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.'' \28\
---------------------------------------------------------------------------
    \28\ 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)).

    Because religious institutions are overwhelmingly non-
profit and tax-exempt, they will generate less in tax revenues 
than virtually any proposed commercial or residential use. 
Accordingly, when a municipality considers what properties 
should be included under condemnation plans designed to 
increase for-profit development and increase taxable 
properties, the non-profit, tax-exempt property of religious 
institutions will by definition always qualify and always be 
vulnerable to seizure.\29\
---------------------------------------------------------------------------
    \29\ Brief of Amicus Curiae the Becket Fund for Religious Liberty, 
2004 WL 2787141, at *11.
---------------------------------------------------------------------------
    It bears noting that while religious institutions face 
additional eminent domain risks stemming from religious 
discrimination, many other charitable organizations will face 
similar dangers because of their tax-exempt status alone. 
Indeed, several charitable organizations have faced 
condemnation threats in recent years to satisfy municipal 
appetite for more tax revenue.\30\
---------------------------------------------------------------------------
    \30\ 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 
condenmation 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 condenmation 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 condenmation 
of a Goodwill thrift store in order to build a shopping center)).
---------------------------------------------------------------------------

Farmers

    According to the amicus brief filed in the Kelo case by the 
American Farm Bureau Federation:

    The farmer and rancher members of amici curiae own and 
lease significant amounts of land on which they depend for 
their livelihoods and upon which all Americans rely for food 
and other basic necessities. As 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. Thus, each of our 
members is threatened by the decision * * * with the loss of 
productive farm and ranch land solely to allow someone else to 
put it to a different private use * * * American farmers and 
ranchers need the protection of the Fifth Amendment 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.\31\
---------------------------------------------------------------------------
    \31\ Brief Amici Curiae of the American Farm Bureau Federation et 
al., 2004 WL 2787138, at *2-4.

    And according to American Farmland Trust President Ralph 
Grossi, ``With so much farmland on the urban edge and near 
cities still in steep decline, ex-urban towns could be tempted 
by this ruling to make farmland available for subdivisions.'' 
\32\
---------------------------------------------------------------------------
    \32\ American Farmland Trust Policy Update (July 6, 2005).
---------------------------------------------------------------------------

The American people resoundingly reject the Supreme Court's Kelo 
        decision

    The Supreme Court's Kelo decision has been resoundingly 
criticized from all quarters. A resolution, H. Res. 340, 
expressing grave disapproval of the Kelo decision, was approved 
by the House of Representatives on June 30, 2005, by a vote of 
365-33.
    The protection of private property rights is an issue of 
primary concern to Americans today. According to a Wall Street 
Journal/NBC News poll, ``In the wake of court's eminent domain 
decision, Americans overall cite `private-property rights' as 
the current legal issue they care most about.'' \33\ As 
reported in the Wall Street Journal:

    \33\ John Harwood, ``Poll Shows Division on Court Pick,'' Wall 
Street Journal (July 15, 2005).
---------------------------------------------------------------------------
    [T]he issue has struck a nerve with Americans. In 
Connecticut, where the Supreme Court case originated, a 
Quinnipiac University poll shows just how much the eminent-
domain issue resonates. By an 11-to-1 margin, those surveyed 
said they opposed the taking of private property for private 
uses, even if it is for the public economic good. According to 
the poll, 89 percent of those surveyed were against 
condemnations for private economic development, compared with 8 
percent for them. Douglas Schwartz, head of the poll, says he 
has never seen such a lopsided margin on any issue he has 
polled.\34\
---------------------------------------------------------------------------
    \34\ Michael Corkery and Ryan Chittum, ``Eminent-Domain Uproar 
Imperils Projects,'' The Wall Street Journal (August 3, 2005) at B1.

    Also, according to an American Survey poll conducted July 
14-17, 2005, among 800 registered voters nationwide:
    Passing legislation limiting the government's ability to 
snatch private property should not be a heavy lift--especially 
if lawmakers listen to their constituents * * * Congressional 
action gets plenty of sympathy from constituents. Sixty-eight 
percent of registered voters favor legislative limits on the 
government's ability to take private property away from owners. 
Public support for limiting the power of eminent domain is 
robust and cuts across demographic and partisan groups. 62 
percent of self-identified Democrats, 74 percent of 
independents and 70 percent of Republicans support limits. Few 
issues in recent memory have mobilized citizens against a 
Supreme Court decision with such ferocity. \35\ Then people 
were asked, ``Congress is considering legislation that would 
say the Federal government cannot take private property for 
private commercial development if homeowners object. It would 
also say State and local governments can NOT take private 
property for private commercial development against homeowners 
wishes if any federal funds are being used in the project. What 
about you, would you favor or oppose Congress placing these 
limits on the ability of government to take private property 
away from owners?'' A resounding 68 percent favored such 
Congressional action. \36\
---------------------------------------------------------------------------
    \35\ Gary Andres, ``The Kelo Backlash: Americans Want Limits on 
Eminent Domain,'' The Washington Times (August 29, 2005) at A21.
    \36\ Gary Andres, ``The Kelo Backlash: Americans Want Limits on 
Eminent Domain,'' The Washington Times (August 29, 2005) at A21. 
Indeed, Americans' confidence in the Supreme Court keeps getting worse. 
On June 21, 2005, the Gallup Poll released a survey in which it asked 
whether people had confidence in the Supreme Court. The survey 
concluded that the reported ``41% confidence rating is among the lowest 
Gallup has ever found for this institution, and it perpetuates a 
gradual decline in the public's confidence over the past three years.'' 
Joseph Carroll, Gallup Poll Assistant Editor, ``Americans' Confidence 
in High Court Declines'' (June 21, 2005). In fact, respect for the 
Supreme Court has dropped among citizens of all political dispositions, 
including conservatives, moderates, and liberals Id.

    Even Justice John Paul Stevens, who wrote the Kelo decision 
for the five Justice majority, has said publicly he has 
concerns about the results of that decision, if not the legal 
reasoning behind it. Justice Stevens recently told the Clark 
County, Nevada, Bar Association that if he were a legislator 
instead of a judge, he would have opposed the results of his 
own ruling by working to change current law. \37\
---------------------------------------------------------------------------
    \37\ Samantha Young, ``Committee Tackles Court's Property Ruling, 
the Las Vegas Review Journal (September 8, 2005) (``Justice Stevens 
told the Clark County Bar Association that if he were a legislator 
instead of a judge bound by the law, he would have opposed the court's 
ruling in the case, Kelo v. the City of New London'').
---------------------------------------------------------------------------

H.R. 4128, the ``Private Property Rights Protection Act''

    Property rights are civil rights. There can be no 
individual freedom without the power of an individual to 
control their own autonomy through the free use of their own 
property. The Supreme Court's recent Kelo decision poses an 
immediate threat to that essential freedom, and the most likely 
victims will be the most vulnerable in our society if Congress 
does not act.
    Congress' 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 penalty is an appropriate use of Congress' 
spending power, as the Supreme Court has made clear that 
Congress may attach conditions to the receipt of any Federal 
funds provided such conditions are related to the ``Federal 
interest in particular national projects or programs'' and that 
they are ``unambiguous.'' \38\
---------------------------------------------------------------------------
    \38\ See South Dakota v. Dole, 483 U.S. 203 (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).
---------------------------------------------------------------------------
    H.R. 4128 denies States or localities that abuse eminent 
domain all Federal economic development funds for a period of 
two years.\39\ Under such a penalty, 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 which could themselves result 
in abusive takings of private property.
---------------------------------------------------------------------------
    \39\ H.R. 4128 also provides that any two year penalty period will 
begin only after final judgment on the merits by a court that the state 
or locality has violated the terms of this legislation.
---------------------------------------------------------------------------
    To ensure that any conditioning of the use of Federal funds 
is unambiguous, H.R. 4128 includes a ``notification'' section 
that would require the Attorney General to compile a list of 
the Federal laws under which Federal economic development funds 
are distributed and communicate such list to the chief 
executive officer of each state (its Governors) and also make 
it available on the Internet for use by the public and by the 
authorities in each State and political subdivisions of each 
State empowered to take private property and convert it to 
public use subject to just compensation for the taking. That 
way, States and localities will be put on notice that if they 
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. Further, only the 
locality, and not the whole State, would suffer the punishment 
if only the locality abused its eminent domain powers. H.R. 
4128 also contains a definition of ``Federal economic 
development funds'' that the Department of Justice would use 
when putting together its list of those Federal laws that meet 
such definition. The notification provisions also provide that 
basic information about the legislation be made available to 
the public through the Department of Justice's Internet 
website.
    H.R. 4128 provides States and localities with an 
opportunity to cure any violation before they lose any Federal 
economic development funds by either returning or replacing the 
improperly taken property.
    H.R. 4128 also includes an express private right of action 
to make certain that those suffering injuries for a violation 
of this legislation be allowed access to State or Federal court 
to enforce the provisions of the bill. Further, H.R. 4128 
contains a statute of limitations of seven years following the 
conclusion of any condemnation proceedings improperly 
condemning the private property for an improper private use or 
any subsequent allowance of the use of such property for an 
improper private use.\40\
---------------------------------------------------------------------------
    \40\ This is to allow enforcement of the Act if the government says 
it needs to use eminent domain to build a road, and it takes private 
property to do so, but then it never actually builds the road but 
instead gives the land to a large private company for use as a 
business.
---------------------------------------------------------------------------
    H.R. 4128 also includes a fee-shifting provision--identical 
to those in other civil rights laws--that allows a prevailing 
property owner to be awarded attorney and expert fees as part 
of the costs of bringing the litigation to enforce the bill's 
provisions.
    H.R. 4128 also includes a definition of ``economic 
development'' that allows the types of takings that have 
traditionally been considered appropriate public uses. The bill 
also includes exceptions for the transfer of property to public 
ownership, and to common carriers \41\ and public utilities, 
and for related things like pipelines. The bill also 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. The bill also makes exceptions for: the merely 
incidental use of a public property by a private entity, such 
as a retail establishment on the ground floor in a public 
property; for 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.
---------------------------------------------------------------------------
    \41\ Black's Law Dictionary defines ``common carrier'' as an entity 
that is ``generally required by law to transport * * * without refusal, 
if the approved fare or charge is paid.'' Black's Law Dictionary (8th 
ed. 2004). The term ``as of right'' is defined in Black's Law 
Dictionary as ``by virtue of a legal entitlement,'' ibid, which is part 
of the criteria that defines a common carrier's legal obligations, as a 
publicly regulated entity, to allow access to the public. A common 
carrier is something entirely different from, for example, a private 
shopping mall, which is not open to the public as of right, as a 
shopping mall generally has the right to exclude anybody from its 
premises.
---------------------------------------------------------------------------
    H.R. 4128 also includes a rule of broad construction that 
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.
    Finally, H.R. 4128 includes a provision providing that the 
legislation would not become effective until the start of the 
first fiscal year following the enactment of the legislation in 
order to provide States and localities with sufficient lead 
time within which to come into compliance with the legislation, 
and in any case the legislation would not apply to any project 
for which condemnation proceedings have been initiated prior to 
the date of enactment.

                                HEARINGS

    The House Committee on the Judiciary held no hearings on 
H.R. 4128.

                        COMMITTEE CONSIDERATION

    On October 25, 2005, the House Committee on the Judiciary 
received a referral of H.R. 4128. On October 27, 2005 the 
Committee met in open session and ordered favorably reported 
the bill H.R. 4128 as amended to the House by a recorded vote 
of 27-3, a quorum being present.



                      COMMITTEE OVERSIGHT FINDINGS

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports 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. 4128, the following estimate and 
comparison prepared by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974.
                                                  October 31, 2005.
Hon. F. James Sensenbrenner, Jr.,
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. 4128, the Private 
Property Rights Protection Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Gregory 
Waring (for federal costs) and Marjorie Miller (for the state 
and local impact).
            Sincerely,
                                               Douglas Holtz-Eakin.
    Enclosure.

H.R. 4128--Private Property Rights Protection Act of 2005

    H.R. 4128 would deny federal economic development 
assistance to any state or local entity that uses the power of 
eminent domain for economic development and would prohibit 
federal agencies from engaging in this practice. The bill would 
specifically prohibit state and local governments from taking 
private property and conveying or leasing that property to 
another private entity, either for a commercial purpose or to 
generate additional taxes, employment, or general economic 
health. A state or local government found to have violated this 
prohibition would be ineligible for certain federal economic 
development funds for two years, but could become eligible by 
returning or replacing the property. The bill would give 
private property owners the right to bring legal actions 
seeking enforcement of these provisions and would waive states' 
constitutional immunity to such suits.
    CBO expects that implementing the bill would have no 
significant impact on the federal budget because most 
jurisdictions would not risk the economic development 
assistance they receive from the federal government by using 
eminent domain as described in the bill. Further, a few states 
are considering legislation that would restrict the authority 
of localities to take private property for economic development 
projects. Because the bill would deny certain economic 
assistance for up to two years to localities using eminent 
domain in a way proscribed in the bill, the pace of spending 
for some discretionary grant programs could be marginally 
reduced. Enacting the bill would not affect direct spending or 
revenues.
    H.R. 4128 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 these conditions would apply to a large pool of 
funds, the bill would effectively restrict the use of eminent 
domain, and would have a significant impact on local 
governments' powers to manage land use in their jurisdictions. 
Further, state and local governments could incur significant 
additional legal expense to respond to private legal actions 
authorized by the bill.
    On October 19, 2005, CBO transmitted a cost estimate for 
H.R. 3405, the Strengthening the Ownership of Private Property 
Act of 2005, as ordered reported by the House Committee on 
Agriculture on October 7, 2005. H.R. 3405 contains similar 
provisions that would deny federal economic development 
assistance to any jurisdiction that uses the power of eminent 
domain for economic development. CBO also estimates that 
neither piece of legislation would have a significant impact on 
the federal budget.
    The CBO staff contacts for this estimate are Gregory Waring 
(for federal costs) and Marjorie Miller (for the state and 
local impact). This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                    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. 
4128 is designed to preserve the property rights granted to our 
Nation's citizens under the Fifth Amendment of the Constitution 
following the Supreme Court's decision in Kelo v. City of New 
London, which puts those rights in jeopardy.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in art. I, Sec. 8, cl. 1 (the Spending 
Clause), art. I, Sec. 8, cl. 3 of the Constitution, and Sec. 5 
of Amendment XIV.

               SECTION-BY-SECTION ANALYSIS AND DISCUSSION

    The following section-by-section analysis describes the 
bill as reported by the Committee on the Judiciary.

Section 1. Short title

    Section 1 provides for the short title of the legislation, 
the ``Private Property Rights Protection Act of 2005.''

Section 2. Prohibition of eminent domain abuse by States

    Section 2(a) 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 or 
political subdivision receives Federal economic development 
funds during any fiscal year in which it does so.
    Section 2(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 two fiscal years following a 
final judgment on the merits by a court of competent 
jurisdiction that such subsection has been violated, and any 
Federal agency charged with distributing those funds shall 
withhold them for such two 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.
    Section 2(c) provides that a State or political subdivision 
shall not be ineligible for any Federal economic development 
funds under subsection (b) if such State or political 
subdivision returns all real property the taking of which was 
found by a court of competent jurisdiction 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 the Federal Government or any 
authority of the Federal Government shall not exercise its 
power of eminent domain to be used for economic development.

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, and a State 
shall not be immune under the eleventh amendment to the 
Constitution of the United States from any such action in a 
Federal or State court of competent jurisdiction. Any such 
property owner may also seek any appropriate relief through a 
preliminary injunction or a temporary restraining order.
    Subsection (b) provides that an action brought under this 
Act may be brought if the property is used for economic 
development following the conclusion of any condemnation 
proceedings condemning the private property of such property 
owner, but shall not be brought later than seven years 
following the conclusion of any such proceedings and the 
subsequent use of such condemned property for economic 
development.
    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. 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. The Attorney General shall 
compile annual revisions of such list as necessary. 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 for use 
by the public and by the authorities in each State and 
political subdivisions of each State empowered to take private 
property and convert it to public use subject to just 
compensation for the taking.
    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 6. Report

    Section 6 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. The report shall 
(1) identify all private rights of action brought as a result 
of a State's or political subdivision's violation of this Act; 
(2) 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; and (3) discuss all instances in which 
a State or political subdivision has cured a violation as 
described in section 2( c) of this Act.

Section 7. Sense of Congress regarding rural America

    Section 7 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 should protect the property 
rights of Americans, including those who reside in rural areas.

Section 8. Definitions

    Section 8 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 9. Severability and effective date

    Subsection (a) provides for a severability clause. 
Subsection (b) provides that this Act shall take effect upon 
the first day of the first fiscal year that begins after the 
date of the enactment of this Act, but shall not apply to any 
project for which condemnation proceedings have been initiated 
prior to the date of enactment.

Section 10. Sense of Congress

    Section 10 contains a Sense of Congress providing 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 11. Broad construction

    Section 11 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 this Act and the 
Constitution.

            CHANGES IN EXISTING LAW BY THE BILL, AS REPORTED

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that H.R. 
4128 makes no changes to existing law.

         ADDITIONAL CONCURRING VIEWS OF REPRESENTATIVE LOFGREN

    At markup, I intended to offer an amendment to this 
legislation creating an exception to the definition of 
``economic development'' for the development of affordable 
housing for low-income residents. I ultimately decided not to 
offer this amendment, however, based on my recognition, and the 
apparent recognition of my colleagues, that this bill as 
introduced does not in any way limit the ability of states and 
local governments to exercise their eminent domain powers for 
the building of affordable housing for low-income residents. In 
fact, during markup, I pointed this out and received no 
objections from my colleagues.
    The provision of low-income housing, whether by a for-
profit or a non-profit entity, should not constitute ``economic 
development'' under the definition in this bill because such 
activity constitutes neither ``commercial enterprise'' nor an 
activity designed to ``increase tax revenue, tax base, 
employment or general economic health.'' Rather, the 
development of affordable housing for low-income residents 
constitutes a traditional public purpose for which eminent 
domain powers have long been recognized. Given that this bill 
will not in any way limit the exercise of eminent domain powers 
for the development of affordable housing, I concur in the 
Committee's report.
                                                       Zoe Lofgren.

                            DISSENTING VIEWS

    We share our colleagues' concern that the Supreme Court's 
recent decision in Kelo v. City of New London \1\ could open 
the door to a dangerous expansion of the eminent domain power. 
We are also concerned that this legislation, far from providing 
a remedy for the historic abuses of eminent domain, will permit 
the sorts of injustices with which we are all too familiar 
while, at the same time, crippling local governments in the 
pursuit of their legitimate public duties. This poorly crafted 
bill, with broad, if uncertain, application, would place every 
state and locality in permanent peril, without providing the 
protection vulnerable communities need.
---------------------------------------------------------------------------
    \1\ 2005 Westlaw 1469529 (No. 04-108) (U.S. June 23, 2005).
---------------------------------------------------------------------------
    We share the unanimous conviction that private property 
should never be taken for the private benefit of another 
private person. There can be no more fundamental meaning of the 
``public use'' clause of the Fifth Amendment.\2\ The awesome 
power of eminent domain may not be exercised under our 
constitution, regardless of the extent of due process or 
compensation, if the purpose for which it is exercised is to 
benefit a private party rather than the public interest.
---------------------------------------------------------------------------
    \2\ U.S. Const. amend. V: ``nor shall private property be taken for 
public use, without just compensation'' (emphasis added).
---------------------------------------------------------------------------
    The Supreme Court's efforts to define ``public use,'' and 
Congress' legislative efforts to do so, are at the heart of 
this debate.
    While the Supreme Court has left the outer boundaries of 
the definition of ``public use'' for future cases, the 
Committee has attempted to provide a bright-line test to settle 
the issue with finality. Unfortunately, a plain reading of the 
legislation, and the debate in the Committee on its meaning, 
show that the one thing it lacks is a bright-line. What exactly 
is permitted or prohibited appears to have been unclear even to 
the proponents of the legislation, many of whom could not agree 
on the meaning of the definitions, nor could they agree on the 
policy they were attempting to enact.
    If the legislative history so far shows anything, it is 
that Congress has no clear intent, and that the language it has 
chosen is even less clear. Courts and local governments trying 
to apply the standards in this bill will encounter rules so 
convoluted, they could not hope to comply with any reasonable 
degree of certainty.
    The costs of running afoul of this legislation would be 
catastrophic. Any taking, for any project, later determined to 
have been in violation of this statute, would result in the 
loss of two years of economic development funding for the state 
or local government, even if the project received no such 
funds. This determination and penalty could arise years, even 
decades, after the original taking. The financial cloud hanging 
over the entire jurisdiction ad infinitum would disrupt every 
aspect of local governance.
    For these reasons, we believe that this legislation is not 
ready to be considered by the full House, and we respectfully 
dissent.

Takings, public works and displacement
    The history of eminent domain and displacement need not be 
fully recounted here. Suffice to say that the exercise of 
eminent domain has long fallen most heavily on the shoulders of 
poor, minority, immigrant, working class, and other communities 
lacking in political and economic power. As Hilary O. Shelton, 
Director of the NAACP Washington Bureau, told the Subcommittee 
on the Constitution:

    The history of eminent domain is rife with abuse 
specifically targeting racial and ethnic minority and poor 
neighborhoods. Indeed the displacement of African Americans and 
urban renewal projects are so intertwined that ``urban 
renewal'' was often referred to as ``Black Removal.'' \3\
---------------------------------------------------------------------------
    \3\ Oversight Hearing on ``The Supreme Court's Kelo Decision and 
Potential Congressional Responses Before the Subcomm. on the 
Constitution of the House Judiciary Committee (2005) (Statement of 
Hilary O. Shelton at 2) (Hereafter ``Shelton Testimony'').

    Mr. Shelton testified that the burden on minority 
communities has not been confined to projects involving private 
economic development of the type at issue in Kelo. Mr. Shelton 
cited a 1990 study showing that ``90% of the 10,000 families 
displaced by highway projects in Baltimore were Africans 
American.'' \4\
---------------------------------------------------------------------------
    \4\ Id. Citing Bernard J. Frieden & Lynn B. Sagalyn, Downtown, 
Inc.: How America Rebuilds Cities 29, (1990).
---------------------------------------------------------------------------
    In his seminal work on urban political power, The Power 
Broker, Robert Caro reports:

    [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.\5\
---------------------------------------------------------------------------
    \5\ Robert Caro, The Power Broker 967-8 (1974).

    The record indicates that, in addition to the impact on 
property owners and their communities, families and small 
business who rent rather than own property suffer displacement 
often without compensation or a right to contest their 
displacement.\6\ These burdens, whether for classically public 
projects, or for economic development projects, fall most 
heavily on those who can least afford the burden. As Mr. 
Shelton observed, ``even if you dismiss all other motivations, 
allowing municipalities to pursue eminent domain for private 
development as was upheld by the U.S. Supreme Court in Kelo 
will clearly have a disparate impact on African Americans and 
other racial and ethnic minorities in our country.'' \7\
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    \6\ Renters are often innocent, and powerless, bystanders in this 
process. In poorer communities, absentee slum-lords have rights denied 
to their tenants.
    ``Eminent domain is a vitally important tool. It is a power that 
can be abused, as the painful experience in Boston's West End reminds 
us. But Boston is also a place where eminent domain has been used 
creatively. Consider the experience of the Dudley Street Neighborhood 
Initiative, which has enabled a low-income community in Roxbury to 
reclaim its future. The community confronted a serious problem. 
Absentee owners held decaying properties that stood in the way of 
redevelopment plans. The initiative lobbied the city to give it the 
power of eminent domain. The result of this public/private partnership 
has been a widely acknowledged improvement in the neighborhood.
    David J. Barron and Gerald E. Frug, Make Eminent Domain Fair for 
All, Boston Globe, August 12, 2005.
    \7\ Shelton testimony, at 2-3.
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The penalty is disproportionate and threatens city and State financial 
        solvency

    H.R. 4128 would impose a penalty on any jurisdiction out of 
all proportion to the harm, or even the offending project, 
involved. It would extend not just to those projects receiving 
federal economic development assistance, but to any activity by 
a state or local government, including those receiving no 
federal funds of any kind.\8\ Similarly, all economic 
development funds, including those having nothing to do with 
the project in question, would be lost to the state or local 
jurisdiction for two years. Unquestionably meritorious public 
projects, even those that do not use eminent domain, would lose 
funding. Because of the catastrophic loss of federal funds, the 
municipality would face bankruptcy, endangering all municipal 
functions.
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    \8\ ``No State or political subdivision of a state shall exercise 
its power of eminent domain * * * if that state or political 
subdivision receives Federal economic development funds during any 
fiscal year in which it does so.'' H.R 4128, Sec. 2(a).
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    The jurisdiction would appear to face an open-ended risk of 
this expansive penalty. A property owner would have seven years 
from the conclusion of a condemnation proceeding to bring an 
action alleging a violation of the Act.\9\ The Act would allow 
such an action to be brought for an additional seven years 
following ``the subsequent use of such condemned property for 
economic development'' \10\
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    \9\ H.R. 4128, Sec. 4(b).
    \10\ Id.
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    This would appear to leave the jurisdiction open to legal 
attack, and expansive penalties, years, perhaps decades, after 
the initial development. If, at any time in the future, any 
portion of an otherwise permissible development is put to a 
prohibited use, an action may be commenced within seven years. 
There appears to be no point beyond which a jurisdiction could 
consider other uses of land without risking potentially 
catastrophic legal and financial exposure.
    Once the property is taken, the jurisdiction's only 
recourse would be to return the property and ``replace[ ] any 
other property destroyed and repair[ ] any other property 
damaged as a result of such violation.'' \11\ If this means 
what it appears to say, the government would be forced to clear 
the property previously taken, and restore any structures, 
including homes, to their previous condition. It does not 
specify how the subsequently vested rights of other parties are 
to be handled. A jurisdiction could conceivably be required to 
raze a half-acre plot in the middle of a multi-acre development 
and rebuild a home in order to protect the public fisc.
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    \11\ Id. Sec. 2(c).
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    This unpredictable, open-ended, and substantial financial 
exposure would be faced by any jurisdiction exercising eminent 
domain with respect to even one property. It would be a risk so 
great that cities would lose their ability to issue bonds. 
States would face whatever liability might be imposed on 
cities, and would suffer similar financial instability as a 
result of this uncertainty. Even if the penalty is never 
imposed, the mere uncertainty would be enough to place a cloud 
over any jurisdiction's finances.

The prohibition if over broad and unreasonably vague

    At the heart of the legislation is section 8(1) which 
defines ``economic development.'' It is the inherent vagueness 
of this definition, most of which consists of exceptions to the 
general definition, that makes the bill truly unworkable.
    The prohibition applies only to non-consensual takings, and 
only to the actual conveying of that property from one private 
person to another private person ``for commercial enterprise 
carried on for profit, or to increase tax revenue, tax base, 
employment, or general economic health.'' \12\
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    \12\ Sec. 8(1). By its own terms, the bill excludes any claims not 
involving a transfer of title. It would not include an assertion of a 
regulatory or other taking theory. While some have attempted to broaden 
the debate over Kelo to include so-called regulatory takings theories, 
neither the Court, nor the proponents of this legislation, has 
attempted to raise this far more dubious legal theory in this context.
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    The definition contains a number of exceptions which create 
a number of ambiguities and would seem to leave open the 
possibility for perverse results.
    For example, eminent domain is permitted if it conveys the 
private property to a private 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. * * *'' \13\ A public facility, which is 
privately owned, open to the public as of right would appear to 
include a sports stadium or a shopping center. They are at 
least as open to the public as a railroad, which provides a 
seat as of right for the price of a ticket. Indeed, unlike the 
railroad or the stadium, a shopping center is open to the 
public without the need to purchase a ticket.\14\
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    \13\ Sec. 8(1)(A).
    \14\ Mr. Nadler offered an amendment to strike the phrase ``public 
facility,'' which was rejected by the Committee. There was some doubt 
whether a stadium would be a permitted use. Rep. Goodlatte argued that 
a stadium might be a permitted use if it were open to the public as a 
matter of right, but that a shopping center could never be a permitted 
use because they are not, in his view, open to the public as a matter 
of right. Markup of H.R. 4128, Unofficial Transcript 159-160 (Statement 
of Mr. Goodlatte). Ms. Waters took the position that a stadium that was 
privately owned could never be a permitted use. Id. at 165.
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    There appears to have been a concern that private for-
profit uses might fall within the bill's prohibition because 
they are not necessarily a ``common carrier, that makes the 
property available for use by the general public as of right.'' 
Mr. Goodlatte offered an amendment, accepted by a voice vote, 
that moved ``public utility'' from the common carrier clause of 
paragraph (1)(A), and creating a new paragraph (1)(F) allowing 
the ``taking of private property for use by a public utility'' 
thus removing any requirement that a public utility behave in 
its traditional role as a common carrier in order to benefit 
from the extraordinary governmental power of eminent 
domain.\15\
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    \15\ Congress has expanded the power of eminent domain for 
transmission lines in recent energy legislation. Energy Policy Act of 
2005, Pub. L. No. 109-58, Sec. 216(e) 119 Stat. 594, 948 (2005).
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    The term ``blight'' is no longer used to describe a 
permitted use, but the bill does refer to ``removing harmful 
uses of land provided such uses constitute an immediate threat 
to public health and safety.'' \16\ It is our hope that this 
language will prove sufficiently narrow to eliminate the past 
abuses of eminent domain under the pretext of removing 
``blight.'' We remain concerned, however, that the new language 
could be abused in the same manner as the ``blight'' exception. 
We would hope that further clarification on this important 
point would be possible.
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    \16\ Sec. 8(1)(B).
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    Public developments are also precluded if they lease 
property to a private person ``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.'' \17\ 
This would seem to prohibit the use of eminent domain to build 
such projects as New York's World Trade Center, which included 
public offices, transportation facilities, public open space, 
leased office space, and leased retail space. If a public 
project were later privatized, the former property owner would 
have a seven-year window to bring an action against the 
jurisdiction that would result in the loss of all economic 
development funds for two years.
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    \17\ Sec. 8(1)(C).
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    For these reasons, we believe that, however well 
intentioned, the proposed legislation would fail to protect 
vulnerable communities, allow projects of the type many 
proponents seek to prohibit, and hinder many projects normally 
considered to be in the public interest. Worse still, it would 
create financial chaos for cities, states, and the bond and 
insurance markets.
    This careless response to the Kelso decision is also 
unnecessary. States and localities are more than able to 
respond to this decision. To the extent that they fail to do 
so, the Congress would retain the ability and the authority to 
deal more narrowly with any problems that may arise. As the 
National League of Cities has reported,

    The Kelo Court, affirming federalism, did not preclude `any 
state from placing further restrictions on its exercise of the 
Takings power.' Approximately 30 states are already reviewing 
or planning to review their eminent domain laws during upcoming 
legislative sessions, with the majority focused on just 
compensation and comprehensive planning process modifications. 
Since June 2005, Alabama, Texas, and Delaware enacted laws that 
tighten the application of eminent domain power in each 
state.\18\
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    \18\ Letter to Hon. F. James Sensenbrenner & Hon. John Conyers, 
Jr., from Donald J. Borut, Executive Director, National League of 
Cities (Oct. 30, 2005).

    Land use planning is primarily a state and local function. 
For Congress to step in so precipitously, while states are 
still acting, violates fundamental principles of federalism. 
Were the states moving to take full advantage of the broadest 
possible reading of the Kelo decision, Congress might well have 
reason to move with equal dispatch. Just the opposite is true. 
States and localities are responding to the same concerns 
behind this legislation. They are, however, better able to 
respond to local needs and local realities. Congress is still 
free to respond to actual, rather than hypothetical, problems 
should the need arise.\19\
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    \19\ Representative Watt offered an amendment that would have left 
only the ``Sense of the Congress'' language of section 7, reflecting 
the view that Congress should state the principle that the power of 
eminent domain must be exercised properly and with restraint, but that 
congressional control over the minute details of these decisions goes 
too far.
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    We urge our colleagues to move with great care. The 
uncertainty with which the Judiciary Committee proceeded during 
its recent markup demonstrates just how chaotic a congressional 
effort to act as a national zoning board would likely be. At 
the very least, we would urge greater caution.
                                                    Jerrold Nadler.
                                                      Robert Scott.