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109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-658

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



 
           PRIVATE PROPERTY RIGHTS IMPLEMENTATION ACT OF 2006

                                _______
                                

 September 14, 2006.--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

                            DISSENTING VIEWS

                        [To accompany H.R. 4772]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 4772) to simplify and expedite access to the Federal 
courts for injured parties whose rights and privileges under 
the United States Constitution have been deprived by final 
actions of Federal agencies or other government officials or 
entities acting under color of State law, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
    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 Implementation 
Act of 2006''.

SEC. 2. JURISDICTION IN CIVIL RIGHTS CASES CONCERNING REAL PROPERTY.

  Section 1343 of title 28, United States Code, is amended by adding at 
the end the following:
  ``(c) Whenever a district court exercises jurisdiction under 
subsection (a) in an action in which the operative facts concern the 
uses of real property, it shall not abstain from exercising or 
relinquish its jurisdiction to a State court if the party seeking 
redress does not allege a violation of a State law, right, or 
privilege, and no parallel proceeding is pending in State court, at the 
time the action is filed in the district court, that arises out of the 
same operative facts as the district court proceeding.
  ``(d) In an action in which the operative facts concern the uses of 
real property, the district court shall exercise jurisdiction under 
subsection (a) even if the party seeking redress does not pursue 
judicial remedies provided by a State or territory of the United 
States.
  ``(e) If the district court has jurisdiction over an action under 
subsection (a) in which the operative facts concern the uses of real 
property and which cannot be decided without resolution of an unsettled 
question of State law, the district court may certify the question of 
State law to the highest appellate court of that State. After the State 
appellate court resolves the question so certified, the district court 
shall proceed with resolving the merits. The district court shall not 
certify a question of State law under this subsection unless the 
question of State law--
          ``(1) is necessary to resolve the merits of the Federal claim 
        of the injured party; and
          ``(2) is patently unclear.
  ``(f)(1) Any claim or action brought under section 1979 of the 
Revised Statutes of the United States (42 U.S.C. 1983) to redress the 
deprivation of a property right or privilege secured by the 
Constitution shall be ripe for adjudication by the district courts upon 
a final decision rendered by any person acting under color of any 
statute, ordinance, regulation, custom, or usage, of any State or 
territory of the United States, which causes actual and concrete injury 
to the party seeking redress.
  ``(2) For purposes of this subsection, a final decision exists if--
          ``(A) any person acting under color of any statute, 
        ordinance, regulation, custom, or usage, of any State or 
        territory of the United States, makes a definitive decision 
        regarding the extent of permissible uses on the property that 
        has been allegedly infringed or taken, without regard to any 
        uses that may be permitted elsewhere; and
          ``(B) one meaningful application to use the property has been 
        submitted but denied, and the party seeking redress has applied 
        for but is denied one waiver and one appeal, if the applicable 
        statute, ordinance, regulation, custom, or usage provides a 
        mechanism for waiver by or appeal to an administrative agency.
The party seeking redress shall not be required to apply for a waiver 
or appeal described in subparagraph (B) if such waiver or appeal is 
unavailable or can not provide the relief requested, or if pursuit of 
such a mechanism would otherwise be futile.''.

SEC. 3. UNITED STATES AS DEFENDANT.

  Section 1346 of title 28, United States Code, is amended by adding at 
the end the following:
  ``(h)(1) Any claim brought under subsection (a) that is founded upon 
a property right or privilege secured by the Constitution, but was 
allegedly infringed or taken by the United States, shall be ripe for 
adjudication upon a final decision rendered by the United States, which 
causes actual and concrete injury to the party seeking redress.
  ``(2) For purposes of this subsection, a final decision exists if--
          ``(A) the United States makes a definitive decision regarding 
        the extent of permissible uses on the property that has been 
        allegedly infringed or taken, without regard to any uses that 
        may be permitted elsewhere; and
          ``(B) one meaningful application to use the property has been 
        submitted but denied, and the party seeking redress has applied 
        for but is denied one waiver and one appeal, if the applicable 
        law of the United States provides a mechanism for waiver by or 
        appeal to an administrative agency.
The party seeking redress shall not be required to apply for a waiver 
or appeal described in subparagraph (B) if such waiver or appeal is 
unavailable or can not provide the relief requested, or if pursuit of 
such a mechanism would otherwise be futile.''.

SEC. 4. JURISDICTION OF COURT OF FEDERAL CLAIMS.

  Section 1491(a) of title 28, United States Code, is amended by adding 
at the end the following:
  ``(3) Any claim brought under this subsection founded upon a property 
right or privilege secured by the Constitution, but allegedly infringed 
or taken by the United States, shall be ripe for adjudication upon a 
final decision rendered by the United States, that causes actual and 
concrete injury to the party seeking redress. For purposes of this 
paragraph, a final decision exists if--
                  ``(A) the United States makes a definitive decision 
                regarding the extent of permissible uses on the 
                property that has been allegedly infringed or taken, 
                without regard to any uses that may be permitted 
                elsewhere; and
                  ``(B) one meaningful application to use the property 
                has been submitted but denied, and the party seeking 
                redress has applied for but is denied one waiver and 
                one appeal, if the applicable statute, ordinance, 
                regulation, custom, or usage provides a mechanism for 
                waiver by or appeal to an administrative agency.
        The party seeking redress shall not be required to apply for a 
        waiver or appeal described in subparagraph (B) if such waiver 
        or appeal is unavailable or can not provide the relief 
        requested, or if pursuit of such a mechanism would otherwise be 
        futile.''.

SEC. 5. CLARIFICATION FOR CERTAIN CONSTITUTIONAL PROPERTY RIGHTS 
                    CLAIMS.

  Section 1979 of the Revised Statutes of the United States (42 U.S.C. 
1983) is amended by adding at the end the following: ``If the party 
injured seeks to redress the deprivation of a property right or 
privilege under this section that is secured by the Constitution by 
asserting a claim that concerns--
          ``(1) an approval to develop real property that is subject to 
        conditions or exactions, then the person acting under color of 
        State law is liable if any such condition or exaction, whether 
        legislative or adjudicatory in nature, including but not 
        limited to the payment of a monetary fee or a dedication of 
        real property from the injured party, is unconstitutional;
          ``(2) a subdivision of real property pursuant to any statute, 
        ordinance, regulation, custom, or usage of any State or 
        territory, or the District of Columbia, then such a claim shall 
        be decided with reference to each subdivided lot, regardless of 
        ownership, if such a lot is taxed, or is otherwise treated and 
        recognized, as an individual property unit by the State, 
        territory, or the District of Columbia; or
          ``(3) alleged deprivation of substantive due process, then 
        the action of the person acting under color of State law shall 
        be judged as to whether it is arbitrary, capricious, an abuse 
        of discretion, or otherwise not in accordance with law.
For purposes of the preceding sentence, `State law' includes any law of 
the District of Columbia or of any territory of the United States.''.

SEC. 6. CLARIFICATION FOR CERTAIN CONSTITUTIONAL PROPERTY RIGHTS CLAIMS 
                    AGAINST THE UNITED STATES.

  (a) District Court Jurisdiction.--Section 1346 of title 28, United 
States Code, is amended by adding at the end the following:
  ``(i) If a claim brought under subsection (a) is founded upon a 
property right or privilege secured by the Constitution that concerns--
          ``(1) an approval from an executive agency to permit or 
        authorize uses of real property that is subject to conditions 
        or exactions, then the United States is liable if any such 
        condition or exaction, whether legislative or adjudicatory in 
        nature, including but not limited to the payment of a monetary 
        fee or a dedication of real property from the injured party, is 
        unconstitutional;
          ``(2) a subdivision of real property pursuant to any statute, 
        ordinance, regulation, custom, or usage of any State or 
        territory, or the District of Columbia, then such a claim 
        against an executive agency shall be decided with reference to 
        each subdivided lot, regardless of ownership, if such a lot is 
        taxed, or is otherwise treated and recognized, as an individual 
        property unit by the State or territory, or the District of 
        Columbia, as the case may be; or
          ``(3) an alleged deprivation of substantive due process, then 
        the United States shall be judged as to whether its action is 
        arbitrary, capricious, an abuse of discretion, or otherwise not 
        in accordance with law.
In this subsection, the term `executive agency' has the meaning given 
that term in section 105 of title 5.''.
  (b) Court of Federal Claims Jurisdiction.--Section 1491 of title 28, 
United States Code, is amended by adding at the end the following:
  ``(4) If a claim brought under subsection (a) is founded upon a 
property right or privilege secured by the Constitution that concerns--
          ``(A) an approval from an executive agency to permit or 
        authorize uses of real property that is subject to conditions 
        or exactions, then the United States is liable if any such 
        condition or exaction, whether legislative or adjudicatory in 
        nature, including but not limited to the payment of a monetary 
        fee or a dedication of real property from the injured party, is 
        unconstitutional;
          ``(B) a subdivision of real property pursuant to any statute, 
        ordinance, regulation, custom, or usage of any State or 
        territory, or the District of Columbia, then such a claim 
        against an executive agency shall be decided with reference to 
        each subdivided lot, regardless of ownership, if such a lot is 
        taxed, or is otherwise treated and recognized, as an individual 
        property unit by the State, or territory, or the District of 
        Columbia, as the case may be; or
          ``(C) an alleged deprivation of substantive due process, then 
        the United States shall be judged as to whether its action is 
        arbitrary, capricious, an abuse of discretion, or otherwise not 
        in accordance with law.
In this paragraph, the term `executive agency' has the meaning given 
that term in section 105 of title 5.''.

SEC. 7. DUTY OF NOTICE TO OWNERS.

  (a) In General.--Whenever a Federal agency takes an agency action 
limiting the use of private property that may be affected by the 
amendments by this Act, the agency shall, not later than 30 days after 
the agency takes that action, give notice to the owners of that 
property explaining their rights under such amendments and the 
procedures for obtaining any compensation that may be due them under 
such amendments.
  (b) Definitions.--For purposes of subsection (a)--
          (1) the term ``Federal agency'' means ``agency'', as that 
        term is defined in section 552(f) of title 5, United States 
        Code; and
          (2) the term ``agency action'' has the meaning given that 
        term in section 551 of title 5, United States Code.

SEC. 8. SEVERABILITY AND EFFECTIVE DATE.

  (a) Severability.--If any provision of this Act or the amendments 
made by this Act or the application thereof to any person or 
circumstance is held invalid, the remainder of this Act, the amendments 
made by this Act, or the application thereof to other persons not 
similarly situated or to other circumstances shall not be affected by 
such invalidation.
  (b) Effective Date.--The amendments made by this Act shall apply to 
actions commenced on or after the date of the enactment of this Act.

                          Purpose and Summary

    The purpose of H.R. 4772, the ``Private Property Rights 
Implementation Act of 2006'', is to ensure that private 
property owner's Fifth Amendment takings claims can be heard by 
a Federal court.

                Background and Need for the Legislation

    H.R. 4772 will allow greater and fairer access to Federal 
courts by those who assert Federal property rights claims under 
the Fifth Amendment's Takings Clause. H.R. 4772, the ``Private 
Property Rights Implementation Act'', is substantially the same 
as H.R. 2372, which passed the House during the 106th Congress 
on March 16, 2000, by a vote of 226-182.
    Under current law, property owners are now blocked from 
raising a Federal Fifth Amendment takings claim in Federal 
court. The Supreme Court's decision in Williamson County v. 
Hamilton Bank, 473 U.S. 172 (1985), requires property owners to 
pursue, and exhaust, all available remedies for just 
compensation in State court before the property owner can file 
suit in Federal court under the Fifth Amendment. In San Remo 
Hotel v. City and County of San Francisco, 125 S.Ct. 2491 
(2005), the Supreme Court recently confirmed and did not modify 
prior lower court case law that held that once a property owner 
tries their case in State court, and loses, the doctrines of 
res judicata and claim preclusion allow Federal courts to 
dismiss the claims on the grounds they were already decided by 
the State court. The combination of these two rules means that 
those with Federal property rights claims are effectively shut 
out of Federal court on their Federal takings claims, setting 
them unfairly apart from those asserting any other kind of 
Federal right, such as every Americans' First Amendment right 
to freedom of speech and freedom of religion, which may be 
asserted in Federal court in the first instance.
    The late Chief Justice Rehnquist observed in his concurring 
opinion in San Remo that the ``Williamson County [decision] all 
but guarantees that claimants will be unable to utilize the 
federal courts to enforce the Fifth Amendment's just 
compensation guarantee.'' Chief Justice Rehnquist specifically 
noted in San Remo that ``[i]t is not clear to me that 
Williamson County was correct in demanding that . . . the 
claimant must seek compensation in State court before bringing 
a federal takings claim in federal court.'' Indeed, the Second 
Circuit Court of Appeals previously noted that ``[i]t would be 
both ironic and unfair if the very procedure that the Supreme 
Court required [property owners] to follow before bringing a 
Fifth Amendment takings claim--a state-court inverse 
condemnation [takings] action--also precluded [them] from ever 
bringing a Fifth Amendment takings claim.'' \1\
---------------------------------------------------------------------------
    \1\ Santini v. Connecticut Hazardous Waste Management Service, 342 
F.3d 118, 130 (2d. Cir. 2003).
---------------------------------------------------------------------------
    Rep. Chabot's Private Property Rights Implementation Act--
which is based on the constitutionally-explicit authority of 
Congress to define the jurisdiction of the lower Federal 
courts, in Article III, section 1, and the appellate 
jurisdiction of the Supreme Court, in Article III, section 2, 
clause 2--would allow property owners raising solely Federal 
takings claims to have their cases decided in Federal court 
without first pursuing a (sometimes fruitless) litigation 
detour in State court. H.R. 4772, far from ``federalizing'' 
local land use issues, preserves federalism values. The current 
legal regime that violates the right of Americans to bring 
Federal suits to enforce Federal rights itself is a violation 
of federalism principles. H.R. 4772 simply makes it easier for 
individuals to hold local planners accountable for Federal 
rights violations. As Supreme Courts Justices William Brennan 
and Thurgood Marshall have said, ``After all, a policeman must 
know the Constitution, then why not a [local] planner?'' \2\
---------------------------------------------------------------------------
    \2\ San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 
621, 661 n.26 (1981) (Brennan, J., dissenting).
---------------------------------------------------------------------------
    H.R. 4772 levels the playing field for small and middle 
class property owners and retirees. The expense of bringing a 
Constitutional takings claim through the labyrinthine of 
procedures in place today is disproportionately borne by 
private citizens who often lack the resources to litigate these 
complex claims, and cannot draw on the public treasury to 
defend their rights. H.R. 4772 helps small developers and 
middle class Americans, whose finances are particularly 
strained by the costs of defending their Fifth Amendment 
property rights. (The current procedural rules favor the 
wealthiest developers, who can afford to maintain a Fifth 
Amendment takings claims all the way to Federal court, even 
though these claims, once heard in Federal court, are almost 
always rejected on procedural grounds.)
    H.R. 4772 does not grant greater access to Federal courts 
to those asserting their Federal Fifth Amendment rights than to 
those who assert any other Federal constitutional rights. 
Indeed, the Constitution forbids the government from depriving 
its citizens of life, liberty, or property without due process 
of law, just as takings may not occur without just 
compensation. Yet few would seriously argue that plaintiffs 
claiming any deprivation of constitutionally-protected rights 
without due process of law under 42 U.S.C. Sec. 1983 should not 
be able to sue in Federal courts without first having engaged 
in costly and protracted litigation at the State level.
    Indeed, more takings cases should be allowed to be heard 
and decided in Federal court to help clarify takings law 
itself. As the Supreme Court stated in Lingle v. Chevron 
U.S.A., Inc., ``regulatory takings jurisprudence cannot be 
characterized as unified.'' \3\ More cases must be allowed to 
be brought in Federal court in order to ensure that Federal 
precedents can be applied in a national and uniform manner. It 
is essential that Congress help ensure this outcome because 
State supreme courts are currently applying standards 
inconsistent with those handed down by the Supreme Court, 
secure in the knowledge that those suffering under the 
different standards applied by those State supreme courts will 
have no chance of being appealed to the Federal courts.\4\ This 
process undermines the uniform, national application of Federal 
rights that the Constitution affords to all Americans, 
irrespective of their State of residence.
---------------------------------------------------------------------------
    \3\ 125 S.Ct. 2074, 2082 (2005).
    \4\ For example, consider the following dynamic in Ohio. The U.S. 
Supreme Court has established a two part disjunctive test. The 
application of a zoning law will be deemed an unconstitutional taking 
if the ordinance (1) does not substantially advance legitimate State 
interests or (2) denies an owner economically viable use of his land. 
Agins v. Tiburon, 447 U.S. 255, 260 (1980). The government has the 
burden of proving a substantial interest is served by the zoning 
regulation. Nollan v. Cal. Coastal Comm'n, 483 U.S. 825 (1987). By 
establishing a disjunctive test, a property owner need only satisfy one 
of two burdens to show a zoning regulation is unconstitutional. In 
1990, Ohio adopted its own test for applying the Fifth Amendment 
takings clause to zoning challenges. Rather than the disjunctive 
Federal test, Ohio adopted a conjunctive test. In order to invalidate a 
zoning ordinance on constitutional grounds, a property owner had to 
show, beyond ``fair debate,'' that the zoning classification denied 
them ``the economically viable use of their land without substantially 
advancing a legitimate interest in the health, safety, or welfare of 
the community.'' Ketchel v. Bainbridge Twp., 557 N.E.2d 779, 783 (Ohio 
1990). ``Fair debate'' has been analogized to the criminal probative 
standard of ``beyond a reasonable doubt.'' Central Motors Corp. v. 
Pepper Pike, 653 N.E.2d 639, 642 (Ohio 1995). The Federal standard 
places the burden of proof on the government. In applying this two-part 
test, the court would first determine whether the zoning ordinance 
allowed the landowner an economically feasible utilization of his land. 
Next, the court would determine whether the ordinance permissibly 
advanced a legitimate interest of the city. Columbia Oldsmobile, Inc. 
v. Montgomery, 564 N.E.2d 455, 457-458 (Ohio 1990). In 1998, Ohio 
realigned itself with the Agins disjunctive test. After reconsidering 
Agins and its own prior cases on zoning challenges, the Ohio Supreme 
Court held that a zoning ordinance may be found unconstitutional if it 
is ``arbitrary and unreasonable, having no substantial relation to the 
public health, safety, morals, or general welfare regardless of whether 
it has deprived the landowner of all economically viable uses of the 
land.'' Goldberg Cos. Inc. v. Richmond Heights, 690 N.E.2d 510, 514 
(Ohio 1998). Despite adopting the disjunctive Agins test, the property 
owner challenging the zoning ordinance maintained the burden of proof, 
and the standard of proof remained beyond fair debate. Id. at 515. This 
same burden of proof remains Ohio law today. Consequently, current Ohio 
law is less protective of constitutionally guaranteed property rights 
than current Federal law. By placing a high burden on the aggrieved 
property owner, i.e. ``beyond a reasonable doubt,'' to show a zoning 
ordinance either serves no legitimate government interest or denies 
himself or herself of the economically viable use of his property, the 
Ohio Supreme Court has made it easier to pass unconstitutional zoning 
ordinances. Ohio is essentially depriving property owners of 
constitutionally protected rights. This is a fundamental violation of 
constitutional law. H.R. 4772 would solve this problem by allowing an 
aggrieved property owner in Ohio to immediately sue under the Fifth and 
Fourteenth Amendments in Federal court.
---------------------------------------------------------------------------
    H.R. 4772 would also remove another artificial barrier 
blocking property owners' access to Federal court: Williamson 
County also requires that, before a case is ``ripe'' (that is, 
ready) for review by a Federal court, property owners must 
first obtain a ``final decision'' from the State government on 
what is an acceptable use of their land.\5\ This has created an 
incentive for regulatory agencies to avoid making a final 
decision, thereby perpetually denying a property owner access 
to court. Studies of takings cases in the 1990s indicate that 
it took property owners nearly a decade of negotiation and 
litigation (which most property owners cannot afford) before 
takings claims were ``ripe'' enough to be heard on the merits 
in any court.\6\ H.R. 4772 would clarify when a final decision 
has been issued and when the case is ripe for Federal court 
review. Under the bill, if a land use application is reviewed 
by the relevant agency and rejected, a waiver is requested and 
denied, and an administrative appeal also rejects the 
application, then a property owner can bring his or her Federal 
constitutional claim in a Federal court. The bill would not 
change the way agencies resolve disputes; rather, H.R. 4772 
simply makes clear to the court when a ``final agency action'' 
has taken place.
---------------------------------------------------------------------------
    \5\ See Williamson County v. Hamilton Bank, 473 U.S. 172, 186 
(1985) (``holding that ``a claim that the application of government 
regulations effects a taking of a property interest is not ripe until 
the government entity charged with implementing the regulations has 
reached a final decision regarding the application of the regulations 
to the property at issue.'').
    \6\ See H.R. Rep. No. 106-518, at 10 (2000).
---------------------------------------------------------------------------
     H.R. 4772 also clarifies the rights of property 
owners who assert certain types of constitutional claims: \7\
---------------------------------------------------------------------------
    \7\ Each of the following provisions simply clarifies what types of 
property rights cases can be brought in Federal court. 42 U.S.C. 
Sec. 1983, which H.R. 4772 amends, already states that cases can be 
heard in Federal court for--quote--``deprivation of any rights, 
privileges, or immunities secured by the Constitution and laws.'' All 
the following provisions do is further define what, in the property 
rights context, is a ``deprivation of any rights, privileges, or 
immunities secured by the . . . laws.''
---------------------------------------------------------------------------
     H.R. 4772 clarifies that conditions or exactions 
that are imposed upon a property owner before they can receive 
a permit must be proportional to the impact the development 
might have on the surrounding community. One recent example of 
an abusive exaction occurred in Burbank, California, where the 
city required that a Home Depot build a day-laborer center--for 
use by people, many of them illegal aliens, who were loitering 
in the Home Depot parking lot against Home Depot policy and 
looking for spot contracting jobs from Home Depot customers. 
The government conditioned Home Depot's construction of its 
store on its paying an annual fee that finances the center's 
operation.\8\ Property owners and business owners may 
constitutionally be required to cover the government's costs 
that are incurred due to development or expansion of a 
business. For example, exactions may be imposed on developers 
to pay for expanding schools to accommodate children who will 
be living in the new development; and a business owner who is 
seeking permission to expand the business may be required to 
pay for the costs of installing a stop light if the expansion 
will result in increased traffic, and the increase in traffic 
merits a stop light. However, sometimes the conditions imposed 
on a development bear no relation to public costs associated 
with the development plan. Occasionally, a government will try 
to impose a condition for development approval that has nothing 
to do with the project at hand or has no relationship to the 
project's impact.\9\ A developer should not be required to 
build a new school for children who already live in the town 
\10\ and should not be required to pay for a road that will not 
be used by residents of the subdivision under construction.\11\ 
In addition, a business owner should not be required to build a 
library or fund art exhibits in exchange for receiving approval 
to expand her store.\12\
---------------------------------------------------------------------------
    \8\ See Michael Martinez, ``Hiring Site For Day Labor Stirs 
Protest,'' The Chicago Tribune (February 6, 2006) at 3 (``Opponents 
contend the center legitimizes illegal immigrants . . . Home Depot 
built it, then deeded the site to the city; the retailer pays a 
$94,000-a-year fee, which the city uses to pay Catholic Charities to 
run the center . . . Never before has Home Depot been required to build 
a day-laborer center in tandem with a store and then pay an annual fee 
that ultimately finances the center's operation . . . Burbank's demand 
for the approximately 2,500-square-foot worker site coincides with Home 
Depot's ban on day laborers and other outsiders soliciting store 
customers'').
    \9\ See ``A Caution Flag on Developer Fees,'' The Press Democrat 
(``The case concerned Richard K. Ehrlich, a Culver City man who wanted 
to tear down a money-losing private tennis club and build 30 homes. The 
city, citing a shortage of public tennis courts and swimming pools, 
said the man would have to pay a $280,000 recreation fee and $33,000 to 
fund public arts projects for his plan to be approved. That would have 
added more than $10,000 to the cost of each house, even before all 
other impact fees are added in.'').
    \10\ See Volusia County v. Aberdeen at Ormond Beach L.P., 760 So. 
2d 126 (Fla. 2000) (requirement of public school impact fees on a 
mobile home park struck down because the park did not increase the need 
for new schools since no students lived in the park).
    \11\ See Town of Flower Mound v. Stafford Estates Limited 
Partnership, 135 S.W.3d. 620 (Tex. 2004) (holding a taking an exaction 
that required construction and improvement of streets adjacent to 
development when there was insufficient evidence that new traffic 
related to the subdivision would use such roads).
    \12\ See Jennifer Kabbany, ``Vista, Calif., Council Agrees to Study 
Art Development Fee,'' North County Times (September 29, 2004) (``The 
City Council on Tuesday agreed with the concept of creating a 
development fee to pay for public art projects, undeterred by 
complaints from those who said it would hurt businesses and home buyers 
* * * The commission proposed that a fee of 5-cents per square foot be 
tacked on to residential, commercial and industrial building permits 
for projects larger than 500 square feet, starting in July 2006. The 
fee would increase to 10 cents for the 2007-08 fiscal year that begins 
July 1. In 2008-09, the fee would jump to 15 cents per square foot.'').
---------------------------------------------------------------------------
    Fundamental fairness dictates that property owners should 
have the right to defend themselves in Federal court against 
unreasonable exactions or impact fees that amount to 
unconstitutional extortion. The U.S. Supreme Court in Nollan v. 
California Coastal Commission, 483 U.S. 827 (1987), and Dolan 
v. City of Tigard, 512 U.S. 374 (1994), has affirmed these 
principles, but H.R. 4772 clarifies that Nollan and Dolan apply 
to both regulatory and legislatively-imposed exactions, and 
extortionate conditions in any form--whether they encompass the 
compelled give-away of land, the payment of disproportionate 
fees, or some other demanded condition that has no ``essential 
nexus'' to the project or its impact on public resources.\13\ 
The lower Federal and State courts have reached varying 
decisions on what types of exactions are subject to the 
``essential nexus'' and ``rough proportionality'' requirements. 
One source of this judicial divergence is uncertainty as to 
whether the standards apply only to exactions calling for the 
actual dedication of land with public access (such as the hiker 
and biker path at issue in Dolan), or whether Nollan and Dolan 
also apply to monetary exactions like the payment of an impact 
fee.\14\ Another aspect of the controversy concerns whether 
Nollan and Dolan apply to legislative actions, or only to 
adjudicatory actions that concern conditioned approvals 
directed toward a specific project and property owner.\15\ In 
order to remedy the confusion created by the lower courts, H.R. 
4772 amends 42 U.S.C. Sec. 1983 to state that Fifth Amendment 
takings claims challenging an unconstitutional exaction apply 
whether the exaction is legislative or adjudicative in nature, 
or whether the exaction seeks a land dedication or payment of a 
monetary fee as a condition to development approval.
---------------------------------------------------------------------------
    \13\ In Lingle v. Chevron U.S.A., Inc., 125 S.Ct. 2074 (2005), the 
Supreme Court clarified that one of the theories available to a takings 
plaintiff is that an exaction, or a regulatory condition imposed by a 
government body as a precondition to a development approval, may be 
unconstitutional. Lingle affirmed the prior ruling from Nollan, which 
held that a regulatory condition imposed on development must have an 
``essential nexus'' to support the government's stated objective in 
imposing the condition in the first place. Lingle also affirmed the 
standard from Dolan, which held that the government has the burden to 
show that any condition on development bear ``rough proportionality''--
that is, the development condition must be related both in nature and 
extent to the impact of the proposed development.
    \14\ See, e.g., Town of Flower Mound v. Stafford Estates Ltd. 
P'Ship, 135 S.W.2d 620 (Tex. 2004); A.S. Klein, ``Validity and 
Construction of Statute or Ordinance Requiring Land Developer to 
Dedicate Portion of Land for Recreational Purposes, or Make Payment in 
Lieu Thereof,'' 43 A.L.R. 3d 862.
    \15\ See, e.g., Parking Ass'n of Georgia v. City of Atlanta, 515 
U.S. 1116 (1995) (Thomas, J., joined by O'Connor, J., dissenting from 
denial of petition for writ of certiorari).
---------------------------------------------------------------------------
     H.R. 4772 clarifies the so-called ``denominator 
question'' \16\ in cases concerning subdivided lots by 
requiring that Federal courts look at the impact of a takings 
claim on each individual lot that is recognized as a separate 
independent property unit under State law (instead of looking 
to the impact of the taking in the context of all such lots 
grouped together). That is, H.R. 4772 would clarify that if 
property units are individually taxed under State law, then the 
adverse economic impact a regulation has on a piece of property 
should be measured by determining how much value the regulation 
has taken away from the individual lot affected, not the 
broader collection of lots grouped together. The Supreme Court, 
in Lucas v. South Carolina Coastal Council,\17\ established the 
rule that a taking occurs, as a categorical matter, when a 
regulation deprives a land owner of all economically viable 
uses of the property. The Court recognized that ``the 
rhetorical force of our deprivation of all economically 
feasible use rule is greater than its precision, since the rule 
does not make clear the property interest against which the 
loss of value is to be measured.'' \18\ The Court also held: 
``[T]his uncertainty regarding the composition of the 
denominator in our `deprivation' fraction has produced 
inconsistent pronouncements by the Court * * * '' \19\
---------------------------------------------------------------------------
    \16\ When a court tries to figure out what fraction of piece of 
property has been denied all economic value by a regulation, it must 
look to the fraction x/y, where ``x'' is the area of the property 
denied all economic value and ``y'' is the area of the larger property 
of which ``x'' is a part. The question courts have come to different 
answers on is what exactly is ``y''? Is ``y'' a subdivided lot within a 
larger set of lots, or is ``y'' itself a subdivided lot? If the answer 
is the former, fewer takings will be found unconstitutional. If the 
answer is the latter, more takings will be found unconstitutional 
because the x/y ratio will be higher.
    \17\ 505 U.S. 1003 (1992).
    \18\ 505 U.S. 1003, 1016, n.7.
    \19\ Id.
---------------------------------------------------------------------------
    As a result, the lower Federal and State courts have 
rendered inconsistent decisions on the proper scope of the 
takings denominator. Some courts have held that a taking should 
be judged by considering what portion of land has been 
regulated in the context of the entire parcel. Other courts 
have held that the bottom part of the takings fraction should 
focus on the specific land that has been taken.\20\ The 
denominator question is particularly troublesome in the context 
of subdivided lots. When a landowner subdivides property 
pursuant to a local ordinance, State law generally treats each 
subdivided lot as a unique and distinct property interest. 
Indeed, a land owner typically bears a much higher tax burden 
on subdivided property (compared to raw land), and assessments 
are levied on a lot-by-lot basis. Accordingly, if a landowner 
must treat individual lots as separate units for taxation 
purposes, then the standards determining just compensation 
should be the same when government takes subdivided lots under 
the Fifth Amendment's takings clause. To level the playing 
field, where subdivided land is at issue, the denominator in 
the takings fraction should be each lot--not the entire land 
holding. To accomplish this, H.R. 4772 amends 42 U.S.C. 
Sec. 1983 to provide that the relevant parcel, for purposes of 
Fifth Amendment takings claims in the context of land 
subdivisions, is each subdivided lot if such lots are 
separately taxed under State law as individual units.
---------------------------------------------------------------------------
    \20\ Compare Loveladies Harbor, Inc. v. United States, 28 F.3d 
1171, 1180 (Fed. Cir. 1994) (acknowledging that the scope of the 
denominator was the ``key question,'' and ruling that the relevant 
focus was only the regulated 12.5 acres that were rendered useless from 
the larger parcel) with District Intown Props. Ltd. P'Ship v. Dist. of 
Columbia, 198 F.3d 874, 880 (D.C. Cir. 1999) (recognizing that ``we 
must first define what constitutes the relevant parcel'' and deciding 
that all nine lots in the subdivision provided the appropriate 
denominator, not just the lots that were subject to regulation).
---------------------------------------------------------------------------
     H.R. 4772 also clarifies that due process 
violations involving property rights should be found when the 
government has been found to have acted in an ``arbitrary and 
capricious'' manner. In Lingle v. Chevron U.S.A., Inc.\21\ the 
Supreme Court overruled an earlier holding that a taking arises 
when a regulation ``does not substantially advance legitimate 
State interests.'' Lingle held that the ``[substantially 
advances] formula prescribes an inquiry in the nature of a due 
process, not a takings, test, and * * * it had no proper place 
in our takings jurisprudence.'' \22\ Justice Kennedy, in a 
concurring opinion, stated that the majority's decision ``does 
not foreclose the possibility that a regulation might be so 
arbitrary or irrational as to violate due process.'' \23\
---------------------------------------------------------------------------
    \21\ 125 S.Ct. 2074 (2005).
    \22\ 125 S.Ct. 2074, 2083 (2005).
    \23\ Id. at 2087 (following earlier due process analysis in his 
concurrence in Eastern Enterps. v. Apfel, 524 U.S. 498, 539 (1998)).
---------------------------------------------------------------------------
    Lingle also characterized a seminal case, Village of Euclid 
v. Ambler (1926), as a ``historic decision holding that a 
municipal zoning ordinance would survive a substantive due 
process challenge so long as it was not `clearly arbitrary and 
unreasonable, having no substantial relation to the public 
health, safety, morals or general welfare.' '' \24\ But because 
the Lingle case was so recently decided, the Supreme Court's 
modern land use due process jurisprudence is not developed. As 
a result, the lower courts are in utter disarray over the 
proper test for a land use due process claim. The Second, 
Fourth, Sixth and Tenth Circuits adhere to a traditional test 
that an arbitrary, capricious, or irrational land use 
regulation may violate due process.\25\ The Fifth and Seventh 
Circuits have adopted a ``reasonable basis'' or ``rational 
relationship'' standard for analyzing due process claims,\26\ 
while the Eighth Circuit has announced a ``truly irrational 
test.'' \27\ The Third Circuit (and the First Circuit, at least 
in part) rely on a test that government conduct must ``shock 
the conscience'' before due process is violated.\28\ The D.C. 
Circuit throws an ``egregious conduct'' standard into this 
analysis.\29\ Prior to Lingle, the Ninth Circuit had ruled that 
due process claims are subsumed within a takings claim,\30\ 
while the Eleventh Circuit had taken the most hostile position 
that deprivation of land use rights simply cannot support a 
substantive due process claim.\31\ Both of those circuits will 
likely need to revisit their rulings in light of Lingle's 
recognition that due process claims do, indeed, have a place in 
constitutional land use litigation.
---------------------------------------------------------------------------
    \24\ Lingle, 125 S.Ct. at 2083.
    \25\ See, e.g., Warren v. City of Athens, 411 F.3d 697, 707 (6th 
Cir. 1997) (``a substantive due process violation occurs when arbitrary 
and capricious government action deprives an individual of a 
constitutionally protected property interest''); Southern Blasting 
Servs, Inc. v. Wilkes County, 288 F.3d 584 (4th Cir. 2002) (no due 
process violation found where plaintiff failed to ``demonstrate that 
the County's actions were arbitrary or irrational''); Harlen Assocs. v. 
Inc. Vill. of Mineola, 273 F.3d 494, 503 (2d Cir. 2001) (substantive 
due process claim survives summary judgment where a plaintiff shows 
that he has a protectable property interest and that the government 
``infringed that property interest in an arbitrary or irrational 
manner''); Crider v. Bd. of County Comm'rs of County of Boulder, 246 
F.3d 1285, 1289 (10th Cir. 2001) (plaintiff bringing a land use due 
process claim must show that ``the challenged government action was 
`arbitrary and capricious' '').
    \26\ See, e.g., Simi Inv. Co. v. Harris County, 236 F.3d 240, 249 
(5th Cir. 2000) (substantive due process claims governed by a 
``deferential `rational basis' test''); Durigan v. Sanitary Dist. No. 
4, 5 Fed. Appx. 492, 494-95 (7th Cir. 2001) (``[l]and use regulations 
satisfy substantive due process if they do not violate a specific 
constitutional guarantee and are rationally related to a legitimate 
governmental interest'').
    \27\ See, e.g., Iowa Coal Mining Co. v. Monroe County, 257 F.3d 
846, 853 (8th Cir. 2001) (government action must be ``truly 
irrational'' in order to violate due process rights).
    \28\ See, e.g., United Artists Theatre Circuit, Inc. v. Township of 
Warrington, 316 F.3d 392, 400-402 (3d Cir. 2003) (overruling prior line 
of Third Circuit cases, employing ``unrelated to the merits'' and 
``improper notice'' standard, in favor of ``shocks the conscience'' 
test for due process claims); Barrington Cove Ltd. P'Ship v. Rhode 
Island Housing and Mortg. Fin. Corp., 246 F.3d 1, 5 (1st Cir. 2001) 
(for substantive due process claim to survive a motion to dismiss, the 
complaint must ``either (i) allege that [the agency] deprived [the 
plaintiff] of a cognizable property interest * * * or, failing that, 
(ii) allege that the [agency's] conduct was so egregious as to `shock 
the conscience' '').
    \29\. See, e.g., George Washington Univ. v. Dist. of Columbia, 318 
F.3d 203, 209 (D.C. Cir. 2003) (``the doctrine of substantive due 
process constrains only egregious government misconduct'' that is 
designed to ``prevent[] only grave unfairness'').
    \30\ See, e.g., Armendariz v. Penman, 75 F.3d 1311, 1325-26 (9th 
Cir. 1996).
    \31\ See, e.g., Lewis v. Brown, 409 F.3d 1271, 1273 (11th Cir. 
2005) (regulatory ``deprivations of State-created rights, which would 
include land use rights, cannot support a substantive due process 
claim, not even if the plaintiff alleges that the government acted 
arbitrarily and irrationally'').
---------------------------------------------------------------------------
    These cases clearly demonstrate that constitutional land 
use cases are notorious for their inconsistency. The chaos 
surrounding the standard for due process claims is 
extraordinary and begs for congressional guidance. In order to 
correct this situation, H.R. 4772 amends 42 U.S.C. Sec. 1983 to 
state that a government land use body violates due process when 
its actions are ``arbitrary, capricious, an abuse of 
discretion, or otherwise not in accordance with law.'' In this 
regard, the language tracks the text of the Administrative 
Procedure Act,\32\ which includes the traditional and 
deferential standard that courts are accustomed to employing 
when judging the legality of government regulatory action. 
Under this standard, it is well established that a government 
agency need only ``examine the relevant data and articulate a 
satisfactory explanation for its action including a `rational 
connection between the facts found and the choice made.' ''
---------------------------------------------------------------------------
    \32\ 5 U.S.C. Sec. 706(2)(A).
---------------------------------------------------------------------------

                                Hearings

    The Committee's Subcommittee on the Constitution held a 
hearing on H.R. 4772 on June 8, 2006. Witnesses appearing at 
the hearing were: Joseph L. Trauth, Jr., Keating, Muething & 
Klekamp, PLL; Franklin Kottschade, President, North American 
Realty; Daniel L. Siegel, Supervising Deputy Attorney General, 
Office of the Attorney General, State of California; and Steven 
J. Eagle, Professor of Law, George Mason University School of 
Law.

                         Commitee Consideration

    On July 12, 2006, the Committee met in open session and 
ordered favorably reported the bill H.R. 4772 with an amendment 
by voice vote, a quorum being present.

                         Vote of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were no recorded votes during the committee consideration of 
H.R. 4772.

                      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 Ofice 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. 4772, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                                   August 31, 2006.
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. 4772, the Private 
Property Rights Implementation Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
Hoople.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 4772--Private Property Rights Implementation Act of 2005

    H.R. 4772 would provide greater access to the federal 
courts to parties whose property rights have been affected by 
the decisions of federal, state, and local governments. As a 
result, the bill is likely to impose additional costs on the 
federal government by increasing both the number of cases heard 
by federal courts and the number of claims brought against the 
United States. CBO has no basis, however, for estimating new 
discretionary expenses (incurred by the court system to try new 
cases) or increases in direct spending (for future awards that 
may be paid from the permanent indefinite judgment 
appropriation).
    CBO has not reviewed this bill for intergovernmental or 
private-sector mandates. Section 4 of the Unfunded Mandates 
Reform Act of 1995 excludes from application of that act 
legislative provisions that enforce constitutional rights of 
individuals. CBO has determined that H.R. 4772 would fall 
within that exclusion because changes to federal jurisdiction 
over property rights cases would involve the enforcement of 
certain individual constitutional rights.
    The Fifth Amendment prohibits the taking of private 
property for public use without just compensation. This 
restriction on government action is extended to the states 
through the due process clause of the 14th Amendment. Under 
current law, parties who believe that a government agency's 
actions or decisions have taken their property may sue the 
federal, state, or local government. Plaintiffs alleging 
takings by state and local governments are often denied access 
to federal district courts, however, until they have exhausted 
their opportunities to obtain compensation through the state 
courts.
    H.R. 4772 would give greater access to federal courts to 
plaintiffs making claims based on property owners' rights 
secured by the Constitution. First, this bill would prohibit a 
federal district court from refusing to hear claims of takings 
by states and localities until a final decision has been 
rendered by a state court. The bill also would make other 
changes to existing law applicable to takings claims, such as 
defining ``final decision'' for the claims, thereby relaxing 
the standards by which such claims are found ripe for 
adjudication in federal district courts or in the U.S. Court of 
Federal Claims.
    Section 6 of the bill would change the standards for 
evaluating takings claims where the United States is acting as 
a defendant. Under current law, courts analyze contiguous lots 
as a single parcel to determine whether a taking has occurred. 
H.R. 4772 would narrow the courts' analysis to the impact on 
each lot, effectively allowing some claims that would have been 
denied under a ``parcel as a whole'' analysis. In addition, 
under H.R. 4772, a taking would be deemed a violation of 
substantive due process if decisionmaking by a federal agency 
was found to be ``arbitrary and capricious.''
    CBO expects that enacting the changes under H.R. 4772 would 
impose additional costs on the U.S. court system to the extent 
that additional takings claims are filed and heard in federal 
courts. Based on information obtained from various legal 
experts, however, CBO estimates that only a small percentage of 
all civil cases filed in state courts involve takings claims 
and that only a small proportion would be tried in federal 
court as the result of enacting H.R. 4772 (in part because 
state and local regulators may have an incentive to settle with 
plaintiffs to avoid a trial in federal court). On the other 
hand, most cases that would reach trial in a federal court as a 
result of this bill are likely to involve relatively large 
claims and could be time-consuming and costly to adjudicate. In 
addition, based on information from the Department of Justice, 
CBO estimates that the number of cases brought to court would 
increase under the new standards. Lower legal standards may 
also increase the number and size of payments from the 
permanent, indefinite judicial settlement fund. However, CBO 
has no basis for estimating the number of cases that would be 
affected or the amount of court costs that would result. 
Administrative costs for handling additional cases would be 
paid from appropriated funds, while any additional judgment 
payments would increase direct spending.
    The CBO staff contact for this estimate is Daniel Hoople. 
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. 
4772, the Private Property Rights Implementation Act of 2006, 
is designed to ensure that private property owner's Fifth 
Amendment takings claims can be heard by a Federal court.

                   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 article I, section 8, of the Constitution.

               Section-by-Section Analysis and Discussion

    The following discussion describes the bill as reported by 
the Committee.

Section 1. Short title

    This section provides the short title for the bill as the 
``Private Property Rights Implementation Act of 2006.''

Section 2. Jurisdiction in civil rights cases concerning real property

    This section prevents a Federal court from refusing to hear 
a case in which only Federal claims are alleged. If a matter of 
State law is unresolved, then the Federal district court may 
certify the question of State law to the highest appellate 
court of that State. After the State appellate court resolves 
the question certified to it, the Federal district court shall 
proceed with resolving the merits of the Federal claim.
    This provision addresses abstention, the legal principle 
under which courts relinquish their jurisdiction over a case 
and refuse to hear it. Abstention is one of the primary 
jurisdictional hurdles that currently prevent nearly all 
property owners from having their Federal Fifth Amendment 
taking claims heard in Federal court. This provision of H.R. 
4772 states that abstention can not be exercised by a Federal 
court in a takings case where no State law claim is alleged, 
and where there is no pending State court proceeding addressing 
the same claims. Moreover, to address any concerns about 
Federal courts' entangling themselves with State law issues, 
this section allows a Federal judge to have unresolved 
questions concerning State law answered by the State courts 
through a certification procedure if doing so is factually 
necessary to resolve the Federal constitutional property rights 
claim. This ensures that Federal courts do not decide State law 
issues, while ensuring property owners have access to Federal 
court to defend their Fifth Amendment rights.
    This section also allows a property owner whose 
constitutional rights may have been violated the same access to 
Federal court that other claimants alleging a violation of 
their constitutional rights (such as freedom of speech and 
religion) have. Accordingly, under this section, a property 
owner raising solely Federal claims can have his or her case 
decided in Federal court without first pursuing a litigation 
detour in State court on the same issues. If an individual 
claims that his constitutional right to free speech was 
violated, he can take that claim directly to Federal court. The 
same goes for alleged infringements of other constitutional 
rights, like the rights to privacy and the free exercise of 
religion, and all such claims can be brought immediately in 
Federal court. However, property owners with a Fifth Amendment 
claim have been treated differently and unfairly by courts. 
Unlike other constitutional cases, the Federal courts require 
that property owners with takings and due process claims 
litigate their case in State court first. This unfair situation 
derives from the Supreme Court's Williamson County (1985) 
decision, which the lower Federal courts have interpreted as 
requiring property owners to pursue, and exhaust, all available 
remedies for just compensation in State court, before the 
property owner can file suit in Federal court on a Fifth 
Amendment claim. Moreover, the Supreme Court's decision in San 
Remo (2005) confirmed that once a takings case is brought to 
State court and decided there, the property owner is forever 
precluded from a review of the case in Federal court, thereby 
placing property owners who want to file a constitutional 
takings claim in Federal court in an untenable Catch-22.
    Section two of the bill also clarifies when a 
constitutional takings claim is ``ripe'' and therefore ready 
for Federal adjudication. Current case law requires, among 
other factors, a ``final decision'' to be rendered before a 
constitutional takings claim is ripe, because exactly what a 
``final decision'' is is unclear under current law. Under the 
terms of the bill, a final agency decision exists after a 
property owner goes through three steps: (1) the property owner 
submits and is denied a ``meaningful application'' to use 
property that is consistent with local land use and zoning 
requirements; (2) the property owner then applies for but is 
denied a waiver from applicable land use requirements that 
caused the initial application to be rejected; and (3) after 
the waiver is denied, the property owner then pursues but is 
denied an administrative appeal on the waiver. Therefore, the 
legislation provides that a property owner would have a ripe 
Fifth Amendment constitutional claim for adjudication in 
Federal court only after land use reviews at the application, 
waiver, and administrative appeal levels.
    Finally, section two includes an explanation of 
``futility.'' This provision reflects current case law of the 
Supreme Court and states that a property owner shall not be 
required to apply for an appeal or waiver if no such appeal or 
waiver is available, if the appeal or waiver cannot provide the 
relief requested, or if the application would be futile.

Section 3. United States as defendant

    This section closely mirrors section 2 but applies to 
takings claims against the United States. This section applies 
only to suits against the Federal government involving $10,000 
or less. Under Federal law, these cases are tried in Federal 
district court.

Section 4. Jurisdiction of Court of Federal Claims

    Section 4 is identical to section 3, except it applies to 
suits against the Federal government involving more than 
$10,000. Under Federal law, these cases are heard in the Court 
of Federal Claims.

Section 5. Clarification for certain constitutional property rights 
        claims

    Section 5 clarifies the rights of property owners raising 
certain types of constitutional claims.
    Subsection 1 of section 5 clarifies that conditions or 
exactions that are imposed upon a property owner in order to 
receive a permit must be roughly proportional to the impact the 
development might have. This would apply to all kinds of 
exactions, regardless of whether the exaction stems from a 
legislative or regulatory requirement. Property owners and 
business owners may constitutionally be required to cover the 
government's costs that are incurred due to development or 
expansion of a business. For example, exactions may be imposed 
on developers to pay for expanding schools to accommodate 
children who will be living in the new development. Also, a 
business owner who is seeking permission to expand the business 
may be required to pay for the costs of installing a stop light 
if the expansion will result in an increase in traffic, and the 
increase in traffic merits a stop light. However, sometimes the 
conditions imposed on a development plan amount to nothing more 
than extortion. Occasionally, a government will try to palm-off 
on a property owner a condition for approval that has nothing 
to do with the project at hand or has no relationship to the 
extent of the project's impact. For example, a developer cannot 
be required to build a new school for children who already live 
in the town and likewise should not be required to pay for a 
road that will not be used by residents of the subdivision 
under construction, and the business owner should not be 
required to build a library or fund art exhibits in exchange 
for receiving approval to expand her store. Property owners 
should have the right in Federal court to defend themselves 
against unreasonable exactions or impact fees that amount to 
extortion. The Supreme Court in the Nollan (1987) and Dolan 
(1994) cases affirmed these principles, but this subsection 
clarifies that these principles apply to both regulatory and 
legislatively-imposed exactions, and extortionate conditions in 
any form, whether they encompass the forced relinquishment of 
land, the payment of disproportionate fees, or some other 
demanded condition that has no nexus to the project or its 
impact on public resources.
    Subsection 2 of section 5 clarifies the so-called 
``denominator question'' in cases concerning subdivided lots by 
requiring that Federal courts look at the impact of a takings 
claim on each individual lot that is recognized as a separate 
independent property unit under State law. If a government 
approves subdividing a property into lots, the property owner 
is often required to pay higher property taxes on each of the 
newly-created lots. On occasion, the government will later 
impose restrictions on some of the lots that deprive the 
property owner of all use of that particular lot. In 
challenging such an action as an unconstitutional taking, 
courts frequently look at the entire swath of owned property. 
In doing so, the courts almost always rule that as long as the 
property owner can still develop some of the lots in a larger 
subdivision, it is not a taking. In this scenario, the property 
owner is now saddled with unusable lots on which he or she is 
paying a higher property tax burden. It is unjust for cities to 
both receive the higher tax revenue on individual lots and also 
deny the property owner the use of that lot. If the government 
wants to receive the monetary benefit of taxing each individual 
lot as a separate unit, then it should also have the 
responsibility of paying compensation when it takes each 
individual lot and renders it unusable by regulation. The 
proper remedy is for the courts to look at each individual lot 
rather than the entire subdivision, and that is what this 
section of H.R. 4772 requires. This means that a property owner 
may have a valid constitutional takings claim if any single lot 
is rendered unusable due to government actions.
    Subsection 3 of section 5 clarifies due process violations 
in a takings case should be found when the government has been 
found to have acted in an ``arbitrary and capricious'' manner. 
This section of H.R. 4772 provides that the appropriate 
question in a due process case in land use matters is whether 
the government had no rational basis for its decision and it 
made an ``arbitrary and capricious'' decision. (Proving that a 
government made an arbitrary and capricious decision on a land 
use matter remains an extremely high standard, and only a small 
number of land use cases will meet it.)

Section 6. Clarification for certain constitutional property rights 
        claims against the United States

    This section, which was added by an amendment by 
Representative Flake, extends the clarifications of section 5 
to cases in which the Federal government takes property in 
violation of the takings clause.

Section 7. Duty of notice to owners

    This section requires a Federal agency to provide notice to 
property owners explaining their rights and the procedures for 
obtaining any compensation that may be due to them whenever 
that agency takes an action impacting their private property.

Section 8. Severability and effective date

    This section makes the provisions of this act severable 
should any provision be found unconstitutional. This section 
also provides that the amendments made by this act become 
effective when it is signed into law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

TITLE 28, UNITED STATES CODE

           *       *       *       *       *       *       *



PART IV--JURISDICTION AND VENUE

           *       *       *       *       *       *       *


CHAPTER 85--DISTRICT COURTS; JURISDICTION

           *       *       *       *       *       *       *



Sec. 1343. Civil rights and elective franchise

  (a) * * *

           *       *       *       *       *       *       *

  (c) Whenever a district court exercises jurisdiction under 
subsection (a) in an action in which the operative facts 
concern the uses of real property, it shall not abstain from 
exercising or relinquish its jurisdiction to a State court if 
the party seeking redress does not allege a violation of a 
State law, right, or privilege, and no parallel proceeding is 
pending in State court, at the time the action is filed in the 
district court, that arises out of the same operative facts as 
the district court proceeding.
  (d) In an action in which the operative facts concern the 
uses of real property, the district court shall exercise 
jurisdiction under subsection (a) even if the party seeking 
redress does not pursue judicial remedies provided by a State 
or territory of the United States.
  (e) If the district court has jurisdiction over an action 
under subsection (a) in which the operative facts concern the 
uses of real property and which cannot be decided without 
resolution of an unsettled question of State law, the district 
court may certify the question of State law to the highest 
appellate court of that State. After the State appellate court 
resolves the question so certified, the district court shall 
proceed with resolving the merits. The district court shall not 
certify a question of State law under this subsection unless 
the question of State law--
          (1) is necessary to resolve the merits of the Federal 
        claim of the injured party; and
          (2) is patently unclear.
  (f)(1) Any claim or action brought under section 1979 of the 
Revised Statutes of the United States (42 U.S.C. 1983) to 
redress the deprivation of a property right or privilege 
secured by the Constitution shall be ripe for adjudication by 
the district courts upon a final decision rendered by any 
person acting under color of any statute, ordinance, 
regulation, custom, or usage, of any State or territory of the 
United States, which causes actual and concrete injury to the 
party seeking redress.
  (2) For purposes of this subsection, a final decision exists 
if--
          (A) any person acting under color of any statute, 
        ordinance, regulation, custom, or usage, of any State 
        or territory of the United States, makes a definitive 
        decision regarding the extent of permissible uses on 
        the property that has been allegedly infringed or 
        taken, without regard to any uses that may be permitted 
        elsewhere; and
          (B) one meaningful application to use the property 
        has been submitted but denied, and the party seeking 
        redress has applied for but is denied one waiver and 
        one appeal, if the applicable statute, ordinance, 
        regulation, custom, or usage provides a mechanism for 
        waiver by or appeal to an administrative agency.
The party seeking redress shall not be required to apply for a 
waiver or appeal described in subparagraph (B) if such waiver 
or appeal is unavailable or can not provide the relief 
requested, or if pursuit of such a mechanism would otherwise be 
futile.

           *       *       *       *       *       *       *


Sec. 1346. United States as defendant

  (a) * * *

           *       *       *       *       *       *       *

  (h)(1) Any claim brought under subsection (a) that is founded 
upon a property right or privilege secured by the Constitution, 
but was allegedly infringed or taken by the United States, 
shall be ripe for adjudication upon a final decision rendered 
by the United States, which causes actual and concrete injury 
to the party seeking redress.
  (2) For purposes of this subsection, a final decision exists 
if--
          (A) the United States makes a definitive decision 
        regarding the extent of permissible uses on the 
        property that has been allegedly infringed or taken, 
        without regard to any uses that may be permitted 
        elsewhere; and
          (B) one meaningful application to use the property 
        has been submitted but denied, and the party seeking 
        redress has applied for but is denied one waiver and 
        one appeal, if the applicable law of the United States 
        provides a mechanism for waiver by or appeal to an 
        administrative agency.
The party seeking redress shall not be required to apply for a 
waiver or appeal described in subparagraph (B) if such waiver 
or appeal is unavailable or can not provide the relief 
requested, or if pursuit of such a mechanism would otherwise be 
futile.
  (i) If a claim brought under subsection (a) is founded upon a 
property right or privilege secured by the Constitution that 
concerns--
          (1) an approval from an executive agency to permit or 
        authorize uses of real property that is subject to 
        conditions or exactions, then the United States is 
        liable if any such condition or exaction, whether 
        legislative or adjudicatory in nature, including but 
        not limited to the payment of a monetary fee or a 
        dedication of real property from the injured party, is 
        unconstitutional;
          (2) a subdivision of real property pursuant to any 
        statute, ordinance, regulation, custom, or usage of any 
        State or territory, or the District of Columbia, then 
        such a claim against an executive agency shall be 
        decided with reference to each subdivided lot, 
        regardless of ownership, if such a lot is taxed, or is 
        otherwise treated and recognized, as an individual 
        property unit by the State or territory, or the 
        District of Columbia, as the case may be; or
          (3) an alleged deprivation of substantive due 
        process, then the United States shall be judged as to 
        whether its action is arbitrary, capricious, an abuse 
        of discretion, or otherwise not in accordance with law.
In this subsection, the term ``executive agency'' has the 
meaning given that term in section 105 of title 5.

           *       *       *       *       *       *       *


CHAPTER 91--UNITED STATES COURT OF FEDERAL CLAIMS

           *       *       *       *       *       *       *


Sec. 1491. Claims against United States generally; actions involving 
                    Tennessee Valley Authority

  (a)(1) * * *

           *       *       *       *       *       *       *

  (3) Any claim brought under this subsection founded upon a 
property right or privilege secured by the Constitution, but 
allegedly infringed or taken by the United States, shall be 
ripe for adjudication upon a final decision rendered by the 
United States, that causes actual and concrete injury to the 
party seeking redress. For purposes of this paragraph, a final 
decision exists if--
          (A) the United States makes a definitive decision 
        regarding the extent of permissible uses on the 
        property that has been allegedly infringed or taken, 
        without regard to any uses that may be permitted 
        elsewhere; and
          (B) one meaningful application to use the property 
        has been submitted but denied, and the party seeking 
        redress has applied for but is denied one waiver and 
        one appeal, if the applicable statute, ordinance, 
        regulation, custom, or usage provides a mechanism for 
        waiver by or appeal to an administrative agency.
The party seeking redress shall not be required to apply for a 
waiver or appeal described in subparagraph (B) if such waiver 
or appeal is unavailable or can not provide the relief 
requested, or if pursuit of such a mechanism would otherwise be 
futile.
  (4) If a claim brought under subsection (a) is founded upon a 
property right or privilege secured by the Constitution that 
concerns--
          (A) an approval from an executive agency to permit or 
        authorize uses of real property that is subject to 
        conditions or exactions, then the United States is 
        liable if any such condition or exaction, whether 
        legislative or adjudicatory in nature, including but 
        not limited to the payment of a monetary fee or a 
        dedication of real property from the injured party, is 
        unconstitutional;
          (B) a subdivision of real property pursuant to any 
        statute, ordinance, regulation, custom, or usage of any 
        State or territory, or the District of Columbia, then 
        such a claim against an executive agency shall be 
        decided with reference to each subdivided lot, 
        regardless of ownership, if such a lot is taxed, or is 
        otherwise treated and recognized, as an individual 
        property unit by the State, or territory, or the 
        District of Columbia, as the case may be; or
          (C) an alleged deprivation of substantive due 
        process, then the United States shall be judged as to 
        whether its action is arbitrary, capricious, an abuse 
        of discretion, or otherwise not in accordance with law.
In this paragraph, the term ``executive agency'' has the 
meaning given that term in section 105 of title 5.

           *       *       *       *       *       *       *

                              ----------                              


        SECTION 1979 OF THE REVISED STATUES OF THE UNITED STATES

  Sec. 1979. Every person who, under color of any statute, 
ordinance, regulation, custom, or usage, of any State or 
Territory or the District of Columbia, subjects, or causes to 
be subjected, any citizen of the United States or other person 
within the jurisdiction thereof to the deprivation of any 
rights, privileges, or immunities secured by the Constitution 
and laws, shall be liable to the party injured in an action at 
law, suit in equity, or other proper proceeding for redress, 
except that in any action brought against a judicial officer 
for an act or omission taken in such officer's judicial 
capacity, injunctive relief shall not be granted unless a 
declaratory decree was violated or declaratory relief was 
unavailable. For the purposes of this section, any Act of 
Congress applicable exclusively to the District of Columbia 
shall be considered to be a statute of the District of 
Columbia. If the party injured seeks to redress the deprivation 
of a property right or privilege under this section that is 
secured by the Constitution by asserting a claim that 
concerns--
          (1) an approval to develop real property that is 
        subject to conditions or exactions, then the person 
        acting under color of State law is liable if any such 
        condition or exaction, whether legislative or 
        adjudicatory in nature, including but not limited to 
        the payment of a monetary fee or a dedication of real 
        property from the injured party, is unconstitutional;
          (2) a subdivision of real property pursuant to any 
        statute, ordinance, regulation, custom, or usage of any 
        State or territory, or the District of Columbia, then 
        such a claim shall be decided with reference to each 
        subdivided lot, regardless of ownership, if such a lot 
        is taxed, or is otherwise treated and recognized, as an 
        individual property unit by the State, territory, or 
        the District of Columbia; or
          (3) alleged deprivation of substantive due process, 
        then the action of the person acting under color of 
        State law shall be judged as to whether it is 
        arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with law.
For purposes of the preceding sentence, ``State law'' includes 
any law of the District of Columbia or of any territory of the 
United States.

                           Markup Transcript



                            BUSINESS MEETING

                        WEDNESDAY, JULY 12, 2006

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:45 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable F. 
James Sensenbrenner, Jr. (Chairman of the Committee) presiding.
    Chairman Sensenbrenner. The Committee will be in order. A 
working quorum is present.
    [Intervening business.]
    Chairman Sensenbrenner. Pursuant to notice, I now call up 
the bill H.R. 4772, the ``Private Property Rights 
Implementation Act of 2005,'' for purposes of mark up and move 
its favorable recommendation to the House.
    [The bill, H.R. 4772, follows:]
    
    
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any point.
    The Chair recognizes the author of the legislation, Mr. 
Chabot, Chairman of the Subcommittee on the Constitution, for 5 
minutes to explain the bill.
    Mr. Chabot. Thank you, Mr. Chairman.
    I would first like to compliment the Chairman on his gavel. 
We appreciate it. There is a story behind that, and one must 
check out the New York Times if they----
    Chairman Sensenbrenner. If the gentleman would yield, it is 
the front page of yesterday's New York Times.
    Mr. Chabot. Yes, so if anybody wants to get to the details 
of this.
    But I thank the Chairman.
    We introduce this bill, H.R. 4772, the ``Private Property 
Rights Implementation Act,'' along with our Democratic 
colleague Bart Gordon of Tennessee, earlier this year to help 
all Americans defend their constitutionally protected property 
rights.
    I would also like to thank the gentleman from California, 
Mr. Gallegly, for his leadership on this issue as well as his 
work over the years and getting it successfully passed back in, 
I believe, the 105th Congress.
    Most Americans are familiar with one recent decision 
involving all Americans' property rights, the case of Kelo v. 
City of New London, in which the Supreme Court held that the 
Constitution allows Government to take private property from 
one citizen and give it to a private company.
    The House of Representatives acted to correct that 
victorious decision by passing a bill, H.R. 4128, by the 
overwhelming bipartisan margin of 376 to 38. However, the 
Supreme Court during its last term handed down another bad 
decision that fails to protect the property rights of all 
Americans and correcting that decision through the legislation 
we will be addressing today should have the same bipartisan 
support.
    Here is the problem. Strange as it sounds, under current 
law property owners are now blocked from raising a Federal 
fifth amendment takings claim in Federal court. Here is why! 
The Supreme Court's 1985 decision in Williamson County v. 
Hamilton Bank requires property owners to pursue to the end all 
available remedies for just compensation in State court before 
the property owner can file suit in Federal court under the 
Fifth Amendment.
    Just last year in the case of San Remo Hotel v. City and 
County of San Francisco, the Supreme Court held that once the 
property owner tries their case in State court and loses, the 
legal doctrine of claim preclusion requires Federal courts to 
dismiss the claims that have already been raised in State 
court, even though the property owner never wanted to be in 
State court with their Federal claim in the first place.
    The combination of these two rules means that those with 
Federal property rights claims are effectively shut out of 
Federal court on their Federal takings claims, setting them 
unfairly apart from those asserting any other kind of Federal 
rights, such as those asserting free speech or religious 
freedom rights, who nearly universally enjoy the right to have 
their Federal claims heard in Federal court in the first 
instance.
    The late Chief Justice Rehnquist commented directly on this 
unfairness, observing in his concurring opinion in the San Remo 
case that, ``The Williamson County decision all but guarantees 
that claimants will be unable to utilize the Federal courts to 
enforce the Fifth Amendment's just compensation guarantee.''
    The 2nd Circuit Court of Appeals also noted that, ``It is 
both ironic and unfair if the very procedure that the Supreme 
Court required property owners to follow before bringing a 
Fifth Amendment takings claim, a State court takings action, 
also precluded them from ever bringing a fifth amendment 
takings claim in the Federal court.''
    H.R. 4772, the ``Private Property Rights Implementation 
Act'' that we are considering here today, will correct the 
unfair legal bind that catches all property owners in a Catch-
22. This bill, which is based on Congress' clear authority to 
define the jurisdiction of the Federal courts and the appellate 
jurisdiction of the Supreme Court, would allow property owners 
raising Federal takings claims to have their cases decided in 
Federal court without first pursuing a wasteful and unnecessary 
litigation detour and possible dead end in State court.
    H.R. 4772 would also remove another artificial barrier 
blocking property owners' access to Federal court. The Supreme 
Court's Williamson County decision also requires that before a 
case can be brought for review in a Federal court, property 
owners must first obtain a final decision from the State 
government on what is an acceptable use of their land. This has 
created an incentive for regulatory agencies to avoid making a 
final decision at all by stringing out the process and thereby 
forever denying property owner access to court.
    Studies of takings cases in the 1990's indicate that it 
took property owners nearly a decade of litigation, which most 
property owners can't afford, before takings claims were ready 
to be heard on the merits in any court. To prevent that unjust 
result, H.R. 4772 would clarify when a final decision has been 
achieved and when the case is ready for Federal court review.
    Under this bill, if a land use application is reviewed by 
the relevant agency and rejected, a waiver is requested and 
denied, and an administrative appeal also rejects the 
application, then a property owner can bring their Federal 
constitutional claim in Federal court.
    Mr. Chairman, I would ask for an additional 2 minutes.
    Chairman Sensenbrenner. Without objection.
    Mr. Chabot. Thank you.
    The bill would not change the way agencies resolve 
disputes. Rather, H.R. 4772 simply makes clear the steps the 
property owner must take to make their case ready for court 
review.
    H.R. 4772 also clarifies the rights of property owners 
raising certain types of constitutional claims in the following 
ways.
    First, it would clarify that conditions that are imposed 
upon a property owner before they can receive a development 
permit must be proportional to the impact the development might 
have on the surrounding community.
    Second, it would clarify that if property units are 
individually taxed under State law, then the adverse economic 
impact the regulation has on a piece of property should be 
measured by determining how much value the regulation has taken 
away from the individual lot affected, not a whole collection 
of lots grouped together.
    And, third, the bill would clarify that due process 
violations involving property rights should be found when the 
Government has been found to have acted in an arbitrary and 
capricious manner.
    Mr. Chairman, I urge my colleagues to join me in supporting 
this bipartisan legislation and yield back the balance of my 
time.
    Chairman Sensenbrenner. Does the gentleman from Virginia 
wish to give the Democratic opening statement?
    Mr. Scott. No, Mr. Chairman. I would ask unanimous consent 
that the Ranking Member of the Committee be allowed to enter a 
statement into the record.
    Chairman Sensenbrenner. Without objection.
    [The prepared statement of Mr. Conyers follows:]
    
    
    Chairman Sensenbrenner. Without objection, all Members may 
enter opening statements in the record.
    At this point, are there amendments?
    For what purpose does the gentleman from Arizona seek 
recognition?
    Mr. Flake. I have an amendment at the desk.
    Chairman Sensenbrenner. Clerk will report the amendment.
    The Clerk. ``Amendment to H.R. 4772, offered by Mr. Flake 
of Arizona. Insert the following after Section 5 and 
redesignate succeeding sections accordingly''----
    [The amendment by Mr. Flake follows:]
    
    
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read. And the gentleman from Arizona is 
recognized for 5 minutes.
    Mr. Flake. I thank the Chairman.
    This is really a noncontroversial amendment. This simply 
would apply the same clarification that this bill makes in 
cases in which a locality is taking private property to cases 
in which the Federal Government is taking private property.
    Chairman Sensenbrenner. Would the gentleman yield?
    Mr. Flake. Yes.
    Chairman Sensenbrenner. It sounds good to me. I am willing 
to accept it.
    Mr. Flake. Sounds good.
    Mr. Chabot. Mr. Chairman, we support the amendment as well.
    Chairman Sensenbrenner. Okay.
    The question is on the amendment offered by the gentleman 
from Arizona, Mr. Flake. Those in favor will say ``aye.''
    Opposed, ``no.''
    The ayes appear to have it. The ayes have it. The amendment 
is agreed to.
    Are there further amendments?
    For what purpose does the gentleman from California, Mr. 
Gallegly, seek recognition?
    Mr. Gallegly. Strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Gallegly. And I won't take 5 minutes, Mr. Chairman.
    I want to congratulate Mr. Chabot. We worked on this issue 
for many, many years together. In fact, almost 10 years ago, in 
fact it may be over 10 years ago--I lose time when we are 
having fun.
    But this bill that we had back in the 105th passed by an 
overwhelming majority, a bipartisan majority, in the House, and 
was only a couple of votes short of cloture in the Senate. Had 
they not had the cloture provision over there or the 60 percent 
rule, this rule would have been passed out of the House. What 
would have happened with it during the Clinton administration, 
of course, we will never know.
    But the fact remains that this is critical legislation. The 
gentleman from Ohio is to be commended for his leadership, and 
I would urge my colleagues to join in a strong vote of support 
and move this on to the floor.
    Mr. Chairman, I yield back.
    Mr. Scott. Will the gentleman yield?
    Mr. Gallegly. I would yield, yes.
    Mr. Scott. I would ask the gentleman if you could explain 
the 100 percent rule and what the bill does to it.
    Mr. Gallegly. Mr. Chabot?
    Chairman Sensenbrenner. The gentleman from California 
controls the time.
    Mr. Gallegly. I would yield to Mr. Chabot for----
    Mr. Chabot. If the gentleman would yield, are you talking 
about the subdivisions? The denominator question? The 
subdivisions?
    Mr. Scott. Yes.
    Mr. Chabot. Essentially what we are talking about here is 
that if an individual subdivision, one of the parcels is taxed 
individually, then it would be considered based upon its own, 
not the relationship within the whole subdivision.
    Mr. Gallegly. Reclaiming my time.
    Mr. Chairman, I would urge my colleagues to join in 
supporting this bill.
    I yield back.
    Chairman Sensenbrenner. Are there amendments?
    Mr. Scott. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman from Virginia has 
already been recognized for the minority statement.
    Ms. Lofgren. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the 
gentlewoman from California seek recognition?
    Ms. Lofgren. I move to strike the last word.
    Chairman Sensenbrenner. The gentlewoman is recognized for 5 
minutes.
    Ms. Lofgren. And I would yield my time to Mr. Scott.
    Mr. Scott. Thank you.
    Mr. Chairman, I would seek to clarify on the 100 percent 
rule and ask the gentleman from Ohio, if the property as a 
whole is being considered and one portion of that is rendered 
undevelopable, but the property of the whole can be developed 
nicely, would that constitute a taking? Is there a substantive 
change in the law in the bill?
    Mr. Chabot. Would the gentleman yield?
    If the property is taxed separately, if it is a separate 
piece of property, then it would be considered on its own.
    Mr. Scott. Is that a substantive change in the law?
    Mr. Chabot. It is a clarification of the law.
    Chairman Sensenbrenner. Does the gentlewoman from 
California yield back?
    Ms. Lofgren. I would yield back the balance of my time.
    Chairman Sensenbrenner. Are there amendments? If there are 
no amendments, a reporting quorum is not present.
    Without objection, the previous question is ordered on the 
motion to report the bill H.R. 4772 favorably, and the vote on 
this question will be taken when a reporting quorum appears.
    [Intervening business.]
    The question occurs on the motion to report the bill H.R. 
4772 favorably as amended upon which the previous question has 
been ordered.
    All those in favor will say ``aye.''
    Opposed, ``no.''
    The ayes appear to have it. The ayes have it. The motion to 
report favorably is agreed to.
    Without objection, the bill will be reported favorably to 
the House in the form of a single amendment and in the nature 
of a substitute incorporating the amendments adopted here 
today.
    Without objection, the staff is directed to make any 
technical conforming changes and all Members will be given 2 
days as provided by the House rules in which to submit 
additional dissenting supplemental or minority views.
    [Intervening business.]
    Chairman Sensenbrenner. This concludes the business that is 
on the agenda. And without objection, the Committee stands 
adjourned.
    [Whereupon, at 2:30 p.m., the Committee was adjourned.]

                                 

                            DISSENTING VIEWS

    We respectfully dissent from the favorable reporting of 
H.R. 4772, the ``Private Property Rights Protection Act of 
2005.'' This legislation will narrow the judicial doctrine of 
ripeness \1\ and significantly pare back the abstention 
doctrine \2\ for land owners asserting so-called regulatory 
takings claims against state and local governments in federal 
courts. Supporters of H.R. 4772 argue that the legislation 
would allow greater and fairer access to federal courts by 
those who have federal property rights claims under the Fifth 
Amendment's Taking Clause.\3\ However, H.R. 4772 appears to do 
little more than permit landowners to forum shop between state 
and federal courts when they pursue takings claims against the 
government. In addition, this bill would make significant 
changes to takings law as established by Supreme Court 
precedent.\4\
---------------------------------------------------------------------------
    \1\ Ripeness is a judicial doctrine, partly rooted in Article III 
of the United States Constitution's ``cases'' and ``controversies'' 
requirement, which seeks to ensure that a matter is sufficiently mature 
for resolution.
    \2\ Abstention is a discretionary doctrine under which a federal 
court may decline to decide cases that are otherwise properly before 
the court. The abstention doctrine is based on the notion that federal 
courts should not intrude on sensitive state political and judicial 
controversies unless it is necessary.
    \3\ See Letter from Joseph M. Stanton, Chief Lobbyist, National 
Association of Homebuilders to Members of the United States House of 
Representatives (March 1, 2006).
    \4\ H.R. 4772, as well as its predecessors, was introduced in 
response to the United States Supreme Court's decision in Williamson 
County v. Hamilton Bank (473 U.S. 186) (1985). The Court's decision in 
Williamson County established that a takings plaintiff was barred from 
filing suit in federal court absent a definitive final decision by the 
local land use authorities and if plaintiff had failed to pursue 
available state procedures for obtaining compensation. Most recently, 
in San Remo Hotel v. City and County of San Francisco (545 U.S. 323) 
(2005). The Supreme Court confirmed and did not modify prior case law 
that held that once a property owner tries their case in state court, 
and loses, the doctrine of collateral estoppel bars the owner from re-
litigating takings issues previously resolved by the state court. 
Furthermore, Subsection 2 of Section 5 overrides the parcel as a whole 
rule as upheld by the Supreme Court in 2002 in Tahoe-Sierra 
Preservation Council v. Tahoe Regional Planning Agency (535 U.S. 302).
---------------------------------------------------------------------------

                                Overview

    H.R. 4772 deals with regulatory takings--takings in which 
the government subjects property to regulations but does not 
change its ownership--such as zoning ordinances. H.R. 4772 
would force premature federal involvement in local land use 
disputes and tells the states and municipalities that they are 
not competent to adjudicate their land disputes. This 
legislation would also benefit just one set of plaintiffs--real 
property owners alleging Fifth Amendment takings--to the 
exclusion of other persons who face abrogation of their 
constitutional rights and who must first bring their claims in 
state court. Furthermore, evidence suggests that state courts 
quickly and fairly resolve most takings cases so legislation 
like H.R. 4772 is unnecessary. Most significantly, H.R. 4772 
may be unconstitutional as it would make cases prematurely--and 
unconstitutionally--``ripe'' for review, even if the claimant 
had not pursued available state remedies. Since such actions 
may not meet the constitutional standard of ``finality,'' such 
claims would be dismissed by the courts.
    H.R. 4772 revives--with some significant additions--a set 
of legislative proposals that have been pending in Congress for 
almost a decade. Most of the provisions of H.R. 4772 first 
appeared in the 105th Congress as H.R. 1534, which passed the 
House by a mostly party line vote of 248 to 178, and as a 
portion of S. 2271, and which died on the Senate floor on a 52 
to 42 cloture vote. In the 106th Congress, the House passed a 
similar bill, H.R. 2372, by a vote of 226 to 182, but the 
proposal died in the Senate. Prior to this year, most observers 
had believed that this failed legislative effort had run its 
course.
    This so-called ``procedural approach'' to the takings issue 
was launched in the 105th Congress in response to the widely 
perceived extremism of the takings provision in the Contract 
with America in the 104th Congress. The Contract with America 
proposal would have inserted into federal law a new statutory 
standard for takings liability that went far beyond the 
standard for takings liability under the Takings Clause of the 
Fifth Amendment to the U.S. Constitution. This proposal passed 
the House, again, on a mostly party line vote, but generated 
widespread opposition and eventually died in the U.S. Senate. 
The procedural approach to takings in H.R. 1534 was presented 
as an alternative, less extreme approach to takings. It also 
reflected the emerging role in the takings debate of the 
developer lobby, which is primarily interested in using the 
threat of takings litigation as leverage in land use 
negotiations.
    While H.R. 4772 includes many of the procedural elements of 
H.R. 2372 (and the earlier H.R. 1534), it also is designed to 
revive the controversial, discredited approach of altering the 
constitutional standard for takings liability. Indeed, in some 
ways H.R. 4772's approach to modifying constitutional standards 
is more extreme than the approach in the Contract with America. 
This bill would establish new standards of liability that would 
alter the constitutional standards under both the Takings 
Clause and the Due Process Clause. Unlike the Contract with 
America proposal, which primarily focused on altering the 
standard of liability applicable to the federal government, 
H.R. 4772 would establish new standards of liability 
exclusively applicable to state and local governments. In this 
sense, H.R. 4772 is a far greater assault on federalism that 
any prior takings proposal in Congress.
    Many groups join us in concluding that H.R. 4772 is not 
sound policy. These groups include the American Planning 
Association, the Community Rights Counsel, American Rivers, 
Clean Water Action, Defenders of Wildlife, Earthjustice, 
Friends of the Earth, National Audubon Society, National 
Wildlife Federation, Natural Resources Defense Council, Sierra 
Club, the Wilderness Society, U.S. Public Interest Research 
Group, the United States Conference of Mayors, the National 
Center for State Courts, the National League of Cities, the 
National Association of Counties, the National Conference of 
State Legislatures, the Council of State Governments and the 
International City Management Association.\5\
---------------------------------------------------------------------------
    \5\ See Letters from the American Planning Association, the 
Community Rights Counsel, American Rivers, Clean Water Action, 
Defenders of Wildlife, Earthjustice, Friends of the Earth, National 
Audobon Society, National Wildlife Federation, Natural Resources 
Defense Council, Sierra Club, the Wilderness Society, U.S. Public 
Interest Research Group, the United States Conference of Mayors, the 
National Center for State Courts, the National League of Cities, the 
National Association of Counties, the National Conference of State 
Legislatures, the Council of State Governments and the International 
City Management Association to Members of Congress (109th Congress) (on 
file with the House Committee on the Judiciary).
---------------------------------------------------------------------------
    The United States Conference of Mayors ``support[s] the 
longstanding requirement that claimants under the Takings 
Clause of the U.S. Constitution pursue available State 
compensation procedures before filing a federal Takings claim 
in Federal court.'' \6\ The Conference of Chief Justices and 
the National Center for State Courts note that there is ``no 
record that state courts generally fail to render fair 
decisions in land use cases.'' \7\ Notably, the National League 
of Cities, the National Association of Counties, the National 
Conference of State Legislatures, the Council of State 
Governments and the International City Management Association 
believe that ``the bill raises very serious constitutional 
questions. The Supreme Court has repeatedly stated that a 
takings claimant suffers no constitutional injury unless a 
state court has denied a claim for just compensation.'' \8\
---------------------------------------------------------------------------
    \6\ Letter from the United States Conference of Mayors to the 
Honorable Arlen Specter, Senate Judiciary Chairman, and the Honorable 
Patrick Leahy, Senate Judiciary Ranking Member (June 6, 2006).
    \7\ Letter from Randall T. Shepard, Supreme Court of Indiana Chief 
Justice and Conference of Chief Justices President, to the Honorable 
James Sensenbrenner, Jr. House Judiciary Chairman, and the Honorable 
John Conyers, Jr., House Judiciary Ranking Member.
    \8\ Letter from the National League of Cities, the National 
Association of Counties, the National Conference of State Legislatures, 
the Council of State Governments and the International City Management 
Association to the Honorable Steve Chabot, House Judiciary Constitution 
Subcommittee Chairman, and the Honorable Jerrold Nadler, House 
Judiciary Constitution Subcommittee Ranking Member (June 8, 2006).
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                       Concerns With Legislation


     I. H.R. 4772 ENCOURAGES FEDERAL INTERFERENCE IN LOCAL MATTERS

    H.R. 4772 would undermine local zoning and land use 
authority by giving large land developers and special interests 
a ``club'' with which to intimidate communities that cannot 
afford to put up a fight in federal court. In addition, by 
permitting takings plaintiffs to bring their cases in federal 
court prematurely, it would burden localities with higher legal 
fees--again discouraging independent decision-making at the 
local level at the risk of engaging in a protracted federal 
court fight. The costs of defending unjustified federal takings 
litigation would threaten local community fire, police, and 
environmental protection services.
    For example, a developer may apply for a permit to build 
800 homes on a parcel of land. A zoning official may deny that 
request, and a zoning board may as well. Without any 
determination of what would be a permissible use of that land 
short of the denied use, the case could be brought before a 
federal district court. Currently, such an issue might be 
deferred, dismissed or stayed while a state administrative 
agency or court concludes consideration of the claim. H.R. 4772 
gives claimants a ``fast track'' to the federal courts, 
potentially burdening both the federal judiciary and the land 
use procedures of states and localities.
    H.R. 4772 would also minimize the local citizens' ability 
to effectively participate in the land use process. At the 
administrative level, neighbors can participate without hiring 
a lawyer. Neighboring property owners and citizen groups 
sometimes do not find out about harmful land use proposals 
until the later stages of local processes--the very stages that 
the bill would allow developers to bypass. The bill would 
eliminate the most convenient and inexpensive forums for 
neighbors, who may be concerned about a proposal's impact on 
their property, health, safety, community, and environment. We 
need to ask ourselves whether we really want to make it more 
difficult for our local governments to protect their citizens 
against groundwater contamination or to prevent a corporation 
from operating a waste dump? Do we really want to limit the 
ability of our local governments to regulate adult bookstores? 
Yet this is precisely the effect H.R. 4772 will have by 
prematurely allowing takings claims to be brought into federal 
court.

II. H.R. 4772 ENCOURAGES FORUM SHOPPING AND CREATES AND UNDUE BURDEN ON 
                             FEDERAL COURTS

    H.R. 4772 increases a plaintiff's ability to forum shop. 
Under the regime of H.R. 4772, developers would be given 
greater flexibility to choose to file suit in federal court 
when that forum appears to be more favorable to them in a 
particular jurisdiction, or to file suit in state court when 
the state forum is perceived to be more favorable. To the 
extent that courts apply the constitutional takings standard in 
a slightly different manner, we should not encourage parties to 
take unfair advantage of such variations among jurisdictions.
    The changes wrought by H.R. 4772 are likely to result in a 
significant increase in the federal judicial workload. In 1997, 
with respect to an earlier version of this legislation, the 
Congressional Research Service (CRS) has found ``there is a 
sound argument that H.R. 1534 will result in a significant 
increase in the workload of the federal courts, particularly 
from takings litigation.'' \9\ When this legislation was first 
taken up in the 105th and 106th Congresses, the Judicial 
Conference of the United States commented, ``this legislation 
could sweep large numbers of takings claims into the federal 
courts. Such an increase in case filings, especially if brought 
prematurely, could raise workload impact concerns and 
contribute to existing backlogs in some judicial districts.'' 
\10\
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    \9\ Robert Meltz, CRS Report for Congress, ``Property Rights'' 
Bills Take a Process Approach: H.R. 992 and H.R. 1534, September 22, 
1997 (97-877A).
    \10\  Letter from Leonidas Ralph Mecham, Secretary, Judicial 
Conference of the United States, to Rep. Henry J. Hyde, Chairman, 
Committee on the Judiciary, Feb. 14, 2000, at 3.
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    Another problem is that the legislation's limitation on the 
abstention doctrine raises problems where the States do not 
have formal certification procedures. The bill creates a 
procedure whereby federal courts certify ``significant but 
unsettled'' questions of state law to the highest appellate 
court of the State. But not all States have adopted such 
procedures. Thus, the bill may block the federal courts from 
abstaining and could force them to decide the State law 
question themselves.
    Ultimately, H.R. 4772 creates a scheme completely at odds 
with federalist principles: the massive transfer of power over 
local land use decisions to the federal judiciary.

                     III. H.R. 4772 IS UNNECESSARY

    Advocates of the bill allege that takings claims get 
bottled up for years in expensive and time-consuming 
litigation. In fact, there is no reliable evidence that this 
occurs with any statistical frequency.\11\ California Deputy 
Attorney General Daniel Siegel finds, ``[w]hen compared to the 
many thousands of land use decisions made every year by the 
nation's 35,000 cities and towns, however, and the typical 
length of time that the judicial process requires, the stories 
of extreme delay are isolated.'' \12\ Although the National 
Association of Home Builders (``NAHB'') has stated that it 
takes an average of 9.6 years to resolve takings disputes, the 
facts do not support this contention. NAHB arrived at this 
statistic by using only 14 federal appellate court cases over a 
nine-year period (1990-1998).\13\ In view of the hundreds of 
land use matters handled by local governments every day, this 
tiny statistical sample--fewer than two cases per year--is 
meaningless. By ignoring the countless land use disputes that 
are resolved in the local planning process without litigation, 
as well as the hundreds of takings cases litigated in state 
court each year (the bulk of the lawsuits), the NAHB's 
selective sampling biased the results of its survey.\14\ 
Moreover, if the NAHB's argument concerning federal court 
delays has merit, it would see to militate against this bill 
which would place these cases into federal system. For all the 
complaints about the state courts, the NAHB study does not 
address that system at all.
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    \11\ See Hearing on H.R. 4772, the ``Private Property Rights 
Implementation Act of 2005'' Before the House Committee on the 
Judiciary, Subcommittee on the Constitution, 109th Congress (June 8, 
2006) (testimony of Daniel Siegel, California Deputy Attorney General).
    \12\ Id.
    \13\ Community Rights Counsel, Talking Points, The False and 
Misleading Statistics Behind the NAHB Takings Bill, available at http:/
/www.communityrights.org/PromotesSmartGrowth/NAHB/talkingpoints.asp.
    \14\ Id.
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    Supporters also allege that federal courts are hostile to 
property rights because they dismiss 83% of takings cases 
without reaching the merits.\15\ This statistic, too, is 
misleading. In the vast majority of the cases surveyed (29 of 
33 cases), the federal court dismissed the takings case because 
the claimant's lawyer refused to follow state procedures for 
seeking compensation before suing in federal court.\16\ The 
Supreme Court repeatedly has ruled that the Constitution 
requires takings claimants to follow state compensation 
procedures first.\17\ Federal courts hardly can be faulted for 
applying this straightforward and binding rule. It is therefore 
disingenuous to suggest that these cases demonstrate hostility 
to property rights by federal courts or local governments. This 
statistic merely shows that a few takings claimants (33 over a 
nine-year period) tend to lose when their attorneys ignore the 
rules that apply to everyone.
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    \15\ Id.
    \16\ Id.
    \17\ See City of Monterey v. Del Monte Dunes, 526 US 687, 710 
(takings claimants ``suffer no constitutional injury'' until the state 
court denies compensation).
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 IV. H.R. 4772 DEPARTS FROM TRADITIONAL CONSTITUTIONAL INTERPRETATION 
                 AND SIGNIFICANTLY CHANGES TAKINGS LAW

    H.R. 4772 contains provisions that were not found in the 
105th and 106th's versions of this bill. These new provisions 
are found in Section 5 and give additional cause for concern.
    Subsection 1 of Section 5 addresses conditions or exactions 
imposed on developers in conjunction with the grant of 
development authorizations. It does so in a highly ambiguous 
and confusing fashion. The language appears to be circular in 
the sense that it states that localities shall be liable under 
section 1983 if conditions or exactions are unconstitutional.
    The bill broadens the terms ``condition'' or ``exaction'' 
by adding ``whether legislative or adjudicatory in nature, 
including but not limited to the payment of a monetary fee or a 
dedication of real property from the injured party.'' Although 
the Constitution appears to supply the governing standard for 
the purpose of this provision, this language can be read as at 
least attempting to encourage the view that all kinds of 
conditions and exactions may be subject to the same heightened 
constitutional scrutiny regardless of whether they are 
legislative or adjudicatory in nature, and regardless of 
whether they involve the payment of money or dedication of real 
property.
    The U.S. Supreme Court has said that a heightened standard 
of review, including specifically the so-called ``essential 
nexus,'' or Nollan test,\18\ and the ``rough proportionality,'' 
or Dolan test,\19\ apply to certain exactions, in particular 
those involving dedications of entitlements to physically 
occupy private property imposed through adjudicatory 
procedures.
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    \18\ Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987).
    \19\ Dolan v. City of Tigard, 512 U.S. 374 (1994).
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    The Supreme Court has not said that the rule applicable to 
exactions applies to any and all sorts of conditions. In 
particular, it is very doubtful under current precedent whether 
these demanding tests apply to conditions requiring payment of 
money or exactions imposed through general legislation. 
Virtually all courts that have addressed the issue have 
concluded that financial exactions imposed through legislative 
measures are not subject to these demanding tests.\20\ To the 
extent this subsection is designed to promote the opposite 
viewpoint, it departs from the established reading of the 
Constitution.
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    \20\ See, e.g., Rogers Machinery v. Washington County, 45 P.3d 966 
(Or.App. 2002).
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    Subsection 2 of Section 5 would override the so-called 
``parcel as a whole'' rule, a proposition the Supreme Court has 
repeatedly reaffirmed by finding that takings jurisprudence 
``does not divide a single parcel into discrete segments and 
attempt to determine whether rights in a particular segment 
have been entirely abrogated.'' \21\ Instead, the Court focuses 
``both on the character of the action and on the nature and 
extent of the interference with rights in the parcel as a 
whole.'' \22\ There has long been a debate about whether 
regulatory takings claims should be evaluated by focusing on 
the restricted portion of a property or an owner's entire 
contiguous ownership. The Supreme Court effectively resolved 
this debate in favor of the parcel as a whole rule in the 2002 
decision in Tahoe-Sierra Preservation Council v. Tahoe Regional 
Planning Agency.\23\ Many courts have recognized that the 
parcel as a whole rule applies regardless of whether the 
property is divided into separate tax lots or is otherwise 
divided up for other purposes.\24\
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    \21\ Penn Central Transp. Co. v. New York City, 438 U.S. 104,131-
133 (1978); See Hearing on H.R. 4772, the ``Private Property Rights 
Implementation Act of 2005'' Before the House Committee on the 
Judiciary, Subcommittee on the Constitution, 109th Congress (June 8, 
2006) (testimony of Daniel Siegel, California Deputy Attorney General). 
At the hearing, Daniel Siegel stated, ``the bill seeks to modify the 
existing ``parcel as a whole'' rule under which the courts analyze the 
owner's entire property interests, rather than the particular portion 
of the property that is regulated, to determine whether the impact of 
the regulation on a parcel is ``so onerous'' as to amount to a 
taking.''
    \22\ Id.
    \23\ 535 U.S. 302 (2002).
    \24\ See e.g. Broadwater Farms Joint Venture v. United States, 232 
F.3d 908 (Fed. Cir. 2000), District Intown Properties Ltd. v. District 
of Columbia, 198 F.3d 874 (D.C. 1999).
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    In overriding the established application of the parcel as 
a whole rule, Subsection 2 of Section 5 would allow a developer 
to divide up the lot in order to have a small section 
considered independently for takings purposes. For example, if 
a developer owned property, 99% of which was suitable for 
development, and 1% of which consisted exclusively of wetlands, 
the bill would allow the developer to divide that 1% into an 
independent parcel and claim a 100% loss that would be 
potentially compensable. The new rule would thus allow a 
developer to game the system and force taxpayers to pay 
``compensation'' for the developer's ability to build on 99% of 
his land. The Constitution has never guaranteed the ability to 
build on every square inch of property regardless of the harm 
it would cause neighboring landowners and the community at 
large. This radical change in the parcel as a whole rule which 
would give developers a limitless ability to game the system 
and defraud taxpayers.
    Faced with an attempt by a plaintiff to divide a property 
in the manner permitted by this legislation, the Idaho Supreme 
Court had this to say:

        We cannot say, however, that the transfer and fact of 
        separate ownership by themselves necessarily end the 
        inquiry. Indeed, the City has questioned the purpose of 
        the transfer and we believe the circumstances of the 
        transfer may be entirely relevant to the denominator 
        inquiry. To explain: a rule that separate ownership is 
        always conclusive against the government would be 
        powerless to prevent landowners from merely dividing up 
        ownership of their property so as to definitively 
        influence the denominator analysis. It is not pure 
        fantasy to imagine a scenario wherein halfway through a 
        takings suit, Landowner agrees with Company to transfer 
        a parcel of Beachacre--which appears, as the waterward 
        parcel does here, to be separate from Landowner's other 
        parcel-with a wink-and-a-nod agreement to transfer back 
        after the suit or to jointly manage, use, and develop 
        the property. As the Court of Claims explained in 
        Ciampitti, supra, the purpose of the denominator 
        inquiry is to define the property as realistically and 
        fairly as possible in light of the factual 
        circumstances. We cannot endorse a rule that turns a 
        blind eye to all the relevant factual circumstances, 
        including the purpose, character and timing of any 
        transfer, especially one made during the course of a 
        takings case.\25\
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    \25\ City of Coeur D'Alene v. Simpson, 136 P.3d 310, 320 (2006) 
(citations omitted).

    Finally, subsection 3 of Section 5 would provide that, in 
the case of alleged deprivations of property rights or 
privileges, a substantive Due Process claim should be evaluated 
based on ``whether [the government action] is arbitrary, 
capricious, an abuse of discretion or otherwise not in 
accordance with law.'' The provision is apparently designed to 
overturn the widely accepted view that substantive due process 
claims should be evaluated under a ``shocks the conscience'' 
standard.\26\ Deputy Attorney General Siegel testified, 
``[u]nder that standard [the ``shocks the conscience'' 
standard], it is ``insufficient'' to allege that local 
government ``arbitrarily applied'' a land use restriction.'' 
\27\
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    \26\ See, e.g., United Artists Theatre Circuit v. Township of 
Warrington, 316 F.3d 392 (3rd Cir. 2003) (Alito, J.); See also Hearing 
on H.R. 4772, the ``Private Property Rights Implementation Act of 
2005'' Before the House Committee on the Judiciary, Subcommittee on the 
Constitution, 109th Congress (June 8, 2006) (testimony of Daniel 
Siegel, California Deputy Attorney General).
    \27\ Hearing on H.R. 4772, the ``Private Property Rights 
Implementation Act of 2005'' Before the House Committee on the 
Judiciary, Subcommittee on the Constitution, 109th Congress (June 8, 
2006) (testimony of Daniel Siegel, California Deputy Attorney General).
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                V. H.R. 4772 IS LIKELY UNCONSTITUTIONAL

    In its 1985, 7-1 \28\ opinion in Williamson County Regional 
Planning Commission v. Hamilton Bank of Johnson City, the 
Supreme Court held that a takings claim is not ripe for federal 
court review if: (1) the property owner had not obtained a 
``final decision'' from the appellate administrative agency, 
and (2) the property owner had not first filed the claim in 
state court to challenge the government action.\29\ 
Importantly, the Court held that these requirements inhere in 
the nature of the Takings Clause of the Constitution. The Court 
found that the plaintiff needed to avail itself of the state's 
and locality's procedures in order to evaluate essential 
components of the takings claim--the economic impact of the 
regulation and whether the claimant was denied just 
compensation.\30\ This rule is ``compelled by the very nature 
of the inquiry required by the Just Compensation [Takings] 
Clause'' because the factors applied in deciding a takings 
claim ``simply cannot be evaluated until the administrative 
agency has arrived at a final definitive position regarding how 
it will apply the regulations at issue to the particular land 
in question.'' This Supreme Court authority indicates that H.R. 
4772 unconstitutionally attempts to circumvent these 
constitutionally mandated ripeness requirements through a 
statutory mechanism.\31\
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    \28\ Justice Powell Took no part in the decision.
    \29\ 473 U.S. at 186.
    \30\ Id. at 191-95.
    \31\ Williamson, 473 U.S. at 190-91; see also McDonald, 477 U.S. at 
350 (``Whether the inquiry asks if a regulation has gone `gone too 
far,' or whether it seeks to determine if proffered compensation is 
`just,' no answer is possible until a court knows what use, if any, may 
be made of the affected property.'').
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    Significantly, the Supreme Court reaffirmed this principle 
in 1999. In 1999, in Del Monte Dunes, the Court stated, ``A 
federal court . . . cannot entertain a takings claim under 
Sec. 1983 unless or until the complaining landowner has been 
denied an adequate post deprivation remedy. Even the State of 
California, where this suit arose, now provides a facially 
adequate procedure for obtaining just compensation for 
temporary takings such as this one.'' \32\ H.R. 4772 would 
therefore appear to make cases prematurely--and 
unconstitutionally--``ripe'' for review, even if the claimant 
had not pursued available State remedies.
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    \32\ 526 U.S. at 721.
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VI. H.R. 4772 ELEVATES PROPERTY RIGHTS OVER OTHER CONSTITUTIONAL RIGHTS

    H.R. 4772 elevates property rights over other 
constitutional rights by giving claimants with takings claims 
expedited access to the federal courts, while leaving in place 
requirements that plaintiffs with other constitutional claims 
exhaust state court procedures before filing a case in federal 
court. This turns the very purpose of Section 1983 actions 
completely on its head by making property rights the civil 
right most explicitly and prominently protected by Section 
1983. Section 1983 was adopted as part of the Civil Rights Act 
of 1871 and was specifically designed to halt a wave of 
lynchings of African Americans that had occurred under guise of 
state and local law.
    In numerous instances, courts have stated that prior to 
filing a constitutional claim under 42 U.S.C. Sec. 1983 in 
federal court, the plaintiff must first pursue state court 
remedies. The CRS finds that Federal courts invoke the 
abstention doctrine against many Section 1983 claims--not just 
those Section 1983 claims that involve takings of property.\33\ 
This has occurred, for example, in cases involving 
constitutional challenges to the termination of parental 
rights,\34\ detention in violation of the 6th Amendment right 
to counsel,\35\ confinement for juvenile offenders in violation 
of the 8th Amendment,\36\ denial of Medicaid benefits in 
violation of 1st Amendment religious protections,\37\ gender 
discrimination,\38\ and many others.\39\ If we are going to 
give property owners the ability to ``jump the line'' into 
federal court, it seems only fair that we should extend this 
same right to other Section 1983 plaintiffs.
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    \33\ CRS stated specifically, ``[a]bstention is indeed invoked by 
federal courts to dismiss or stay non-real-property-related section 
1983 claims.'' Robert Meltz, CRS Memorandum, ``Property Rights'' Bills 
Take a Process Approach: H.R. 992 and H.R. 1534, (September 22, 1997).
    \34\ See, e.g., Amerson v. State of Iowa, 94 F.3d 510 (8th Cir. 
1996).
    \35\ See, e.g., Mann v. Jett, 781 F.2d 1448 (9th Cir. 1985). See 
also Bullock v. Woodside, 2000 U.S. App. LEXIS 12814 (9th Cir. 2000) 
(the abstention doctrine outlined in Mann applies only to criminal 
prosecutions).
    \36\ See, e.g., Manney v. Cabell, 654 F.2d 1280 (9th Cir. 1990), 
cert. denied, 455 U.S. 1000 (1982), See also Toussaint v. Yockey, 722 
F.2d 1490 (9th Cir. 1984) (abstention in Manney was proper because the 
law which was at issue in the case was ``unusual.'')
    \37\ See, e.g., Winters v. Lavine, 574 F.2d 46 (2d Cir. 1978). 
Winters identified three times when abstention is proper: (1) when the 
state statute is unclear or the issue of law uncertain; (2) when 
resolution of a federal issue depends upon the interpretation given to 
a state law; and (3) when the state law is susceptible to an 
interpretation that would avoid or modify the constitutional issue. Id.
    \38\ Tiger Inn v. Edwards held that abstention is proper for the 
state court to clarify the state court position on the applicable law. 
636 F. Supp. 787 (D.N.J. 1986).
    \39\ See, e.g., Allen v. McCurry, 449 U.S. 90 (1980) (individual 
required to litigate a Fourth Amendment search and seizure claim in a 
state criminal proceeding is completely barred from asserting his 
federal constitutional claim in a subsequent Section 1983 action in 
federal court); Heck v. Humphrey, 512 U.S. 477 (1994) (abstention may 
be appropriate when there is a parallel state-court criminal 
proceeding).
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                               CONCLUSION

    In conclusion, H.R. 4772 presents a substantial number of 
concerns. We believe that H.R. 4772 serves as an assault on the 
principles of federalism. This legislation encourages forum 
shopping with no evidence that there is a need for increased 
access to federal courts for takings claims. Significantly, 
H.R. 4772 departs from traditional Constitutional 
interpretation and makes substantive changes in takings law. In 
fact, this bill could be deemed unconstitutional itself. We 
also take issue with this bill elevating property rights over 
the very civil rights 1983 was enacted to protect. It is for 
these reasons that we must submit dissenting views on H.R. 
4772.
                                   John Conyers, Jr.
                                   Debbie Wasserman Schultz.
                                   Sheila Jackson-Lee.
                                   Chris Van Hollen.