Property Rights Foundation of America®

Presented at the
Tenth Annual National Conference on Private Property Rights
Property Rights Foundation of America, Inc.
Albany, N.Y. - October 14, 2006

UPDATE ON PROPERTY RIGHTS IN THE U.S. CONGRESS

JASON KNOX
Staffer, Committee on Resources, U.S. House of Representatives

First, I'd like to begin by thanking Carol for inviting me. I really appreciate it. She gave me the warning, actually, when she invited me that she didn't exactly envy my position because I don't really come bearing a whole lot of good news, and I'm not going to attempt to justify a lot of things that have been done or that have not been done. I come with open hands and slightly bowed head. But I also feel the need sometimes to let you know where I am coming from, kind of the "I'm with you" side of things, because so often when they hear you're a Congressional staffer, you tend to get kind of an arched eyebrow. But one time someone told me, oh, so you've drunk the Kool-Aid, and yes, I have drunk the Kool-Aid, and I am firmly on your side of the aisle on things.

With the limited amount of time that I have, I just want to divide my talk up into two separate sections. First I'm going to talk briefly about current legislation or legislation that has recently gone through Congress. Then, in the second part, kind of since I'm within the belly of the beast, I would like to talk about what the general attitudes are and what the trends are. Then, grounding this in reality, where I would like to see things move. I'd also maybe like to talk about some more effective ways that we could act together to further the cause.

With that, I am going to pick on two really important pieces of legislation that have recently passed through. I am going to stay away from the Endangered Species Act, because there are some much more qualified people that I know are going to talk about it, so I won't tramp on their ground.

The first one is the legislative response to Kelo, Chairman Sensenbrenner's HR.4128 and its companion bill, S.3873. Currently, H.R.4128 passed in the House 376 to 38, and what it does exactly is it makes local municipalities ineligible for federal funds if they've used the funds in the past to take property for economic redevelopment or if they will use the funds to take property for economic redevelopment, much like what happened in the Kelo case with Susette Kelo. It passed the House. Currently it is languishing in the Senate, where good ideas go to die. What has happened is that H.R.4128 is sitting in the Judiciary Committee. It has not been given a hearing. And what happened was Senator Inhofe from Oklahoma introduced the companion bill S.3873 to break the log jam, and the good Senator Frist, who is about to return back to Tennessee, has not put it on the Senate agenda. There is an outside possibility that it may get through in the lame duck session after the election, which would be November. I believe I have heard, actually, that they would return around November 14. That's the current status of that bill. If it is not passed, then basically the process will have to start from scratch, because in the 110th Congress the bills will not be carried over from the 109th. So basically the baby is thrown out with the bath water.

The second piece of legislation that I believe is quite important relating to property rights is H.R.4772, which Representative Chabot from Ohio introduced, and he's chairman of the constitutional subcommittee. Basically, under current federal law property owners are blocked from raising Fifth Amendments takings cases in federal court until they have exhausted all remedies in state courts. Bad enough, but on top of that, in the case of San Remo Hotel vs. City and County of San Francisco, the court confirmed that if the owner loses in state court, the doctrine of res judicata allows federal courts to dismiss it because it has already been decided by the state courts.

Basically, what they are doing is they are telling property owners to go stand in a circular room and try to find a corner. It's really set up for failure, and what this bill would do is it would allow property owners to raise solely federal takings claims in federal court. This bill would also clarify some due process violations by clarifying "arbitrary and conspicuous" language. Currently, the many circuit courts are all over the place as far as what the exact definition is of the government acting in that way.

Actually, I would like to kind of segue into my second part, with talking about general trends and the current status of things. One of the remarks struck me during the debate on H.R.4772, Chabot's bill. I think it is kind of indicative of what we're facing and where we're going and what can be done. I was sitting next to R. J. Smith when I was in the hearing, and Ranking Member Jerrold Nadler, the good representative from Manhattan, basically put forth what I think is the opposition's mindset. Basically, he said, if the government acts to protect endangered species, to curb sprawl, to enact clean air and clean water regulations, that property owner should not be compensated. He actually put it that succinctly. It was it is a little bit shocking to hear if you've ever read the Constitution, but that's where their mindset is, basically the supremacy of the state.

Also, when they were down on the House floor in the hour of debate before they were going to vote on this bill, what I was struck by—and you see this a great deal with property rights legislation—is just how there seems to be a lack of a cohesive alliance between legislators, legislative staff, trial and appellate attorneys, grassroots organizations, and affected property owners. When Chairman Sensenbrenner and Representative Chabot were down on the floor arguing for this bill, they did not cite one single example of a property owner that would be helped. They were talking in general terms, and these men, especially Chairman Sensenbrenner, are brilliant men. As you can see by Rep. Sensenbrenner's ability to basically stop the President on the immigration bill, he is a quite effective politician. But for some reason in the area of property rights it is as if they don't bother to go out and do their research to see who exactly this legislation would help. That to me is troublesome, because I see that a great deal.

It was the last day of session before Congress broke for recess, and what also struck me as interesting as I watched was Rep. Jerrold Nadler, Democrat from Manhattan, who was down on the floor all day and I saw him in the course of this debate when he was speaking out against H.R.4772. He basically said, I believe, rich property owners should not be clogging up our federal courts with these nuisance claims. And then, later on, if you were to continue watching this riveting kind of obnoxious debate, you would see that on that day he was arguing vehemently and passionately that detainees should have access to our federal courts. I found it rather astounding that a man as intelligent as he couldn't exactly see the hypocrisy in his argument that American citizens who own property who have effectively had it taken by regulation should not have their day in court but yet non-citizens captured on the field of combat should. I found that rather astounding, but be that as it may.

Moving forward, like Mr. Fund talked on, you can't hope but acknowledge the utterances in the room about the upcoming elections, and I just want to touch on this. Also, I like to think of myself as a pretty positive person but also realistic. I'd just like to encourage everyone that our movement, the property rights movement, and the fundamental issue of property rights doesn't turn on a single election. We didn't get to our current position overnight. The starting point for where we are now was actually the 1930's. But, the opposition that we face, it is never enough and they are never going to stop.

The example I would like to use is a gentleman that I work with on the House Resource Committee. He is a great guy. He used to run a grassroots organization and his name is Rob Gordon. He recently told me the story that he was meeting with environmentalists. In this particular area, the environmentalists essentially want to lock down land use and basically take away property owners' ability to enjoy and use their own property. So what they are doing is by using the ESA is they are basically just trying to, and they told Rob, they said what we are going to do is we are going submit this certain type of bird to have listed on the Endangered Species Act. If it doesn't listed, he said, we have twelve more, and he said, we will continue to do it until we get it listed. That is the mindset that we're up against.

I want to compliment this group because I have been at other functions with other like-minded groups where essentially the general theme of the party is, well, basically this party is one way. The other party is the exactly same way, the Republicans and Democrats at this point. They're the same, so at this point let's just drink and be merry. I think that is something of a cop out and a capitulation. I think we need to continue to work past that.

I'd like to speak about where I would like to see property rights go and where I think it may be going. This is contingent upon not only how this election goes but in the future, and this is also based on what I have heard, not only from my boss, Chairman Richard Pombo, who is currently engaged in basically the election of his life this year. He's getting hammered by environmental groups out in California District 11 for "weakening" the ESA for putting in a compensation component.

Basically, what needs to be addressed at the federal level, I think, before we start shaking our fingers at states, is we need to reform the Federal Condemnation Act. It is very rarely ever discussed, because, I think, the issue isn't the "public use" question. That's almost never the issue, but what is at issue at the federal condemnation level—and I could give you examples of abuses that will rival anything at the state level—are the due process protections, where property owners affected by federal condemnation efforts suffer because they are not given the proper due process rights. Nor are they ever given full and just compensation.

Just to touch on this, we need to reform the commission system that is used to run through property owners. Here are examples. The currently best example of this abuse going on is in the Everglades reclamation project, but you can look over the past twenty years at Clinton Reservoir project in Kansas and Cape Cod National Seashore in Massachusetts. Basically, property owners are threatened and intimidated. What you are currently seeing by the Park Service and by the Army Corps of Engineers is basically they have gotten caught. They have actually gotten quite wise as far as how to operate.

I was just talking with a gentleman here, Mr. Blackman. They used to be very direct as far as how they would operate, which is to basically down zone and regulate land. They used to round up the property owners and essentially tell them, we are going to offer you 30 cents on the dollar for your property. We know what it's worth, but if you fight us, we are going to condemn your property. This is a famous case, the Althaus case, and I believe it was a national park expansion in Minnesota.(1) This process still continues and needs to be reformed. Under the Fifth Amendment you should be guaranteed a jury trial for compensation. You see, with these commission trials they are literally set up, and this is again born out of the New Deal projects, where the goal was literally to get property owners removed off the property as fast as possible so they could put up the Grand Cooley Dam or the Oak Ridge nuclear facility. They could move them out and maybe you could justify that during the time of war you could do this. Well, this antiquated system remains where basically property owners are run through.

I've been working with others on getting this type of legislation together. I think that, especially given Kelo, sometimes we lose our coalition when we start bringing in regulatory and inverse takings but with direct condemnation I think we pretty much always are able to bring people from the other side of the spectrum.

I've also heard talk as far as looking at monument designations, the Clinton Administration's eleventh hour ones that basically tied up land. This also goes to another issue where we currently don't know enough about. Whenever you hear that the federal government is growing by about 100,000 acres every year, most of the time when you heard it, it's "willing sellers" that are submitting their property to be bought by the federal government in these land acquisitions. No eminent domain powers are used. But what I think you will find is that many of these willing sellers have actually been affected by regulation. We don't know the exact numbers on this, but this is something that I know that various committees and my boss, Chairman Pombo, want to look at.

The perfect example is in these monument designations that happened in the eleventh hour as in the Cascades-Siskiyou National Monument and Upper Missouri Breaks, where you have essentially 32,000 acres of private land checker boarded in federal land. Essentially, in these monuments ranchers can't graze. You can't do timber cuts. Basically the ability to use your property is taken away, and so what happens is it becomes a mercy killing. The federal government comes in after ten or fifteen years and says, we will offer you this amount of money. In reality, it gives you far below, not just usually, it is obviously always far below what you could get if the regulation hadn't taken place. What we need to look at and, unfortunately, we have kind of gotten the cold shoulder from this Administration, but we want to look at possibly persuading them toward either lifting these designations or looking to amend or do something retroactively to help compensate these property owners, because essentially these ranchers and farmers are being driven off their properties.

I know that I am preaching to the choir at this point, but just one other general thing as a wrap-up is, I guess, from my limited experience of being up on the Hill, I want to leave you with this thing of hope. Certainly there are a great many other people there that hold my beliefs. We are kind of like an underground, and I think what you tend to find is that that there is a lack of communication. I think more so in our movement and our issue than you will find in most other movements. I don't know, maybe it's because we tend to be the kind of the rugged individualistic types. I don't know, but I do know I see it a lot within the grassroots organizations as far as a lack of communication within each other, and, also, in between personal offices you see it a lot.

Just the other day I emailed and I spoke to a gentleman that works in another personal office, and he told me offhandedly, oh, we are thinking about dropping an omnibus property rights bill. It was this kind of a throw-away statement. Essentially you see this a lot, where, for some reason—I don't think it's that they don't take property rights seriously—people aren't communicating, but it tends to be that people are making the disconnect. This is an issue you could actually move forward on. This is an issue that you could run on. This is an issue that could actually hurt you, a la George Allan. For example, I was just told Rep. Wolf is suffering from what I believe is their support of the Heritage area designation, the Journey Through Hallowed Ground.

I think that we need to look at the congressional staff, and Mr. Fund did a wonderful article a couple of weeks ago writing about how Capitol Hill is now staff-driven. We need to find a way to educate a bunch of 27-year-old people that for the most part went to college and then immediately went up to the Hill. Most of them have never owned a piece of property. And that's a large task. That's a huge task, but it's an important one. I think, too much we talk about the Representatives who need to change their minds. I want you to say, no. You need to sell an idea to a staffer, and if you begin with that point, then I think you are in a pretty good place.

Thank you.

Notes:

(1) Althaus v. United States, 7 Cl. Ct. 688, 691 (1985), where the National Park Service condemned hundreds of private tracts to create the Voyageurs National Park, intending to pay 30 percent of market value. The court determined fair market value averaging 78.5 percent greater than the amounts that the Park Service offered. (As cited in: Alan Romero, "Reducing Just Compensation for Anticipated Condemnations," from footnote (5), Journal of Land Use, Spring 2006, pp. 153ff.)

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