Property Rights Foundation of America®

Speech from the Eighth Annual New York Conference
on Private Property Rights

A Voice for Forest Landowners in Washington—Protecting Productive Private Property

Scott Jones

Thank you very much for inviting me here today. It is a real pleasure to be here with the Property Rights Association of America. I would like to give you a little bit of an idea of how this got started and how this meeting and the invitation came to me from Carol.

I got a call from a Congressional committee staffer in Washington, DC, who is with the House Resources Committee, and he said you really need to meet Carol LaGrasse, and you two need to be really talking. What he saw was that the organization that I represent, Forest Landowners Association, and the Property Rights Foundation of America were working on some of the same issues, but we weren't working on them together. I think you will see by the end of my presentation that some of it will be preaching to the choir a little bit. But it is a good thing to see that we have organizations that might seem a little bit different on the surface but are working on some of the same things, and that by working together we can have a little bit stronger voice in Washington, DC. So thank you very much for having me here today, Carol, and I look forward to some of the relationships that hopefully will start beginning here.

To begin, I would like to just give you a brief overview of my organization, the Forest Landowners Association, and how it came to be. So who is the FLA? The Forest Landowners Association was founded in 1941 with the desire to organize wood producing groups in the forestry community. If you recognize the date, in 1941 something else significant was happening at that time. It was the beginning of World War II, and what was happening was that they were trying to organize some of the people growing wood, some of the people manufacturing wood and bringing that wood to the end market. At the time, there was a lot of use for wood at that time in crates and shipping and other areas like that, in other uses, and they wanted to make sure that all those efforts were organized. That is really when the Landowners Association got started and started getting organized.

At that time forestry and forest landowners did not have an advocate or a unified voice in Washington, DC. And at that time, as is important now, it was important that landowners have reasonable assurance that their investment in forests will be protected and that someone will speak on their behalf when new laws and regulations are proposed that might affect their ability to continue managing their land effectively. So this group formed with just a few small landowners from south Georgia and some other southern states and has grown today to an organization representing over 10,000 private landowners in more than 20 states that are managing over 47 million acres of timberland. So we have grown to be a pretty large organization now, and we have done this because we have provided effective representation at the federal level for the issues that are important to our members.

This is why FLA got started. We have grown to be such a large organization because we have effectively been able to communicate to our members that without proper representation on private property rights our rights will continue to be eroded away. When unfavorable regulations and laws are passed that adversely affect landowners growing timber, the landowners have a potential to lose part of the value of their investment in that timber land, and that is really the key to why effective representation is necessary for our members.

Forestry is a long-term investment. You have an initial cost in getting the land planted into trees. In many of our states, our landowners have annual taxes on the land itself. So the investment is a long-term investment, and the first time any of our landowners can hope to see a return on their investment is within the twelfth or fifteenth year into the investment with the final liquidation of that investment being at 25 to 35 years. Now, all of you know that in 25 to 35 years a lot can happen on the regulatory front and on the legislative front that could affect their ability to go out and get a return on their full investment. The reason why a lot of our members are with us is because we are providing them that voice, we are watching those regulatory agencies, we are watching what is going on in Washington, DC, and giving them the ability to communicate to their elected officials the concerns they have and assuring that they will be able to get a return on their investment when it is time.

Representative Pombo of California made a statement at a breakfast that we had, a PAC breakfast that we had in Washington, DC, in July, and it kind of sums up or validates the concern that many of our members have. Basically, what he said at one point is that if Congress had to go into a debate today on reaffirming the Fifth Amendment of the U.S. Constitution, it would be very long and combative and that many of the Congressmen today question this basic constitutional right, and even though they do, our founding fathers were very clear on the important role that private property rights plays in both maintaining a free society and in our economy. Rep. Pombo, who is Chairman of the House Resources Committee, was very, very clear when he made this statement that we do have a valid concern that a lot of his colleagues up there don't understand private property rights and the importance that it plays in our society.

Really, private property rights, the right to use and own property, is one of the cornerstones of American democracy. Private property is not only the foundation of prosperity but also of freedom itself. Through the Constitution and law, our founding fathers protected private property and the rights of people to acquire, use, and dispose of their property. This is the point of beginning for almost any conversation on proactive land use and private property rights. Private property and the ability to protect it and the Constitutional protections that our founding fathers found so important in the birth of our nation are clearly just as important today. That is why you are all there and why you are all so actively participating in these organizations that are represented here today. The need to protect private property was very important to get this nation started and get us to where we are today. It is very important now, also, but what we have seen is, with the urbanization of America, many of our legislators and our citizens have moved away from the land and have been a little disconnected from the land itself and don't necessarily see the importance of private property rights as they used to. That is why it is so important to have organizations like the ones represented here today working for you to help educate those regulatory agencies and legislators about the importance that private property rights plays in everything that we do.

One of the main reasons we believe that this right is so vulnerable is that there has never been a solid moral defense of the institution of private property rights. I think few would doubt that in today's world a society with a legal infrastructure that lacks this institution is in serious economic trouble. To fairly respect and legally protect the institution of private property has corollaries such as freedom of contract. But the settling of tort by parties has produced economic weakness across the globe. This is where one of the real fears is that we don't have a moral defense of private property ownership.

So what brings us together? Why are we all here today? And why is it necessary for our organizations to start working together? The issue is our organizations appear to be different on the surface but we do need to work together because we all are working on some of the same issues. The reason goes back to the statement that I referred by Rep. Pombo. There is a decline in our rights. The definition of private property rights has been narrowed. It has been chipped away at by courts and governments on all levels for the past fifty years. This decline has not led to ignoring these private property rights altogether. However, it has led to the narrowing of the definition of private property rights and at the same time the widening of the definition of public use and limited grounds for compensation.

Where our group comes in is the key. I will repeat it again just for some clarity. It is that we have seen the narrowing of the definition of private property rights and the widening of the definition of public use and when compensation is necessary. When governments take property outright by taking title from the owner, then the government compensates the owner for the losses. However, the modern problem we are facing is the partial taking of the use of property while leaving title with the owner. Courts have seemed reluctant to rightly tackle this in some cases, because they have failed to grasp the principle of this matter.

The principle of the matter that I talk about now is that property is not a singular concept. It is not just a matter of the title but a bundle of rights. You take away any one of these rights and you have taken away something that belongs to the owner. Property rights, including the right to acquire property, dispose of property, exclude others, the right against trespass, the quiet enjoyment, and the right to actively use your property so long as it doesn't infringe on other property owners' ability to use their property and enjoy it. Property law recognizes that property is a bundle of sticks, any of which could be bought, sold, rented, or bequeathed in every area except takings. This is where the real fundamental difference is. Current takings laws poses the idea that the entire bundle must be taken before the government has to pay compensation. This all or nothing view really enables the government to extinguish nearly all the uses through regulation which could regulate all the value out of the property while the government escapes having to compensate the landowner. This, of course, is clearly wrong. Compensation should be required when government takes any right, whether full or partial.

When any use has been taken away, and as you heard from Craig's talk, he was talking about partial use being taken away when they did not want to have the compensation. Obviously compensation was due when they wanted to extend that right-of-way, but at the time the government did not see the need to have to compensate for that. But a use is being taken away. When they were trying to restrict the crossings that the landowner had to have, a use is being taken away; however, they were reluctant to pay compensation. Our standpoint, the things that we are communicating in Washington, DC, is that when any value is taken away, when any stick out of this property right bundle has been taken away, compensation is due. The public has to pay for the goods it wants and takes, just as a private person would have to.

This gets down to where we see some of these bundles of sticks being taken away, for instance, through regulation. I'll give you a few examples of where we as private land owners, as forest landowners, see a lot of restrictions and value being taken away on our property. One agency, the U.S. Fish and Wildlife Service, has been pretty good at doing this over the past several years through the Endangered Species Act. It was enacted in 1972 and since then they have had over 1,200 species of plants and animals put on this list, all of which come with a set of regulations of how you have to manage your property when these species occur on your property. To give you an idea of how ineffective and broken the Endangered Species Act is, the question is asked, how many of these species do you think have been de-listed since that time? That is the real purpose of the Endangered Species Act—protect that species, that plant, that animal—so you can bring its population up to a level to where it is healthy again and thriving like it once was. Since that time only a handful, somewhere around ten or twelve, of these species have been removed out of the 1,200. The Act is obviously not working. It is not doing what it is supposed to be doing, although it gives enormous power for the agency to come in and put regulations on property. Let me give you a little example of how this works.

One of the main species protected in the Endangered Species Act that hurts a lot of southern forest landowners is a little woodpecker called the red-cockaded woodpecker. The red-cockaded woodpecker has for some of us been talked of as the south's "spotted owl." We hope we don't get into that situation. The reason why we have such good wood markets right now is because the Northwest relinquished their control because of the spotted owl. The spotted owl is a great example of how the Endangered Species Act can really shut down an entire industry, as it did in the Northwest. All the wood producing companies basically came to the South and created what we have today, this big thriving industry in the South for wood and the wood-producing market. But, when the little red-cockaded woodpecker is found on your property, all of a sudden you cannot harvest around cavity trees. You must manage around those cavity trees. You can't burn. And I'll tell you what land looks like. It doesn't look this pretty like you have up here. We don't have the variety of trees. We have a lot of plantation forests, and a lot of these plantation forests need certain management on them. You can't follow these management objectives when these species occur on your property. So we end up with fires like we saw in 1998 in Florida, which burned basically from the central part of the state all the way to the ocean in Daytona Beach. It shut down Disney World. We see that kind of catastrophic fires happening.

The thing we always talk about in our address is that the difference between private land ownership and public land ownership is you look how the government manages their forests, which is that they don't manage their forests. We have always argued that the U.S. Forest Service needs to just go ahead and change itself to the National Park Service because that is how they manage their land, as a park, not as a forest. Because a forest is an active biological thing that continues to evolve and grow all the time. Their forests are burning up. Our resources are burning up. Our resources are not providing any revenue for our government. They are standing out there and burning, and when they burn, we get in legal battles even over harvesting the burnt timber. Most of it just stands out there and dies, although it could be utilized.

Private landowners, however, have the ability to manage their land, but when we have things like the Endangered Species Act coming in and restricting the use for the public good, there is no compensation being paid. However, the value that the landowner has and the investment the landowner has put in place there is being taken away.

Another real example of some restrictions through regulation is through the Environmental Protection Agency. The area where we get hit the hardest is Section 404, the Clean Water Act. In 2000 we saw a real threat to being able to use our property and manage our property sustainably for healthy forests through a part of this section called "total maximum daily load."

Total maximum daily load (TMDL) is basically how they manage entries into streams of sediments and other things. Industries that have basically pipes that go into rivers have to get permits to do that. Landowners, who obviously don't have pipes going into the rivers but have land that might wash off into the river, don't have to get permits. The EPA was suggesting that we amend total maximum daily load regulations so that all private landowners would have to get permits for any activities on their property that might have some effect on water quality. This would mean that any landowner doing any road construction, any road improvement, just grading your road, just fixing your road, any burning, any harvesting, any tree planting, would have to go to the federal government and get a permit for that. As many of you know, you don't just walk into the federal permit office and say, I would like a permit, and turn around twenty minutes later and walk out. This is going to be a serious infringement upon private landowners, our landowners private property rights, and it is seriously going to infringe on our ability to continue managing forests.

That was an issue where, thankfully, groups like mine and many others around the South and the nation got together and sent a very strong message to Washington that we weren't going to stand for this type of regulation, and it was defeated. We saw meetings in Georgia where there was over 2,000 landowners showing up in protest. In Arkansas they had almost 3,000 landowners show up for a meeting; so it was really an issue that brought us all together. But it is sad that we have to wait for a TMDL. We weren't being very proactive. We were being very defensive of our rights. What I hope will come out of this today is a little bit better coordination between the groups that are working on issues like this so that we can all help each other.

I don't want you to get the wrong idea that landowners don't want to protect endangered species, that we don't want to see bald eagles thrive, that we don't want to see red-cockaded woodpeckers survive. We do. I will give you an idea. In the southern United States as far as productive forests go, 75 percent of all the productive forests in the southeast is managed by private landowners. There are over 660,000 private landowners managing their forest land in the state of Georgia alone. So there are a lot of private landowners out there. Because of that, a great burden gets placed on their shoulders. The burden is managing their land sustainably so we can have improved air quality, so we can have wildlife habitat, we can have clean water. All these things are being placed on the backs of private landowners, and when that happens, you see a lot of the people in the public who don't understand what it means to manage and own property, wanting a bird protected, wanting a species protected, not wanting to see forests harvested. They don't understand the investment cost. That's where organizations like Forest Landowners Association come in and try to educate not only the public but our legislators and our law makers on sustainable forestry, on good management, on how we can work together and how these two things can coincide. We can be compatible with environmental goals and private property rights. It can happen, but it has to come through communication. It has to come through a clear understanding and relationships being built with our lawmakers and with the regulatory agencies so there is not misunderstanding and laws are not put in place or regulations attempted to be put in place that infringe on our rights. This is sort of a resounding theme. If society as a whole benefits from government actions, society as a whole must pay the bill.

So I think I have made it clear why private property rights are so important to our members. Over the past 25 years we have seen significant decline in our private property rights by acts of Congress in an attempt to secure public benefits. This is the widening of the public use and the public benefits definition. We feel that regulations that are not cost beneficial need to be removed. A good example is the Endangered Species Act and other regulations that are out there that have not gone through a cost/benefit analysis and offer very little scientific or public gain but are still in place and not being looked at.

Once again, rights cannot be taken away without being paid for. Currently, we had a big success yesterday. It can happen. You do get successes and wins in Washington every now and then. Our organization has been working on a modification of the Internal Revenue Code for fifteen years that would give forest landowners a benefit in how they sell their timber. It is capital gains. They would be able to count some of the income as capital gains, which is very helpful to private landowners when reinvesting for reforestation. A reforestation tax credit also got passed. It all got signed by the President yesterday as part of that enormous jobs bill that went through. But we have been working on the Internal Revenue Code modification section for fifteen years. There are a lot of people that put in a lot of time and a lot of sweat equity trying to get this legislation passed. They spent a lot of time going to Washington, DC, meeting with their Congressman, trying to educate them on how beneficial this would be, and we just now got it passed. It can happen. It does work sometimes.

The message there is be vigilant in your visits to your Congressmen. Be vigilant in your visits to your local representatives, your mayors, your city councils. Be vigilant in those efforts because the more you are vigilant on those things and the more you put that information in front of them, it will pay off eventually.

Among the things we are working on today is Endangered Species Act reform. Of course, this is one of our major ones we are working on now. We have seen two small pieces of legislation that are starting to get some ground under them and gain some momentum that are going to change and have more science brought into the listing of an endangered species. You won't see a wholesale renovation of the Endangered Species Act. What you will see is a piecemeal approach to the Endangered Species Act. Go at it bit by bit, piece by piece, and try to fix this piece of legislation and this law that has been seriously infringing our rights for a long time.

Also, one of the major issues for us, and it will really depend on what happens in November how successful we are with this the next four years, is the permanent repeal of the "death tax." This is, of course, a major issue for everyone that owns property and anyone who hopes to pass this property on to their future generations. But a good example of how partnerships can work and how hopefully this partnership that we are hoping to start with the Property Rights Foundation of America will work is we partnered with a group, the American Family Business Institute, whose director you will be hearing from later today. Our partnership with the American Family Business Institute has helped bring an influx of needed funds and needed voices into their issue. This is an issue they have been taking a lead on for quite a while now, and our group has joined in with the American Family Business Institute. It has taken on their talking points and has given talking points to our members, and our members are now going and lobbying their Congressmen effectively on the issue because now we have the information we need. It is an issue that they have been taking the lead on for a long time, and we are just happy to go in and try to help them and partner with them when we can.

That is the main thing I wanted to bring forth today. By working together we can have a greater impact on leaders in Congress. When you think about that statement by Rep. Pombo that I gave you at the beginning of the talk, leaders in Congress today need educating. It is very important that they understand the importance of private property rights and how private property rights plays in our heritage and the founding of our nation and how important it is to our economy today. FLA has been an active advocate in protection of all of our rights for over sixty years and we need your help. We need the help of every private landowner that is out there. We have, like I said, 10,000 members right now. That sounds like a large number, but when you think about that number I gave you from Georgia, 660,000 private landowners just in Georgia managing timber, we are not being as effective as we could be. What is important right now is that these organizations right now are working for you. These organizations all need your help in order to be effective. Please do. We have a full time lobbyist in Washington, DC.

As Carol mentioned, we do an annual fly-in in Washington, DC. The fly-in in 2005 will be in March. We bring our members there. We set up their appointments with their Congressmen. We have a briefing session where we get everybody up to speed on the issues and send people like myself and our lobbyists and our government affairs team with those members to go lobby their Congressmen, and we are having an impact.

Just in conclusion, we are ready to work with you. I am going to be around for most of the conference this morning, but also use the information on how you can get in touch with us. I just encourage you all, like I said, to continue being vigilant in your efforts, because they will pay off. Thank you very much.

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