Introduction. Mr. Chairman, I am Diane S. Shea, Associate Legislative Director for Environment, Energy and Land Use for the National Association of Counties (NACo). I am appearing today on behalf of NACo and the National League of Cities (NLC), which together represent 90% of the local governments of this nation. NACo and NLC strenuously object to H.R. 2372, and urge the Congress to reject this proposal.

Local elected officials are dedicated to improving the livability of their communities through the equitable balancing of private property rights with the rights of the community at large. In good faith, local governments adopt ordinances and approve building permits, not for the purpose of infringing on property rights, but rather for the opposite reason -- to protect the property rights of all. Often they have very difficult situations to handle, but given the potential for disagreement among competing interests, it’s remarkable how successful they actually are in reaching an accommodation among the parties involved.

NACo and NLC are disappointed and surprised that the Congress would seriously consider legislation that is so obviously offensive to our system of federalism. Counties and cities across the country have worked with Congress in a variety of ways over the last several years to bolster the concept of federalism, for example, through the enactment of legislation to address the problem of unfunded mandates, and more recently, in developing legislation designed to limit federal preemption of state and local government actions. This proposed legislation goes in completely the opposite direction.

Land use is a local matter – it has been under the purview of state and local government since the beginning of the Republic. Planning and zoning questions are a central responsibility for local government boards and officials, and have never been regarded as an appropriate subject for federal interference. But federal interference with these traditional local government functions is exactly what this legislation would accomplish. The bill would seriously undermine our local zoning and land use authority. It would represent a completely unprecedented intrusion by Congress into a function traditionally reserved exclusively to state and local governments. It would impose significant new unfunded federal mandates by imposing higher legal fees on local governments. And it would give large land developers and special interests a "club" with which to intimidate communities that cannot afford to put up a fight in federal court. It is frankly difficult for us to conceive of a legislative proposal less worthy of Congress’ attention.

Historical Precedent. The founding fathers of this nation never intended that federal courts be the place to settle disputes about zoning and land use regulations. In fact, the United States Supreme Court, in its decision of Alden v. Maine warns us of the dangers of skewing the balance of dual sovereignty in favor of federal government. As Justice Kennedy wrote, "When the Federal Government asserts authority over a state's most fundamental political processes, it strikes at the heart of the political accountability so essential to our liberty and republican form of government" (Alden v. Maine, 67 U.S.L.W. at 4614, 1999).

Similarly, the Clinton Administration, following in the path of previous administrations, has issued an Executive Order No. 13132 entitled "Federalism", acknowledges the vital role of our federalist form of government by stating "Federalism is rooted in the belief that issues that are not national in scope or significance are most appropriately addressed by the level of government closest to the people."

The Proposed Legislation. H.R. 1534 would change existing law regarding when local land issues are "ripe" for review in court, and in federal court in particular. It would promote litigation by a disgruntled property owner at the earliest possible moment by making a takings claim "ripe" for litigation if a local government rejects a development application or rezoning or variance request, even if the planning commission or elected body has not reached a final and definitive ruling on the matter.

In addition, the bill would overturn a key Supreme Court decision, Williamson County Planning Comm’n v. Hamilton Bank of Johnson City, 105 S.Ct. 3108 (1985), establishing the standards for determining when a regulatory taking claim is ripe to be heard in federal court. In that decision, the Court stated that, in order to present a ripe taking claim in federal court, a taking claimant must: (1) present a "final decision regarding the application of the regulations to the property at issue" from "the governmental entity charged with implementing the regulations"; and (2) demonstrate that the claimant requested "compensation through the procedures the State has provided for doing so." In other words, a property owner must first make every effort to resolve land use disputes through the local public hearing, review and appeals process before going into federal court. The proposed legislation would essentially eliminate both prongs of this established Supreme Court ripeness test.

H.R. 2372 will also prevent a federal court from exercising its traditional doctrine of abstaining from hearing a case concerning local land use issues when the court believes the case can more appropriately be resolved in state court. Removing the courts’ discretion to abstain would preempt the state courts’ traditional preeminence in local land use disputes, transfer significant control over these issues to federal courts, and entangle the courts in local policy matters. A federal judiciary, subject to no accountability for how the community will look or protects its people from undesirable land uses, is a frightening prospect to local elected officials.

The Bill’s Likely Consequences. The bill’s "by-pass" of local procedures and state courts will have a number of serious, adverse consequences for local governments.

First, the bill would result in more frequent, and more expensive, litigation against local governments. The bill is literally an invitation for developers to sue local communities – early and often. By authorizing developers to short-circuit administrative procedures at the local level, the bill would mean that land use disputes end up in court at a far earlier point in the process. In addition, the bill would force counties and cities to defend their challenges in distant and more expensive federal courts.

The result would be an enormous financial burden on smaller communities in particular. To give you some perspective on this issue, consider the fact there are some 40,000 cities and towns in the United States, most of which have small populations, few professional staff, and miniscule budgets. Ninety-seven percent (97%) of the cities and towns in America have populations of less than 10,000 and fifty-two percent (52%) have populations less than 1000. Similarly, out of 3,066 counties, twenty-four percent (24%) have populations of less than 10,000. Virtually without exception, counties, cities and towns with populations under 10,000 have no full time legal staff. These small communities are forced to hire outside legal counsel each time they are sued, imposing large and unexpected burdens on small governmental budgets.

One example from Missouri illustrates the magnitude of the threat that takings litigation can pose for a smaller community. Several year’s ago, the nation’s fourth largest pork producer started operating a 50,000 hog farm in rural Lincoln Township, in Putnam County. The citizens of the town, who numbered only a few hundred, objected that the operations violated the township zoning ordinance. The company responded with lawsuit contending that the township’s attempt to enforce its zoning represented a taking, and sought damages of $8,000,000. The proposed legislation would simply encourage the filing of more lawsuits of this type in the future.

In another case, the city of Hudson, Ohio, a fast-growing community of 22,000, had to spend $250,000 to defeat an unfounded takings claim. The city’s plan to control their growth through an equitable allotment process for building permits -- the product of three years of public hearings, study and review -- was challenged as a takings action. The legal expenses to the city were the equivalent of a cost of $35 per household to defend this single case.

In a very real sense, this proposed legislation would represent yet one more unfunded mandate on local governments. Do the proponents of this legislation propose that Congress reimburse local governments for the increased litigation costs if this bill is enacted? Not that we are aware of.

Second, the proposed legislation would seriously undermine the ability of locally elected officials to protect public health and safety, safeguard the environment, and support the property values of all the residents of the community. By granting developers a number of significant new procedural advantages in land use litigation, the bill would provide developers and other claimants greater leverage to challenge local land use planning regulations. As a result of this bill, some developers would inevitably use their deep pocketbooks and threats of federal litigation to intimidate local officials. Local officials would be forced into the position of either having to approve their projects or face daunting legal expenses. Developers would have little incentive to resolve their disputes with the neighbors or negotiate for a reasonable settlement outside the courtroom. In short, local governments would be unable to protect the average property owner against poorly planned mega-malls, factory farms, or the sprawl-producing subdivisions.

Local governments attempt to administer their land use laws to balance many different competing interests. For example, a developer exercising his alleged "right" to build a landfill or animal feedlot may encroach on the property rights of others in the vicinity. A factory owner that wants to build a plant next door to a day care center may not want to deal with the neighbors’ concerns that the emissions may cause negative health impacts on the children. While these decisions are often complex and difficult, locally elected officials are in the best position to make these judgements. By contrast, the proposed legislation would tend to take these important community decisions away from the people’s elected representatives who are closest to them, and transfer them to unelected federal judges.

Finally, the proposed legislation would circumvent the careful and open processes that have been established under state law to assure that other property owners have an opportunity to make their case, and that all the facts of the situation have been thoroughly examined. By-passing the local hearing and appeals process effectively undermines the ability of interested citizens to comment upon and influence land use decisions which are important to the future of their communities.

Further, by allowing a federal court action to be filed prematurely, the bill would make it difficult if not impossible for a plan commission, zoning board, or elected body to compile a complete record. In turn, courts would have incomplete information on which to make a fair decision.

Congressional Federalism Legislation. The bill before this Subcommittee would also contravene other efforts in this Congress to provide greater federal government accountability across the board. H.R. 2245, "The Federalism Act of 1999", a bill with bi-partisan support, is currently pending before this Congress. H.R. 2245 seeks to address the federal government's increasing predilection for preempting state and local laws by requiring Congress to fully explore the impacts of its federal actions. Congress would be required to issue federalism impact statements to assess the costs to state and local governments, and include state and local governments in the federal legislative process through early consultation procedures.

We cannot think of a more fitting example of why the federalism legislation is needed than the fact that H.R. 2372 is currently being considered by this Subcommittee. There has been no mandates impact study done for this bill. There has been no effort to sit down with local elected officials and demonstrate a compelling need for the United States Congress to interfere with one of the most traditional roles and responsibilities of communities in this country since its founding.

Conclusion. The National Association of Counties and the National League of Cities urge you not to upset the balance between the federal, state and local levels of government. H.R. 2372 is a radical bill, designed to trample over common sense and fundamental issues of fairness, and we urge you to oppose it.

Thank you for the opportunity to testify.