Washington, D.C. – Today, Congressman Jerrold Nadler (D-NY), Ranking Member of the House Judiciary Committee, delivered the following statement on the House floor in opposition to H.R. 1689, the Private Property Rights Protection Act of 2017:
"Mr. Speaker, I rise in opposition to H.R. 1689, the “Private Property Rights Protection Act of 2017.
"While I believe this bill is well intentioned, it is the wrong approach to a serious problem. It seeks to prevent abuse of the eminent domain power, but its provisions could cripple the finances of State and local governments, without even providing a remedy to the victims of an unjust taking.
"In Kelo v. City of New London, the Supreme Court upheld the right of a municipality to use eminent domain authority to take private property and to transfer it to another private entity for a public purpose. Building on a century of precedent defining “public use” to include a “public purpose,” the Court held that such a transfer did not violate the Fifth Amendment’s Takings Clause, which provides that no person’s “private property [shall] be taken for public use without just compensation.”
"Critics of the Kelo decision believe the Court overreached, and that eminent domain should be exercised only when the taken property will be owned by the government, or by a private entity acting as a public utility. H.R. 1689 would overturn Kelo, by prohibiting any State or local government that receives federal economic development funds from using eminent domain to transfer private property to another private entity for the purpose of economic development.
"The bill broadly defines “economic development funds” to include any federal funds distributed to states or localities under laws designed to improve or increase their economies. Should a state or local government violate this prohibition, it is subject to the loss of all such funds for two years.
"This draconian remedy could potentially devastate the finances of State and local governments. Even projects unrelated to takings could lose funding, and cities could face bankruptcy simply by incorrectly guessing whether a given project would sufficiently qualify as being for a “public use.” The potential loss of such funding would also have a chilling effect on a government’s willingness to use eminent domain to promote legitimate economic development projects.
"Even if a government never takes a prohibited action, it would likely be adversely impacted by this bill. Just the potential loss of significant federal funding may make it impossible for a government to sell municipal bonds, or it could require a government to pay inordinate interest rates given the possibility that it might—at some point in the future—use eminent domain improperly, and thereby lose all federal economic aid, and with it the ability to repay the bonds.
"The power of eminent domain is an extraordinary one, and it should be used with great care. Historically, there are examples of States and localities abusing eminent domain for purely private gain, or to favor one community at the expense of another. When used inappropriately, this power has wrecked communities for projects resulting in little economic benefit.
"When used appropriately, however, eminent domain is an important tool, making possible transportation networks, irrigation projects, and other important public works that support communities and are integral to their economic and social well-being.
"Unfortunately, this bill’s vague definitions may prohibit projects that have a genuine public purpose, while allowing others that historically have abused eminent domain. For example, H.R. 1689 allows the use of eminent domain to give property to a private party “such as a common carrier that makes the property available for use by the general public as of right.” That would seem to include a stadium, which is privately owned and is available for use by the general public as of right. On the other hand, communities could be barred from using eminent domain to pursue affordable housing projects if they are built using a public-private partnership, such as the Hope VI program, which uses federal money to encourage private development of mixed-income housing.
"Yet another shortcoming of the bill is that it does not actually help an aggrieved property owner or tenant because it would not allow them to sue to stop the allegedly prohibited taking. The bill only authorizes suit after a condemnation proceeding has concluded, when it is too late. In addition, injured persons would not be entitled to any damages other than the just compensation they got at the time of the taking. All that they could get is the psychic satisfaction that they may receive from bankrupting their community after the fact.
"I would also point out that this bill is unnecessary since more than 40 states have already moved aggressively to narrow their eminent domain laws in the 13 years since Kelo was decided.
"Finally, H.R. 1689 undermines federalism and it may raise constitutional concerns. Subject to the Takings Clause, local land use decisions are generally left to the judgments of state and local governments, which are in the best position to weigh local conditions and competing interests. This is the essence of federalism, and Congress should not be in the business of sitting as a national zoning board. Also, the loss of all economic funding—even for projects that may have nothing to do with takings—is so draconian that it may amount to an unconstitutional coercion of state and local governments.
"Accordingly, I oppose this bill and I reserve the balance of my time."