Today, Congressman Jerrold Nadler (D-NY), Ranking Member of the House Judiciary Committee, delivered the following opening statement for the markup of H.R. 1689, the Private Property Rights Protection Act of 2017:

“Mr. Chairman, I question whether marking up H.R. 1689, the “Private Property Rights Protection Act of 2017”, is the wisest use of the Committee’s time.  To begin with, the bill is a response to Kelo v. City of New London, a now well-established 13-year-old Supreme Court decision to which most state legislatures have already reacted by curtailing their eminent domain authority.  Worse yet, this measure could potentially devastate the finances of state and local governments.  It also raises federalism concerns.  For these reasons, I must oppose the bill.

“Kelo affirmed the right of a city to use eminent domain to take and transfer property from one private party to another for the public purpose of economic development.  Building on a century of precedent defining “public use” to include a “public purpose,” the Court held that such a transfer satisfied the Fifth Amendment’s Takings Clause, which provides that no person’s “private property [shall] be taken for public use without just compensation.” 

“This legislation seeks to overturn Kelo by prohibiting the use of eminent domain for the purpose of economic development through private-to-private property transfers by any state or local government that receives federal economic development funds.  The bill defines “economic development funds” broadly 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.

“The power of eminent domain is an extraordinary one and should be used with great care.  Historically, there are examples of states and localities abusing the eminent domain power for purely private gain or to benefit one community at the expense of another. 

“The poorly-planned use of this power has destroyed communities for projects resulting in little economic gain.  For example, highways have thoughtlessly cut through neighborhoods, destroying them.  Some of these communities are in my district and they have yet to recover from the wrecker’s ball.

“Eminent domain, however, is also an important tool, making possible transportation networks, irrigation projects, and other public works that support communities and are integral to their economic and social well-being.

“I continue to believe, as I have since 2005, when we first considered this bill, that it is the wrong approach to a very serious issue.  Most importantly, this bill would cast a cloud over potential future takings and could destroy state and local governments’ ability to float bonds because of the increased risks and attendant increased interest rates.  The loss of all “federal economic development funds” is so draconian and misguided a penalty that a government that never takes a prohibited action would be hobbled financially by it.   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.”  

“In addition, the bill’s definitions appear to prohibit some projects that might have a genuine public purpose, while allowing other uses that historically have been abused.  There is no obvious rhyme or reason to such disparate treatment.

“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.”  Does that include, for example, a stadium?  A stadium is privately-owned and available for use by the general public as of right.

“Affordable housing – such as the Hope VI program, which uses federal money to encourage private development of mixed-income housing as a way to respond to failing public housing projects, or the Nehemiah program, a faith-based affordable housing program in Brooklyn -- could never have gone forward.  So under this bill, public housing completely constructed by the government is permissible, but public-private partnerships for affordable housing are not.

“In addition, the bill is unnecessary.  Since the Kelo decision, there have been new developments that call into question whether Congress should even act at this point.  In response to Kelo, more than 40 states have moved aggressively to narrow their eminent domain laws.  In doing so, states have carefully considered the implications of this decision and the needs of their citizens. 

“H.R. 1689 does not even help an aggrieved property owner or tenant because they cannot sue to stop the allegedly prohibited taking.  They cannot get any damages other than the just compensation they got at the time of the taking.  The bill only authorizes suit after a condemnation proceeding has concluded, when it is too late.  All that injured persons can get is the psychic satisfaction that they may get from bankrupting their community.

“Finally, H.R. 1689 undermines federalism and 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.

“This bill takes a sledgehammer to what may not even be a nail.  It threatens communities with bankruptcy without necessarily protecting property owners or the communities most vulnerable to abuse of the eminent domain power, all while raising potential federalism concerns.  For these reasons, I urge the Committee to reject this bill and I yield back the balance of my time.”

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