Congressman Jerrold Nadler today offered a critical amendment to correct a major flaw in H.R. 4128, the Private Property Rights Protection Act of 2005.  The bill attempts to limit government seizure of private land for economic development purposes – but in doing so, it would make it extraordinarily difficult for states and localities to secure financing for major projects.

The bill’s flawed structure does not allow property owners to stop takings before they occur, allowing them instead to sue, retroactively, to forbid the government authority from receiving federal economic development funding for two years.

“How could a state or locality ever float a bond or secure any financing for economic development projects if there is the constant, open-ended threat that a property owner could sue to block federal funding?” Congressman Nadler asked.  “It makes much more sense to allow property owners to stop the takings at the front end.”

Congressman Nadler’s amendment would have remedied the problem by removing the retroactive penalty, and instead giving property owners the explicit right to go to court to seek an injunction before a court allows the taking.  That way, no punishment is needed.  States’ and localities’ funding would not have been threatened, because takings ruled improper, would be stopped before they began.

“My amendment would have allowed property owners to act first to stop improper takings, rather than allowing them only to seek retroactive punishment,” Congressman Nadler continued.  “If you get an injunction, you don’t have to worry about punishing anyone for the taking ten years later, because there was no improper taking in the first place.  It’s only reasonable to put the horse before the cart.”

Despite support from the National League of Cities, the National Association of Housing and Redevelopment Officials, and the International Economic Development Council, the amendment was not agreed to by the House.

If this problem is not corrected by the Senate and is signed into law by the President, the legislation will severely impede state and local governments’ ability to secure funding for critical projects because of the financial uncertainty involved.