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PROMOTING RESPONSIVE, EFFECTIVE AND COST-EFFICIENT

ADMINISTRATION OF STATE TRUST - RESOURCES.

Mereus, Congress and most state legislatures are being asked to anactlavs requiring "takings" assessments or requiring compensation when none would be required by the fifth amendment to the United States aonstitution; and

Nereas, member organizations of the Western States Land Commissioners Association promulgato rules and regulations governing the use and disposition of stata trust lands, and so may be subject to these laws; and

Woreas, laws requiring "takings" assessments for compensation for the promulgation of regulations could result in lengthy and expensive litigation; and

Morns, "takings" legislation may be contrary to two hundred years of federal and state judicial decisions, and the application of property and contract, law; and.....

Meruus, mtakingsø legislation may intarfere with the cualisation of the maximum economic value of the state trust lando 'to the detriment of the trust beneficiarius. by unduly restricting the ability of the trustees to manage those lands; and

mesmas, "takings" législation requiring assessments or compensation could increase the costs of trust administration; and

whereas, "takinga" legislation may result in the solidification of leasehold values in stata trust" land to the detrinant of its beneficiaries; and

Waras, takings" legislation may attempt to establish. potentially destabilizing and unproven "property" rights in state trust lands, and improperly transfer such rights from the beneficiaries to certain users of trust lands; and

Therons"taking: lagiolation could subject local and state: govornnanta to potential financial risk of compensation claias: cor alleged "takingo", tharuby reducing boriding..capacity car : capital improvmant projects; nos

Whereas, "takings" lawe may be unnsodesany bodaus, property overs in the datted States bave seady recourite through Ena courts to challenge any unconstitutional property takings: :

NON TANKTORI BE. IT REBOLVED, that the Western States Land Comaissioners Association artis 169.comaltzant to raspansive, effective, cost-efficiant administration of state trust lands, lncloding the proper promulgation of necessary regulations, and

BE IT RESOLVED, that the Western states Land Commissioners Association strongly supports property rights as envisioned and enforced by the constitutions of the Onited States, and the respective states, and

-... DB IT PURTRA RESOLVID, that the Western States Land commissioners Association urgus. Its naaber states to oppose the passage of takings legislation that would diminish the value of the trusts they administer..pr. diminish their ability to administar tbazo trusts.

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Mr. CANADY. Senator Russman, we will go ahead with your statement, but I am going to have to leave in 5 minutes in order to go vote. And we will come back and conclude with Mr. Adler. STATEMENT OF SENATOR RICHARD L. RUSSMAN, NEW HAMP

SHIRE STATE SENATE, ON BEHALF OF THE NATIONAL CON-
FERENCE OF STATE LEGISLATURES
Mr. RUSSMAN. Thank you so much.

Mr. Chairman, members of the committee, I am Rick Russman. I am a Republican State senator from New Hampshire. I am a supporter of term limits—sponsor of the bill, as a matter of fact-line item veto, balanced budget amendment, the return to biennial sessions where we meet every other year.

I am here on behalf of the National Conference of State Legislatures, and I would like to indicate to you that the National Conference of State Legislatures is prepared to work with Congress in terms of trying to find common ground and deal with overreaching government regulations.

These types of bills, though, are clearly having Congress go in the wrong direction. I think out in the hinterlands where I come from there is no question that there is a feeling, a good feeling that Congress is doing what it is doing in terms of limiting government and making things smaller. At the same time, this type of legislation in terms of takings legislation are clear budget busters-absolutely.

Certainly, there are anecdotal stories about problems that have occurred. And if there are, they ought to be fixed. If there is something wrong with the statute, it ought to be amended. It is almost like Congress saying they can't get it fixed so they are going to do it another way. Obviously, those things need to be addressed.

At the same time, we all live downstream or downwind or next door to some property where pollution exists. Obviously, all our property values are enhanced by some regulation over those types of properties so they should do what they are doing.

You can't expect the people to pay to allow polluters or to have polluters not pollute. I think that that is only going to raise taxes, and it is going to discourage good regulations that are going to protect the community and neighboring property owners.

There has been no studies that I have heard of or read that are fully scientific or comprehensive in terms of the scope of this problem outside of the anecdotal stories we have heard. I think that certainly, if there is that type of thing, that we need to deal with it. We ought to fix it.

At the same time, it strikes me that this is simply a solution looking for a problem.

What we are primarily concerned about and one of our big things with the National Conference of State Legislatures is what will this do with the States? Clearly, if this starts a culture from the Federal Government, we in the States are going to be forced to do the same thing. The localities and municipalities are going to be forced to do the same thing.

The next thing that we know, if a town decides to go from perhaps 1-acre zoning to 2-acre zoning for the general good, will the town be forced to buy every other lot in town? We can't afford that.

22-591 - 96 - 4

Certainly nobody has begun to put any type of figure on what this is going to cost the Federal Government today. At a time the Federal Government is going in the right direction in other areas, certainly this is not the time to go off on a tangent in terms of trying to make the public pay instead of the polluter pay.

States simply cannot afford a new entitlement program, which I think is being espoused here today as a good thing. The Federal Government has said with the new administration that one size doesn't fit all. Yet this type of legislation does just that, one size fits all, that in dealing with a specific problem we will use this one size fits all.

As a lawyer I can tell you certainly I would be wanting to become an expert in this area and represent people because why not askwhy not see if there is a taking? No harm in trying. The assessments, expert witness fees, appraisals, they are going to be huge.

With that, I will close. And I thank you for your attention.
Mr. CANADY. Senator, we appreciate your being here.
[The prepared statement of Mr. Russman follows:)
PREPARED STATEMENT OF SENATOR RICHARD L. RUSSMAN, NEW HAMPSHIRE STATE
SENATE, ON BEHALF OF THE NATIONAL CONFERENCE OF STATE LEGISLATURES

INTRODUCTORY REMARKS Mr. Chairman and Members of the House Judiciary Subcommittee on the Constitution, I am Richard L. Russman, Republican State Senator from Kingston, New Hampshire. In New Hampshire, I am known for my strong support for term limits, the line item veto, the balanced budget amendment and a return to biennial meetings for our state legislature.

appear on behalf of the National Conference of State Legislatures (NCSL) to discuss the concerns of state legislators with federal takings legislation. We believe that state concerns need to be addressed in order to obtain a truly equitable and sensible resolution to the problem of unfair government intrusions upon private property rights. At the outset it should be made clear that NCSL is prepared to work with Congress to restrict overreaching government actions while respecting measures that are necessary to protect the public health, safety and welfare. However, takings legislation that seeks to create an expensive new entitlement program is not the proper approach.

GENERAL COMMENTS As a fiscal conservative and believer in limited government, compensation-type "takings” bills represent expensive “budget-busters. Their purpose is to give taxpayer subsidies to those who have to comply with requirements designed to protect all property values, and the health and safety of average Americans. After all, we all live downstream, downwind or next door to property where pollution and other harmful activities have been restrained to protect all of our property values and our collective interest in a safe, healthy and enjoyable community. In cases where there is clearly no constitutional right to compensation, “takings” bills would injure average citizens by increasing taxes or by diverting limited government resources for a new entitlement program. Such legislation will harm the general public by raising taxes and by discouraging government actions that protect the community and neighboring property owners.

As you are aware, the Fifth Amendment to the U.S. Constitution provides that private property shall not be “taken for public use, without just compensation.” For over two hundred years, federal courts have enforced our Constitution and have consistently protected private property owners from overreaching government actions. Current "takings” legislation does not attempt to codify present constitutional protections and guarantees. Rather, legislation such as H.R. 9, Title IX, radically expands the definition of a compensable government action and creates an expensive new government program.

Most troubling of all is that, beyond a few isolated anecdotal accounts, there are no studies or evidence to support the notion that the judicial branch of government has abdicated its role in protecting private property owners from overreaching gov. ernment regulation. If anything, recent court decisions such as Dolan v. City of Tigard, Nollan v. California Coastal Commission and Lucas v. South Carolina Coastal Council demonstrate a willingness by the U.S. Supreme and the lower federal courts to find "takings” of property value when governmentally imposed land use restrictions go too far.

To many observers, current takings legislation represents a solution which is searching for a problem. All of this, of course, brings to mind the old adage that “if it ain't broke, don't fix it."

H.R. 9 provides for cash payments for any reduction in property value of 10 percent or more due to certain restrictions on property use. H.R. 9 and other similar "compensation type” legislation propose a dramatic new takings theory that would limit government's ability to respond to public demands and increase the cost and size of government. At its core, such takings legislation would severely limit the government's ability to govern by forcing government to pay for the right to regulate. As Justice Oliver Wendell Holmes stated in Pennsylvania Coal v. Ťahon, “government could hardly go on if to some extent values incident to property could not be diminished without

paying for every . change in the general law.Pennsylvania Cool Co. v. Mahon, 260 U.S. 393, 413 ( 1922).

The federal government, through H.R. 9, will find itself in the unenviable position of paying polluters not to pollute and paying individuals not to engage in conduct that could

damage the health, safety or property values of others. For instance, pursuant to H.R. 9, if the federal government requires a hazardous waste landfill operator to incorporate groundwater protection safeguards into a landfill's construction design, and the cost of such engineering requirements limit the overall return on the operators' investment by 10 percent, then the operator would be entitled to monetary compensation. It is irrelevant that the groundwater protection safeguards are intended solely for the protection of the local communities' drinking water supplies and their property values. The monetary payment would be paid by the federal government agency which required the environmental safeguard.

In essence, H.R. 9 would force the government to either pay the environmental component of the landfill operator's cost of doing business or allow pollution to continue unabated. In the area of groundwater contamination, where the maxim of an "ounce of prevention equals a pound of cure” most assuredly rings true, the govern. ment would have no economic choice but to require the appropriate environmental safeguards and pay the landfill operator's environmental compliance costs.

This type of legislation seeks to entirely reverse our present system of environmental regulation. Our present system says that if you are engaged in activities that pose a threat to public health, then you are the entity who should shoulder the cost of limiting the impact of your activities. For instance, if you operate a hazardous waste incinerator, then as the operator of such a business you should pay the cost of installing pollution control devices. The legislation presently before us would require the general public, the average American taxpayer, to pay the costs of such pollution control equipment. This attempt to change our present system of environmental regulation from “polluter pays” to public pays” is premised upon the notion that if the public wants cleaner air, let the public pay for cleaner air with their federal tax dollars. This legislation seeks to dramatically limit government's ability to maintain public health protections by forcing the government, and in turn the average American taxpayer, to pay for any such protections. At its core, if protecting public health costs more, then there will be less public health protection. Ultimately, if there is less public health protection generally, then there is less public health protection, specifically, for my constituents.

STATE-SPECIFIC IMPACT Legislation such as H.R. 9, and similar "compensation-type" takings legislation, represents a direct threat to States because many federal public health and safety programs, which would be jeopardized by federal "takings” bills, are actually implemented in whole or in part by state and local governments. In fact, the trend is to shift more responsibility for the implementation of federal programs to the state level. Additionally, due to the federal governments' pervasive role in regulating public health hazards and the increasingly interstate and complex nature of our nations' environmental problems, states have come to rely on the federal government for leadership in this area. The end result is that given the federal government's history of leadership in promoting public health and safety, many of the most important laws protecting state citizens' public health and safety are federal laws.

State lawmakers have an acute interest in seeing that federal laws providing significant protections to state residents are not diluted or disabled. Compensation. type takings legislation not only has the ability to weaken the federal government's

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