PRIVATE PROPERTY RIGHTS PROTECTION ACT OF 2013

Mr. SCOTT of Virginia. Mr. Speaker, in the wake of the Supreme Court's decision in Kelo v. City of New London, I have been concerned that States and municipalities could use this decision to expand their power of eminent domain, whether for the benefit of private parties or for public projects, to the detriment of those who are least powerful in the community.

While I believe the power of eminent domain has been abused, particularly against those lacking economic or political power, in the 9 years since the Kelo decision, States have properly addressed the issue on their own, and we should respect their judgment rather than impose this awkward, one-size-fits-all Federal legislative response.

I have reached this conclusion for several reasons. The first and foremost is that it is important to note that in Kelo, the Supreme Court acknowledged that State courts may interpret their own eminent domain powers in a manner that is actually more protective of property rights. I am, therefore, encouraged that no fewer than 43 States have followed that advice and taken steps to restrict their own powers of eminent domain to guard against abuse.

Given the fact that our system of federalism appears to be working and that the States have already enacted legal protections that are needed to prevent abuse of eminent domain power, I do not believe that Federal intervention is necessary or appropriate at this time.

Second, the bill's enforcement provisions are very troubling. A jurisdiction found in violation of this legislation would be stripped of all Federal economic development funds for 2 years, which could have a devastating impact on its financial health.

The Supreme Court has long held that, ``when Congress attaches conditions to a State's acceptance of Federal funds, the conditions must be set out 'unambiguously.''' But the term ``Federal economic development funds'' is, in fact, ambiguous and could conceivably include transportation, housing, and all kinds of significant Federal funding.

Those who could bear the heaviest burden of cuts and programs like the Community Development Block Grants could be precisely the same communities that have suffered the most under the abuse of eminent domain power in the past, that is, the powerless in our communities.

Furthermore, the impact of this legislation could be severe, even if a city or State never exercised the power of eminent domain. That is because no lender could ignore the risk of a future administration violating this legislation by using them in a domain for a prohibited purpose and, consequently, facing the devastating penalties during the life of the bond, thereby affecting the city's ability to make the payments on the bond.

This bill gives no discretion and no flexibility with respect to the penalty. It fails to take into account the severity or magnitude of the violation, so even a small violation would have to result in a complete loss of all economic development funds for 2 years.

No matter how clean a city's record may be, the danger that some future violation would have such a devastating effect could negatively impact its bond rating.

Finally, against this backdrop, we need to remember that eminent domain has a long and shameful history of disproportionately impacting foreign minority communities.
Inner-city neighborhoods that lacked institutional and political power were often designated as blighted areas slated for redevelopment through urban renewal programs. Properties were condemned, and land was turned over to private developers.

That abuse was not confined to the use of eminent domain for economic development purposes. Many of those abuses would still be allowed under this bill. You can trace the cost of any major highway in America to see where poor and minority communities were located. You can map political power, where it is and where it isn't, by the proposed route of the Keystone pipeline today.

This bill does nothing to protect property owners like the witness who testified before the House Judiciary Committee about how her property was taken to benefit the foreign corporation building that pipeline.

The bill does not even give property owners the right to sue to stop an illegal taking in the first place. Suits can only be brought after the property is taken, after it is too late. Despite the draconian penalties in the bill, the actual property owner would get nothing.

This underscores why it is important that we continue to monitor the facts on the ground to determine whether Federal action is warranted. If so, what effective action should be taken?

If the States fail to protect our citizens, Congress should remain ready, willing, and able to do so. However, as the States have already acted to curb reviews, we in Congress should allow them to maintain their authority to act.

Even if you believe the bill achieves the correct balance between State authority and Federal intervention and prohibits the inappropriate use of eminent domain, the irrational penalties it imposes and the fact that individual property owners are not even protected still require that the bill be defeated.