By a vote of 52-42, the U.S. Senate has just killed a proposed law which would have protected private property owners from the sometimes devastating effects of regulatory takings. The defeated proposal, Senate Bill 2271, was known as the Private Property Rights Implementation Act. It would have afforded prompt federal court access to property owners who have lost the value of their property due to excessive government regulation. Last year, several similar proposals passed in the House.

Last year, developers and property owners successfully urged the House to approve a similar Bill. The proposal allowed property owners to sue the government in federal court once the state or federal government denied a land use application or a waiver request. Significantly, the proposed law would have applied to both state and federal agency denials.

Governments have historically blocked development by refusing to approve environmental and other land use applications. As a result, they have taken all value from these property owners without actually purchasing the property from them. The impact: the owner pays taxes, but cannot do anything with the property. In legal parlance, this is referred to as a "regulatory taking" because the impact of the government denial is the same as if it had taken title to the property without paying for it.

HOW THE PROPOSED TAKINGS LAW WAS KILLED
One might ask who could oppose a law that would allow private property owners who have suffered this kind of tremendous loss to simply have their day in court. Indeed, organizations that represent property owners and developers, such as the National Association of Home Builders, lobbied for the Senate's passage of the proposal. In recent years, many wetlands laws and restrictive zoning laws, have dramatically hurt home builders by denying them the right to develop, in some cases, on 100% of their property.

On the other side of the battle were government organizations and environmental groups. For example, the National Conference of State Legislatures argued that the proposal might preempt the system for resolving local zoning and land use disputes. The National Governor's Association, the National League of Cities, the American Planning Association, and 37 State Attorneys General, also opposed the Bill for the same reasons.

Environmental groups such as the Natural Resources Defense Council and the Sierra Club, also fought against the Bill's passage. These groups generally favor the kind of broad reaching wetlands and related regulations which are at the center of this controversy

PROGNOSIS
For years, governments have avoided actually paying for takings. Money is seldom budgeted for takings and governments are reluctant to make payment. Unless required to do so by a court, governments tend to fight tooth and nails making payment, whether or not payment should be made.

It is largely for this reason that the Senate killed the current Bill. If passed, it would have streamlined the judicial process, thus resulting in increased, and some times well deserved payments to property owners.

Laws which afford actual payment will be very difficult to pass in the near future. While the National Association of Home Builders pledged that it would raise this issue next year "and every year after that" until a takings law is passed, it is also clear that the powerful opponents of these measures will also return for another round of combat.

The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.

Stuart Lieberman, Esq., and IRED.Com, Inc., will not accept any responsibilty for any reliance on the information in this column or any damages whatsoever resulting from reading this column.