Yesterday, the United States House Judiciary Committee held a hearing on a bill entitled the “Private Property Rights Protection Act” (H.R. 1433) that would prohibit the federal government and states (and their political subdivisions) from engaging in economic development takings.  If the states do engage in these takings, they will not be eligible for federal economic development funds for two years.

Federal economic development funds appears to be broadly defined and “means any Federal funds distributed to or through States or political subdivisions of States under Federal laws designed to improve or increase the size of the economies of States or political subdivisions of States.”

There’s always a concern that any prohibition on economic development takings will be easy to get around.  The bill does clarify that there is a private cause of action.

The key thing that the bill does that I have discussed over and over is it requires condemnors to have the burden of proof to establish that a taking is not for economic development: “In such action, the defendant has the burden to show by clear and convincing evidence that the taking is not for economic development.”

This is very similar to my recommended language that says “Condemnors shall prove by clear and convincing evidence that a taking is for a public use.”  Both Michigan and Nevada included burden of proof language in their recent constitutional amendments.

The purpose of such language is to ensure that on a question of fact such as whether a taking is really for economic development or for a true public use, it should be the government that proves that the taking is proper.  Right now, without such language, the government can come up with almost any legitimate reason and that will be good enough for courts even if it is obvious that the reason is just a pretext for taking property for economic development.