	Background

The just compensation clause of the Fifth Amendment provides that the  government may not take private property for public use without just  compensation. The President issued this EO  on March 15, 1988. Such actions may include rules  and regulations that propose or implement licensing, permitting, or other  conditions, requirements or limitations on private property use. The EO also requires the U.S. Attorney General to issue general guidelines  to help agencies evaluate the takings implications of their proposed  actions, and, as necessary, update these guidelines to reflect fundamental  changes in takings case law resulting from Supreme Court decisions. Justice Has Not Updated Its 1988 Guidelines, but Has Issued Supplemental Guidelines for Three of Four Agencies

Agency officials and other experts differ on the need to update the  Attorney General’s guidelines to reflect changes in regulatory takings case  law since 1988. In contrast, officials at  Interior and Agriculture said that it would be helpful if Justice updated the  summary of key takings cases contained in an appendix to the guidelines  to reflect significant developments in this case law over the past 15 years. For example, legal experts concerned with the  protection of private property rights said that there had been significant  developments in regulatory takings case law since 1988. The Attorney General has issued supplemental guidelines required by the  EO for three of the four agencies—the Corps, EPA, and Interior. The Attorney General has not issued supplemental guidelines for  Agriculture because Justice and Agriculture could not agree on how to  assess the potential takings implications of the latter agency’s actions  related to grazing and special use permits covering applicants’ use of  public lands. Implementation of Key Provisions by the Four Agencies Has Changed Over the Life of the Executive Order

Although the EO’s requirements have not been amended or revoked since  1988, the four agencies’ implementation of some of its key provisions has  changed over time in response to subsequent OMB guidance. For example,  the agencies no longer prepare annual compilations of just compensation  awards or account for these awards in their budget documents because  OMB guidance issued in 1994 advised agencies that such information was  no longer required. According to OMB, this information is not needed  because the number and amount of these awards are small and the awards  were not paid from the agencies’ appropriations but are paid from the  Department of the Treasury’s Judgment Fund. Other provisions of the EO have been implemented. Officials at each of the four agencies said that they fully consider the  potential takings implications of their planned regulatory actions, but  again provided us with limited documentary evidence to support this  claim. Agencies provided us a few written examples of takings implication  assessments. Agency officials said that these assessments are not always  documented in writing, and, with the passage of time, any assessments  that were put in writing may no longer be on file. Few Awards of Just Compensation Were Made Against the Four Agencies for Takings Cases Concluded during Fiscal Years 2000 through 2002

According to Justice data, 44 regulatory takings cases against the four  agencies were concluded during fiscal years 2000 through 2002. Fourteen  of these 44 cases resulted in government payments. In addition to the cases concluded during fiscal years 2000 through 2002,  Justice reported that an additional 54 regulatory takings cases involving  the four agencies were still pending resolution at the end of fiscal year  2002. The EO’s requirements for assessing the takings implications of planned  regulatory actions applied to only 3 of these 14 cases. For the other 11  cases, the associated regulatory action either predated the EO’s issuance  or the matter at hand was otherwise excluded from the EO’s provisions. Based on evidence made available to us, the relevant agency assessed the  takings potential of its action in only one of the three cases subject to the  EO’s requirements. This case concluded with a settlement of $3 million for the  plaintiff.
Why GAO Did This Study

Each year federal agencies issue numerous proposed or final rules or take other regulatory actions that may potentially affect the use of private property. Some of these actions may result in the property owner being owed just compensation under the Fifth Amendment. In 1988 the President issued Executive Order 12630 on property rights to ensure that government actions affecting the use of private property are undertaken on a well-reasoned basis with due regard for the potential financial impacts imposed on the government. This testimony is based on our recent report on the compliance of the Department of Justice and four agencies--the Department of Agriculture, the Army Corps of Engineers, the Environmental Protection Agency, and the Department of the Interior--with the executive order. (Regulatory Takings: Implementation of Executive Order on Government Actions Affecting Private Property Use, GAO-03-1015 , Sept.19,2003). Specifically, GAO examined the extent to which (1)Justice has updated its guidelines for the order to reflect changes in case law and issued supplemental guidelines for the four agencies, (2) the four agencies have complied with the specific provisions of the executive order, and (3) just compensation awards have been assessed against the four agencies in recent years.

What GAO Found

Justice has not updated the guidelines that it issued in 1988 pursuant to the executive order, but has issued supplemental guidelines for three of the four agencies. The executive order provides that Justice should update the guidelines, as necessary, to reflect fundamental changes in takings case law resulting from Supreme Court decisions. While Justice and some other agency officials said that the changes in the case law since 1988 have not been significant enough to warrant a revision, other agency officials and some legal experts said that significant changes have occurred and that it would be helpful if a case law summary in an appendix to the guidelines was updated. Justice issued supplemental guidelines for three agencies, but not for Agriculture because the two agencies were unable to resolve issues such as how to assess the takings implications of denying or limiting permits that allow ranchers to graze livestock on federal lands managed by Agriculture. Although the executive order's requirements have not been amended or revoked since 1988, the four agencies' implementation of some of these requirements has changed over time as a result of subsequent guidance provided by the Office of Management and Budget (OMB). For example, the agencies no longer prepare annual compilations of just compensation awards or account for these awards in their budget documents because OMB issued guidance in 1994 advising agencies that this information was no longer required. According to OMB, this information is not needed because the number and amount of these awards are small and the awards are paid from the Department of the Treasury's Judgment Fund, rather than from the agencies' appropriations. Regarding other requirements, agency officials said that they fully consider the potential takings implications of their regulatory actions, but provided us with limited documentary evidence to support this claim. The agencies provided us with a few examples of takings implications assessments stating that such assessments were not always documented in writing or retained on file. In addition, our review of the agencies' rulemakings for selected years that made reference to the executive order revealed that relatively few specified that an assessment was done and few anticipated significant takings implications. According to Justice, property owners or others brought 44 regulatory takings lawsuits against the four agencies that were concluded during fiscal years 2000 through 2002, and of these, 14 cases resulted in just compensation awards or settlement payments totaling about $36.5 million. The executive order's requirement for assessing the takings implications of planned actions applied to only three of these cases. The actions associated with the other 11 cases either predated the order's issuance or were otherwise excluded from the order's provisions. The relevant agency assessed the takings potential of its action in only one of the three cases subject to the order's requirements. According to Justice, at the end of fiscal year 2002, 54 additional lawsuits involving the four agencies were pending resolution.