Such actions may include rules  and regulations that propose or implement licensing, permitting, or other  conditions, requirements or limitations on private property use. Justice Has Not Updated Its 1988 Guidelines, but Has Issued Supplemental Guidelines for Three of the Four Agencies

Justice has not updated the general guidelines that it issued pursuant to the  EO in June 1988 for evaluating the risk of and avoiding regulatory takings,  but it has issued supplemental guidelines for three of the four agencies. Officials at Justice and two of the four agencies said that changes in takings  case law related to Supreme Court decisions made since 1988 have not  been significant enough to warrant a revision of the general guidelines. 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 because of subsequent guidance provided by 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 is no longer required. According to OMB, this information  is not needed because the number and amount of these awards is small and  the awards are paid from the Department of the Treasury’s Judgment Fund,  rather than from the agencies’ appropriations. Hence, these officials said the annual reporting of just compensation  awards was unnecessary. Agencies Report That They Fully Consider the Takings Implications of Their Planned Actions but Provided Little Evidence to Support This Claim

The four agencies said that they fully consider the potential takings  implications of their planned regulatory actions, but 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, because of the passage of time, those  assessments that were put in writing may no longer be on file. However, the EO’s requirements for assessing  the takings implications of planned regulatory actions applied to only 3 of  these 14 cases. As of the end of fiscal  year 2002, Justice reported that 54 additional regulatory takings cases  involving the four agencies were pending resolution. For the other 11 cases, the  agency action involved either predated the EO’s issuance or was otherwise excluded from the EO’s requirements. Of the three cases subject to the EO’s requirements, we found evidence that  a regulatory takings implication assessment had been done in only one  instance. With the  exception of OMB, the agencies provided us with technical corrections and  editorial comments that we have incorporated as appropriate. Major contributors to this report are listed in appendix V.

Objectives, Scope, and Methodology

The Chairman of the House Subcommittee on the Constitution, Committee  on the Judiciary, asked us to provide information on measures taken by the  Department of Justice to implement certain provisions of Executive Order  12630 (EO) regarding regulatory takings of private property and the efforts  of four agencies—the Department of Agriculture, U.S. Army Corps of  Engineers, Environmental Protection Agency, and the Department of the  Interior—to comply with the requirements of the EO. Specifically, the  Chairman asked us to examine the extent to which (1) Justice has updated  its guidelines to implement the EO 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 EO, and (3) awards of just  compensation have been assessed against the four agencies by the courts  for regulatory takings in recent years and, in these cases, whether the  agencies assessed the potential takings implications of their actions before  implementing them. Finally, regarding awards of just compensation made against the agencies  and, in these cases, whether the agencies had assessed the takings  potential of their actions, we obtained from Justice a list of all takings  cases related to the four agencies that were concluded during fiscal years  2000 through 2002.
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. GAO was asked to provide information 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. 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. We provided the agencies with a draft of this report for comment. They provided technical and editorial suggestions that we incorporated as appropriate.

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 fundamental changes have occurred and that the guidelines should be updated. Justice issued supplemental guidelines for three agencies, but not for Agriculture because of unresolved 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. For example, the agencies provided us with a few examples of takings implications assessments because, agency officials said, these assessments are 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 a takings implication assessment was done and few anticipated significant takings implications. According to Justice, 44 regulatory takings lawsuits brought against the four agencies by property owners 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, as of the end of fiscal year 2002, 54 additional regulatory takings lawsuits involving the four agencies were pending resolution.