This is the accessible text file for GAO report number GAO-04-120T 
entitled 'Regulatory Takings: Agency Compliance with Executive Order on 
Government Actions Affecting Private Property Use' which was released 
on October 16, 2003.

This text file was formatted by the U.S. General Accounting Office 
(GAO) to be accessible to users with visual impairments, as part of a 
longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov.

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately.

Testimony:

Before the Subcommittee on the Constitution, Committee on the 
Judiciary, House of Representatives:

United States General Accounting Office:

GAO:

For Release on Delivery Expected at 10:00 a.m. EDT:

Thursday, October 16, 2003:

Regulatory Takings:

Agency Compliance with Executive Order on Government Actions Affecting 
Private Property Use:

Statement of Anu K. Mittal, Director, Natural Resources and 
Environment:

GAO-04-120T:

GAO Highlights:

Highlights of GAO-04-120T, a testimony before the Subcommittee on the 
Constitution, Committee on the Judiciary, House of Representatives

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 toof 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, tThe 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.

What GAO Recommends:

www.gao.gov/cgi-bin/getrpt?GAO-04-120T.

To view the full product, including the scope and methodology, click 
on the link above. For more information, contact Anu K. Mittal at 
(202) 512-3841 or mittala@gao.gov.

[End of section]

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss the measures taken by the 
Department of Justice (Justice) to implement certain provisions of 
Executive Order 12630 (EO) and the efforts of four agencies--the 
Department of Agriculture, the U.S. Army Corps of Engineers (Corps), 
the Environmental Protection Agency (EPA), and the Department of the 
Interior[Footnote 1]--to comply with the EO's requirements. Our 
testimony is based on work included in a report recently released by 
this subcommittee. [Footnote 2]

Each year federal agencies issue numerous proposed or final rules or 
take other regulatory actions that may potentially affect the use of 
private property. Agencies take these actions to meet a variety of 
societal goals, such as protecting the environment, promoting public 
health and safety, conserving natural resources, and preserving 
historic sites. At the same time, these actions may place restrictions 
on the use of private property, such as limiting the development of 
land that includes critical wildlife habitat or wetlands needed for 
flood control, thereby potentially depriving the landowner of the use 
or economic value of the property.

Any landowner believing that a government regulatory action has 
resulted in a taking of his or her private property may file a lawsuit 
seeking just compensation under the Fifth Amendment to the U.S. 
Constitution. In general, these suits must be brought in the United 
States Court of Federal Claims; Justice is responsible for litigating 
these cases on behalf of the government. Such cases, many of which may 
take years to resolve, may result in a dismissal, a decision in favor 
of the government, a settlement payment made to the landowner, or an 
award of just compensation. In general, such awards and settlements are 
paid from the Department of the Treasury's Judgment Fund.

In 1988 the President issued Executive Order 12630,[Footnote 3] 
"Governmental Actions and Interference with Constitutionally Protected 
Property Rights," to ensure that government actions are undertaken on a 
well reasoned basis with due regard for the potential financial impacts 
imposed on the government by the Just Compensation Clause of the Fifth 
Amendment. Specifically, the EO requires executive branch agencies, 
among other things, to (1) prepare annual compilations of awards of 
just compensation resulting from landowner lawsuits alleging takings, 
(2) account for takings awards levied against them in their annual 
budget submissions, (3) designate an agency official responsible for 
implementing the order, and (4) consider the potential takings 
implications of their proposed actions and document significant takings 
implications in notices of proposed rulemaking. The EO also requires 
Justice, specifically the U.S. Attorney General, to issue general 
guidelines to provide agencies with a uniform framework for 
implementing the EO and to issue supplemental guidelines for each 
agency, as appropriate, that reflect that agency's unique 
responsibilities. In addition, the EO requires the Attorney General to 
update the general guidelines, as necessary, to reflect fundamental 
changes in takings case law resulting from U.S. Supreme Court 
decisions. Furthermore, the EO requires the Office of Management and 
Budget (OMB) to ensure that the policies of executive branch agencies 
are consistent with the EO's requirements and that just compensation 
awards made against the agencies are included in agencies' budget 
submissions.

Our testimony discusses the extent to which (1) Justice has updated its 
guidelines 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 by the courts against the four agencies 
in recent years and whether in these cases, the agencies had assessed 
the potential takings implications of their actions before implementing 
them.

In summary, we found the following:

* Justice has not updated the general guidelines that it issued 
pursuant to the EO in June 1988, but has issued supplemental guidelines 
for three of the four agencies. Officials at Justice, the Corps and EPA 
expressed the general view that changes in takings case law related to 
Supreme Court decisions since 1988 had not been significant enough to 
warrant a revision of the guidelines. Justice officials also noted that 
the guidelines were intended to provide a general framework for 
agencies to follow in implementing the EO, and thus did not require 
frequent revision. However, Interior and Agriculture officials said 
that it would be helpful if Justice updated a summary of the key 
aspects of relevant case law contained in an appendix to the guidelines 
to reflect significant developments over the past 15 years. Similarly, 
representatives of property rights groups and law professors stated 
that the guidelines should be updated, noting that the body of relevant 
case law has evolved significantly over the past 15 years. Justice has 
issued supplemental guidelines for all of the individual agencies 
except Agriculture.

* The four agencies' implementation of some of the EO's key provisions 
has changed over time in response to subsequent OMB guidance. The 
agencies have not prepared annual compilations of just compensation 
awards or accounted for these awards in their budget documents since 
OMB issued guidance in 1994 advising agencies that this information is 
no longer required. Regarding the EO requirement for designating an 
official responsible for ensuring the agency's compliance with the EO, 
the four agencies have each designated such an official--typically the 
chief counsel, general counsel, or solicitor. Finally, the four 
agencies told us that they fully consider the potential takings 
implications of their planned regulatory actions, but they provided us 
with limited documentary evidence to support this claim. Specifically, 
agency officials told us that takings implication assessments are not 
always documented in writing, and with the passage of time any 
assessments that were documented may no longer be on file with the 
agency.

* According to Justice data, property owners or other parties brought 
44 regulatory takings cases against the four agencies that were 
concluded during fiscal years 2000 through 2002. Of these, the courts 
decided in favor of the plaintiff in 2 cases, resulting in awards of 
just compensation totaling about $4.2 million. The Justice Department 
settled in 12 other cases, providing total payments of about $32.3 
million. 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 the 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. As of the end 
of fiscal year 2002, Justice reported that 54 additional regulatory 
takings cases involving the four agencies were pending resolution.

Background:

The just compensation clause of the Fifth Amendment provides that the 
government may not take private property for public use without just 
compensation. Initially, this clause applied to the government's 
exercise of its power of eminent domain. In eminent domain cases, the 
government invokes its eminent domain power by filing a condemnation 
action in court against a property owner to establish that the taking 
is for a public use or purpose, such as the construction of a road or 
school, and to allow the court to determine the amount of just 
compensation due the property owner. In such cases, the government 
takes title to the property, providing the owner just compensation 
based on the fair market value of the property at the time of the 
taking. Supreme Court decisions later established that regulatory 
takings are also subject to the just compensation clause. In contrast 
to the direct taking associated with eminent domain, regulatory takings 
arise from the consequences of government regulatory actions that 
affect private property. In these cases, the government does not take 
action to condemn the property or offer compensation, but rather 
effectively takes the property by denying or limiting the owner's 
planned use of the property, referred to as an inverse taking.[Footnote 
4] An owner claiming that a government action has effected a taking and 
that compensation is owed must initiate suit against the government to 
obtain any compensation due.[Footnote 5] The court awards just 
compensation to the owner upon concluding that a taking has occurred.

In 1987, concerned with the number of pending regulatory takings 
lawsuits and with court decisions seen as increasing the exposure of 
the federal government to liability for such takings, the President's 
Task Force on Regulatory Relief began drafting an executive order to 
direct executive branch agencies to more carefully consider the takings 
implications of their proposed regulations or other actions. The 
President issued this EO on March 15, 1988.

According to the EO, actions subject to its provisions include 
regulations, proposed regulations, proposed legislation, comments on 
proposed legislation, or other policy statements that, if implemented 
or enacted, could cause a taking of private property. 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 enumerates agency actions that are not 
subject to the order, including the exercise of the power of eminent 
domain and law enforcement actions involving seizure, for violations of 
law, of property for forfeiture, or as evidence in criminal 
proceedings.

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.

The guidelines provide that agencies should assess takings implications 
of their proposed actions to determine their potential for a 
compensable taking and that decision makers should consider other 
viable alternatives, when available, to meet statutorily required 
objectives while minimizing the potential impact on the public 
treasury. In cases where alternatives are not available, the potential 
takings implications are to be noted, such as in a notice of proposed 
rulemaking. The guidelines also include an appendix that provides 
detailed information regarding some of the case law surrounding 
considerations of whether a taking has occurred and the extent of any 
potential just compensation claim. For example, the appendix discusses 
the Penn Central Transportation Co. v. City of New York[Footnote 6] 
case in which the Supreme Court set out a list of three "influential 
factors" for determining whether an alleged regulatory taking should be 
compensated: (1) the economic impact of the government action, (2) the 
extent to which the government action interfered with reasonable 
investment-backed expectations, and (3) the "character" of the 
government action. However, the appendix provides a caveat that it is 
not intended to be an exhaustive account of relevant case law, adding 
that the consideration of the potential takings of an action as well as 
the applicable case law will normally require close consultation 
between agency program personnel and agency counsel.

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. Justice officials said that the guidelines had not 
been updated since 1988 because there had been no fundamental changes 
in regulatory takings case law, which is the EO's criterion for an 
update. They said that the guidelines, as written, are still sufficient 
to determine the risk of a regulatory taking and that subsequent 
Supreme Court decisions have not substantially changed this analysis. 
For example, officials said the three-factor test outlined in the 1978 
Penn Central case remains the most important guidance for analyzing the 
potential for a taking that is subject to just compensation. Justice 
officials also emphasized that the guidelines address only a general 
framework for agencies' evaluations of the takings implications of 
their proposed actions and thus are not intended to be an up-to-date, 
comprehensive primer on all possible considerations. The guidelines 
state that the individual agencies must still conduct their own 
evaluations, including necessary legal research, when assessing the 
takings potential of a proposed regulation or action.

The four agencies were divided on the need to update the guidelines. 
Corps and EPA officials supported Justice's position that the 
guidelines do not need to be updated. Corps staff indicated that, based 
on their review of relevant Supreme Court decisions since 1988, no 
fundamental change in the criteria for assessing potential takings had 
occurred and thus no update to the Attorney General's guidelines was 
necessary. Similarly, EPA staff said that some of the takings cases 
decided since 1988 gave the appearance that the Court was changing the 
three-pronged test set out in the Penn Central decision. However, these 
officials noted that more recent cases have returned to the Penn 
Central test, thereby removing the need for updating the Attorney 
General's guidelines. 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.

Other legal experts said that the Attorney General's guidelines should 
be updated, noting that regulatory takings case law had not remained 
static 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. 
These experts said that the mere passage of time and the sheer number 
of regulatory takings cases concluded since 1988 argued for updating 
the guidelines. In another case, a law professor, who has written and 
lectured on the issue of regulatory takings, said that the level of 
specificity with which Justice prepared the original guidelines sets a 
precedent that calls for updating these guidelines to reflect the many 
important changes 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.[Footnote 7] The EO directed the Attorney General, in 
consultation with each executive branch agency, to issue supplemental 
guidelines for each agency as appropriate to the specific obligations 
of that agency. The Attorney General's guidelines state that the 
supplement should prescribe implementing procedures that will aid the 
agency in administering its specific programs under the analytical and 
procedural framework presented in the EO and the Attorney General's 
guidelines, including the preparation of takings implication 
assessments. In general, the three agencies' supplemental guidelines 
include specific categorical exclusions from the EO's provisions for 
certain agency actions.

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.[Footnote 8] Agriculture argued that such permit 
actions should be exempt from the EO's requirements or, if not, that 
the agency should be allowed to do a generic takings implication 
assessment that would apply to multiple permits. Agriculture officials 
indicated that Justice officials did not agree with these suggestions, 
and the matter was never resolved. While lacking supplemental 
guidelines, Agriculture officials said that their implementation of the 
EO and the Attorney General's guidelines has not been encumbered. 
Justice officials agreed with this assessment.

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.[Footnote 9] 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. In addition, because the number and dollar amounts of 
just compensation awards and settlements paid by the federal government 
annually are relatively small, OMB officials said the overall budget 
implications for the government are small. Hence, in their view, 
information on just compensation awards in agency annual budget 
submissions was also unnecessary.

OMB and Justice officials said that the relative lack of regulatory 
takings cases and associated just compensation awards each year is an 
indication that the EO has succeeded in raising agencies' awareness of 
the need to carefully consider the potential takings implications of 
their actions.

Although OMB no longer requires agencies to comply with these EO 
provisions, the provisions remain in the EO. However, OMB and Justice 
officials noted that because executive orders are not the equivalent of 
statutory requirements, non-compliance with these provisions does not 
have the same implications. Instead, executive orders are policy tools 
for the executive branch and are subject to changing interpretation and 
emphasis with each new administration.

Other provisions of the EO have been implemented. For example, each of 
the four agencies has designated an official to be responsible for 
ensuring that the agency's actions comply with the EO's requirements. 
In general, the responsible official at each agency is the agency's 
senior legal official.[Footnote 10] EPA's and Interior's supplemental 
guidelines specifically identify the designated official by title. 
Agency officials could not provide us with any documentary evidence of 
this designation for Agriculture and the Corps, but agency officials 
assured us that their senior legal official fulfilled this role.

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. They 
also noted that these assessments are internal, predecisional documents 
that generally are not subject to the Freedom of Information Act or 
judicial review. As a result, they said, the assessments are not 
typically retained in a central file for a rulemaking or other 
decision, and therefore difficult to locate. For example, the Corps 
internal guidance states that takings implication assessments should be 
removed from the related administrative file once the agency has 
concluded a decision on a permit. In addition, agency officials also 
noted that they do not maintain a master file of all takings 
implication assessments. In many cases, attorneys assigned to field 
offices conduct these assessments. In these cases, agency officials 
said that headquarters staff might not have copies. Nevertheless, with 
the exception of EPA, each agency provided us with some examples of 
written takings implication assessments.[Footnote 11] These 
assessments varied in form and the level of detail included.

To determine if and how the four agencies documented their compliance 
with the EO when issuing regulatory actions, we reviewed information 
contained in Federal Register notices on takings implication 
assessments related to their proposed and final rulemakings, but had 
limited success. Specifically, 375 notices mentioned the EO in 1989, 
1997, and 2002, but relatively few provided an indication as to whether 
a takings implication assessment was done. Most of these rules included 
only a simple statement that the EO was considered and, in general, 
that there were no significant takings implications. In contrast, 50 
specified that an assessment of the rule's potential for takings 
implications was prepared, and of these, 10 noted that the rule had the 
potential for "significant" takings implications. Given the limited 
amount of information available from the agencies or available in the 
Federal Register notices that we reviewed, we could not fully assess 
the extent to which agencies considered the EO's requirements.

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.[Footnote 
12] Fourteen of these 44 cases resulted in government payments. In 2 of 
these 14 cases, the U.S. Court of Federal Claims decided in favor of 
the plaintiff, resulting in awards of just compensation totaling about 
$4.2 million. The Justice Department settled in 12 other cases 
providing total payments of about $32.3 million.[Footnote 13] Of these 
combined 14 cases with awards or settlement payments, 10 related to 
actions of Interior, 3 to actions of the Corps , and 1 to an action of 
Agriculture.

In general, the settled cases were concluded with compromise 
agreements, including stipulated dismissals or settlement agreements, 
reached among the litigants and approved by the applicable court. In 
these cases, the document usually stated that the parties had agreed to 
end the case with a payment to the plaintiff, but no finding that a 
taking occurred. For example, in one case concluded in 2001 that 
alleged a taking of an oil and gas lease on federal land managed by 
Interior's Bureau of Land Management, the litigants negotiated a 
stipulated dismissal that provided that a payment of $3 million be made 
to the plaintiffs to cover all claims. However, the stipulated 
dismissal also provided that the final outcome should not be construed 
as an admission of liability by the United States government for a 
regulatory taking. In addition, the dismissal required that the 
plaintiffs surrender their interests in a portion of the lease. In the 
two cases with award payments, the court concluded that a taking had 
occurred and thus it awarded just compensation.

Of the 14 cases with awards or settlement payments, the 10 Interior 
cases generally dealt with permits related to mining claims on federal 
lands managed by that agency or matters related to granting access on 
public lands. For example, one case involving mining claims resulted in 
the plaintiff receiving a settlement of almost $4 million. In another 
case, involving the denial of preferred access to a lake on land 
managed by the agency, the plaintiff received a settlement of $100,000. 
The Corps' three cases generally related to a denial or issuance, with 
conditions, of wetlands permits for private property. One of these 
cases, concerning the filling of a wetland in Florida, resulted in a 
settlement payment of $21 million, accounting for more than half of the 
total compensation awards and settlement payments related to the 14 
cases. The Agriculture case concerned the title to mineral rights in a 
national forest managed by the agency. The plaintiff received an award 
of $353,000 in this case. (Appendix I provides further information on 
just compensation awards or settlement payments, by agency, for cases 
concluded during fiscal years 2000 through 2002.):

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. Of the 54 pending cases, 30 involved Interior, 14 
involved the Corps, 7 involved Agriculture, and 3 involved EPA.

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. In that case, the Corps denied a 
wetlands permit sought by the plaintiff to fill wetlands on the 
plaintiff's property in order to develop a commercial medical center. 
The plaintiff brought suit against the agency alleging a compensable 
taking had occurred. In its takings implication assessment, the Corps 
had concluded that the permit denial did not constitute a taking 
because the applicant was still free to use the property for other 
purposes that did not involve filling the wetland. Therefore, the Corps 
concluded that the permit denial did not deprive the plaintiff of all 
viable economic use of the property. However, the case ended with a 
stipulated dismissal and a payment of $880,000 to the 
plaintiff.[Footnote 14]

In the two other cases, based on information Interior provided to us, 
it appears that the EO would apply. Interior stated that, in hindsight, 
it appears that the EO may have applied in the first case involving a 
denial of applications to drill for oil and gas on federal land. 
Although a formal takings implication assessment was not prepared in 
this case, Interior stated there was a "good faith" discussion of its 
takings implications within the department. The case concluded with 
settlement of $380,000 to the plaintiff for attorney fees.[Footnote 15] 
In the second case, concerning anticipated and actual denial of oil and 
gas drilling permits for federal land, Interior was not certain whether 
the EO actually applied to the case in the first place, but believed 
that a takings assessment had been done and documented in a related 
environmental impact statement. However, Interior was unable to provide 
us a copy of this document. We believe that the EO applied and, lacking 
documentation, that no formal assessment was done. This case concluded 
with a settlement of $3 million for the plaintiff.[Footnote 16]

Mr. Chairman, this completes my prepared statement. I would be pleased 
to respond to any questions that you or other Members of the 
Subcommittee may have at this time.

GAO Contacts and Staff Acknowledgment:

For further information about this testimony, please contact me at 
(202) 512-3841. Doreen Feldman, Jim Jones, Ken McDowell, Jonathan 
McMurray, and John Scott, made key contributions to this statement.

[End of section]

Appendix I: Awards of Just Compensation or Settlement Payments for 
Concluded Regulatory Takings Cases, for Four Agencies, Fiscal years 
2000 through 2002:

[End of section]

(Dollars in thousands).

Agriculture: Number of Concluded Cases: 1; Number of Cases with 
Payments: 1; Just Compensation Awards: $353; Settlements: $0; Total: 
$353.

Corps: Number of Concluded Cases: 15; Number of Cases with Payments: 3; Just Compensation Awards: 0; 
Settlements: 22,085; Total: 22,085.

EPA: Number of Concluded Cases: 2; Number of Cases with Payments: 0; 
Just Compensation Awards: 0; Settlements: 0; 
(Dollars in thousands): Total: 0.

Interior: Number of Concluded Cases: 26; 
(Dollars in thousands): Number of Cases with Payments: 10; Just 
Compensation Awards: 3,851; Settlements: 10,216; Total: 14,067.

Total: Number of Concluded Cases: 44; Number of Cases with Payments: 
14; Just Compensation Awards: 4,204; Settlements: $32,301; Total: 
$36,505.

Source: GAO.

Note: GAO analysis of data provided by the Department of Justice's 
Environment and Natural Resources Division:

[End of table]

FOOTNOTES

[1] We refer to these agencies as the "four agencies" in subsequent 
references.

[2] See U.S. General Accounting Office, Regulatory Takings: 
Implementation of Executive Order on Government Actions Affecting 
Private Property Use, GAO-03-1015 (Washington, D.C., Sept. 19, 2003).

[3] 53 Fed. Reg. 8859 (Mar. 18, 1988).

[4] In general, an inverse taking has the effect of an affirmative 
exercise of the power of eminent domain. An inverse taking is also 
referred to as inverse condemnation.

[5] Takings of property effected by government actions may occur in a 
number of ways, including: (1) a government regulation restricting 
development, (2) a government requirement that a landowner provide the 
public access to private property (such as by providing access to a 
private beachfront), and (3) an agency's denial of a mineral drilling 
permit.

[6] 438 U.S. 104 (1978).

[7] Justice issued supplemental guidelines for the Corps on January 23, 
1989; for Interior on March 29, 1989; and for EPA on January 14, 1993. 
According to Justice and agency officials, these guidelines have not 
been updated since their original issuance. 

[8] A grazing permit provides official written permission to a rancher 
to graze a specific number, kind, and class of livestock for a 
specified time period on defined federal rangeland. A special use 
permit is a written instrument that grants rights or privileges of 
occupancy and use, such as for recreational and commercial purposes, 
subject to specified terms and conditions.

[9] The agencies had difficulty documenting their submission of 
compilations reports for the period 1989 through 1993 because the 
passage of time made documents less accessible. 

[10] At Agriculture and EPA, the designated official is the General 
Counsel. At the Corps, this official is the Chief Counsel. At Interior, 
the designated official is the Solicitor. 

[11] EPA officials indicated that they did not have any written 
examples of takings implication assessments prepared by the agency 
largely because the agency's actions are generally excluded from the 
EO's requirements.

[12] The data provided by Justice referred to these 44 cases as 
regulatory takings cases. According to information provided by 
Interior, at least 9 of the 44 cases, including 4 with award or 
settlement payments, were alleged by the property owner to be 
"legislative" takings. In legislative takings cases, the potential 
taking results directly from an act of Congress. One of these nine 
cases (Board of County Supervisors of Prince William County, Virginia 
v. United States) involved the government's taking title to property by 
exercising its power of eminent domain.

[13] In addition to the financial remuneration made to the plaintiff, 
the award and settlement payment totals may include compensation for 
attorney fees, interest, and other litigation costs. 

[14] James Koconis & Ted G. Koconis v. United States.

[15] Devon Energy Corporation, et al. v. United States.

[16] W.A. Moncrief, Jr. et al. v. United States.