Administration Blasts Plan to Compensate Landowners : Regulation: House GOP proposal to pay for devalued property is called ‘stupid.’ Advocates say it’s needed to ease heavy-handed federal rules.

Clinton Administration officials on Friday denounced as dangerous and costly a Republican proposal that would force government agencies to compensate property owners whose land is devalued by federal regulations.

The compensation proposal, part of the House GOP’s “contract with America” campaign manifesto, would require the federal government to pay compensation any time a regulation leads to reduction in the value of property by 10% or more.

Critics said that includes all manner of regulations, from zoning laws in the District of Columbia that stop developers from building skyscrapers, to anti-pesticide laws that prevent farmers from using toxic chemicals for growing improved crops, to clean-air regulations that stop incinerators from spewing foul air. The cost to taxpayers would be in the billions of dollars, they said.

This proposal takes “a blunderbuss approach that would provide unjust windfalls to wealthy corporations at a tremendous cost to the health, safety and pocketbooks of middle-class Americans,” Associate Atty. Gen. John R. Schmidt told the House Judiciary Subcommittee on Civil and Constitutional Rights.

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Georgetown law professor J. Peter Byrne, who also testified, labeled the proposal “profoundly stupid and deeply cynical.”

If the bill becomes law, tongue in cheek, Byrne said he will “buy a wetland on Virginia’s eastern shore, request a permit to fill it, get potentially massive compensation under H.R. 9 (the Republican proposal), pay off my mortgage and have enough left to build a house on the dry land.”

Despite these criticisms and the opposition of state officials and environmentalists, the Republican proposal is expected to win approval in the Judiciary Committee within the next two weeks and move to the House floor. Friday’s hearing was attended by only three members because the House was simultaneously voting on far-reaching crime legislation.

Property-rights advocates say the compensation measure is needed to stop heavy-handed government regulators. In recent years, landowners and developers, many of them from California, have told horror stories about having their homes, farms or businesses--and their bank accounts--left in ruins after encountering zealous regulators.

Nancy Cline of Sonoma told the panel that she and her family have been “living a nightmare” for the last five years because of the Army Corps of Engineers. She said she and her husband planned to put a small winery on 350 acres of their land, but were threatened with prison and a $25,000 fine because they plowed land that federal engineers said was a wetland.

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“This is happening all over the country,” said Roger Pilon, a property-rights expert with the CATO Institute, a conservative think tank. “Property owners are being harassed by bureaucrats using police-state tactics.”

Pilon said that strict regulation of private property should be labeled simply as theft.

He noted that the bill would not pay compensation if a property owner’s actions would “constitute a nuisance” under state or local law. However, panelists disagreed about whether the exception would affect many regulations.

The most disputed cases recently have involved wetlands and endangered species. Property owners have protested when told that they cannot develop their land because of its potential impact on an endangered animal.

“It may be that not every species is worth saving,” Pilon told the committee.

The Fifth Amendment to the Constitution says that “private property (shall not) be taken for public use without just compensation” but the federal courts generally do not require the government to pay compensation except when its regulations deny an owner all productive use of his or her land.