16 Dec 2005 CRESA: Property Rights at Risk In Senate

Property rights advocates who thought they could relax after the House voted 229-193 September 29 for much-needed relief to small property owners who have shouldered the enormous financial burden of the Endangered Species Act, think again:

Senator Crapo’s Endangered Species Act Reform Effort Bad for Property Owners and SpeciesWashington, D.C. – Yesterday Senator Mike Crapo (R-ID) introduced an Endangered Species Act (ESA) reform bill that he claims will offer “incentives” to property owners to help recover endangered species. However, according to The National Center for Public Policy Research, the “Collaboration and Recovery of Endangered Species Act” (CRESA) offers perks to large landowners and developers at the expense of small property owners and rare species.

“Senator Crapo’s contribution to property rights is like Britain’s contribution to fine cuisine – a contribution best not made,” said David Ridenour, vice president of The National Center for Public Policy Research.

According to the Liberty Matters News Service, just three years ago, in defense of his position on another property rights issue, Senator Crapo wrote: “My record in Congress includes attempts to get direct financial payments to private property owners who suffer a loss in property valuation due to threats from federal agencies over endangered species or other wildlife issues.”

Yet Senator Crapo’s ESA bill does not offer any direct payments to American landowners whose land values are harmed due to endangered species regulations. Instead, CRESA establishes a system whereby landowners are forced to sign away property rights in return for tax credits.

“The House of Representatives recently passed an ESA reform bill that promises to give property owners 100 percent direct compensation for their lost rights. Incredibly, Senator Crapo’s bill seeks to undo this,” said Peyton Knight, director of environmental and regulatory affairs for The National Center. “For property rights advocates, CRESA snatches defeat from the jaws of victory.”

Since its enactment in 1973, the ESA has penalized landowners for good stewardship. Farmers, ranchers, tree farmers, homeowners and others who harbor endangered species or habitat on their property are subjected to severe land-use restrictions that can lead to economic ruin. In much of rural America, the ESA has unnecessarily turned landowners and endangered species into enemies. In order to prevent their property from falling under the ESA’s land-use controls, landowners have preemptively “sterilized” their land to rid it of species and habitat.

“Unfortunately, Senator Crapo’s ESA bill fails to fix this disastrous law,” said National Center Senior Fellow R.J. Smith. “It would remain bad for people and bad for species. Rather than creating a win-win situation by ending the taking of property of good stewards, he tries to make a broken Act work by adorning it with gimmicks – much like the futile efforts of Ptolemaic astronomy to save an Earth-centered universe. It will fail, until Congress creates an ESA built on the use of property rights as the basis for species recovery. Ten years ago Rep. Crapo cosponsored the Shadegg bill, which would have worked voluntarily with private landowners. What happened? It’s time to save America’s small landowners and homeowners as well as species and their habitat.”

CRESA would offer tax incentives for approved conservation efforts, but for property owners to receive tax credits equal to their full costs (lost fair market value plus out-of-pocket conservation program expenses), they must enter binding agreements of not less than 99 years. And, as this is only a tax credit, even a 99-year commitment wouldn’t be enough for property owners to get back all of their costs.

“This scheme would make even Charles Ponzi blush,” said David Ridenour. “It promises only a partial return on investment, yet saddles a future generation with regulatory requirements.”

CRESA also includes a provision that would establish an ill-defined conservation credit trading mechanism to permit landowners to earn credits for conservation efforts that could either be applied toward other development projects or sold on the open market.

The National Center believes such a mechanism poses risks to both species and property owners.

“Landowners who earn credits would have a vested interest in increasing the value of their credits,” said Knight. “The value can be increased by either more stringent regulation or reduced species populations that require a reduction in the number of credits available.”

Ridenour adds: “In the classic film ‘It’s a Wonderful Life,’ George Bailey asks Mr. Potter if it is too much to have people ‘work, pay and live and die in a couple of decent rooms and a bath’ of their own. Judging from Senator Crapo’s ESA bill, he apparently thinks it is too much to ask.”

“Furthermore,” said Ridenour, “In ‘It’s a Wonderful Life’ George Bailey is given the opportunity to see what life would have been like had he never been born. After seeing his old boss a penniless drunk, his mother destitute, his uncle in an insane asylum, his wife a hopeless spinster, his brother’s tombstone and his quaint hometown a place of decadence, he begs God to allow him to ‘live again.’ We’ve had a chance to see what the ESA would be without property rights. Let species and property rights live again…”

The press release can be found here.