August 16, 1972
Page 28515
S. 632, THE LAND USE POLICY AND PLANNING ASSISTANCE ACT OF 1972
Mr. MUSKIE. Mr. President, there have been numerous reports and speculation that there is a jurisdictional dispute regarding S. 632, the Land Use Policy and Planning Assistance Act of 1972.
S. 632 substantially differs from the bill as originally introduced.
S. 632 affects at least 112 Federal programs and other matters which are in the substantive jurisdiction of several Committees of the Senate.
S. 632, despite its broad implications, was subject to only 4 days of hearings last year.
But far more important than any jurisdictional matters are basic substantive issues relating to the impact of S. 632, issues which are not clarified on the face of the bill or in the report explaining it.
Mr. President, there is no question of the need for national land use policy. In fact, elements of land use policy have been incorporated in a great many Federal laws relating to development, economic growth and environmental policy. Many Senate committees have been involved in developing these elements of land use policy and, it would seem to me, that these same committees should be involved in the development of a "national" land use policy.
The broad input of Members of other committees would be beneficial to the goals which S. 632 articulates. Hearings on the impact of the legislation on other Federal programs by relevant committees would be beneficial. I think the wise course for the Senate and the Nation would be to have those hearings and have that input.
My concern with the jurisdictional questions is not the narrow one of committee prerogatives. It is not my desire to assert these in any obstructionist way whatsoever.
I am concerned that several relevant committees – each with broad background and expertise – have not made their input into the shaping of a national land use policy with its far-reaching implications.
Apparently this course – further committee review – is not available. Apparently it is the desire of the Senate to act on this legislation without the broad consideration it deserves. Therefore, it is essential that consideration of this legislation on the floor of the Senate be as thorough and complete as possible. I will do my best to identify the important issues raised by S. 632.
The Land Use Policy and Planning Assistance Act now awaiting Senate consideration has significant implications – perhaps greater than any domestic legislation we have yet considered in this session of Congress.
It mandates that States closely supervise or control land use decisions which have long been the province of local government;
It requires States to coordinate all State and local services which significantly affect land use;
It establishes the Federal Government as procedural supervisor of these newly centralized State responsibilities; and
It proposes policies for land use and resource conservation which appear to be oriented toward development and may conflict with environmental legislation we have enacted.
These proposals will have significant ramifications on the financial structure and sovereignty of State and local government, on the relationship of the Federal Government and the States, and upon the future of Federal and State laws to protect the environment.
Mr. President, this bill creates an outline for national land use policy with no substance; declares a national policy but concedes to the several States responsibility to determine what that policy should be; and directs all Federal programs to subject themselves to the State-determined policy.
Federal legislation of this magnitude, with far-reaching impact on many Federal programs – at least 112 by the Interior Committee's count – should provide some Federal policy guidance. This legislation provides none.
In an effort to meet some of these deficiencies and highlights this area of concern, I will propose amendments to S. 632 to set national policy criteria. These policy positions, if enacted, would provide valuable public benefits.
Today I suggest several criteria as a possible direction for national land use policy. I urge discussion of my proposals so that when the time comes for amendments to S. 632 we can adopt a national land use program that includes a true national policy adequately considered by the Senate; a clear statement of statutory indices to establish the basic elements of good land use.
As a basis to begin the discussion of criteria for national land use policy, I suggest the following:
That legislation affecting national land use patterns incorporate as a minimum the requirements and land use controls of the Clean Air Act, the Federal Water Pollution Control Act, and other environmental regulatory legislation;
That further commercial, industrial, or residential development of flood plains be limited to that which is absolutely necessary and so constructed as to minimize land damage;
That productive agricultural land be preserved for farming activities, with development limited, except where a State deems development essential to health and welfare or where it is necessary to provide adequate housing;
That new development be limited to that which can be supported without exhausting available energy supplies, water and sewer systems, roads, or transit systems, and other necessary services;
That wetlands and coastal areas be protected from development;
That further development covering lands so they cannot absorb storm waters be required to include holding systems to prevent rapid runoff of storm waters into sewers or natural streams;
That the ecological characteristics of upland watersheds be preserved;
That redevelopment and improvement of existing communities be favored over industrial, commercial or residential development which will utilize existing agricultural lands, wild areas, woodlands, and other undeveloped land areas, and that development contrary to these principles be allowed only where it will provide significant jobs, housing and educational opportunities for low and middle income families.
These are some of the criteria for good national land use policy which I propose for discussion.
My proposals are intended to fill the void of S. 632 as reported. I would hope, after discussion, that the Senate will approve a responsible set of criteria to serve as a national land use policy guide.
But lack of policy direction while it purports to set Federal policy is only one of my concerns with S. 632.
The legislation before us would require, in a short time, great strides in coordination and consolidation of land use planning efforts, but it entirely ignores the other side of the coin – the excessive dependence of cities and counties on property taxes which has led to the haphazard and confused land use patterns of today. This cannot be ignored. You cannot seriously consider land use planning reform without property tax reform, for they are inextricably tied together in a complex series of relationships dating back to the early days of the Republic.
Mandating major reform of land use planning authority, as S. 632 does, without also addressing the local property tax dependence issue, can further strangle many of our major cities that are already on the verge of bankruptcy.
Today 66 percent of all locally generated revenues come from the property tax – $38 billion.
Today about 40 States set maximum limits on the property tax rates cities may charge and set limits on local borrowing which relate to the property tax base.
When a city reaches the limits imposed by State law – as some cities such as Detroit and Cleveland have – its only recourse is to somehow influence use of land for greater tax productivity. If this fails, municipal services, police, fire protection, sanitation, et cetera must be cut back.
S. 632 would require States to strip cities of this essential revenue raising option – an option which has created well recognized problems – but S. 632 suggests absolutely nothing be substituted to assure that local revenues will be there to support local services if control of the property tax base is lost or its expansion is restricted. Further, this bill grants supervisory authority for program implementation to the Interior Department which has no experience in cities, no experience in State and local finance, and no experience in comprehensive planning.
I submit we cannot act so casually and after so little consideration on an issue of such vital impact to our grassroots of government at the local level.
Let me emphasize that in taking this position, I am in no way justifying the present property tax system which is often regressive, haphazard, and unfair. Nor am I downplaying the need for more sensible land use planning. I am only stating that we cannot have reform of one without reform of the other.
Last year my Subcommittee on Intergovernmental Relations published a study entitled "Property Taxation: Effects of Land Use and Local Government Revenue." This study clearly identified the close identity of property tax and land use. It stated:
The low taxation of land based on present-use value also facilitates speculative holding of land in the path of urban development for large capital gains. An added incentive for withholding land from the market for large price rises comes from the favorable capital gains treatment of land investment profits under the Federal income tax laws. Another Federal income tax feature, the allowance of business building depreciation, creates local pressures to allocate more value to building improvements and less to non-depreciable land. A focus on building improvements in assessments for local property taxation inhibits rehabilitation of older residential properties.
Large acreages of vacant close-in suburban land as well as re-buildable central city sites are withheld from the market for large price rises under the present property tax system. That occurs as land is taxed at low effective rates, in relation to realistic market value, and building improvements are subject to a relatively greater tax burden. Consequently land prices are high in urbanizing areas and builders "leapfrog" further out to cheaper lands for residential development.
Less than optimum size communities are created, entailing high per-unit costs of services, increased daily commutation, and an extension of urban sprawl.
The deadening impact of property taxes on land use in central cities has been starkly illustrated by Mayor Kenneth Gibson of Newark, N.J., who stated:
We must rely upon our local property tax for 65% of our revenues. In a city where we already have one of the highest and most confiscatory rates in the country, we were forced to raise the rate of taxation this year by almost 10%. This increase means that an owner of a $20,000 home will pay about $1,850 in annual property taxes. We have reached a point where our property tax has only hastened the flight of industry, commerce, and the remaining middle class homeowners out of Newark. The excessive rates we are forced to impose have actually been the cause of abandonment, deterioration, and a decline in our tax base. The stark reality finds buildings being abandoned at the clip of one a day.
I shall propose amendments to force consideration of the property tax issue as part of this land use reform package.
Also, because I believe that no single Federal agency has either the breadth or the competence to assume the responsibility implicit in this legislation, I will offer an amendment to place responsibility for the program in the Executive Office of the President.
Beyond my general concern about lack of policy direction and failure to deal with or even recognize the property tax side of the land use issue, I have several very specific questions about the impact of this legislation which, I believe, must be answered before S. 632 is enacted:
First. Will the State assumption of land use control required in this bill shift liability for damages from incompatible land uses – such as airport noise – from local governments to the States? This is no small matter. It will mean shifting up to $10 billion in damage claims from Los Angeles to the State of California. As States are specifically required to assume "determinative" authority over land use around airports, it would appear they also might be liable for allowing continuation of incompatible uses.
Second. Will the uncertainties of impending State controls compromise the capacity of municipalities to borrow money? The borrowing capacity of municipalities is closely tied to property values and property tax income. Changes in zoning designations from agricultural to commercial or from low-density to high-density residential, for example, can mean thousands of dollars of revenue and hundreds of thousands or even millions of dollars in increased tax base on which to borrow. Any federally required State actions or potential actions which might restrict use designations to less valuable uses could compromise capacity of some localities to sell bonds and if the more restrictive use designations were imposed could make some bond sales based on the higher assessed valuations actually illegal.
Third. If a State assumes major responsibility for land use control, what concurrent responsibility does it assume to pay the cost of local services, particularly in those communities whose levels of service are restricted by a low property tax base? Already in three major cases, Serrano against Priest, Van Dusartz against Hatfield, and Rodriguez against Edgar, courts have held that disparities in the level of educational services caused by differing property tax bases are a violation of the equal protection clause of the 14th amendment. The Supreme Court will consider the issue this fall. It would appear that assumption of a major State role in determining local property values would invite similar rulings relating to other local services – police, fire, sanitation, transportation. Certainly the courts would not permit States to keep levels of local services permanently low in some communities by prohibiting higher value land uses. The potential impact of this radical reform in the way we pay for local services must be seriously contemplated as we examine the ramifications of the bill before us.
Fourth. What is intended by the requirement that States set up a method for coordinating programs and services of "all State and local agencies significantly affecting land use?" Just what agencies are intended, and what degree of coordination? Almost every major State or local function has a "significant" effect on land use – police and fire protection, welfare, trash disposal, sewage treatment, parks and recreation, schools, transportation. Are all of these activities to be coordinated at the State level? This broad based mandate for coordination in section 302 is typical of the many general phases of potentially severe impact which are unexplained in the legislative development of this bill.
Fifth. Is the legislation, by setting policy for equal consideration of environment and economics and for "balanced" land use and by requiring States to override local laws designed to restrict development, intended in any way to conflict with nondegradation policies and air and water quality improvement mandates of other Federal laws or with State laws intended to restrict development? What will be the impact of these new Federal policy positions on court cases involving those other laws?
Sixth. Will any State constitutional changes be required by this legislation, and if so, does it give States time enough to consider and act? It would appear that the major redirection of responsibility S. 632 requires will necessitate some constitutional changes, particularly in those States that have strong local home-rule laws.
Further, all States which act responsibly and undertake property tax reform and land use reform together will probably have to adopt constitutional changes. But they may not have time.
Eighteen States require that constitutional changes be adopted by two sessions of the legislature and then be approved by the electorate. This would be a 3- to 7-year process at best, more if adequate consideration of these vast reforms is to be allowed. In three States where two-session approval is required – Nevada, Tennessee, and Vermont – the legislature only meets biannually, and if major reform was not approved in their 1973 session, which might be difficult, final approval would not be possible until at least 1977 and probably 1980.
Just what is intended by this legislation, and what the ramifications of that intent are must be examined in much greater detail before this bill is approved.
The real issue now is whether or not legislation of this scope and magnitude will be adequately digested by the Senate prior to its passage. I would hope, in the days ahead, my colleagues will address themselves to the issues covered by the bill, will bring to bear on this legislation their knowledge of other programs which will be affected by it, and bring to the Senate their recommendations for perfecting changes which shape a national land-use policy with real direction designed to protect the environment and enhance the quality of life in America.
Mr. President, I intend to explore the full implications of the issues which I have raised during the debate on the bill. Whenever the leadership is prepared to call up the bill, I will be prepared to discuss its implications and propose amendments to address the concerns I have put forward today.