For many years anti-environment "property rights" advocates have sought to undermine land use, public health, clean water, and other environmental protections by changing the way that courts determine if compensation is required because local, state, or federal government regulation results in a "taking" of private property. In 1995 the House passed H.R. 925, a bill that would have required taxpayers to pay landowners when the Endangered Species Act or wetlands protections under the Clean Water Act limited the potential value of any portion of the landowner's property. In 1997, the House passed H.R. 1534, a bill that would have given developers a substantial advantage in challenging land use protections in court. Fortunately neither of these bills became law.

This year, Representative Charles Canady (R-FL), at the urging of the National Association of Home Builders (NAHB), reintroduced the bill that passed the House in 1997. His bill, H.R. 2372, would allow developers to challenge local land use, zoning, and environmental laws directly in federal court, bypassing local elected officials and land use procedures, as well as state courts.

Opponents argued that the bill, if passed, would allow developers to use the threat of premature, costly federal lawsuits to coerce small towns, counties, and cities into approving inappropriate projects that would harm local residents and the environment. The bill would also undermine hundreds of popular local initiatives that limit and control development without "taking" any property rights. A few days before the House vote, NAHB's chief lobbyists declared that H.R. 2372 would be "a hammer to the head" of local officials.

State courts have already rejected "takings" challenges to limits on growth and to bans or controls on certain activities in residential neighborhoods such as mining, factories, and liquor stores. And in 1999, the U.S. Supreme Court ruled that takings claimants "suffer no constitutional injury" from local government action unless and until a state court denies compensation. The Court has also ruled that after an unreasonable proposal is denied, developers must explore alternative development proposals before filing a "takings" claim. H.R. 2372, however, would allow developers to challenge the denial of a permit without exploring any alternatives. The bill also includes a new provision, added by Representative Jim Traficant (D-OH), that would require federal agencies to notify potentially affected property owners of any anti-pollution or other agency action that limits the use of private property.

H.R. 2372 was opposed by virtually every state and local government and judicial organization, major religious organizations, national and local planning and historic preservation groups, labor unions, conservation organizations, and the Clinton administration. On March 16, 2000, the House voted 226–182 to pass H.R. 2372 (House roll call vote 55). NO is the pro-environment vote. Senator Orrin Hatch (R-UT) introduced a Senate version of this bill; however, the Senate Judiciary Committee did not take up the bill before the end of the session.