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Abstract

This article explains why the Nollan/Dolan test should not apply to legislatively imposed exactions, provided that such exactions satisfy two key criteria: (1) the exaction is generally-applied; and (2) the exaction is applied based on a set legislative formula without any meaningful administrative discretion in that application. Legislative exactions that fail to meet those two criteria should be governed by the Nollan/Dolan standard of review in the same manner as the ad hoc adjudicative exaction in Koontz. Furthermore, legislative exactions that satisfy those two criteria also should not be governed by the factored analysis in Penn Central Transportation Co. v. New York City. Instead, a “reasonable relationship” test should be applied to legislative exactions that satisfy those two criteria.

Part II of this Article discusses the constitutional rationales that guided the Court in reaching its decision in Koontz regarding adjudicative monetary exactions. Part III examines how those rationales, as well as the arguments raised by the Koontz dissent, demonstrate that Nollan/Dolan should not govern legislative exactions that are generally-applied and provide no meaningful discretion to administrators. Part IV explains why the Penn Central factored analysis also should not govern legislative exactions that meet those two criteria. Part V demonstrates why a reasonable relationship test that has been employed in various forms by state courts should govern legislative exactions that satisfy those two criteria. Applying that reasonable relationship test to qualifying legislative exactions lessens judicial interference with local land use decisions, reinforces the constitutional rationale in Koontz that development projects should pay for the external costs they create, and addresses the concern of property owners that some generally-applied legislative exactions may “go too far.”

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