As the United States continues to grow and urbanize, local governments have tried to manage this growth to mitigate the external impacts that new developments can cause.  One method by which state and local governments seek to control growth within their borders is by imposing conditions on the issuance of building permits—otherwise known as exactions.  Exactions, however, face federal constitutional limits under the Takings Clause of the Fifth Amendment, which applies to state and local governments through the Fourteenth Amendment.

In Nollan v. California Coastal Commission and Dolan v. City of Tigard, the U.S. Supreme Court restricted exactions in certain situations by requiring that, prior to imposing the exaction, the government make an individualized determination that the condition has an “essential nexus” and is “roughly proportionate” to the foreseen harm from the development.  The Nollan/Dolan test is primarily grounded in a fear of government overreach and coercion of property owners.  The courts agree that the Nollan/Dolan test applies when a government agency, such as a zoning board, imposes an exaction on a discretionary and ad hoc basis.  The U.S. Supreme Court, however, has not yet determined whether exactions that are generally imposed on property owners through a legislative action, such as an ordinance, must comply with the Nollan/Dolan test.  On the one hand, a legislatively imposed exaction is like a typical land use regulation, to which the Court has granted broad deference.  But on the other hand, such exactions still carry the risk of government overreach by unfairly targeting a small, politically unpopular group:  developers.

This Note evaluates the debate over whether the Nollan/Dolan test should apply to legislatively imposed exactions and ultimately concludes that it should not.  Legislatively imposed exactions are fundamentally different from administrative exactions because of their greater democratic legitimacy.  Indeed, courts already recognize and are hardening this line between legislative and administrative actions, as evidenced by the nondelegation doctrine.  Thus, the Nollan/Dolan test should not apply to legislatively imposed exactions.