Takings and Mitigation

National Cooperative Highway Research Program (NCHRP) Legal Research Digest, No. 70, 2016

36 Pages Posted: 9 Dec 2015 Last revised: 20 Apr 2016

Date Written: April 1, 2016

Abstract

When land developers approach a State Department of Transportation (“State DOT”) for permission to build access to a State highway, the State DOT may attempt to mitigate the development’s impact to the highway system by exacting concessions from the developers. For example, State DOTs often require the donation of a portion of the developer’s real property for an acceleration/deceleration lane near the entrance of the development, for highway widening to support additional traffic generated by the development, or for other improvements. Likewise, other permitting agencies, such as local governments and environmental and natural resource agencies, may be charged with exacting other concessions to mitigate the development’s impact to the environment. Increasingly, permitting agencies including State DOTs attempt to exact offsite improvements (e.g., require the developer to fund or construct improvements to the State highway system) rather than on-site exactions such as dedications of a portion of the developer’s real property. In 2013, in Koontz v. St. Johns River Water Management District, the U.S. Supreme Court held that heightened judicial scrutiny (known as the “essential nexus” test) applies in cases of offsite exactions. The essential nexus test, articulated in the Court’s earlier Nollan and Dolan opinions, was previously understood to apply to onsite exactions. The essential nexus test requires the permit condition to have a close relationship or “nexus” to a legitimate governmental interest involving the proposed development, and for the burden on the developer to be roughly proportional to the anticipated adverse impact of the development on the public. A permit condition that fails to satisfy the essential nexus test is an unconstitutional taking. The purpose of this report is to provide updated legal research regarding the legal standard for exactions, including the impact of the 2013 Koontz decision on the ability of State DOTs and other permitting agencies to advance public policy goals (e.g., traffic flow management, public safety, and environmental mitigation) in the land use permitting and project development processes.

Keywords: exaction, takings, impact fee, wetlands mitigation

JEL Classification: R52, K11

Suggested Citation

Wyatt, Timothy R., Takings and Mitigation (April 1, 2016). National Cooperative Highway Research Program (NCHRP) Legal Research Digest, No. 70, 2016, Available at SSRN: https://ssrn.com/abstract=2700736 or http://dx.doi.org/10.2139/ssrn.2700736

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