Exactions

NOTE:  This summary is very simplified, and is provided for informational purposes.  Any questions on this topic should be directed to The Office of the Property Rights Ombudsman.

What is an Exaction?

An exaction is a required contribution to a governmental entity imposed as a condition of approval for a proposed land development.  Exactions generally take the form of (1) dedication of land to the public; (2) construction of public improvements, (3) money paid in lieu of property dedication or construction, (4) connection fees, or (5) impact fees.

May Local Governments Require Exactions?

Exactions are permitted, provided they meet legal standards established to protect constitutional rights. Exactions that do not satisfy those standards are not allowed.  All local governments may impose exactions, including local districts which provide utility service.

What are the Standards for a Permissible Exaction?

An exaction may be imposed on a proposed development provided that it meets “rough proportionality” analysis, which is:

    1. An essential link exists between the exaction and a legitimate governmental interest; and
    2. Each exaction is roughly proportionate, both in nature and extent, to the impact of the development.

See Utah Code  § 10-9a-508 and § 17-27a-507.

How is the Validity of an Exaction Determined?

Each exaction must satisfy “rough proportionality” analysis.  The local government imposing the exaction has the burden of showing that the exaction meets rough proportionality standards.

What is a Legitimate Governmental Interest?

Government entities have a legitimate interest in promoting the health, safety, and welfare of the public.  Activities that improve or promote public well being are usually considered legitimate interests.  These include “traditional” government activities such as roads, parks, water systems, stormwater drainage, sewer systems, etc.

What is an Essential Link?

An essential link between an exaction and a legitimate government interest is established if the proposed exaction promotes or advances a public interest.  The exaction does not necessarily need to be the most efficient or “best” means of promoting the public interest.

What is the Impact of the Development?

A development’s “impact” is a measure of the increased burden on public services caused by the development.

How May an Exaction be Shown to be Roughly Proportionate to the Impact of the Development?

Rough Proportionality analysis has two aspects:  An exaction must be roughly proportionate to the development’s impact, both in nature and extent.

An exaction is roughly proportionate in nature if the exaction addresses a need created by the development.  In other words, the impact may be seen as a problem, and the exaction the solution to that problem.

An exaction is roughly proportionate in extent if the expense of compliance is roughly equal to the public cost necessary to address or assuage the impact.  The costs do not need to be exactly equal, only roughly equivalent.

How Can the Ombudsman’s Office Help Property Owners Facing Exactions?

The Office of the Property Rights Ombudsman can advise property owners who are facing exactions from a government entity.  Since exactions are a type of property takings, the Ombudsman is authorized to mediate or arbitrate disputes.  In addition, proposed exactions could be analyzed in an Advisory Opinion issued by the Office.

Click HERE for Cases on Exactions and Impact Fees

Click HERE to Access Advisory Opinions on Exactions

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