BILL ANALYSIS SENATE LOCAL GOVERNMENT COMMITTEE Senator Dave Cox, Chair BILL NO: AB 133 HEARING: 6/9/10 AUTHOR: Smyth FISCAL: No VERSION: 5/20/10 CONSULTANT: Detwiler SUBDIVISION FEES IN LOS ANGELES COUNTY Background and Existing Law As a condition of approving subdivisions under the Subdivision Map Act, cities and counties can impose fees to pay for the costs of public works projects that are related to those subdivisions. Local officials can also impose subdivision fees to pay for new bridges and major thoroughfares, but they must put the revenues into a fund for each bridge or major thoroughfare project. Local officials can spend the fee revenues only for construction or to reimburse construction costs. San Diego County has special statutory permission to spend its bridge and major thoroughfare fees on the costs of design, right-of-way acquisition, and actual construction which includes direct and indirect environmental, engineering, accounting, legal, and contract administration costs. San Diego County can also pay for "reasonable administrative expenses," up to $300,000 a year, adjusted for changes in the consumer price index. Administrative expenses include office, personnel, and other management expenses (AB 4351, Cortese, 1987). Los Angeles County has six bridge and thoroughfare districts that receive subdivision fees, but the County spends some of its countywide gas tax revenues to pay for the related administrative, accounting, and legal costs. Instead of diverting countywide revenues to pay for bridge and thoroughfare costs that benefit specific areas, the County wants to use some of its subdivision fees. The City of Santa Clarita (Los Angeles County) also wants similar permission. Proposed Law Assembly Bill 133 allows city officials in certain situations and Los Angeles County officials to spend bridge AB 133 -- 5/20/10 -- Page 2 and major thoroughfare subdivision fees on construction costs that include design, acquisition of rights-of-way, contract administration, and actual construction. AB 133 caps spending on "reasonable administrative expenses" at $300,000 a year, adjusted after 1986, for changes in the consumer price index. The bill applies to construction: In the unincorporated area of Los Angeles County. Where the area of benefit and all of the improvements lie within both a city in Los Angeles County and the County's unincorporated area. Where all of the area of benefit and all of the improvements lie completely within a city in Los Angeles County. Comment Costs and benefits . AB 133 adds Los Angeles County and the City of Santa Clarita to the existing law that lets San Diego County pay for some its administrative costs with bridge and major thoroughfare fees. By segregating those costs to the projects that benefit from administrative spending, AB 133 shifts some of the cost burden away from countywide and citywide gas tax revenues. The carefully written language applies to Santa Clarita, but not to the City of Calabasas, which wanted to be left out of the bill. Assembly Actions Assembly Local Government Committee: 5-0 Assembly Floor: 71-0 Support and Opposition (6/3/10) Support : County of Los Angeles, City of Santa Clarita. Opposition : Unknown.