BILL ANALYSIS SENATE COMMITTEE ON EDUCATION Gloria Romero, Chair 2009-2010 Regular Session BILL NO: AB 2048 AUTHOR: Torlakson AMENDED: March 24, 2010 FISCAL COMM: Yes HEARING DATE: June 16, 2010 URGENCY: No CONSULTANT:Kathleen Chavira SUBJECT : School Facilities Construction Fees KEY POLICY ISSUE Should the issuance of a building permit by the Office of Statewide Health Planning and Development be contingent upon compliance with existing law requirements regarding the payment of fees, charges or other school district governing board requirements? SUMMARY This bill prohibits the Office of Statewide Health Planning and Development (OSHPD) from issuing a building permit for any construction absent certification by a school district of compliance with any fee, charge, dedication, or other requirement levied by the governing board of the school district, and makes other conforming changes. BACKGROUND Current law authorizes the governing board of any school district to levy a fee, charge, dedication, or other requirement against any new commercial and industrial construction, new residential construction, as specified, and against the location, installation or occupancy of manufactured or mobile homes within the boundaries of the district, for the purpose of funding the construction or reconstruction of school facilities. In addition, a city or county is prohibited from issuing a building permit for any construction absent certification by the appropriate school district that; 1) the fee, charge, dedication, or other requirement levied has been complied with or, 2) the fee, charge, dedication, or other requirement is SB 2048 Page 2 inapplicable to the construction project. (Education Code 17620) The fees, charges, or dedications authorized in the Education Code are subject to specified limitations. These include prescribed calculation of fee amounts and their annual adjustment, and specified exemptions from these fees for facilities used for religious purposes, private full-time day schools, and facilities owned and occupied by federal, state, or local governments. (Government Code 65995) SB 50 (Green, Chapter 407, Statutes of 1998) in addition to establishing the current School Facility Program, revised developer fee procedures for school facility purposes. SB 50 authorized three different levels of developer fees to be assessed under specified conditions: Level 1 - A district is authorized to levy per square footage fees of $1.93 per square foot for residential construction and $0.31 for commercial or industrial construction to be adjusted for inflation every two years according to the class B construction index as determined by the SAB at its annual January meeting. This fee level is currently at $2.97 per square foot for residential construction, and is assessed if the district conducts a Justification Study that establishes the connection between the development coming into the district and the assessment of fees to pay for the cost of the facilities needed to house future students. Level 2 - A district may levy Level 2 fees if it has conducted a needs analysis, as specified, has SAB approval of eligibility for state funding, and meets two of the following four conditions: o The district has attempted to pass a local bond at least once during the last four years and received approval by the voters of 50 percent plus one. o For a K-6 district, it has at least 30 percent of its enrollment on a multi-track year round schedule (MTYRE). For a high school district, it has at least 30 percent of its SB 2048 Page 3 enrollment or 40 percent of the K-12 students within the high school attendance area, in MTYRE schools. o The district has issued debt or incurred obligations for capital outlay equal to 15% of the district's local bonding capacity for indebtedness approved by voters before November 4, or 30% of capacity for indebtedness approved by voters after November 4, 1998. o Twenty percent of the teaching stations in the district are in re-locatable classrooms. The fee may not exceed 50% of construction and site acquisition and development costs. Level 3 - A district is authorized to seek 100 percent of school facilities costs if the state has exhausted state school bond funds and the SAB is no longer approving apportionments for new construction projects. (GC 65995.5 - 65995.6) ANALYSIS This bill : 1) Prohibits the OSHPD from issuing a building permit for any construction absent certification by an appropriate school district of compliance with any fee, charge, dedication, or other requirement levied by the governing board of that school district. 2) Prohibits application of these provisions to the OSHPD unless, in accordance with existing law requirements, the agency has been notified of the adoption of, or increase in, fees or other requirements. 3) Makes other technical and conforming changes. STAFF COMMENTS 1) Need for the bill . According to the author, due to the SB 2048 Page 4 omission of OSHPD in Education Code 17620, the lengths to which school districts have to go to levy and collect school impact fees on non-public hospitals vary widely, with some having to engage legal counsel to levy and collect these fees. Because OSHPD is not explicitly prohibited from issuing a building permit, school districts are not assured that school impact fees will be paid by developers who construct non-public hospitals. This bill, by prohibiting the issuance of a building permit, would create a means of alerting districts to the collection of fees to which they are entitled under current law. 2) OSHPD . The Facilities Development Division (FDD) of the OSHPD reviews and inspects health facility construction projects. FDD enforces building standards, per the California Building Standards Code, as they relate to health facilities construction and is responsible for overseeing all aspects of general acute care hospital, psychiatric hospital, skilled nursing home and intermediate care facility construction in California, including the development of administrative regulations and building standards for these facilities. 3) Is this a new fee ? No. As reflected in the background of this analysis, current law authorizes the collection of fees for school facility construction purposes for any commercial, industrial, or residential construction within a school district's boundaries. This bill would provide a means for ensuring compliance with current law requirements for assessing developer fees on nonpublic hospitals. 4) Conforming technical amendments . Current law (GC 65995) provides for a specified fee per square foot for "chargeable covered and enclosed space" within the perimeter of a commercial or industrial structure, and specifically requires the city or county building department issuing the building permit to make this determination. The bill does not currently make provision for such determination for structures for which OSHPD issues building permits. Staff recommends the bill be amended to make the following parallel addition within GC 65995 for SB 2048 Page 5 buildings approved by OSHPD; "For any commercial or industrial construction required to be approved by the Office of Statewide Health Planning and Development, the determination of the chargeable covered and enclosed space within the perimeter of a commercial or industrial structure shall be made by the project Architect of Record submitting the project plans and specifications to the Office of Statewide Health Planning and Development. Staff further recommends the bill be amended to include the following additional conforming changes: On page 3 line 35, and on page 4 line 15, and on page 4 line 17, add "or the Office of Statewide Health Planning and Development" after "county." Add and amend EC 17621(c) to add the Office of Statewide Health Planning and Development to the entities to receive specified information upon the adoption of, or increase in, a fee, charge, or dedication or other requirement. SUPPORT Coalition for Adequate School Housing Elk Grove Unified School District OPPOSITION None received.