BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 147
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          ASSEMBLY THIRD READING
          AB 147 (Dickinson) 
          As Amended  May 2, 2011
          Majority vote 

           LOCAL GOVERNMENT    6-2                                         
           
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          |Ayes:|Alejo, Bradford, Campos,  |     |                          |
          |     |Davis, Gordon, Hueso      |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Smyth, Norby              |     |                          |
          |     |                          |     |                          |
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           SUMMARY  :  Authorizes a local ordinance to require the payment of 
          a fee subject to the Mitigation Fee Act, as a condition of 
          approval of a final map or as a condition of issuing a building 
          permit for purposes of defraying the actual or estimated cost of 
          constructing other transportation facilities.  Specifically, 
           this bill  :

          1)Provides that a local ordinance may require the payment of a 
            fee subject to the Mitigation Fee Act, as a condition of 
            approval of a final map or as a condition of issuing a 
            building permit for purposes of defraying the actual or 
            estimated cost of constructing other transportation 
            facilities, including, but not limited to, pedestrian, 
            bicycle, transit, and traffic-calming facilities.

          2)Specifies that the ordinance may require payment of fees for 
            other transportation facilities if the ordinance refers to the 
            circulation element of the general plan which identifies those 
            transportation facilities that are required to minimize the 
            use of automobiles and minimize the traffic impacts of new 
            development on existing roads.

          3)States that the ordinance may require payment of the fees if 
            all of the following requirements are satisfied:

             a)   The ordinance provides that there will be a public 
               hearing held by the governing body for each area benefited;

             b)   The ordinance provides that at the public hearing, the 








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               boundaries of the area of benefit, the costs, whether 
               actual or estimated, and a fair method of allocation of 
               costs to the area of benefit and fee apportionment are 
               established; and,

             c)   The ordinance provides that if, within the time when 
               protests may be filed under the provisions of the 
               ordinance, there is a written protest, filed with the clerk 
               of the legislative body, by the owners of more than 
               one-half of the area of the property to be benefited by the 
               improvement, and sufficient protests are not withdrawn so 
               as to reduce the area represented to less than one-half of 
               that to be benefited, then the proposed proceedings shall 
               be abandoned, and the legislative body shall not, for one 
               year from the filing of that written protest, commence or 
               carry on any proceedings for the same improvement or 
               acquisition.

          4)States that fees paid pursuant to an ordinance adopted shall 
            be deposited in a planned transportation facility fund.

          5)Requires a fund to be established for each planned bridge 
            facility project or each planned major thoroughfare project.

          6)States that a local agency imposing the fees may advance money 
            from its general fund or road fund to pay the cost of 
            constructing the improvements and may reimburse the general 
            fund or road fund for any advances from planned transportation 
            facility fund established to finance the construction of those 
            improvements.

          7)States that a local agency imposing the fee may incur an 
            interest-bearing indebtedness for the construction of other 
            transportation facilities and the sole security for repayment 
            shall come from moneys in planned transportation facility 
            fund.

          8)Defines the term "construction" to include design, acquisition 
            of rights-of-way, administration of construction contracts, 
            and actual construction. 

           EXISTING LAW  :

          1)Provides that a local ordinance may require the payment of a 
            fee as a condition of approval of a final map or as a 








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            condition of issuing a building permit for purposes of 
            defraying the actual or estimated cost of constructing bridges 
            over waterways, railways, freeways, and canyons, or 
            constructing major thoroughfares.

          2)States that the ordinance may require payment of the fees if 
            all of the following requirements are satisfied:

             a)   The ordinance refers to the circulation element of the 
               general plan and, in the case of bridges, to the 
               transportation or flood control provisions thereof which 
               identify railways, freeways, streams, or canyons for which 
               bridge crossings are required on the general plan or local 
               roads and in the case of major thoroughfares, to the 
               provisions of the circulation element which identify those 
               major thoroughfares whose primary purpose is to carry 
               through traffic and provide a network connecting to the 
               state highway system;

             b)   The ordinance provides that there will be a public 
               hearing held by the governing body for each area benefited;

             c)   The ordinance provides that at the public hearing, the 
               boundaries of the area of benefit, the costs, whether 
               actual or estimated, and a fair method of allocation of 
               costs to the area of benefit and fee apportionment are 
               established;

             d)   The ordinance provides that payment of fees shall not be 
               required unless the major thoroughfares are in addition to, 
               or a reconstruction of, any existing major thoroughfares 
               serving the area at the time of the adoption of the 
               boundaries of the area of benefit;

             e)   The ordinance provides that payment of fees shall not be 
               required unless the planned bridge facility is an original 
               bridge serving the area or an addition to any existing 
               bridge facility serving the area at the time of the 
               adoption of the boundaries of the area of benefit.  The 
               fees shall not be expended to reimburse the cost of 
               existing bridge facility construction; and, 

             f)   The ordinance provides that if, within the time when 
               protests may be filed under the provisions of the 
               ordinance, there is a written protest, filed with the clerk 








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               of the legislative body, by the owners of more than 
               one-half of the area of the property to be benefited by the 
               improvement, and sufficient protests are not withdrawn so 
               as to reduce the area represented to less than one-half of 
               that to be benefited, then the proposed proceedings shall 
               be abandoned, and the legislative body shall not, for one 
               year from the filing of that written protest, commence or 
               carry on any proceedings for the same improvement or 
               acquisition.

          3)States that fees paid pursuant to an ordinance adopted shall 
            be deposited in a planned bridge facility or major 
            thoroughfare fund.

          4)Requires a fund to be established for each planned bridge 
            facility project or each planned major thoroughfare project.

          5)States that a local agency imposing the fees may advance money 
            from its general fund or road fund to pay the cost of 
            constructing the improvements and may reimburse the general 
            fund or road fund for any advances from planned bridge 
            facility or major thoroughfares funds established to finance 
            the construction of those improvements.

          6)States that a local agency imposing the fee may incur an 
            interest-bearing indebtedness for the construction of bridge 
            facilities or major thoroughfares and the sole security for 
            repayment shall come from moneys in planned bridge facility or 
            major thoroughfares funds.

          7)Authorizes a local agency to charge a variety of fees, 
            dedications, reservations, or other exactions in connection 
            with the approval of a development project, as defined.

          8)Provides, under the Mitigation Fee Act, that in any action 
            establishing, increasing, or imposing a fee as a condition of 
            approval of a development project by a local agency, the local 
            agency is required to determine how there is reasonable 
            relationship between the amount of the fee and the cost of 
            public facility or portion of the public facility attributable 
            to the development project on which the fee is imposed.

           FISCAL EFFECT  :  None

           COMMENTS  :  Fees and dedications are one-time exactions collected 








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          from a developer as a condition of an approval being granted by 
          a local government.  Impact fees are used to finance the 
          construction or incremental cost of improvements to those public 
          facilities and services that the new development requires or 
          burdens.  Local agencies exact fees and dedications pursuant to 
          their police power to protect the health, safety, and welfare of 
          the public.  The police power allows cities and counties to act 
          in the interest of their unique community.  Under the police 
          power, local agencies may enforce all local police, sanitary, 
          and other ordinances and regulations not in conflict with 
          general laws of the state.  A land use regulation lies within 
          the police power if the purpose of the act reasonably relates to 
          the public welfare.

          Since the passage of Proposition 13 and other measures limiting 
          local agencies' general revenue sources, local agencies have 
          increasingly required development projects to bear their own 
          costs within the community, on the principle that development 
          should pay its full share of the additional burden it places on 
          public services and facilities.  The major issue involving 
          exactions is the reasonableness of the exaction in kind and 
          amount.

          In 1987, the California Legislature enacted the Mitigation Fee 
          Act.  The legislation was enacted in response to developer 
          concerns that local public agencies were requiring developers to 
          pay for infrastructure improvement costs that developers 
          contended should have been borne by the public as a whole.  The 
          Mitigation Fee Act closely regulates the adoption, levy, 
          collection of, and challenge to development fees imposed by 
          local public agencies.  It applies to both fees imposed on a 
          broad class of projects by legislation of general applicability 
          and fees imposed on a project-specific basis.  The Mitigation 
          Fee Act applies to development impact fees imposed by local 
          agencies to finance all or part of the cost of public facilities 
          (e.g., streets, traffic signals, bridges and major 
          thoroughfares, drainage and flood control facilities, water and 
          sewer, and government buildings).

          Whenever establishing, imposing, or increasing a fee as a 
          condition of development, the local public agency must identify 
          the purpose of the fee and the use to which the fee will be put. 
           The public agency must also explain why there is a reasonable 
          relationship, or nexus, between the fee and the development on 
          which it is imposed.  Moreover, fees must not exceed the 








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          estimated reasonable cost of providing the service for which the 
          fee was collected.

          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.

          Statewide efforts, such as SB 375 (Steinberg), Chapter 728, 
          Statutes of 2008, and the development of regional sustainable 
          communities' strategies, encourage more compact growth and 
          infill development in cities, existing urban cores, and urban 
          unincorporated areas. 

          According to the sponsor, the California State Association of 
          Counties (CSAC), there are many impediments to infill 
          development; a primary issue is the cost of the necessary 
          infrastructure improvements.  Infill development projects can 
          also require different types of transportation mitigation 
          projects than the typical roadway or bridge improvement. 

          CSAC states that "often times a city or county cannot add new or 
          widen existing roads and/or bridges to support new development 
          projects in built-out or nearly built-out urban areas.  However, 
          a city or county could mitigate the transportation impacts with 
          other modal improvements such as adding or improving transit 
          facilities such as bus turnouts and stops, bicycle lanes, and/or 
          safe pedestrian paths.  This is also consistent with statewide 
          complete streets goals." 

          This measure is substantially similar to AB 2971 (DeSaulnier) of 
          2008 that was heard by the Assembly Local Government Committee 
          and passed out on a 5-1 vote.  AB 2971 (DeSaulnier) was later 
          gutted and amended into a transportation funding bill. 

          Support arguments:  Supporters argue that some local governments 
          have updated the circulation element in their general plans to 
          provide for a balanced transportation system that helps to 
          reduce cumulative traffic impacts, harmful air emissions and 
          single-occupant commuting, and encourages use of transit.  Local 








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          governments now want to update their transportation fees for new 
          development to fund off-site pedestrian, bicycle, transit and 
          traffic calming facilities.

          Opposition Arguments:  Opposition may argue that fees are 
          already collected for a myriad 
          of things related to development, including transportation and 
          transit facilities under the Mitigation Fee Act and that adding 
          another layer of fees to cover non-vehicle circulation costs 
          could add on more costs to an already expensive development 
          process.

           
          Analysis Prepared by  :    Katie Kolitsos / L. GOV. / (916) 
          319-3958 


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