BILL ANALYSIS Ó AB 147 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 147 (Dickinson) As Amended May 31, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |49-23|(May 5, 2011) |SENATE: |23-16|(July 14, | | | | | | |2011) | ----------------------------------------------------------------- Original Committee Reference: L. GOV. 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. The Senate amendments clarify that the authorizations granted by this measure are additional to all other authority granted by law to local agencies relating to subdivisions and shall in no way be construed as a limitation on or diminution of that authority. 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 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 AB 147 Page 2 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 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. AB 147 Page 3 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. AS PASSED BY THE ASSEMBLY , this bill: 1)Provided 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)Specified 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)Stated that the ordinance may require payment of the fees if all of the following requirements are satisfied: AB 147 Page 4 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 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)Stated that fees paid pursuant to an ordinance adopted shall be deposited in a planned transportation facility fund. 5)Required a fund to be established for each planned bridge facility project or each planned major thoroughfare project. 6)Stated 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)Stated 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)Defined the term "construction" to include design, acquisition of rights-of-way, administration of construction contracts, and actual construction. AB 147 Page 5 FISCAL EFFECT : None COMMENTS : Fees and dedications are one-time exactions collected 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. AB 147 Page 6 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 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 AB 147 Page 7 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 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 FN: 0001251