BILL ANALYSIS Ó
AB 1801
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Date of Hearing: May 2, 2012
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 1801 (Campos) - As Amended: April 23, 2012
SUBJECT : Land use: fees.
SUMMARY : Limits the total amount of fees charged by a city or
county for an applicant to install a solar energy system to the
actual costs borne by the local agency in providing the service
for which the fee is charged, prohibits a city or county from
calculating a fee for a solar energy system by utilizing
specified methods, and requires a city or county to identify the
individual fees assessed on the invoice provided to the
applicant. Specifically, this bill :
1)Prohibits the total amount of fees charged by a city or county
for an applicant to install a solar energy system from
exceeding the actual costs to the city or county in providing
the service for which the fees are charged.
2)Prohibits a local agency from basing the calculation of a fee
on the valuation of the solar energy system, any costs
associated with the installation of the solar energy system,
or any other factor not directly associated with the cost to
issue the permit.
3)Prohibits a local agency from basing the calculation of the
fee on the valuation of the property on which the improvement
is planned, or the improvement, materials, or labor costs
associated with the improvement.
4)Requires a local agency to separately identify each fee
assessed for the installation of a renewable energy system on
the invoice provided to the applicant.
5)Makes findings and declarations that the oversight of local
agency fees is a matter of statewide interest and concern, and
is a matter of statewide concern rather than a municipal
affair, therefore applying the provisions of the bill to all
cities, including charter cities.
EXISTING LAW :
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1)Provides that, notwithstanding any other provision of law,
when a local agency charges fees for zoning variances; zoning
changes; use permits; building inspections; building permits;
filing and processing applications and petitions filed with
the local agency formation commission or conducting
preliminary proceedings or proceedings under the
Cortese-Knox-Hertzberg Local Government Reorganization Act of
2000, Division 3 (commencing with Section 56000) of Title 5;
the processing of maps under the provisions of the Subdivision
Map Act, Division 2 (commencing with Section 66410) of Title
7; or planning services under the authority of Chapter 3
(commencing with Section 65100) of Division 1 of Title 7 or
under any other authority; those fees may not exceed the
estimated reasonable cost of providing the service for which
the fee is charged, unless a question regarding the amount of
the fee charged in excess of the estimated reasonable cost of
providing the services or materials is submitted to, and
approved by, a popular vote of two-thirds of those electors
voting on the issue.
2)Specifies that the fees listed in 1) above may include the
costs reasonably necessary to prepare and revise the plans and
policies that a local agency is required to adopt before it
can make any necessary findings and determinations.
3)Enacts the Solar Rights Act and declares that it the policy of
the state to promote and encourage the use of solar energy
systems and to remove obstacles to their installation.
4)Defines the term "solar energy system" in the Civil Code to
mean either of the following:
a) Any solar collector or other solar energy device whose
primary purpose is to provide for the collection, storage,
and distribution of solar energy for space heating, space
cooling, electric generation, or water heating; or,
b) Any structural design feature of a building, whose
primary purpose is to provide for the collection, storage,
and distribution of solar energy for electricity
generation, space heating or cooling, or for water heating.
5)Declares that any covenant, restriction, or condition
contained in any deed, contract, security instrument, or other
instrument affecting the transfer or sale of, or any interest
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in, real property, and any provision of a governing document,
as defined, that effectively prohibits or restricts the
installation or use of a solar energy system is void and
unenforceable.
6)Allows for reasonable restrictions on solar energy systems
that do not significantly increase the cost of the system or
significantly decrease the efficiency or specified
performance, or that allow for an alternative system of
comparable cost, efficiency, and energy conservation benefits.
7)Requires solar energy systems to meet applicable health and
safety standards and requirements imposed by state and local
permitting authorities.
8)Provides, whenever approval is required for the installation
or use of a solar energy system, that the application for
approval be processed and approved by the appropriate
approving entity, as specified, and shall not be willfully
avoided or delayed.
9)Prohibits a public entity from receiving funds from a
state-sponsored grant or loan program for solar energy if that
entity fails to comply with specified requirements, and
requires a public entity to certify its compliance with the
specified requirements when applying for funds from a
state-sponsored grant or loan program.
10)Requires a city or county to administratively approve
applications to install solar energy systems through the
issuance of a building permit or similar nondiscretionary
permit, and requires review of the application to install a
solar energy system to be limited to the building official's
review of whether it meets all health and safety requirements
of local, state and federal law.
11)Limits the requirements of local law to those standards and
regulations necessary to ensure that the solar energy system
will not have a specific, adverse impact upon the public
health or safety.
12)Prohibits a city or county from denying an application for a
use permit to install a solar energy system unless it makes
written findings based upon substantial evidence in the record
that the proposed installation would have a specific, adverse
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impact upon the public health or safety, and that there is no
feasible method to satisfactorily mitigate or avoid the
specific, adverse impact.
13)States that the implementation of consistent statewide
standards to achieve the timely and cost-effective
installation of solar energy systems is not a municipal
affair, but is instead a matter of statewide concern, and
further states that it is the intent of the Legislature that
local agencies not adopt ordinances that create unreasonable
barriers to the installation of solar energy systems,
including, but not limited to, design review for aesthetic
purposes, and not unreasonably restrict the ability of
homeowners and agricultural and business concerns to install
solar energy systems.
14)States the intent of the Legislature to encourage the
installation of solar energy systems by removing obstacles to,
and minimizing the costs of, permitting for such systems.
FISCAL EFFECT : None
COMMENTS :
1)In 1978, recognizing the importance of promoting solar energy
systems, the Legislature enacted the Solar Rights Act (Act),
declaring that it is the policy of the state to promote and
encourage the use of solar energy systems and to remove
obstacles to their installation. The Act was initially
formulated to address issues related to the installation of
solar systems in areas where homeowners associations (HOAs)
placed restrictions on the utilization of solar systems in
their jurisdiction, with the express or clearly implied intent
of preventing any such installation. When passed, the Act
made any instrument affecting the transfer of real property
that prohibited or restricted the installation of solar energy
system void and unenforceable. Subsequent amendments added
specific national and state standards for solar energy systems
and prohibited unreasonable restrictions on the installation
of solar energy systems.
The term "solar energy system," as defined in the Civil Code,
means either of the following:
a) Any solar collector or other solar energy device whose
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primary purpose is to provide for the collection, storage,
and distribution of solar energy for space heating, space
cooling, electric generation, or water heating; or,
b) Any structural design feature of a building, whose
primary purpose is to provide for the collection, storage,
and distribution of solar energy for electricity
generation, space heating or cooling, or for water heating.
2)According to the author, this bill ensures that permitting
fees for solar energy systems and other related fees are
linked to local governments' actual costs to issue the
permits. The author references a recent study conducted by
the Loma Prieta Chapter of the Sierra Club, which revealed a
wide variation in the fees municipalities charged to obtain
permits for commercial and residential rooftop photovoltaic
energy systems. The study found that fees for projects of 131
kilowatts in size varied from $240 to over $19,000.
The author notes that many local governments base permit fees
on the value of the energy equipment or the cost of labor to
install that equipment, which tends to generate higher fees
that the actual costs incurred to issue a permit.
According to the author "there is currently no uniform
standard for issuing a set of permits for a solar energy
system. Some cities require an inspection by the planning
department (to review aesthetics), the building department (to
determine structural safety of roof and physical
installation), and electrical review (to ensure the system is
properly connected), and the fire department (to ensure the
installation does not impede ingress or egress)."
3)The author articulates the following as the problems that the
bill seeks to address:
a) Excessive fees decrease the affordability and thus
discourage the adoption of solar energy systems. With
ambitious goals for the production of renewable energy, the
state must address issues that impede those goals;
b) With such significant variation between the costs of
permitting similarly sized solar energy systems, there is a
need for clarification on what a reasonable fee amount is;
c) No appropriate nexus exists between the cost of a solar
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energy system and the labor that is required to ensure that
the system is property installed;
d) No appropriate nexus exists between the cost of labor
to install a solar energy system and the labor that is
required to properly issue a permit;
e) There is a need for more transparency, consistency, and
certainty regarding the fee structures that local
governments set to review solar energy systems.
4)Prior legislation in 2004 dealt with the issue of local
government permitting for solar energy systems. AB 2473
(Wolk), Chapter 789, Statutes of 2004, required cities and
counties to permit the installation of solar energy systems by
right if the system meets specified requirements, and
redefined the term "significantly" with respect to
restrictions on solar energy systems that raise costs or
decrease efficiency. According to research conducted by the
author, and the sponsor of that bill, the California Solar
Energy Industries Association, a number of jurisdictions were
placing serious obstacles in the way of solar power system
installation, giving reason for the need for the bill.
AB 2473 addressed this issue in two ways. The bill created
specific standards for what constituted "significant"
increases in solar energy system costs or decreases in those
systems' efficiency. The bill also declared that solar energy
system installation is a matter of statewide concern, and made
a local government's grant of permission to install a solar
energy system ministerial rather than discretionary unless the
permitting agency has good cause to believe doing so would
create an adverse impact on public health or safety, in which
case an application for a discretionary permit may be
required. The local government cannot refuse to approve that
application unless it makes detailed written findings based on
substantial evidence that granting the permit will create
specific adverse impacts on public health or safety. If
conditions are placed on an approval to mitigate public health
or safety impacts, the required mitigation must be designed to
accomplish its goal at the lowest possible cost.
As a follow-up to AB 2473, Assembly Member Wolk sent a letter
dated June 7, 2006, to all California city attorneys, city
planners, county counsels, and county planners regarding the
legislative intent of AB 2473:
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"It has come to my attention that a number of quite different
approaches have been taken in the design-review of solar
energy systems and in the process of establishing the cost of
issuing a permit for the installation of a solar energy
system. Some of these approaches appear to be inconsistent
with the intent of my legislation amending the California
Solar Rights Act. The purpose of this letter is to clarify
the Legislature's intent with respect to design review for
aesthetic purposes and the assessment of fees for the
permitting of solar energy systems?
California Government Code Section 66005 (a) provides that
"Ýdevelopment permit] fees or exactions shall not exceed the
estimated reasonable cost of providing the service?" On
December 2, 2005, the California State Supreme Court upheld
this statute by ruling that building permit fees must be based
on the "estimated reasonable costs of providing the services
for which the fees are charged" (Barratt v. C. of Rancho
Cucamonga, Ct. App. 4/2 E0325780).
I have been advised by industry experts that the average time
spent by local jurisdictions to permit and inspect a solar
system is between 2 and 5 hours. A fixed fee method to
compute solar permit fees has been shown to be an appropriate
method of establishing solar permit fees, since it takes about
the same amount of time to permit a 2 kilowatt photovoltaic
system, a 6 kilowatt system, or a residential or commercial
solar water heating system. A permit fee computation
methodology that is based on the monetary valuation of the
system or its sales price, rather than the estimated
reasonable costs of providing the permit service is
inconsistent with the intent of AB 2473 as well as the Supreme
Court case cited above and may unnecessarily discourage the
installation of solar energy systems.
I respectfully request that all permitting agencies enact
reasonable permitting policies that encourage affordable solar
energy system installation (including over-the-counter
permits, permit fees based on the permitting agency's actual
costs, and cessation of design reviews for aesthetic
concerns)."
5)This bill prohibits the total amount of fees charged by a city
or county for an applicant to install a solar energy system
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from exceeding the actual costs to that city or county in
providing the service for which the fees are charged. The
bill also prohibits the permitting costs from being calculated
based on the valuation of the solar energy system, or the
valuation of the property on which the improvement is planned.
Additionally, the bill requires a city or county to
separately identify each fee assessed on an applicant for the
installation of a solar energy system on the invoice provided
to the applicant. Language in the bill specifies that its
provisions apply to all cities, including charter cities.
6)Proposition 26 (2010) amended Article XIIIC to broaden the
definition of what constitutes a tax to include many payments
previously considered fees or charges. Language in
Proposition 26 lists seven exceptions to what constitutes a
local tax, including three that are relevant to this bill.
Article XIII C excludes from the new definition of "tax":
a) A charge imposed for a specific benefit conferred or
privilege granted directly to the payer that is not
provided to those not charged, and which does not exceed
the reasonable costs to the local government of conferring
the benefit or granting the privilege;
b) A charge imposed for a specific government service or
product provided directly to the payer that is not provided
to those not charged, and which does not exceed the
reasonable costs to the local government of providing the
service or product; and,
c) A charge imposed for the reasonable regulatory costs to
a local government for issuing licenses and permits,
performing investigations, inspections, and audits,
enforcing agricultural marketing orders, and the
administrative enforcement and adjudication thereof.
Proposition 26 also added the following language regarding the
burden of proof:
"The local government bears the burden of proving by a
preponderance of the evidence that a levy, charge, or other
exaction is not a tax, that the amount is not more than
necessary to cover the reasonable costs of governmental
activity, and that the manner in which those costs are
allocated to a payor bear a fair or reasonable relationship to
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the payor's burdens on, or benefits received from the
governmental activity."
The Committee may wish to consider whether existing law,
especially in light of Proposition 26 (2010), already
prohibits local governments from charging excessive amounts of
permitting or building fees, making legal action to enforce
the terms of Proposition 26 as they relate to unreasonable
fees the more appropriate course of action.
7)Support arguments : The Renewable Energy Accountability
Project writes that this proposal encourages the installation
of renewable energy systems by eliminating the disincentives
of disproportionately expensive permitting.
Opposition arguments : Given that Proposition 26 prohibits
cities and counties from charging excessive fees, the
provisions of this bill may be unnecessary.
REGISTERED SUPPORT / OPPOSITION :
Support
Renewable Energy Accountability Project (REAP)
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958