BILL ANALYSIS Ó
AB 1801
Page 1
ASSEMBLY THIRD READING
AB 1801 (Campos)
As Amended April 23, 2012
Majority vote
LOCAL GOVERNMENT 8-0
-----------------------------------------------------------------
|Ayes:|Smyth, Alejo, Campos, | | |
| |Davis, Gordon, Hueso, | | |
| |Knight, Norby | | |
-----------------------------------------------------------------
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 solar 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
AB 1801
Page 2
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 :
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 Government Code Section
56000) of Title 5; the processing of maps under the provisions
of the Subdivision Map Act, Division 2 (commencing with
Government Code Section 66410) of Title 7; or planning
services under the authority of Chapter 3 (commencing with
Government Code 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 is 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,
AB 1801
Page 3
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
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.
AB 1801
Page 4
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
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 : 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 a solar energy
system void and unenforceable. Subsequent amendments added
AB 1801
Page 5
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: 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.
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 than
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)."
The author articulates the following as the problems that the
bill seeks to address:
1)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
AB 1801
Page 6
issues that impede those goals.
2)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.
3)No appropriate nexus exists between the cost of a solar energy
system and the labor that is required to ensure that the
system is property installed.
4)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.
5)There is a need for more transparency, consistency, and
certainty regarding the fee structures that local governments
set to review solar energy systems.
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 justification 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
AB 1801
Page 7
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:
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
AB 1801
Page 8
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).
This bill 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 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,
this 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.
Proposition 26 (2010) amended Article XIII C of the California
Constitution 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:"
1)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.
2)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.
3)A charge imposed for the reasonable regulatory costs to a
local government for issuing licenses and permits, performing
investigations, inspections, and audits, enforcing
AB 1801
Page 9
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 the payor's burdens on, or benefits
received from the governmental activity.
The Legislature 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.
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.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0003481