BILL ANALYSIS Ó SENATE GOVERNANCE & FINANCE COMMITTEE Senator Lois Wolk, Chair BILL NO: AB 1359 HEARING: 6/26/13 AUTHOR: R. Hernández FISCAL: No VERSION: 6/19/13 TAX LEVY: No CONSULTANT: Lui QUIMBY ACT FEES Allows Quimby Act fees to be used in a neighborhood other than where fees were paid, under specified conditions. Background and Existing Law The Subdivision Map Act allows cities and counties to impose fees or dedications of land for specific uses as conditions of subdivision map approval. Since 1975, the Quimby Act, as part of the Subdivision Map Act, authorizes counties and cities, by ordinance, to require subdividers to dedicate land or pay in-lieu fees for park or recreational purposes as a condition of approving a new subdivision (SB 977, Gregorio, 1974). The California courts also ratified the use of Quimby Act fees, holding that they are designed to maintain and preserve open space for the recreational use of the residents of new subdivisions, not the city at large (Associated Homebuilders of the East Bay v. City of Walnut Creek (1971)). To impose Quimby Act fees, a county or city must have a general plan or a specific plan that contains policies and standards for park facilities. Park and recreational facilities must also be consistent with principles and standards. Special districts work with cities and counties to receive parkland dedications or in-lieu fees. The imposition of dedications or fees is authorized by a local government's general police power, and is subject to the U.S Supreme Court's "nexus" (Nollan v. Coastal Commission (1987)) and "rough proportionality" tests. The "nexus" test requires a government to establish the link between the exaction and the interest being advanced by that exaction. There also must be a "rough proportionality" between proposed exactions and the project AB 1359 -- 6/19/13 -- Page 2 impacts that the exactions are intended to allay (Dolan v. City of Tigard (1994)). For example, the Dolan case focused on an administrative permit to expand a small plumbing and electrical supply business, which was conditioned to dedicate of a bike lane and a storm drainage easement along an existing drainage channel. The Supreme Court overturned both exactions, holding that the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development. In response to perceived exaction abuses, the Legislature enacted AB 1600 (Cortese, 1987), known as the "Mitigation Fee Act," which, like Nolan, required local agencies to show a "nexus" or "reasonable relationship" between the facility or park land and the proposed subdivision. Counties and cities can use Quimby Act fees only for developing new parks or rehabilitating parks that serve that subdivision, and revenues generated through the Quimby Act can't be used for park facilities' maintenance and operation. Proposed Law Assembly Bill 1359 authorizes fees paid as a condition to the approval of a tentative map or parcel map to be used for the purpose of developing new or rehabilitating existing park or recreational facilities in a neighborhood other than a neighborhood located in the subdivision for which fees were paid, if all of the following requirements are met: The neighborhood in which the fees are to be expended has fewer than three acres of park per 1,000 members of the neighborhood population. The neighborhood in which the subdivision for which the fees were paid has a park area per 1,000 members of the neighborhood population ratio that meets or exceeds the ratio calculated pursuant to existing state law, but in no event not less than three acres per 1,000 members. The legislative body holds a public hearing before using the fees. The legislative body must make a finding, supported by substantial evidence, that it is reasonably foreseeable that future inhabitants of the subdivision for which the fee is imposed will use the proposed park and recreational facilities in the AB 1359 -- 6/19/13 -- Page 3 neighborhood where the fees are used. AB 1359 requires the principles and standards for determining the proportion of a subdivision to be dedicated, or in-lieu fee amount to be paid, are consistent with the calculation of community park area inventory, pursuant to existing state law. Consistency is not provided when the local agency refuses to: Accept an area in complete or partial satisfaction of the land dedication requirement on the basis that it is unsuitable for park and recreational uses, if the area is substantially similar to areas in the park inventory; Accept an area in complete or partial satisfaction of the land dedication requirement on the basis that the type of use the subdivider proposes is not an appropriate park or recreational use, if the area is substantially similar to areas in the park inventory; or, Provide more than the minimum credit against the amount of land required to be dedicated, or the amount of the fee imposed, on the basis that the active recreational uses the subdivider proposes is not an appropriate park or recreational use, if the area is substantially similar to areas in the park inventory. The city, county, or other local agency to which the land or fees are conveyed or paid may enter into a joint or shared use agreement with one or more other public districts in the jurisdiction, including a school district or community college district, to provide access to park or recreational facilities to residents of subdivisions with fewer than three acres of park per 1,000 members of the population. AB 1359 changes the time when fees should be paid, from the time of the recording of the final map or parcel map, or as prescribed by local ordinance, to the date of the final inspection or when the certificate of occupancy is issued, whichever occurs first. State Revenue Impact No estimate. AB 1359 -- 6/19/13 -- Page 4 Comments 1. Purpose of the bill . Because Quimby Act fees are required to serve the subdivision from which fees were obtained, areas with little to no development do not receive any dedication or in-lieu fees for park improvements. As a result, park-poor neighborhoods do not receive these resources. According to the author, "Low-income communities and communities of color suffer the most from disparities in access to green space and from health and social problems [stemming] from such inequalities. Low-income people of color disproportionately lack equal access to parks, school fields, beaches, trails, and forests. Investing in California's parks and creating equitable access to green space would create healthier communities and decrease childhood obesity." Spending Quimby Act fees to benefit park-poor neighborhoods creates better environments and communities for all. 2. Nexus . The power to approve development is the same power public officials use to impose conditions on their approvals. County and city officials can require subdividers to dedicate land or pay fees in-lieu of dedication to mitigate the effects of the proposed projects. The Mitigation Fee Act, the Map Act, the Quimby Act, and court decisions all require public officials to identify the nexus between a project's effects and the mitigation conditions they impose. Using this nexus requirement, counties and cities can require builders to pay developer fees that mitigate their projects' effects. AB 1359 violates this nexus test. The bill allows local officials to divert fees raised from a specific subdivision and use the money to benefit the wider community. Mitigation fees must be used to mitigate the project's effects, not to compensate for other unmet needs or existing deficiencies. Despite the bill's laudable goal, Legislators should be aware that the bill contradicts over thirty years of Quimby Act practice, challenges case law, and violates the nexus test. As a result, local governments are left vulnerable to litigation. 3. Precedent . AB 1359 may set a precedent that other agencies may attempt to follow. If Quimby Act fees can be spent on a neighborhood other than where the fee is AB 1359 -- 6/19/13 -- Page 5 collected, will local public works departments try to spend traffic mitigation fees outside a boundary area? AB 1359 lays the groundwork for similar proposals. 4. Local discretion . Existing law authorizes a special district to work with the city or county in determining the amount and location of land to be dedicated, or the amount of fees to be paid. In practice, local governments often work closely with its special district to negotiate these terms with a developer. However, AB 1359 eliminates local officials' discretion because it prohibits consistency if a local agency rejects an area for various reasons, if the area is "substantially similar to areas in the park inventory." This means that if a 1987 development's subdivision map was approved with an open-space dedication, a similar 2013 development proposal could be required to accept an open-space dedication, regardless of whether a local government wants an open-space mitigation, because open-space was previously approved. AB 1359 hampers a local community's ability to deliver park amenities as desired by the local community. 5. Case law . Provisions of this bill may have implications for a state court's decision in Home Builders Assn. of Tulare/Kings Counties, Inc. v. City of Lemoore (2010), which held that impact fees are not preempted by the Quimby Act, and affirmed that "the Quimby Act is designed to maintain and preserve open space for the recreational use of the residents of new subdivisions, not the city at large community or recreational facility. In contrast, impact fees are to be used to build unique facilities intended to serve the entire population of the city. There is no duplication of fees." AB 1359 broadens the scope of the Quimby Act beyond park fees tied to a subdivision, blurring the distinction between the Quimby Act and AB 1600, which imposes fees for park and recreational facilities that serve a wider community. 6. Previous legislation . AB 1359 is not the first bill seeking to reallocate Quimby Act fees. AB 2936 (Aroner, 2002) would have allowed cities and counties to spend Quimby Act fees to prepare for park and recreational facilities' master plans. The bill was later amended to contain different provisions. AB 1359 -- 6/19/13 -- Page 6 Assembly Actions Assembly Local Government:5-0 Assembly Floor: 47-26 Support and Opposition (6/20/13) Support : Acajachemen Nation, Janeno Tribe; Amigos de los Rios; Anahuak Youth Sports Association; Asian and Pacific Islander Obesity Prevention Alliance; Asian Pacific Policy and Planning Council; California Pan Ethnic Health Network; California Wilderness Coalition; Charter Oak Unified School District; Cities of Baldwin Park and Coachella; The City Project; Concerned Citizens of South Central Los Angeles; Councilmember Brian Guitierrez, California State Council on Developmental Disabilities; Latino Coalition for a Health California; Montebello Unified School District; The Trust for Public Lands, UFCW Local 1428; Opposition : Unknown.