BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: AB 715
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|Author: |Daly |
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|Version: |May 20, 2015 Hearing |
| |Date: June 17, 2015 |
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|Urgency: |No |Fiscal: |No |
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|Consultant:|Kathleen Chavira |
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Subject: Residential development: school facilities fees
SUMMARY
This bill modifies the calculation of developer fees for
determining school facilities fees on residential construction
by redefining "assessable space" to exclude covered or uncovered
walkways and detached bike storage lockers.
BACKGROUND
Existing law authorizes the governing board of any school
district to levy a fee, charge, dedication, or other requirement
against any construction within the boundaries of the district
for the purpose of funding the construction or reconstruction of
school facilities, as specified. (Education Code § 17620)
Existing law provides for the payment of fees, charges,
dedications or other requirements against a development project.
(Government Code § 65995 - 65998)
Existing law authorizes a district to levy per square footage
fees of $1.93 per square foot of assessable space for
residential construction and $0.31 for commercial or industrial
construction for chargeable covered and enclosed space, and
provides for an inflation adjustment of this amount every two
years, as determined by the State Allocation Board at its
January meeting. In the case of residential construction,
"assessable space" is defined as all of the square footage
within the perimeter of a residential structure, not including
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any carport, walkway, garage, overhang, patio, enclosed patio,
detached accessory structure, or similar area. Existing law
requires the building department of the city or county issuing
the building permit, in accordance with the standard practice of
that city or county, to calculate the amount of the square
footage within the perimeter of a residential structure.
(Government Code § 65995)
ANALYSIS
This bill modifies the calculation of developer fees for
determining school facilities fees on residential construction.
It:
1)Maintains the definition of "assessable space" to mean all the
square footage within the perimeter of a residential space.
2)Specifically excludes a covered or uncovered walkway from this
definition.
3)Specifically excludes a detached bike storage locker from this
definition.
STAFF COMMENTS
1)Need for the bill. According to the author, advances in
apartment design and construction have created confusion for
local jurisdictions regarding what is considered "assessable
space." Many new apartment complexes feature covered walkways
for the comfort of tenants and to meet American with
Disabilities Act (ADA) requirements. In addition,
particularly in urban areas, apartment communities are adding
detached bike storage. According to the author, this bill is
intended to clarify existing law with regards to assessable
space and ensure that it is consistently applied state-wide.
2)Related disputes. Both the Orange County Department of Education
(OCDE) and the Santa Ana Unified School District report that,
prior to the introduction of this bill, there has been
disagreement, and two recent appeals of decisions by the
cities of Tustin and Santa Ana, in relation to development
projects within the Tustin Unified School District. These
disputes arose over whether space internal to the perimeter of
a development should be assessable. In this case, the
developer challenged the payment of fees on internal hallways
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that the developer deemed to be 'non-livable space.' An
appeal to the City's Planning Commission was found in favor of
the school district. The OCDE reports that challenges by
developers regarding the internal hallway fees totaled
$930,343,000 in developer fees. Both the District and the
OCDE assert that the provisions of this bill would have
resulted in a reduction of fee revenue for local school
construction of almost $1 million for the Tustin Unified
School District.
3)Developer fees. SB 50 (Green, Chapter 407, Statutes of 1998) in
addition to authorizing a $9.2 billion education bond and
revising the School Facility Construction program, revised
developer fee procedures for school facility purposes. SB 50
authorized three different levels of developer fees to be
assessed under specified conditions:
a) Level 1 - A district is authorized to levy per square
footage fees of $1.93 per square foot for residential
construction and $0.31 for commercial or industrial
construction to be adjusted for inflation every two years.
This fee level is currently at $3.36 per square foot for
residential construction and $0.54 per square foot for
commercial/industrial construction, and is assessed if the
district conducts a Justification Study that establishes
the connection between the development coming into the
district and the assessment of fees to pay for the cost of
the facilities needed to house future students.
b) Level 2 - A district may levy Level 2 fees, which may not
exceed 50% of construction and site acquisition and
development costs. If it has conducted a needs analysis, as
specified, has SAB approval of eligibility for state
funding and meets two of four conditions related to the
passage of a local bond, debt capacity, and demonstrated
facilities needs.
c) Level 3 - A district is authorized to seek 100 percent of
school facilities costs if the state has exhausted state
school bond funds and the State Allocation Board is no
longer approving apportionments for new construction
projects.
This bill proposes changes to the definition of "assessable
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space" for purposes of calculating Level 1 developer fees.
4)Current status of the School Facilities Program (SFP). Bond
authority for new construction and modernizations programs has
essentially been depleted, respectively, since July 2012 and
May 2012.
Since 2009, the State Allocation Board (SAB) has been making
"unfunded approvals" which represented approved projects
waiting to convert to funding apportionments when bonds are
sold and cash becomes available. In addition, since November
1, 2012, the SAB has maintained an "Applications Received
Beyond Bond Authority" list. This list is presented to the
SAB for acknowledgement, but not approval. Because the
applications are not fully processed for final grant
determination, the project funding amounts on the list are
only estimates. As of January 2015, the list indicated 116
new construction applications totaling $571 million and 200
modernizations applications of about $330 million.
5)Related Governor's proposal. Amid concerns about the complexity
and structure of the current program and the state's
increasing debt service obligations, the Governor has proposed
significant changes to the way school facilities are funded.
In order to allow districts to better meet their facilities
needs at the local level, the Governor's 2015-16 budget
proposed to:
a) Expand revenue generation tools at the local level by
expanding local funding capacity and increasing caps on
local bond indebtedness;
b) Restructure developer fees to set one level for all
projects at a level between existing Level II and Level III
fees subject to local negotiation; and
c) Expand allowable uses of Routine Restricted Maintenance
Funding to authorize the pooling of these funds over
multiple years for modernization and new construction
projects.
The Governor has also noted that he is prepared to engage with
the Legislature and education stakeholders to shape a future
state program that is focused on districts with the greatest
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need, including communities with low property values and few
borrowing options, as well as overcrowded schools.
6)Is this the right time for change? Under current law funding for
new construction and modernization of school facilities comes
from both state and local sources. Current law establishes
the School Facility Program under which the state provides
general obligation bond funding for various school
construction projects. Local funding comes from a variety of
sources including local General Obligation bonds, Mello-Roos
bonds and developer fees.
Notwithstanding the potential need for clarity, in light of
the lack of state general obligation bond funding, and the
uncertain future of such funding, should this Committee
endorse any changes to the definitions of "assessable space"
for purposes of calculating developer fees?
7)Clarity or more confusion? Current law specifies that all square
footage within the perimeter of a residential structure is
assessable space and specifically excludes any carport,
walkway, garage, overhang, patio, enclosed patio, detached
accessory structure or similar area from this definition. City
and County building departments determine which areas within
the perimeter are counted for this purpose, in accordance with
the standard practice of that city or county in calculating
structural perimeters.
Current law already provides for the exclusion of a detached
accessory structure or similar area. Arguably, current law
would already accommodate bike storage lockers outside of the
residential structure. But would this bill create an
incentive for developers to avoid fees by shifting interior
closet space to exterior "bike storage" that would still be
within the perimeter of the residential structure? Should
bike storage lockers be excluded, if similar to closets within
a unit, they increase the square footage available to a
resident?
Staff recommends the bill be amended to delete "including a
detached bike storage locker."
SUPPORT
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California Apartment Association
OPPOSITION
Association of California School Administrators
California Association of School Business Officials
California School Boards Association
Coalition for Adequate School Housing
Orange County Department of Education
Santa Ana Unified School District
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