BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1191


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          Date of Hearing:  May 13, 2015


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                              Brian Maienschein, Chair


          AB 1191  
          (Nazarian) - As Introduced February 27, 2015


          SUBJECT:  Quimby Act:  fees.


          SUMMARY:  Allows the interest income generated from a Quimby Act  
          fee to be expended in the same manner as the Quimby Act fee,  
          pursuant to the Quimby Act.


          EXISTING LAW:  


          1)Establishes the Quimby Act as part of the Subdivision Map Act,  
            and allows the legislative body of a city or county to, by  
            ordinance, require the dedication of land or impose a  
            requirement of the payment of fees in lieu thereof, or a  
            combination of both, for park or recreational purposes as a  
            condition to the approval of a tentative map or parcel map, if  
            all of the following requirements are met:

             a)   The ordinance has been in effect for a period of 30 days  
               prior to the filing of the tentative map of the subdivision  
               or parcel map;

             b)   The ordinance includes definite standards for  
               determining the proportion of a subdivision to be dedicated  
               and the amount of any fee to be paid in lieu thereof, as  








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               specified.  However, the dedication of land, or the payment  
               of fees, or both, shall not exceed the proportionate amount  
               necessary to provide three acres of park area per 1,000  
               persons residing within a subdivision subject to this  
               section, unless the amount of existing neighborhood and  
               community park area, as calculated pursuant to this  
               subdivision, exceeds that limit, in which case the  
               legislative body may adopt the calculated amount as a  
               higher standard not to exceed five acres per 1,000 persons  
               residing within a subdivision subject to this section;

               i)     The park area per 1,000 members of the population of  
                 the city, county, or local public agency shall be derived  
                 from the ratio that the amount of neighborhood and  
                 community park acreage bears to the total population of  
                 the city, county, or local public agency as shown in the  
                 most recent available federal census. The amount of  
                 neighborhood and community park acreage shall be the  
                 actual acreage of existing neighborhood and community  
                 parks of the city, county, or local public agency as  
                 shown on its records, plans, recreational element, maps,  
                 or reports as of the date of the most recent available  
                 federal census.

               ii)    For cities incorporated after the date of the most  
                 recent available federal census, the park area per 1,000  
                 members of the population of the city shall be derived  
                 from the ratio that the amount of neighborhood and  
                 community park acreage shown on the maps, records, or  
                 reports of the county in which the newly incorporated  
                 city is located bears to the total population of the new  
                 city as determined. In making any subsequent calculations  
                 pursuant to this section, the county in which the newly  
                 incorporated city is located shall not include the  
                 figures pertaining to the new city which were 

               calculated pursuant to this paragraph. Fees shall be  
                 payable at the time of the recording of the final map or  
                 parcel map, or at a later time as may be prescribed by  








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                 local ordinance.

             c)   The land, fees, or combination thereof are to be used  
               only for the purpose of developing new or rehabilitating  
               existing neighborhood or community park or recreational  
               facilities to serve the subdivision, except as provided in  
               i), below.

               i)     Notwithstanding c), above, fees may be used for the  
                 purpose of developing new or rehabilitating existing park  
                 or recreational facilities in a neighborhood other than  
                 the neighborhood in which the subdivision for which fees  
                 were paid as a condition to the approval of a tentative  
                 map or parcel map is located, if all of the following  
                 requirements are met:

                  (1)       The neighborhood in which the fees are to be  
                    expended has fewer than three acres of park area per  
                    1,000 members of the neighborhood population;

                  (2)       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 as specified,  
                    but in no event is less than three acres per 1,000  
                    persons;

                  (3)       The legislative body holds a public hearing  
                    before using the fees pursuant to this subparagraph;

                  (4)       The legislative body makes 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 neighborhood  
                    where the fees are used;

                  (5)       The fees are used within a specified radius  
                    that complies with the city's or county's ordinance  








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                    adopted pursuant to subdivision (a), and are  
                    consistent with the adopted general plan or specific  
                    plan of the city or county. For purposes of this  
                    clause, "specified radius" includes a planning area,  
                    zone of influence, or other geographic region  
                    designated by the city or county, that otherwise meets  
                    the requirements of this section.

             d)   The legislative body has adopted a general plan or  
               specific plan containing policies and standards for parks  
               and recreational facilities, and the park and recreational  
               facilities are in accordance with definite principles and  
               standards.

             e)   The amount and location of land to be dedicated or the  
               fees to be paid shall bear a reasonable relationship to the  
               use of the park and recreational facilities by the future  
               inhabitants of the subdivision.

             f)   The city, county, or other local public agency to which  
               the land or fees are conveyed or paid shall develop a  
               schedule specifying how, when, and where it will use the  
               land or fees, or both, to develop park or recreational  
               facilities to serve the residents of the 

             subdivision. Any fees collected under the ordinance shall be  
               committed within five years after the payment of the fees  
               or the issuance of building permits on one-half of the lots  
               created by the subdivision, whichever occurs later. If the  
               fees are not committed, they, without any deductions, shall  
               be distributed and paid to the then record owners of the  
               subdivision in the same proportion that the size of their  
               lot bears to the total area of all lots within the  
               subdivision.

               i)     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, but not limited  








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                 to, a school district or community college district, in  
                 order to provide access to park or recreational  
                 facilities to residents of subdivisions with fewer than  
                 three acres of park area per 1,000 members of the  
                 population.

             g)   If the subdivider provides park and recreational  
               improvements to the dedicated land, the value of the  
               improvements together with any equipment located thereon  
               shall be a credit against the payment of fees or dedication  
               of land required by the ordinance.

          2) Land or fees required shall be conveyed or paid directly to  
            the local public agency which provides park and recreational  
            services on a communitywide level and to the area within which  
            the proposed development will be located, if that agency  
            elects to accept the land or fee. The local agency accepting  
            the land or funds shall develop the land or use the funds in  
            the manner provided in this section.

          3)If park and recreational services and facilities are provided  
            by a public agency other than a city or county, the amount and  
            location of land to be dedicated or fees to be paid shall, as  
            specified, be jointly determined by the city or county having  
            jurisdiction and that other public agency.

          FISCAL EFFECT:  None.


          COMMENTS:  


          1)Bill Summary.  This bill allows the interest income generated  
            from a Quimby Act fee to be expended in the same manner as the  
            fee itself, consistent with the provisions of the Quimby Act.


            This bill is sponsored by the City of Los Angeles.









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          2)Author's Statement.  According to the author, "State law does  
            not grant cities the statutory authority to use interest  
            generated on Quimby fees for park development.  Existing law  
            ties the hands of local municipalities by making local Quimby  
            resources inaccessible and used for their specified purpose.   
            AB 1191 makes long overdue clarifying changes in the law to  
            give cities authority to utilize dormant funds.  Specifically,  
            this bill will ensure Quimby interest fees are used to create  
            much needed public outdoor space."


            According to the author, interest of Quimby fees has amounted  
            to an estimated $15 - $20 million in untapped Quimby revenue  
            for the City of Los Angeles. 


          3)Quimby Act and Previous Legislation.  Cities and counties have  
            been authorized since the passage of the 1975 Quimby Act to  
            pass ordinances that require developers to set aside land,  
            donate conservation easements, or pay fees for park  
            improvements.  The Quimby Act was substantially amended in  
            1982 to further define acceptable uses of or restrictions on  
            Quimby funds, and provide acreage/population standards and  
            formulas for determining the exaction.  One other major change  
            was to specify that the exactions must be closely tied to a  
            project's impacts as identified through traffic studies  
            required by the California Environmental Quality Act (CEQA),  
            meaning that there has to be a "nexus."


            To impose Quimby Act fees, the city or county must have a  
            general plan or specific plan that contains policies and  
            standards for park facilities.  Prior to 2014, fees were  
            required to bear a reasonable relationship to the proposed  
            subdivision.  Those fees could only be used for developing new  
            parks or rehabilitating parks that serve that subdivision.  As  
            well, the Quimby Act requires that the amount and location of  
            land to be dedicated or the fees to be paid shall bear a  








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            "reasonable relationship to the use of the park and  
            recreational facilities by the future inhabitants of the  
            subdivision."


            However, AB 1359 (Hernández), Chapter 412, Statutes of 2013,  
            made several changes to the Quimby Act.  AB 1359 revised the  
            requirements that needed to be met in order for Quimby Act  
            fees to be used for the purpose of developing new or  
            rehabilitating existing park or recreational facilities in a  
            neighborhood other than the neighborhood in which the fees  
            were paid, as follows:


             a)   The neighborhood in which the fees are to be expended  
               must have fewer than three acres of park area per 1,000  
               members of the neighborhood population;

             b)   The neighborhood in which the subdivision for which the  
               fees were paid cannot have less than three acres per 1,000  
               members;

             c)   The legislative body must hold a public hearing before  
               using the fees in this manner;

             d)   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 neighborhood where the fees are used;  
               and,

             e)   The fees must be used within a "specified radius" that  
               complies with the city's or county's ordinance adopted  
               pursuant to the Quimby Act, and must be consistent with the  
               adopted general plan or specific plan of the city or  
               county.  "Specified radius" is defined to include a  
               planning area, zone of influence, or other geographic  
               region designated by the city or county, that otherwise  








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               meets the requirements of the bill.

          4)Policy Considerations.  The Committee may wish to consider the  
            following:


             a)   Prospective Change? The provisions of the bill are not  
               retroactive. Therefore, the $15 - $20 million that is  
               "untapped" Quimby revenue in the city of Los Angeles will  
               not be able to be used because the bill is prospective,  
               taking effect January 1, 2016.   The Committee may wish to  
               ask the author to clarify whether the intent is to apply  
               the bill retroactively.


             b)   Interest Follows the Fee.  The generally held principle  
               on local finances is that the interest income follows the  
               source, in this case the Quimby fee itself.  The Committee  
               may wish to ask the author and sponsor about the City of  
               Los Angeles' legal interpretation that they could not  
               expend the interest income in the same manner as the fee.


             c)   Explicit Prohibition vs. Implicit Understanding.  The  
               author and sponsor argue that the Quimby Act is silent on  
               how interest income on Quimby fees can be used, and thereby  
               prohibits the usage of interest income in the same manner  
               as the fees themselves. However, there is no outright  
               prohibition in the Quimby Act that prevents a local agency  
               from doing this.


             d)   Impact on Local Jurisdictions that are Already Using  
               Interest Income in this Manner.  Several jurisdictions,  
               including Cathedral City, Yuba County, have adopted Quimby  
               Act ordinances at the local level that specify that  
               interest income shall be counted as part of the Quimby fee,  
               and used for the purposes specified for the fees in the  
               Quimby Act.  The Committee may wish to consider whether the  








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               addition of this language in AB 1191 might be harmful to  
               those jurisdictions that have already been treating  
               interest income as Quimby fees, and whether the bill may  
               call into question their legality in order to do so.


             e)   How Long?  The Committee may wish to ask the author and  
               sponsor how long the $15 - $20 million has been sitting in  
               accounts?  The Quimby Act provides that any fees collected  
               under the ordinance "shall be committed within five years  
               after the payment of the fees or the issuance of the  
               building permits on one-half of the lots created by the  
               subdivision, whichever occurs later."  The Quimby Act also  
               provides that "if the fees are not committed, they, without  
               any deductions, shall be distributed and paid the then  
               record owners of the subdivision in the same proportion  
               that the size of their lot bears to the total area of all  
               lots within the subdivision."     


               Because the bill seeks to treat interest income in the same  
               manner as Quimby fees, then the Committee may wish to  
               consider whether interest income sitting in an account for  
               longer than five years would actually need to follow the  
               above provisions and be returned.


          5)Arguments in Support.  The City of Los Angeles argues that  
            state law currently leaves these funds in limbo and prevents  
            cities from using these funds for any public benefit.

          6)Arguments in Opposition.  None on file.


          REGISTERED SUPPORT / OPPOSITION:












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          Support                    Opposition


          City of Los Angeles           None on file







          Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958