BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      AB 1191


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          ASSEMBLY THIRD READING


          AB  
          1191 (Nazarian)


          As Introduced  May 18, 2015


          Majority vote


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          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Local           |9-0   |Maienschein,         |                     |
          |Government      |      |Gonzalez, Alejo,     |                     |
          |                |      |Chiu, Cooley,        |                     |
          |                |      |Gordon, Holden,      |                     |
          |                |      |Linder, Waldron      |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
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          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.  Specifically, this bill:


          1)Defines the term "fee" for purposes of the Quimby Act to include  
            any interest income generated from a fee charged and collected  
            pursuant to the Quimby Act.


          2)States that the addition of the language as specified in 1),  








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            above, does not constitute a change in, but is declaratory of,  
            existing law, and states that the Legislature further finds and  
            declares that any locally adopted ordinance or regulation that  
            is consistent with 1), above, is valid.


          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 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  








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                 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 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  








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                    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 adopted  
                    pursuant to 1) a) above, 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  








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               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  
                 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.









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          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 also clarifies that the treatment of interest income  
            in this manner does not constitute a change in, but is  
            declaratory of existing law, and that any locally adopted  
            ordinance or regulation that is consistent with this  
            interpretation is valid.  This bill is sponsored by the City of  
            Los Angeles.


          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 to $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  








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


            However, AB 1359 (Roger 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  








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               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 meets the requirements of  
               the bill.


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


             a)   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 Legislature  
               may wish to ask the author and sponsor about the City of Los  
               Angeles' legal interpretation that they cannot expend the  
               interest income in the same manner as the fee.


             b)   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.








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             c)   How Long?  The Legislature may wish to ask the author and  
               sponsor how long the $15 to $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 this bill seeks to treat interest income in the same  
               manner as Quimby fees, then the Legislature 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.




          Analysis Prepared by:                                               
                          Debbie Michel / L. GOV. / (916) 319-3958  FN:  
          0000450














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