BILL ANALYSIS �
AB 1903
Page 1
Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1903 (Buchanan) - As Amended: May 2, 2012
Policy Committee: Education
Vote:9-0
Urgency: Yes State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill suspends, commencing on the enactment date of this
measure and until December 31, 2014, the authority for a school
district governing board to increase the developer fee levied
against any residential, commercial, or industrial construction
within the boundary of the school district for the purpose of
funding the construction of K-12 school facilities.
Specifically, this bill:
1)Requires the suspension of the fee to remain inoperative until
December 31, 2014, except upon either of the following
circumstances:
a) A statewide school facilities bond passes prior to
December 31, 2014. If this occurs, the ability to levy the
fee shall become operative upon certification of the
election in which voters approved the bond.
b) A statewide school facilities bond has not been placed
on the ballot by August 31, 2014 for the November 4, 2014
General Election. If a bond fails to be placed on the
ballot, the ability to levy the fee shall become operative
on September 1, 2014.
FISCAL EFFECT
State and local school facility bond cost pressure to suspend
Level III developer fees under the state school facilities
program for two years. Without the ability to assess these
higher fees, school districts will likely require additional
bond funds to cover the cost of constructing new facilities.
AB 1903
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COMMENTS
1)Background . SB 50 (Greene), Chapter 407, Statutes of 1998,
established the state school facilities program. This program
drastically altered how school facilities are constructed and
modernized in the state. Specifically, the program provides
state school construction bond funds to local education
agencies (LEAs) to construct school facilities. Chapter 407
established new per pupil construction and modernization
grants meant to provide 50% of the total cost of the facility
project; this is considered the state portion. The LEA is
required to provide the other 50% of the cost from local
revenue. Chapter 407 established a process for LEAs to assess
fees on developers as a source for this local revenue.
Existing law delineates the different developer fees that LEAs
are able to assess for the purposes of constructing school
facilities. The following table illustrates the three different
levels of fees that may be assessed:
---------------------------------------------------------------
| | Existing Law | Current Fee |
|-------+----------------------------------------+--------------|
|Level |The fee is assessed if the district |$3.20 per sq. |
|I |conducts a justification study that |ft. for |
| |establishes a connection between the |residential |
| |development within the LEA's |construction. |
| |jurisdiction and assessment to pay for | |
| |the cost of housing future students. | |
| | |$0.51 per sq. |
| |Statute established a base fee of $1.93 |ft. for |
| |per sq. ft. and requires an inflation |commercial/ind|
| |adjustment every two years, as |ustrial |
| |specified. |construction. |
| | | |
|-------+----------------------------------------+--------------|
|Level |Based on a five-yr. needs assessment of |The fee is |
|II |LEA capacity, projection of unhoused |calculated by |
| |pupils resulting from new residential |multiplying |
| |development. A LEA must meet two of |the number of |
| |four existing conditions dealing with |unhoused |
| |multi-track year round education, pass |pupils |
| |a local school bond, issue capital |identified in |
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| |outlay debt, and have 20% of capacity |the needs |
| |in relocatable classrooms. |assessment by |
| | |the new |
| | |construction |
| | |grant. |
|-------+----------------------------------------+--------------|
|Level |LEAs may seek these fees when the State |These fees |
|III |Allocation Board is no longer approving |are double |
| |new construction apportionments. |the Level II |
| | |fees. |
---------------------------------------------------------------
2)Purpose . According to the author, "Currently, it is
anticipated that state funds for new construction will be
exhausted between April and September 2012. The governor does
not want to place a school construction bond on the November
2012 ballot. Therefore, a statewide school facilities bond
for additional funding is not anticipated until the November
2014 general election."
The author further states: "Home builders have been hit hard
by the current recession and home values have dropped
dramatically. In 2004, there were 212,960 new housing units
built in California; in 2010, there were only 44,925.
Industry experts predict that the imposition of Level III fees
could bring the already shaky new housing development industry
to a halt. �Also, in February 2012,] the State Allocation
Board (SAB) voted to recommend to the Legislature that Level
III fees be suspended."
3)Will Level III fees be assessed by the end of 2012 ? Statute
requires Level III developer fees to be assessed when the SAB
is no longer making apportionments for new construction bond
funds. As of April 2012, $365 million remains for new
construction. This amount includes $145 million the SAB
transferred from the Critically Overcrowded Schools program to
the new construction program. It is unclear when the SAB will
be unable to make apportionments from the new construction
program and as such, it is unknown when Level III fees will be
assessed.
4)Governor's proposed 2012-13 school facility proposals
affecting Level III fees . The budget proposes the following:
a) Regulation of remaining bond authority. The
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Administration has proposed trailer bill to require the
SAB, upon enactment of the Budget Act of 2012, to apportion
up to $8.5 million for new construction projects and up to
$9 million for modernization projects per month at a board
meeting. This provision shall not apply to new construction
and modernization projects that receive unfunded approval
by the SAB before enactment of the 2012 Budget Act.
b) Prohibition of Funding for Overcrowding Relief Grants.
The proposal prohibits the SAB from approving any projects
pursuant to the Overcrowding Relief Grant (ORG) program on
or after June 30, 2012.
c) Shift ORG funds to New Construction program. The
Administration proposes to transfer $251.25 million from
ORG to the New Construction program. More specifically,
this proposal adjusts the amounts allocated under
Proposition 1D (2006), the latest school facilities bond,
by: (1) reducing the amount authorized for ORG from $1.0
billion to $748.75 million, and (2) increasing the amount
authorized for New Construction from $1.9 billion to $2.15
billion.
According to the Administration, enactment of these proposals
will delay local authority to impose a Level III developer
fee.
1)Opposition . Several education associations, including the
California School Boards Association, the Coalition of
Adequate School Housing (CASH), and the Small School Districts
Association are opposed to the suspension of Level III
developer fees, as proposed in this measure.
According to the CASH, "A suspension of the statute creating
Level III developer fees would violate the very purpose for
which the statute was created. In order to house future
students that will result from new development, school
districts may levy fees against development; this authority
began with ideas deeply rooted in the California Environmental
Quality Act. Commencing in the 1970s, residential project
development must mitigate the need for schools."
CASH further states: "The need for construction of school
facilities is ongoing; the lack of state bond funds?creates
the need for a positive response to schools, not denial of
AB 1903
Page 5
authority for levying Level III fees. Levying these mitigation
fees would provide districts with the resources needed to
accommodate developer-driven growth, as the statute originally
intended, if the state fails to provide a bond."
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081