BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1222 (Leno) -Solar energy: permits.
Amended: May 1, 2012 Policy Vote: G&F 6-2
Urgency: No Mandate: Yes
Hearing Date: May 24, 2012 Consultant: Mark McKenzie
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 1222 would limit the fees that cities and
counties charge for permits related to the installation of
rooftop solar energy systems.
Fiscal Impact: Unknown reimbursable mandate costs (General
Fund). In order for a city or county to charge a permit fee
that exceeds the specified limits, it must provide substantial
evidence of the administrative cost to issue a permit in a
written finding and an adopted resolution or ordinance, as
specified. This additional administrative burden places a
higher level of service on local entities than the current
standard specifying that a fee cannot exceed the estimated
reasonable cost of providing the service for which the fee is
charged. (see staff comments) Proposed amendments are intended
to alleviate the reimbursable mandate by clarifying that a local
entity could recover all costs associated with the
administrative activities related to approving a higher fee.
Background: Existing law, the Mitigation Fee Act, generally
prohibits permit fees charged by a local agency from exceeding
the estimated reasonable cost of providing the service for which
the fee is charged, as specified. A fee that exceeds reasonable
costs must be approved by a two-thirds vote of the electorate.
Permit fees generally are set at a level sufficient to cover a
local agency's cost to review and approve project plans and
perform a site inspection, and may include additional
administrative costs related to the permit process.
Currently, each local authority having jurisdiction over solar
installations determines its fee structure for rooftop solar
permits, and fees vary widely by jurisdiction. According to a
December 2011 survey provided by the author's office that
includes 402 jurisdictions in 25 counties, the City of Lawndale
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charges the highest fee at $1,471 for a 3 kilowatt (kW) system,
while 34 jurisdictions have a $0 permit fee for these small
residential systems. The average solar permit fee across all
cities and counties surveyed is $343.
Proposed Law: SB 1222 would prohibit a city or county from
charging permit fees for rooftop solar energy systems that
exceed $400 for a system that produces 15 kW or less, or $400
plus $5 for each kilowatt above 15 kW. A local agency could
exceed these limits if it provides substantial evidence of the
administrative cost to issue the permit as part of a written
finding and an adopted resolution or ordinance. The written
finding must include the following:
A determination that the local agency has adopted
ordinances, fees, and processes to streamline solar energy
system permit submittals and approvals.
A calculation of the administrative cost of issuing a
solar rooftop permit.
A description of how a higher fee would result in a
streamlined approval process.
SB 1222 also includes a codified provision stating legislative
intent that a local agency that complies with the bill's
requirements would receive priority access to state funds for
purposes of distributed energy generation planning, permitting,
training, or implementation. The bill's provisions would sunset
on January 1, 2018.
Staff Comments: SB 1222 would impose new limits on the fees that
a local agency may charge for permitting a rooftop solar energy
system. While many cities and counties have established fees
below these limits, the bill would require a local agency to
make a specified written finding and adopt a resolution or
ordinance in order to charge a higher fee. The finding must
include a determination that the city or county has adopted
processes that streamline solar permit submittals and approvals.
This requirement would preclude a local entity from charging a
higher permit fee, even if the amount is less than the
reasonable cost of providing the permit, if it has not adopted a
streamlined permitting process for solar energy systems.
Staff notes that a number of local agencies have established
artificially low permit fees for rooftop solar energy systems as
an incentive to encourage the adoption of renewable energy
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technologies. The fee limit established by the bill is also
higher than the current statewide average for all cities and
counties, and the bill provides for higher fee limits for larger
commercial installations. Nevertheless, the limits established
by the bill would preclude any local entity that currently has
lower fees from raising them beyond those limits, unless it
complies with the additional administrative process and
establishes a streamlined permitting program. In this respect,
the bill imposes a state-mandated local program for which a city
or county would be eligible for reimbursement for those costs to
comply with these additional administrative burdens. The
potential reimbursable costs are unknown at this time, but if 10
percent of local agencies incurred costs of $5,000 each to
comply with these additional administrative requirements, total
reimbursable costs would exceed $250,000.
Proposed amendments would authorize local agencies to establish
fees sufficient to cover all administrative costs associated
with approving a permit fee that is higher than the cap
established in the bill.