Bill Text: CA SB937 | 2023-2024 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Development projects: fees and charges.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Enrolled) 2024-08-28 - Assembly amendments concurred in. (Ayes 30. Noes 1.) Ordered to engrossing and enrolling. [SB937 Detail]
Download: California-2023-SB937-Introduced.html
of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first. However, utility service fees may be collected at the time an application for utility service is received. issued.
If the residential development contains more than one dwelling, the local agency may determine whether the fees or charges shall be paid on a pro rata basis for each dwelling when it receives its final inspection or certificate of occupancy, whichever occurs first; occupancy, on a pro rata basis when a certain percentage of the dwellings have received their final inspection or certificate of occupancy, whichever occurs first; occupancy, or on a lump-sum
basis when all the first dwelling dwellings in the development receives its final inspection or receive their certificate of occupancy, whichever occurs first. occupancy. For development projects that meet the conditions in subparagraph (A) of paragraph (2) of subdivision (b), the amount due and payable for the fees and charges when the development receives its
certificate of occupancy shall be the same amount as would have been paid had the fees and charges been paid prior to the issuance of building permits. The local agency shall not charge interest or other fees on any amount deferred.
Bill Title: Development projects: fees and charges.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Enrolled) 2024-08-28 - Assembly amendments concurred in. (Ayes 30. Noes 1.) Ordered to engrossing and enrolling. [SB937 Detail]
Download: California-2023-SB937-Introduced.html
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Senate Bill
No. 937
| Introduced by Senator Wiener (Coauthor: Assembly Member Grayson) |
January 17, 2024 |
An act to amend Sections 66000, 66007, and 66013 of, and to add Section 65914.6 to, the Government Code, relating to land use.
LEGISLATIVE COUNSEL'S DIGEST
SB 937, as introduced, Wiener.
Development projects: permits and other entitlements: fees and charges.
The Planning and Zoning Law requires each county and each city to adopt a comprehensive, long-term general plan for its physical development, and the development of specified land outside its boundaries, that includes, among other mandatory elements, a housing element. Existing law, the Permit Streamlining Act, among other things, requires a public agency that is the lead agency for a development project to approve or disapprove that project within specified time periods. Existing law extended by 18 months the period for the expiration, effectuation, or utilization of a housing entitlement, as defined, that was issued before, and was in effect on, March 4, 2020, and that would expire before December 31, 2021, except as specified. Existing law provides that if the state or a local agency extended the otherwise applicable time for the expiration, effectuation, or utilization of a housing
entitlement for not less than 18 months, as specified, that housing entitlement would not be extended an additional 18 months pursuant to these provisions.
This bill would extend by 18 months the period for the expiration, effectuation, or utilization of a housing entitlement, as defined, that was issued before January 1, 2024, and that will expire before December 31, 2025, except as specified. The bill would toll this 18-month extension during any time that the housing entitlement is the subject of a legal challenge. By adding to the duties of local officials with respect to housing entitlements, this bill would impose a state-mandated local program.The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.
The Mitigation Fee Act regulates fees for
development projects, fees for specific purposes, including water and sewer connection fees, and fees for solar energy systems, among others. The act, among other things, requires local agencies, as defined, to comply with various conditions when imposing fees, extractions, or charges as a condition of approval of a proposed development or development project. The act defines fee to mean a monetary exaction other than a tax or special assessment that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project. The act exempts certain fees from this definition, including a fee paid or land dedicated for park or recreational purposes as a condition to the approval of a tentative map or parcel map, as specified.
This bill would remove that exception. The bill would specify that water districts and sanitation districts
are included in the definition of a local agency for purposes of the act.
The act prohibits a local agency that imposes fees or charges on a residential development for the construction of public improvements or facilities from requiring the payment of those fees or charges until the date of the final inspection or the date the certificate of occupancy is issued, whichever occurs first. The act authorizes a local agency to require the payment sooner if specified conditions are met, including if the fees or charges are to reimburse the local agency for expenditures previously made. The act exempts units reserved for occupancy by lower income households included in a residential development proposed by a nonprofit housing developer, as specified, from the authorization to require an earlier payment, but authorizes a city or county to require for those exempt units the posting of a performance bond or a letter of credit from a federally insured, recognized depository
institution to guarantee payment of any fees or charges. The act, if a fee or charge is not fully paid prior to issuance of a building permit for construction, authorizes the local agency to require the property owner to execute a contract to pay the fee or charge, as specified.
This bill would instead prohibit a local agency from requiring the payment of those fees or charges until the date the certificate of occupancy is issued, and would prohibit the local agency from charging interest or other fees on any amount deferred. The bill would remove the authorization for a local agency to require the payment sooner if the fees or charges are to reimburse the local agency for expenditures previously made. The bill would revise the exemption from earlier payment for units reserved for occupancy by lower income households by a nonprofit housing developer to be those by an affordable housing developer, as specified, and would repeal the authorization for a city or county
to require the posting of a performance bond or a letter of credit for those exempt units. The bill would repeal the authorization of the local agency to require the property owner to execute a contract to pay the fee or charge, and would instead authorize the local agency to withhold the certificate of occupancy until the fees and charges are paid.
Existing law prohibits a local agency from imposing fees for water connections or sewer connections, or capacity charges, that exceed the estimated reasonable cost of providing the service, and specifies that those fees or charges are not subject to the specified provisions of the act applicable to development projects, including requiring local agencies to comply with certain requirements when imposing fees, extractions, or charges as a condition of approval of a proposed development or development project.
This bill would provide that those fees or charges are subject to
specified provisions of the act. By requiring local agencies to comply with specified requirements when imposing fees, extractions, or charges as a condition of approval of a proposed development or development project, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 65914.6 is added to the Government Code, to read:65914.6.
(a) Except as provided in subdivision (b), notwithstanding any law, including any inconsistent provision of a local agency’s general plan, ordinances, or regulations, the otherwise applicable time for the expiration, effectuation, or utilization of a housing entitlement that is within the scope of the timeframes specified in paragraphs (1) and (2) is extended by 18 months. For the purposes of this section, housing entitlements that are extended are entitlements where both of the following apply:(1) It was issued prior to and was in effect on January 1, 2024.
(2) It will expire prior to December 31, 2025.
The otherwise applicable time for
the utilization of a housing entitlement provided by this section includes any requirement to request the issuance of a building permit within a specified period of time.
(b) If the state or a local agency extends, on or after January 1, 2024, but before the effective date of the act adding this section, the otherwise applicable time for the expiration, effectuation, or utilization of a housing entitlement for not less than 18 months and pursuant to the same conditions provided in subdivision (a), that housing entitlement shall not be extended for an additional 18 months by operation of subdivision (a).
(c) For purposes of this section, the following definitions apply:
(1) “Housing entitlement” means any of the following:
(A) A legislative,
adjudicative, administrative, or any other kind of approval, permit, or other entitlement necessary for, or pertaining to, a housing development project issued by a state agency.
(B) An approval, permit, or other entitlement issued by a local agency for a housing development project that is subject to Chapter 4.5 (commencing with Section 65920).
(C) A ministerial approval, permit, or entitlement by a local agency required as a prerequisite to issuance of a building permit for a housing development project.
(D) A requirement to submit an application for a building permit within a specified period of time after the effective date of a housing entitlement described in subparagraph (B) or (C).
(E) A vested right associated with an approval, permit, or other
entitlement described in subparagraphs (A) to (D), inclusive.
(2) For the purposes of this section, a housing entitlement does not include any of the following:
(A) A development agreement issued pursuant to Article 2.5 (commencing with Section 65864).
(B) An approved or conditionally approved tentative map that is extended for a minimum of 18 months pursuant to Section 66452.6 on or after January 1, 2024.
(C) A preliminary application as defined in Section 65941.1.
(3) “Housing development project” means a residential development or mixed-use development in which at least two-thirds of the square footage of the development is designated for residential use. Both of the following apply for
the purposes of calculating the square footage usage of a development for purposes of this section:
(A) The square footage of a development shall include any additional density, floor area, and units, and any other concession, incentive, or waiver of development standards pursuant to Section 65915.
(B) The square footage of a development shall not include any underground space, including, but not limited to, a basement or underground parking garage.
(4) “Local agency” means a county, city, whether general law or chartered, city and county, school district, special district, authority, agency, any other municipal public corporation or district, or other political subdivision of the state.
(d) The extension granted pursuant to subdivision (a) shall be
tolled during any time that the housing entitlement is the subject of a legal challenge.
(e) Nothing in this section is intended to preclude a local government from exercising its existing authority to provide an extension to an entitlement identified in this section.
(f) The Legislature finds and declares that this section addresses a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.
SEC. 2.
Section 66000 of the Government Code is amended to read:66000.
As used in this chapter, the following terms have the following meanings:(a) “Development project” means any project undertaken for the purpose of development. “Development project” includes a project involving the issuance of a permit for construction or reconstruction, but not a permit to operate.
(b) “Fee” means a monetary exaction other than a tax or special assessment, whether established for a broad class of projects by legislation of general applicability or imposed on a specific project on an ad hoc basis, that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public
facilities related to the development project, but does not include fees specified in Section 66477,
fees for processing applications for governmental regulatory actions or approvals, fees collected under development agreements adopted pursuant to Article 2.5 (commencing with Section 65864) of Chapter 4, or fees collected pursuant to agreements with redevelopment agencies that provide for the redevelopment of property in furtherance or for the benefit of a redevelopment project for which a redevelopment plan has been adopted pursuant to the Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code).
(c) “Local agency” means a county, city, whether general law or chartered, city and county, school district, special district, authority, agency, any other municipal public corporation or district, including, but not limited to, water districts and sanitation districts, or
other political subdivision of the state.
(d) “Public facilities” includes public improvements, public services, and community amenities.
SEC. 3.
Section 66007 of the Government Code is amended to read:66007.
(a) Except as otherwise provided in subdivisions (b) and (g), any local agency that imposes any fees or charges on a residential development for the construction of public improvements or facilities shall not require the payment of those fees or charges, notwithstanding any other provision of law, until the date(b) (1) Notwithstanding subdivision (a), the local agency may require the payment of those fees or charges at an earlier time if (A)
the local agency determines that the fees or charges will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan and commenced or will commence construction prior to final inspection or issuance of the certificate of occupancy or (B) the fees or charges are to reimburse the local agency for expenditures previously made. of the development project. “Appropriated,” as used in this subdivision, means authorization by the governing body of the local agency for which the fee is
collected to make expenditures and incur obligations for specific purposes.
(2) (A) Paragraph (1) does not apply to units reserved for occupancy by lower income households included in a residential development proposed by a nonprofit an affordable housing developer in which at least 49 percent of the total units are reserved for occupancy by lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined in Section 50053 of the Health and Safety Code. In addition to the contract that may be required under subdivision (c), a city, county, or city and county may require the posting of a performance bond or a letter of credit from a federally insured, recognized depository institution to guarantee payment of any fees or charges that are subject to this paragraph.
Fees and charges exempted from paragraph (1) under this paragraph shall become immediately due and payable when the residential development no longer meets the requirements of this paragraph.
(B) The exception provided in subparagraph (A) does not apply to fees and charges levied pursuant to Chapter 6 (commencing with Section 17620) of Part 10.5 of Division 1 of Title 1 of the Education Code.
(c) (1)If any fee or charge specified in subdivision (a) is not fully paid prior to issuance of a building permit for construction of any portion of the residential development encumbered thereby, the local agency issuing the building permit may require the property owner, or lessee if the lessee’s interest appears of record, as a condition of issuance of the building permit, to execute a contract to pay the fee or charge, or applicable portion thereof, within the time specified in subdivision (a). If the fee or charge is prorated pursuant to subdivision (a), the obligation under the contract shall be similarly prorated.
withhold certificate of occupancy for the development project until such fees and charges specified in subdivision (a) are fully paid.
(2)The obligation to pay the fee or charge shall inure to the benefit of, and be enforceable by, the local agency that imposed the fee or charge, regardless of whether it is a party to the contract. The contract shall contain a legal description of the property affected, shall be recorded in the office of the county recorder of the county and, from the date of recordation, shall constitute a lien for the payment of the fee or charge, which shall be enforceable against successors in interest to the property owner or lessee at the time of issuance of the building permit. The contract shall be recorded in the grantor-grantee index in the name of the public agency issuing the building permit as grantee and in the name of the property owner or lessee as grantor. The local agency shall record a release of the obligation, containing a legal description of the property, in the event the obligation is paid in full, or a partial release in the event the fee or charge is prorated pursuant to subdivision (a).
(3)The contract may require the property owner or lessee to provide appropriate notification of the opening of any escrow for the sale of the property for which the building permit was issued and to provide in the escrow instructions that the fee or charge be paid to the local agency imposing the same from the sale proceeds in escrow prior to disbursing proceeds to the seller.
(d) This section applies only to fees collected by a local agency to fund the construction of public improvements or facilities. It does not apply to fees collected to cover the cost of code enforcement or inspection services, or to other fees collected to pay for the cost of enforcement of local ordinances or state law.
(e) “Final inspection” or “certificate of occupancy,” as used in this section, have the same meaning as described in Sections 305 and 307 of the Uniform Building Code, International Conference of Building Officials, 1985 edition.
(f) Methods of complying with the requirement in subdivision (b) that a proposed construction schedule or plan be adopted, include, but are not limited to, (1) the adoption of the capital improvement plan described in Section 66002, or (2) the submittal of a five-year plan for
construction and rehabilitation of school facilities pursuant to subdivision (c) of Section 17017.5 of the Education Code.
(g) A local agency may defer the collection of one or more fees up to the close of escrow. This subdivision shall not apply to fees and charges levied pursuant to Chapter 6 (commencing with Section 17620) of Part 10.5 of Division 1 of Title 1 of the Education Code.
SEC. 4.
Section 66013 of the Government Code is amended to read:66013.
(a) Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewer connections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed, unless a question regarding the amount of the fee or charge imposed in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue.(b) As used in this section:
(1) “Sewer connection” means the connection of a structure or project to a public sewer system.
(2) “Water connection” means the connection of a structure or project to a public water system, as defined in subdivision (h) of Section 116275 of the Health and Safety Code.
(3) “Capacity charge” means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. A “capacity charge” does not include a commodity charge.
(4) “Local agency” means a local agency as defined in Section 66000.
(5) “Fee” means a fee for the physical facilities necessary to make a water connection or sewer connection, including, but not limited to, meters, meter boxes, and pipelines from the structure or project to a water distribution line or sewer main, and the estimated reasonable cost of labor and materials for installation of those facilities bears a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the water connection or sewer connection.
(6) “Public facilities” means public facilities as defined in Section 66000.
(c) A local agency receiving payment of a charge as specified in paragraph (3) of subdivision (b) shall deposit it in a separate capital facilities fund with other charges received, and account for the charges in a manner to avoid any commingling with other moneys of the local
agency, except for investments, and shall expend those charges solely for the purposes for which the charges were collected. Any interest income earned from the investment of moneys in the capital facilities fund shall be deposited in that fund.
(d) For a fund established pursuant to subdivision (c), a local agency shall make available to the public, within 180 days after the last day of each fiscal year, the following information for that fiscal year:
(1) A description of the charges deposited in the fund.
(2) The beginning and ending balance of the fund and the interest earned from investment of moneys in the fund.
(3) The amount of charges collected in that fiscal year.
(4) An
identification of all of the following:
(A) Each public improvement on which charges were expended and the amount of the expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used.
(B) Each public improvement on which charges were expended that was completed during that fiscal year.
(C) Each public improvement that is anticipated to be undertaken in the following fiscal year.
(5) A description of each interfund transfer or loan made from the capital facilities fund. The information provided, in the case of an interfund transfer, shall identify the public improvements on which the transferred moneys are, or will be, expended. The
information, in the case of an interfund loan, shall include the date on which the loan will be repaid, and the rate of interest that the fund will receive on the loan.
(e) The information required pursuant to subdivision (d) may be included in the local agency’s annual financial report.
(f) The provisions of subdivisions (c) and (d) shall not apply to any of the following:
(1) Moneys received to construct public facilities pursuant to a contract between a local agency and a person or entity, including, but not limited to, a reimbursement agreement pursuant to Section 66003.
(2) Charges that are used to pay existing debt service or which are subject to a contract with a trustee for bondholders that requires a different accounting of the charges, or
charges that are used to reimburse the local agency or to reimburse a person or entity who advanced funds under a reimbursement agreement or contract for facilities in existence at the time the charges are collected.
(3) Charges collected on or before December 31, 1998.
(g) Any judicial action or proceeding to attack, review, set aside, void, or annul the ordinance, resolution, or motion imposing a fee or capacity charge subject to this section shall be brought pursuant to Section 66022.
(h) Fees and charges subject to this section are not subject to the provisions of Chapter 5 (commencing with Section 66000), but
except for Section 66007, and
are subject to the provisions of Sections 66016, 66022, and 66023.
(i) Subdivisions (c) and (d) only apply to capacity charges levied pursuant to this section.
