FACT SHEET ON SB 1202
Authored By: SENATOR JEFF STONE
What is the origin of the proposal?
The Mitigation Fee Act became law as AB 1600 in 1987. It has been amended many times to further define its purpose and reach. Basically, it follows the Nollan and Dolan appellate decisions requiring local agencies to establish a “nexus”, which is the direct and relatable connection between the need for new infrastructure and service facilities, and the proposed growth of new development projects of all types: Residential/commercial/industrial
Development impact fees are determined based on this “nexus” study which determines an agency’s future needs due to potential growth within the agency’s territory and determines the shared cost per unit or square foot.
Measures of the success of the development impact fees are requirements for
Annual “AB 1600”, and Five Year Reportable Fees Reports. As defined in Government Codes 66006 and 66001, these reports answer simple questions designed to show that the fees were appropriate, and the monies collected have been spent on the necessary infrastructure, to off-set the burdens of a growing community.
But, how do we know if the fees collected and spent by the 25-30% of the local agencies in the State that ignore the Annual reporting requirements were used appropriately?
states that if a collecting agency fails to comply in its annual reporting on the development impact fee funds for 3 or more consecutive years, that agency forfeits a substantial portion of its legal privilege to collect funds pursuant to the Mitigation Fee Act. Additionally, should new development projects be poised to apply for building permits, the agency shall not be allowed to collect more than 50% of the agency’s scheduled development impact fee, nor shall the agency deny or delay a building permit that otherwise would have been approved. Consequently, the agency shall not impose a moratorium on any new construction as a result of its failure to comply with the annual reporting requirements.
What is the background of this proposal?
Nearly 30 % of local agencies with local ordinances allowing for the collection of mitigation fees
fail to meet the annual reporting requirements of the Mitigation Fee Act.
What deficiency in current law does this bill
seek to remedy?
The Mitigation Fee Act is currently
without any corrective measures when a local agency fails to comply with its directives. This bill addresses the lack of any penalty to holding an agency accountable for its failure to report on the balances, collection, and expenditures, of development impact fees on an annual basis.
What specifically will this bill do?
Should a local agency fail to produce the requisite annual reports for a period exceeding 3 consecutive years, that agency forfeits any rights or privileges to collect any more than 50% of scheduled mitigation (impact) fees. The agency will be required to accept all qualified building permit applications without the collection of (maximum) impact fees. The agency is also prohibited from threatening or implementing a moratorium on construction because of its