The existing federal Indian Gaming Regulatory Act provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude tribal-state gaming compacts, subject to ratification by the Legislature. Existing law expressly ratifies a number of tribal-state gaming compacts, and amendments of tribal-state gaming compacts, between the State of California and specified Indian tribes.

The California Environmental Quality Act (CEQA) requires a lead agency to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project, as defined, that it proposes to carry out or approve that may have a significant effect on the environment, as defined, or to adopt a negative declaration if it finds that the project will not have that effect.

This bill would ratify the tribal-state gaming compact entered into between the State of California and the Tule River Indian Tribe of California, executed on June 25, 2024. The bill would provide that, in deference to tribal sovereignty, certain actions related to this compact are not projects for purposes of CEQA.

This bill would declare that it is to take effect immediately as an urgency statute.

The existing federal Indian Gaming Regulatory Act provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude tribal-state gaming compacts, subject to ratification by the Legislature. Existing law expressly ratifies a number of tribal-state gaming compacts, and amendments of tribal-state gaming compacts, between the State of California and specified Indian tribes.

The California Environmental Quality Act (CEQA) requires a lead agency to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project, as defined, that it proposes to carry out or approve that may have a significant effect on the environment, as defined, or to adopt a negative declaration if it finds that the project will not have that effect.

This bill would ratify the tribal-state gaming compact entered into between the State of California and the Tule River Indian Tribe of California, executed on June 25, 2024. The bill would provide that, in deference to tribal sovereignty, certain actions related to this compact are not projects for purposes of CEQA.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the Mitigation Fee Act, imposes certain requirements on a local agency that imposes if the local agency requires payment of a fee fee, as a condition of approval of a development project project, that is imposed to provide for an improvement to be constructed to serve the development project, or a fee for public improvements, as specified. In this regard, the Mitigation Fee Act requires the local agency to deposit the fee in a separate capital facilities account or fund, and to make certain information about the account or fund for the fiscal year available to the public within 180 days after the last day of each fiscal year. The Mitigation Fee Act requires that this information to include, among other things, a brief description of the type of fee in the account or fund, the identification of each public improvement on which fees were expended, and the amount of fee refunds, as specified. The Mitigation Fee Act also requires a local agency to provide a person paying the fee a link to the page on the local agencys internet website where this information is available for review.

This bill, if a local agency has an internet website, on or before the last day of the 202930 fiscal year and on or before the last day of every 5th fiscal year thereafter, would additionally require a the local agency to post this information with respect to each separate account or fund, established as described above, for the preceding 5 years on the local agencys internet website. By imposing new duties on local agencies, this 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.

Existing property tax law defines property to include all matters and things, real, personal, and mixed, that are capable of private ownership.

This bill would make nonsubstantive changes to this provision.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 3276

Author:(Ramos)

As Amended Ver:August 5, 2024

2/3 vote. Urgency

SUMMARY

This bill would ratify the Amended and Restated Tribal-State Compact between the State of California and the Tule River Indian Tribe of California (Tribe) was executed on June 25, 2024.

Senate Amendments

1. Ratifies the Amended and Restated Tribal-State Compact between the State of California and the Tribe, executed on June 25, 2024.
2. Provides that, in deference to tribal sovereignty, certain actions are not deemed projects for purposes of the California Environmental Quality Act (CEQA); and, stipulate, except as expressly provided, that none of the provisions shall be construed to exempt a city, county, or city and county, or the Department of Transportation, or any state agency or local jurisdiction, from CEQA requirements.
3. Contains an urgency clause.

COMMENTS

Background:

On August 14, 2024, the Assembly Governmental Organization Committee held an informational hearing on tribal-state gaming compact between the State of California and the Tule River Indian Tribe of California.

General Compact Overview:

The Compact authorizes the Tribe to operate a maximum of 2,500 slot machines at no more than two gaming facilities, one of which shall have no more than 500 slot machines, located on eligible Indian lands held in trust for the Tribe, and located within the boundaries of the Tribe’s reservation.

The Tribe has agreed to pay the State its pro rata share of costs the State incurs for the performance of its duties under the Compact. If the Tribe operates more than 350 gaming devices at any time in a given calendar year, it shall thereafter, including in that calendar year, pay to the State Gaming Agency, for deposit into the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund (TNGF), 6.0% of its Net Win from its operation of gaming devices in excess of 350.

Specifically, from its payments to the RSTF or the TNGF, the Tribe may take annual credits for up to 100% of the required payments, if the Tribe operates greater than or equal to 350 and less than or equal to 1,200 gaming devices; Annual credits for up to 80% of the payments required, if the Tribe operates greater than 1,200 and less than or equal to 1,800 gaming devices; Annual credits for up to 60% of the payments required, if the Tribe operates greater than 1,800 and less than or equal to 2,500) gaming devices, for in-kind contributions made to the County, local jurisdictions, and non-profit and civic organizations operating facilities or providing services within the County for improved fire, emergency medical services, law enforcement, public transit, education, tourism, health care, transit, road improvements, and other specified payments.

If the Tribe operates more than 349 slot machines the Compact requires the Tribe to pay 0.5% of Net Win to neighboring jurisdictions, public agencies, and local charitable organizations to mitigate impacts upon those entities resulting from the operation of the gaming facility, or other purposes as the Tribe may see fit, consistent with the request of a recipient.

Certain terms of the Compact related to licensing, regulatory, patron protection, and public health provisions are substantially the same as recent compacts. Specifically, the Compact includes a Tribal Labor Relations Ordinance (TLRO), which provides that gaming may commence only after the Tribe has adopted a TLRO that allows for a secret ballot election and union neutrality.

This Compact amends the Tribe's 2020 Compact (SB 869, Chapter 171) provisions relating to specified definitions contained in Sec. 2.0. (gaming employee, gaming facility, and gaming operation), removed specified environmental review and economic impacts and replaces it with local mitigation (above 349 gaming devices, the Tribe distributes 0.5% net win to local governments and charitable organizations to mitigate local impacts), scales tort provisions back to patrons and visitors, with the same $10 million liability insurance, and deletes recognition of state spousal and child support orders.

On January 7, 2020 the Tulare County Board of Supervisors approved a memorandum of understanding and intergovernmental agreement with the Tribe to address local impacts related to the relocation of the Eagle Mountain Casino to land adjacent to the Porterville Airport.

The Compact's preamble notes that the Tribe and the State have concluded that this compact protects the interests of the Tribe and its members, the surrounding community, and the California public, and will promote and secure long-term stability, mutual respect, and mutual benefit.

Once effective (legislative ratification and federal approval required), this Compact will be in full force and effect for 25 years following the effective date.

Brief History of the Tribe. The Tule River Indian Tribe of California is a federally recognized Indian Tribe located in Tulare County, California. The Tribe historically inhabited lands in Central California occupying the territory along the rivers and creeks flowing from the Sierras and around Tulare Lake. The Tribe's reservation was established in 1873 and encompasses over 90 square miles of land. Today the Tribe has approximately 2,000 members, about half of whom live on the Reservation.

Many of the stories told by the elders of the Tule River Indian Reservation have been handed down from generation to generation. Almost all of these stories reflect the ways and life of the Tule River Tribe. All of the stories however, carry a strong message to the youth and adults in the region. Significant historical facts on these stories come from Painted Rock. This is a formation located next to the Tule River on the reservation. At one time, there were many different dialects spoken amongst the original inhabitants on the Tribe's reservation. Today, some members still teach and practice their Tribe’s dialect to continue the culture.

The Tribe is governed by an elected council consisting of nine members. Members of the Tribe vote for each member. The elected officials then decide who will perform the duties of chairperson, vice chairperson, secretary and treasurer.

The Tribe operates many programs to serve its members including a health clinic, a childcare center, an adult and vocational education center, a college scholarship program, a housing authority, and a chemical dependency treatment center. The Tule River Indian Health Center is a 501 (c)(3) non-profit organization founded in 1973 and dedicated to meeting the healthcare and health education needs of the Native American communities in Tulare County. An Advisory Board composed of local tribal members from the Tribe governs the Health Center. The Tribe's Eagle Feather Trading Post is one of the largest convenience stores in Tulare County, located on Hwy 190 just above Lake Success.

It should be noted that due to water shortages on the reservation, the Tribe has had to issue a building moratorium, preventing the further construction of buildings, including homes for the 200 tribal members on the Tribe's housing waiting list.

The Tribe currently operates the new Eagle Mountain Casino near the Porterville Airport, off Highway 65. The relocated casino, which opened in May 2023, is located at 1850 West St. in Porterville, sits on 40 acres of land that was purchased by the Tribe more than 30 years ago with the hopes to relocate the original casino location — approximately 15 miles east of Porterville — to a location more accessible for local residents and employees. The relocation was made in accordance with the ratification of a new tribal-state gaming compact in 2020. The casino offers more than 1,750 slot machines, along with 20 table games. Approximately 700 employees work at the casino. The casino has four restaurants, including the Acorn Diner, and the Redwood Taphouse, which features 65 televisions and a full bar.

The completion and opening of the casino, however, is only stage one of a three-stage project. The Tribe hopes to see groundbreaking on a 250-room hotel and convention center as well as an entertainment complex. The former casino on the reservation was converted into Tribal government offices and will expand existing Tribal schools and health services to Tribal members. Some food options will also be retained for Tribal members.

Key Provisions of the Compact:

Scope of Class III Gaming Authorized. The Tribe is authorized to operate up to 2,500 slot machines, banking or percentage card games, and any devices or games that are authorized under state law to the California State Lottery, provided that the Tribe will not offer such games through use of the Internet unless others in the state not affiliated with or licensed by the California State Lottery are permitted to do so under state and federal law. The Tribe can operate off-track wagering on horse races at a satellite wagering facility pursuant to the requirements outlined in the Compact. The Tribe shall not engage in Class III gaming that is not expressly authorized in the Compact.

Authorized Gaming Facility. The Tribe may establish and operate no more than two gaming facilities, one of which shall have no more than 500 slot machines, and engage in Class III gaming only on eligible Indian lands held in trust for the Tribe, located within the boundaries of the Tribe's reservation.

Payments to the Special Distribution Fund (SDF). The Tribe shall pay to the State, on a pro rata basis, the costs the State incurs for the performance of all its duties under this Compact, as established by the monies appropriated in the annual Budget Act for the performance of their duties under the Class III gaming compacts. The Compact provides that the Tribe is eligible for a reduction or elimination of its SDF pro rata contribution if the Tribe remains a limited-gaming tribe and there are sufficient funds in the SDF.

Payments to the RSTF or the TNGF. If the Tribe operates more than 350 gaming devices at any time in a given calendar year, it shall thereafter, including in that calendar year, pay to the State Gaming Agency, for deposit into the RSTF or the TNGF, 6.0% of its Net Win from its operation of gaming devices in excess of 350.

Distribution to Local Governments. If the Tribe operates more than 349 slot machines the Compact requires the Tribe to pay 0.5% of Net Win to neighboring jurisdictions, public agencies, and local charitable organizations to mitigate impacts upon those entities resulting from the operation of the gaming facility, or other purposes as the Tribe may see fit, consistent with the request of a recipient.

Credits Applied to the RSTF or the TNGF. Specifically, from its payments to the RSTF or the TNGF, the Tribe may take annual credits for up to 100% of the required payments, if the Tribe operates greater than or equal to 350 and less than or equal to 1,200 gaming devices; Annual credits for up to 80% of the payments required, if the Tribe operates greater than 1,200 and less than or equal to 1,800 gaming devices; Annual credits for up to 60% of the payments required, if the Tribe operates greater than 1,800 and less than or equal to 2,500) gaming devices, for in-kind contributions made to the County, local jurisdictions, and non-profit and civic organizations operating facilities or providing services within the County for improved fire, emergency medical services, law enforcement, public transit, education, tourism, health care, transit, road improvements, and other specified payments.

Labor Provisions. The Tribe has entered into an agreement under the federal Labor Management Relations Act and has maintained the TLRO from its 2012 compact. Under the TLRO, if the Tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective. The TLRO makes it clear that employees shall have the right to self-organization, to form, to join, or assist employee organizations, to bargain collectively through representatives of their own choosing. The TLRO provides for a secret ballot election and union neutrality. After verification that 30% of the eligible employees in a bargaining unit have expressed an interest in the union, a notice of election shall be issued and the election shall be concluded within 30 calendar days thereafter. Union representation requires a majority of all votes cast.

According to the Author

The Compact's preamble notes that gaming operation will celebrate its 28th anniversary in 2024, is one of the largest employers in Tulare County, and contributes revenue to fund critical tribal government services including healthcare, education, public safety, public works, social services, cultural, elder, youth and veteran's programs.

The Compact's preamble further notes that this Compact will afford the Tribe primary responsibility over the regulation of its gaming facility and will enhance the Tribe's economic development and self-sufficiency.

Arguments in Support

None on file.

Arguments in Opposition

None on file.

FISCAL COMMENTS

Unknown.

VOTES:

ASM LOCAL GOVERNMENT: 9-0-0

YES: Juan Carrillo, Waldron, Alanis, Haney, Kalra, Pacheco, Ramos, Ward, Wilson

ASM HOUSING AND COMMUNITY DEVELOPMENT: 9-0-0

YES: Ward, Joe Patterson, Grayson, Kalra, Lee, Quirk-Silva, Reyes, Sanchez, Wilson

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Friedman, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 71-0-9

YES: Aguiar-Curry, Alanis, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Holden, Hoover, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Addis, Alvarez, Cervantes, Megan Dahle, Flora, Vince Fong, Gipson, Irwin, Mathis

SENATE FLOOR: 33-0-7

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Blakespear, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Stern, Umberg, Wiener, Wilk

ABS, ABST OR NV: Atkins, Becker, Bradford, Menjivar, Skinner, Smallwood-Cuevas, Wahab

UPDATED

VERSION: August 5, 2024

CONSULTANT: Eric Johnson / G.O. / (916) 319-2531 FN: 0004444

 THIRD READING  

Bill No: AB 3276

Author: Ramos (D)

Amended: 8/5/24 in Senate

Vote: 27- Urgency

SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 6/11/24

AYES: Durazo, Seyarto, Dahle, Glazer, Skinner, Wahab, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 71-0, 5/16/24 (Consent) - See last page for vote

SUBJECT: Tribal gaming: compact ratification

SOURCE: Author

DIGEST:

This bill requires local agencies to post certain impact fee information on their websites by the end of the 2029-30 fiscal year for the previous five years, which it must do every five years thereafter.

Senate Floor Amendments of 8/5/24 delete the current language in the bill and instead ratify the tribal-state gaming compact between the State of California and the Tule River Indian Tribe of California, executed on June 25, 2024.

ANALYSIS:

Existing law:

1. Allows local governments to require applicants for development projects to pay fees to mitigate the project’s effects, known as mitigation or development impact fees.
2. Requires, under the Mitigation Fee Act, local officials that are establishing, increasing, or imposing a fee as a condition of approving a development project to:
   1. Identify the fee's purpose.
   2. Identify the fee's use, including the public facilities to be financed.
   3. Determine a reasonable relationship between the fee's use and the development.
   4. Determine a reasonable relationship between the public facility's need and the development.
   5. Determine a reasonable relationship between the fee's amount and the cost of the public facility.
   6. Hold at least one open and public meeting prior to levying a new fee or increasing an existing one.
   7. If they decide to adopt capital improvement plans, indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees.
   8. Deposit and spend the fees within five years of collecting them.
   9. Refund fees or make specific findings on when and how the fees will be spent for construction, if the fees aren’t spent within five years of collection.
3. Requires local agencies to deposit mitigation fees to fund a capital improvement associated with a development in a separate account or fund.
4. Requires local agencies that impose mitigation fees to produce an annual report within 180 days of the end of the fiscal year that includes specified information.
5. Requires a city, county, or special district that has an internet website to post and update on their websites specified information, including a current schedule of housing development project costs, zoning ordinances and development standards, annual impact fee reports, and an archive of specified impact fee nexus studies.
6. Requires local agencies to conduct and adopt a nexus study prior to the adoption of an impact fee, and specified standards and practices.
7. Provides that cities and counties cannot collect impact fees before they conduct the final inspection or issue a certificate of occupancy, whichever occurs first. However, utilities can collect impact fees at the time the utility receives an application for service, which can happen before a final inspection.

This bill requires a local agency that has a website to post specified information on how it spent mitigation fee revenue in each separate account or fund in which it deposits the revenue for the preceding five years on or before the last day of the 2029-30 fiscal year, and on or before the last day of each fifth fiscal year thereafter.

Comments

1. Purpose of the bill. According to the author, “AB 3276 will provide communities and business with greater sense of transparency into what their local governments are spending on using the money they collected from the collection of Mitigation Fees. This bill would ensure that the people have easy access to this information and that local agencies do their due diligence to maintain a level of transparency that is expected of them by the people of California.”
2. No free lunch. This bill imposes new requirements on local agencies that impose fees without any additional resources to help them comply with new requirements. Absent additional resources, local agencies may have to increase fees if they need additional resources to satisfy new requirements. So, while fees may be more transparent, they could end up higher than they were before. In the case of this bill, local agencies only have to post information online they already must make publicly available, which may not require significant additional resources. However, if a local agency must make more significant updates to its website to comply with these requirements, the agency would face more significant pressure to increase their fees.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 6/25/24)

California Apartment Association

OPPOSITION: (Verified 6/25/24)

None received

ASSEMBLY FLOOR: 71-0, 5/16/24

AYES: Aguiar-Curry, Alanis, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Holden, Hoover, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Addis, Alvarez, Cervantes, Megan Dahle, Flora, Vince Fong, Gipson, Irwin, Mathis

Prepared by: Jonathan Peterson / L. GOV. / (916) 651-4119

8/14/24 15:50:43

**** END ****

 THIRD READING  

Bill No: AB 3276

Author: Ramos (D)

Amended: 8/5/24 in Senate

Vote: 27 - Urgency

PRIOR VOTES NOT RELEVANT

NOTE: On August 13, 2024, the Senate Governmental Organization Committee held an informational hearing on the tribal-state gaming compact between the State of California and the Tule River Indian Tribe of California.

SUBJECT: Tribal gaming: compact ratification

SOURCE: Author

DIGEST:

This bill ratifies the tribal-state gaming compact between the State of California and the Tule River Indian Tribe of California (Tribe).

ANALYSIS:

Existing law:

1. Provides, under the Indian Gaming Regulatory Act (IGRA), for the negotiation and conclusion of compacts between federally recognized Indian tribes and the State for the purpose of conducting Class III gaming activities on Indian lands within a State as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.
2. Authorizes expressly a number of tribal-state gaming compacts between the State of California and specified Indian tribes.
3. Authorizes the conduct of Class III gaming activities to the extent such activities are permitted by state law, a gaming compact has been concluded by a federally recognized tribe and the State, and the compact has been approved by the Secretary of the Interior.
4. Limits the operation of Class III gaming activities to Indian lands acquired on or before October 17, 1988. Provides, for certain exceptions to conduct gaming activities on Indian lands acquired after October 17, 1988.
5. Defines “Indian lands” to mean all lands within the limits of any Indian reservation, and any lands title to which is either held in trust by the United States for the benefit of any Indian tribe, or individual, or held by any Indian tribe or individual subject to restriction by the U.S. against alienation and over which an Indian tribe exercises governmental power.
6. Requires the State to negotiate to conclude a compact in good faith with an Indian tribe having jurisdiction over the Indian lands upon which the Class III gaming activity is to be conducted. Provides the U.S. district courts with jurisdiction over any cause of action initiated by a tribal government alleging that the State failed to negotiate in good faith to conclude a compact. Prescribes the remedy, mediation supervised by the courts, if it is found that the State failed to negotiate in good faith to conclude a compact.
7. Authorizes the Governor, under the California Constitution, to negotiate and conclude compacts, subject to ratification by the Legislature.

This bill:

1. Ratifies the tribal-state gaming compact between the State of California and the Tribe.
2. Provides that, in deference to tribal sovereignty, certain actions are not deemed projects for purposes of the California Environmental Quality Act (CEQA); and, stipulate, except as expressly provided, that none of the provisions shall be construed to exempt a city, county, or city and county, or the Department of Transportation, or any state agency or local jurisdiction, from CEQA requirements.
3. Contains an urgency clause.

Background

1. The Compact authorizes the Tribe to operate a maximum of 2,500 slot machines at no more than two gaming facilities, one of which shall have no more than 500 slot machines, located on eligible Indian lands held in trust for the Tribe, and located within the boundaries of the Tribe’s reservation.

The Tribe has agreed to pay the State its pro rata share of costs the State incurs for the performance of its duties under the Compact. If the Tribe operates more than 350 gaming devices at any time in a given calendar year, it shall thereafter, including in that calendar year, pay to the State Gaming Agency, for deposit into the Revenue Sharing Trust Fund (RSTF) or the Tribal Nation Grant Fund (TNGF), 6.0% of its Net Win from its operation of gaming devices in excess of 350.

Specifically, from its payments to the RSTF or the TNGF, the Tribe may take annual credits for up to 100% of the required payments, if the Tribe operates greater than or equal to 350 and less than or equal to 1,200 gaming devices; Annual credits for up to 80% of the payments required, if the Tribe operates greater than 1,200 and less than or equal to 1,800 gaming devices; Annual credits for up to 60% of the payments required, if the Tribe operates greater than 1,800 and less than or equal to 2,500) gaming devices, for in-kind contributions made to the County, local jurisdictions, and non-profit and civic organizations operating facilities or providing services within the County for improved fire, emergency medical services, law enforcement, public transit, education, tourism, health care, transit, road improvements, and other specified payments.

If the Tribe operates more than 349 slot machines the Compact requires the Tribe to pay 0.5% of Net Win to neighboring jurisdictions, public agencies, and local charitable organizations to mitigate impacts upon those entities resulting from the operation of the Gaming Facility, or other purposes as the Tribe may see fit, consistent with the request of a recipient.

1. Certain terms of the Compact related to licensing, regulatory, patron protection, and public health provisions are substantially the same as recent compacts. Specifically, the Compact includes a Tribal Labor Relations Ordinance (TLRO), which provides that gaming may commence only after the Tribe has adopted a TLRO that allows for a secret ballot election and union neutrality.

The Compact’s preamble notes that the Tribe and the State have concluded that this compact protects the interests of the Tribe and its members, the surrounding community, and the California public, and will promote and secure long-term stability, mutual respect, and mutual benefit. The Tule River Indian Tribe of California is a federally recognized tribe in Tulare County, California. The Tule River Indian Reservation was established in 1873 and covers approximately 85,000 acres. The Tribe operates the Eagle Mountain Casino and boasts 100,000-square feet of gaming floor featuring over 1,750 new and classic slot machines, along with 20 table games.

On January 7, 2020, the Tulare County Board of Supervisors approved a memorandum of understanding (MOU) and intergovernmental agreement with the Tule River Indian Tribe to address local impacts related to the proposed relocation of the Eagle Mountain Casino to land adjacent to the Porterville Airport. Tule River Tribal Council adopted the MOU at their meeting on Dec. 30, 2019 meeting.

Under the agreement, the tribe agrees to pay $3.5 million for Sheriff’s law enforcement services, with $1 million due within 30 days of opening and rest paid in 12 quarterly payments beginning on second anniversary of opening day. The tribe also agrees to a one-time payment of $196,000 towards a fire engine and related equipment to be housed at Tulare County Fire Station 19 in Porterville. The proposed relocation project will also include a new tertiary water treatment facility and a fire station at the casino site with the capability to assist the City and County on emergency calls. If a fire station is not constructed, the tribe will make annual payments of $48,667 for fire service. The tribe will also pay an additional $550,000 per year for ongoing public safety equipment and maintenance, road maintenance and traffic control costs, and mental health services costs. The agreement also includes fair share contributions toward road projects including intersection improvements, traffic signals and roundabouts. Once effective (legislative ratification and federal approval required), this Compact will be in full force and effect for 25 years following the effective date.

1. Brief History of the Tribe. The original inhabitants of the San Joaquin Valley were the Yokut-speaking tribes – about 50 dialect groups occupying the territory along the rivers and creeks flowing from the Sierras and around the Tulare Lake. Their descendants today on the Tule River Indian Reservation continue to have the goal of self-government and self-sufficiency on the land. Many of the stories told by the Elders of the Tule River Indian Tribe have been handed down from generation to generation. Almost all these stories reflect the ways and life of the Tule River Tribes. All of the stories however, carry a strong message to the youth and adults in the region.

At one time, there were many different dialects spoken amongst the original inhabitants on Tule River Indian Reservation. Today, some Tule River Tribal members still teach and practice their Tribe’s dialect to continue the culture. In the old days, basket weaving was not only a common practice but a necessity of everyday life. Today, basket weaving has been a revived skill that is practiced amongst various Tule River Tribal members.

The Tribe is governed by a nine-member council. Each member is voted for by the Tule River Tribal members. The elected officials then decide who will perform functions of Chair, Vice Chair, Secretary, and Treasurer. On January 9, 2023, the Tule River Tribe celebrated 150 years. After being uprooted twice, once from Sebastian Reservation right below Bakersfield, and then from Madden Farm in East Porterville, the Tribe found a home on the Tule River Reservation. The Tribe operates the Eagle Mountain Casino and boasts 100,000-square feet of gaming floor featuring over 1,750 new and classic slot machines, along with 20 table games. The casino includes the Shōkanas Gift Shop with a wide selection of native merchandise.

According to the tribal casino internet website, the “Tule River Indian Tribe of California is a proud sovereign nation that is committed to improving the livelihood of its members and surrounding communities through culture and economic development. The tribe has a rich cultural history that it strives to preserve and maintain. They work to ensure that their traditions, customs, and beliefs are passed down to future generations, helping to keep their community strong and connected. The Tule River Indian Tribe’s dedication to their community and heritage is a testament to their resilience and strength as a sovereign nation.”

1. Scope of Class III Gaming Authorized. The Tribe is authorized to operate up to 2,500 slot machines, banking or percentage card games, and any devices or games that are authorized under state law to the California State Lottery, provided that the Tribe will not offer such games through use of the Internet unless others in the state not affiliated with or licensed by the California State Lottery are permitted to do so under state and federal law. The Tribe can operate off-track wagering on horse races at a satellite wagering facility pursuant to the requirements outlined in the Compact. The Tribe shall not engage in Class III Gaming that is not expressly authorized in the Compact.
2. Authorized Gaming Facility. The Tribe may establish and operate no more than two gaming facilities, one of which shall have no more than 500 slot machines, and engage in Class III gaming only on eligible Indian lands held in trust for the Tribe, located within the boundaries of the Tribe’s reservation.
3. Payments to the Special Distribution Fund (SDF). The Tribe shall pay to the State, on a pro rata basis, the costs the State incurs for the performance of all its duties under this Compact, as established by the monies appropriated in the annual Budget Act for the performance of their duties under the Class III Gaming Compacts. The Compact provides that the Tribe is eligible for a reduction or elimination of its SDF pro rata contribution if the Tribe remains a limited-gaming tribe and there are sufficient funds in the SDF.
4. Payments to the RSTF or the TNGF. If the Tribe operates more than 350 gaming devices at any time in a given calendar year, it shall thereafter, including in that calendar year, pay to the State Gaming Agency, for deposit into the Revenue Sharing Trust Fund or the Tribal Nation Grant Fund, 6.0% of its Net Win from its operation of gaming devices in excess of 350.
5. Distribution to Local Governments. If the Tribe operates more than 349 slot machines the Compact requires the Tribe to pay 0.5% of Net Win to neighboring jurisdictions, public agencies, and local charitable organizations to mitigate impacts upon those entities resulting from the operation of the Gaming Facility, or other purposes as the Tribe may see fit, consistent with the request of a recipient.
6. Credits Applied to the RSTF or the TNGF. Specifically, from its payments to the RSTF or the TNGF, the Tribe may take annual credits for up to 100% of the required payments, if the Tribe operates greater than or equal to 350 and less than or equal to 1,200 gaming devices; Annual credits for up to 80% of the payments required, if the Tribe operates greater than 1,200 and less than or equal to 1,800 gaming devices; Annual credits for up to 60% of the payments required, if the Tribe operates greater than 1,800 and less than or equal to 2,500) gaming devices, for in-kind contributions made to the County, local jurisdictions, and non-profit and civic organizations operating facilities or providing services within the County for improved fire, emergency medical services, law enforcement, public transit, education, tourism, health care, transit, road improvements, and other specified payments.
7. Labor Provisions. The Tribe has entered into an agreement under the federal Labor Management Relations Act and has maintained the TLRO from its 2012 compact. Under the TLRO, if the tribe employs 250 or more persons in a tribal casino facility, then the provisions of the TLRO become effective. The TLRO makes it clear that employees shall have the right to self-organization, to form, to join, or assist employee organizations, to bargain collectively through representatives of their own choosing. The TLRO provides for a secret ballot election and union neutrality. After verification that 30% of the eligible employees in a bargaining unit have expressed an interest in the union, a notice of election shall be issued and the election shall be concluded within 30 calendar days thereafter. Union representation requires a majority of all votes cast.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 8/13/24)

None received

OPPOSITION: (Verified 8/13/24)

None received

Prepared by: Felipe Lopez / G.O. / (916) 651-1530

8/13/24 16:25:22

**** END ****

 THIRD READING  

Bill No: AB 3276

Author: Ramos (D)

Amended: 6/12/24 in Senate

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 6/11/24

AYES: Durazo, Seyarto, Dahle, Glazer, Skinner, Wahab, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 71-0, 5/16/24 (Consent) - See last page for vote

SUBJECT: Mitigation Fee Act: reports

SOURCE: Author

DIGEST:

This bill requires local agencies to post certain impact fee information on their websites by the end of the 2029-30 fiscal year for the previous five years, which it must do every five years thereafter.

ANALYSIS:

Existing law:

1. Allows local governments to require applicants for development projects to pay fees to mitigate the project’s effects, known as mitigation or development impact fees.
2. Requires, under the Mitigation Fee Act, local officials that are establishing, increasing, or imposing a fee as a condition of approving a development project to:
   1. Identify the fee's purpose.
   2. Identify the fee's use, including the public facilities to be financed.
   3. Determine a reasonable relationship between the fee's use and the development.
   4. Determine a reasonable relationship between the public facility's need and the development.
   5. Determine a reasonable relationship between the fee's amount and the cost of the public facility.
   6. Hold at least one open and public meeting prior to levying a new fee or increasing an existing one.
   7. If they decide to adopt capital improvement plans, indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees.
   8. Deposit and spend the fees within five years of collecting them.
   9. Refund fees or make specific findings on when and how the fees will be spent for construction, if the fees aren’t spent within five years of collection.
3. Requires local agencies to deposit mitigation fees to fund a capital improvement associated with a development in a separate account or fund.
4. Requires local agencies that impose mitigation fees to produce an annual report within 180 days of the end of the fiscal year that includes specified information.
5. Requires a city, county, or special district that has an internet website to post and update on their websites specified information, including a current schedule of housing development project costs, zoning ordinances and development standards, annual impact fee reports, and an archive of specified impact fee nexus studies.
6. Requires local agencies to conduct and adopt a nexus study prior to the adoption of an impact fee, and specified standards and practices.
7. Provides that cities and counties cannot collect impact fees before they conduct the final inspection or issue a certificate of occupancy, whichever occurs first. However, utilities can collect impact fees at the time the utility receives an application for service, which can happen before a final inspection.

This bill requires a local agency that has a website to post specified information on how it spent mitigation fee revenue in each separate account or fund in which it deposits the revenue for the preceding five years on or before the last day of the 2029-30 fiscal year, and on or before the last day of each fifth fiscal year thereafter.

Comments

1. Purpose of the bill. According to the author, “AB 3276 will provide communities and business with greater sense of transparency into what their local governments are spending on using the money they collected from the collection of Mitigation Fees. This bill would ensure that the people have easy access to this information and that local agencies do their due diligence to maintain a level of transparency that is expected of them by the people of California.”
2. No free lunch. This bill imposes new requirements on local agencies that impose fees without any additional resources to help them comply with new requirements. Absent additional resources, local agencies may have to increase fees if they need additional resources to satisfy new requirements. So, while fees may be more transparent, they could end up higher than they were before. In the case of this bill, local agencies only have to post information online they already must make publicly available, which may not require significant additional resources. However, if a local agency must make more significant updates to its website to comply with these requirements, the agency would face more significant pressure to increase their fees.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 6/25/24)

California Apartment Association

OPPOSITION: (Verified 6/25/24)

None received

ASSEMBLY FLOOR: 71-0, 5/16/24

AYES: Aguiar-Curry, Alanis, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Holden, Hoover, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Addis, Alvarez, Cervantes, Megan Dahle, Flora, Vince Fong, Gipson, Irwin, Mathis

Prepared by: Jonathan Peterson / L. GOV. / (916) 651-4119

6/27/24 15:38:58

**** END ****

 CONSENT  

Bill No: AB 3276

Author: Ramos (D)

Amended: 6/12/24 in Senate

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 6/11/24

AYES: Durazo, Seyarto, Dahle, Glazer, Skinner, Wahab, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 71-0, 5/16/24 (Consent) - See last page for vote

SUBJECT: Mitigation Fee Act: reports

SOURCE: Author

DIGEST:

This bill requires local agencies to post certain impact fee information on their websites by the end of the 2029-30 fiscal year for the previous five years, which it must do every five years thereafter.

Existing law:

1. Allows local governments to require applicants for development projects to pay fees to mitigate the project’s effects, known as mitigation or development impact fees.
2. Requires, under the Mitigation Fee Act, local officials that are establishing, increasing, or imposing a fee as a condition of approving a development project to:
   1. Identify the fee's purpose.
   2. Identify the fee's use, including the public facilities to be financed.
   3. Determine a reasonable relationship between the fee's use and the development.
   4. Determine a reasonable relationship between the public facility's need and the development.
   5. Determine a reasonable relationship between the fee's amount and the cost of the public facility.
   6. Hold at least one open and public meeting prior to levying a new fee or increasing an existing one.
   7. If they decide to adopt capital improvement plans, indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees.
   8. Deposit and spend the fees within five years of collecting them.
   9. Refund fees or make specific findings on when and how the fees will be spent for construction, if the fees aren’t spent within five years of collection.
3. Requires local agencies to deposit mitigation fees to fund a capital improvement associated with a development in a separate account or fund.
4. Requires local agencies that impose mitigation fees to produce an annual report within 180 days of the end of the fiscal year that includes specified information.
5. Requires a city, county, or special district that has an internet website to post and update on their websites specified information, including a current schedule of housing development project costs, zoning ordinances and development standards, annual impact fee reports, and an archive of specified impact fee nexus studies.
6. Requires local agencies to conduct and adopt a nexus study prior to the adoption of an impact fee, and specified standards and practices.
7. Provides that cities and counties cannot collect impact fees before they conduct the final inspection or issue a certificate of occupancy, whichever occurs first. However, utilities can collect impact fees at the time the utility receives an application for service, which can happen before a final inspection.

This bill requires a local agency that has a website to post specified information on how it spent mitigation fee revenue in each separate account or fund in which it deposits the revenue for the preceding five years on or before the last day of the 2029-30 fiscal year, and on or before the last day of each fifth fiscal year thereafter.

ANALYSIS:

1. Purpose of the bill. According to the author, “AB 3276 will provide communities and business with greater sense of transparency into what their local governments are spending on using the money they collected from the collection of Mitigation Fees. This bill would ensure that the people have easy access to this information and that local agencies do their due diligence to maintain a level of transparency that is expected of them by the people of California.”
2. No free lunch. This bill imposes new requirements on local agencies that impose fees without any additional resources to help them comply with new requirements. Absent additional resources, local agencies may have to increase fees if they need additional resources to satisfy new requirements. So, while fees may be more transparent, they could end up higher than they were before. In the case of AB 3276, local agencies only have to post information online they already must make publicly available, which may not require significant additional resources. However, if a local agency must make more significant updates to its website to comply with these requirements, the agency would face more significant pressure to increase their fees.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 6/25/24)

California Apartment Association

OPPOSITION: (Verified 6/25/24)

None received

ASSEMBLY FLOOR: 71-0, 5/16/24

AYES: Aguiar-Curry, Alanis, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Friedman, Gabriel, Gallagher, Garcia, Grayson, Haney, Hart, Holden, Hoover, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Addis, Alvarez, Cervantes, Megan Dahle, Flora, Vince Fong, Gipson, Irwin, Mathis

Prepared by: Jonathan Peterson / L. GOV. / (916) 651-4119

6/26/24 13:53:48

**** END ****

SENATE COMMITTEE ON LOCAL GOVERNMENT

Senator María Elena Durazo, Chair

2023 - 2024 Regular

Mitigation Fee Act: reports

Requires local agencies to post certain impact fee information on their websites by the end of the 2029-30 fiscal year for the previous five years, which it must do every five years thereafter.

Background

Local government finance after Proposition 13. A series of propositions have drastically cut into local revenue sources, requiring local governments to look elsewhere to fund services that the public demands. First, Proposition 13 (1978) capped property tax rates at 1% of assessed value (which only changes upon new construction or when ownership changes) and required 2/3 voter approval for special taxes; as a result local governments turned to general taxes to avoid the higher voter threshold. When Proposition 62 (1986) required majority voter approval of general taxes, local agencies imposed assessments that were more closely tied to the benefit that an individual property owner receives. Subsequently, Proposition 218 (1996) required voter approval of parcel taxes, assessments, and property-related fees.

In response to the reduction in property tax revenues from Proposition 13 and the difficulty of raising taxes, local agencies have turned to other sources of funds for general operations, including sales taxes and transient occupancy taxes, also known as hotel taxes. Commercial enterprises generate sales tax and hotel tax revenue, and simultaneously pay property taxes and demand relatively few services (such as public safety or parks). Residential developments, by contrast, do not directly generate sales or hotel tax revenue, and the new residents demand a wider variety of more intensive services. As a result, cities and counties face a disincentive to approve housing because of the higher net fiscal cost of residential development, particularly if they have the option to instead permit commercial development that may produce net fiscal benefits, also known as the fiscalization of land use.

Since they cannot impose broad-based taxes without great difficulty, cities and counties follow a simple principle: new developments should pay for the impacts they have on the community and the burden they impose on public services.

Mitigation Fee Act. When approving development projects, counties and cities can require the applicants to mitigate the project's effects by paying fees—known as mitigation fees, impact fees, or developer fees. The California courts have upheld impact fees for sidewalks, parks, school construction, and many other public purposes.

When establishing, increasing, or imposing a fee as a condition of approving a development project, the Mitigation Fee Act requires local officials to:

• Identify the fee’s purpose;
• Identify the fee’s use, including the public facilities to be financed;
• Determine a reasonable relationship between the fee’s use and the development; and
• Determine a reasonable relationship between the public facility’s need and the development.

When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee’s amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an “essential nexus” between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

In the 1996 Ehrlich decision, the California Supreme Court distinguished between “legislatively enacted” conditions that apply to all projects and “ad hoc” conditions imposed on a project-by- project basis. Ehrlich applied the “essential nexus” test from Nollan and the “rough proportionality” test from Dolan to “ad hoc’ conditions. The Court did not apply the Nollan and Dolan tests to the conditions that were “legislatively enacted.” In other words, local officials face greater scrutiny when they impose conditions on a project-by-project basis.

As a result of these decisions and the Mitigation Fee Act, local agencies must conduct a nexus study to ensure any proposed impact fees meet these legal tests for most impact fees. Other requirements in the Mitigation Fee Act ensure that impact fees are appropriately levied and spent, including that a local agency must:

• Hold at least one open and public meeting prior to levying a new fee or increasing an existing one;
• If it decides to adopt capital improvement plans, indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees;
• Deposit and spend the fees within five years of collecting them; and
• Refund fees or make specific findings on when and how the fees will be spent for construction, if the fees are not spent within five years of collection.

If a local agency levies an impact fee to fund a capital improvement associated with a development, it must deposit the fees with any other fees for that improvement in a separate account or fund.

Local officials must also produce an annual report within 180 days of the end of the fiscal year that includes information on the fee amounts, how they used the revenue, and any unspent funds, broken up by each separate fund. The local agency must review this information at the next regularly scheduled public meeting at least 15 days from when it makes the information available to public. It must also provide notice to the public at least 15 days prior to the meeting.

Impact fee audit requirements. Any person may request an independent audit of how the impact fees have been collected and spent, including an assessment of whether the fees exceed the amount reasonably necessary to cover the costs of the stated projects or services. If a person makes that request, the local agency retains an independent auditor to conduct the audit, provided that an audit has not been performed on the same fee within the previous 12 months and the requestor deposits funds necessary to cover the estimated cost for the audit with the local agency. A local agency must adjust its fees if the audit finds that the fees are set too high.

Impact fee transparency legislation. To increase transparency around impact fees, the Legislature enacted AB 1483 (Grayson, 2019). AB 1483 requires cities and counties to post specified housing-related information on their web sites and requires HCD to establish a workgroup, as specified, to develop a strategy for state housing data.

AB 1483 also requires a city, county, or special district that has an internet website to post on their websites the following information, as applicable:

• A current schedule of mitigation fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts of the city or county, applicable to a housing development project, in a manner that clearly identifies the fees that apply to each parcel.
• All zoning ordinances and development standards, including which standards apply to each parcel.
• A list that cities and counties must develop under existing law of projects located within military use airspace or low-level flight path.
• The current and five previous annual fee reports or the current and five previous annual financial reports that local agencies must compile under to existing law.
• An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

A city, county, or special district must update this information on their website within 30 days of any change. The measure also required cities and counties to request the total amount of fees and exactions associated with the project from a developer after construction, but the developer does not have to respond. The city or county must post this information on its internet website, and update it at least twice per year.

Nexus studies. Subsequently, AB 602 (Grayson, 2021) added new impact fee requirements. This bill amended the law to require the preparation of nexus studies to follow certain standards and practices including:

• When applicable, identify the existing level of service and proposed new level of service, explain the metric being used, and include an explanation of why the new level of service is necessary;
• In calculating the fee, require the fee to be proportionate to the square footage of the proposed units, unless the local agency makes a finding that another standard is more appropriate. Local agencies can still establish different fees for different types of developments;
• Adopt a capital improvement plan in jurisdictions located in counties with over 250,000 residents;
• Adopt studies at a public hearing with at least 30 days’ notice, which must be provided to members of the public that request it;
• Calculate fees using standards that comply with existing law, including, but not limited to, vehicle miles traveled; and
• Update studies every eight years, from the period beginning on January 1, 2022.

Importantly, AB 602 exempted sewer and water connection fees and capacity charges. The next year AB 2536 (Grayson, 2022) imposed new requirements when a local agency imposes a connection fee or capacity charge. Prior to levying a new connection fee or capacity charge, the local agency must evaluate the amount of the fee or charge, which must include evidence the fee or charge amount does not exceed the estimated reasonable cost of providing service. The local agency must make all the information included in the evaluation available at least 14 days prior to the public meeting it must hold. The measure also provided it must not be construed to relieve a local agency of complying with existing law, the Constitution, or applicable case law.

The author wants to increase impact fee transparency.

Proposed Law

Assembly Bill 3276 requires for each separate account or fund, on or before the last day of the 2029-30 fiscal year, and on or before the last day of each fifth fiscal year thereafter, the local agency to post on its internet website the information for the preceding five years.

Comments

1. Purpose of the bill. According to the author, “AB 3276 will provide communities and business with greater sense of transparency into what their local governments are spending on using the money they collected from the collection of Mitigation Fees. This bill would ensure that the people have easy access to this information and that local agencies do their due diligence to maintain a level of transparency that is expected of them by the people of California.”

2. No free lunch. AB 3276 imposes new requirements on local agencies that impose fees without any additional resources to help them comply with new requirements. Absent additional resources, local agencies may have to increase fees if they need additional resources to satisfy new requirements. So, while fees may be more transparent, they could end up higher than they were before. In the case of AB 3276, local agencies only have to post information online they already must make publicly available, which may not require significant additional resources. However, if a local agency must make more significant updates to its website to comply with these requirements, the agency would face more significant pressure to increase their fees.

3. What website? While most local agencies have websites, not all of them do. Specifically, SB 929 (McGuire, 2018) exempted special districts from a requirement to have a website if the district adopts a resolution declaring its determination that a hardship exists that prevents the district from establishing or maintaining a website. A special district that has adopted such a resolution would have to create a website to comply with AB 3276’s requirements. The Committee may wish to consider amending the bill to exempt these local agencies that do not have a website.

4. Choppy waters ahead? The U.S. Supreme Court recently decided Sheetz vs. County of El Dorado. In this case, an El Dorado County resident challenged the county’s legislatively enacted traffic impact mitigation fee arguing the county should only charge him based on the impact associated with his specific parcel. In other words, legislatively enacted fees should be subject to the same standards as ad hoc fees. The decision concluded the federal constitution does not distinguish between legislatively enacted and ad hoc fees, and remanded the case back to the California Court of Appeals’ Third District for a decision in line with its holding. Should the Committee consider Mitigation Fee Act legislation before the California Court of Appeals makes its final decision?

5. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 3276 adds to the duties of local officials, Legislative Counsel says the bill imposes a new state mandate. AB 3276 disclaims the state’s responsibility for providing reimbursement by citing local governments’ authority to charge for the costs of implementing the bill's provisions.

6. The song that never ends. The Legislature is considering several other pieces of legislation concerning the Mitigation Fee Act:

• SB 937 (Wiener, 2024), which this Committee approved on a 6-0 vote at its April 3^rd hearing, makes various changes to the process for local agencies to collect development impact fees, and extends development entitlements. The measure is awaiting referral in the Assembly.
• SB 1210 (Skinner, 2024), which this Committee approved on a 5-2 vote at its April 17^th hearing, requires electrical, gas, sewer, and water service utilities to post fee schedules and estimated timeframes for new service connections and capacity upgrades needed to connect new housing construction projects. The measure is awaiting referral in the Assembly.
• AB 1820 (Schiavo, 2024) requires a city or county to provide an estimate of fees and exactions for the project within 30 days of receiving a preliminary application for a housing development project upon a request from the project applicant for an estimate. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 2553 (Friedman, 2024) redefines “major transit stop” for purposes of exempting housing developments within ½ mile of a major transit stop from specified impact fees. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 2663 (Grayson, 2024) requires local agencies to post certain information regarding affordable housing impact fees on their websites. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 2729 (Joe Patterson, 2024) removes the requirement on local agencies that fees must be paid prior to the date of final inspection or issuance of the certificate of occupancy, whichever occurs first. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 3012 (Grayson, 2024) requires cities and counties to create a fee estimate tool the public can use to calculate an estimate of fees and exactions for a proposed housing development project available on its internet website. It also requires the Department of Housing and Community Development to create a fee schedule template, develop best practices for displaying fees, and gives the department the option to create a fee estimate tool. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 3177 (W. Carrillo, 2024) prohibits land dedications for the purpose of mitigating vehicular traffic on housing developments. The measure is also scheduled for this Committee’s June 11^th hearing.

Assembly Actions

Assembly Local Government Committee: 9-0
Assembly Housing and Community Development Committee: 9-0
Assembly Appropriations Committee: 15-0
Assembly Floor: 71-0

Support and Opposition

(6/7/24)

Support: California Apartment Association

Opposition: None submitted.

-- END --

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 3276

Author:(Ramos) – As Amended Ver:March 21, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires a local agency, by the last day of the 2029-30 fiscal year and each fifth fiscal year thereafter, to post information it must otherwise make available to the public pursuant to the Mitigation Fee Act on its internet website. The local agency must do so for each separate account or fund for the preceding five years.

FISCAL EFFECT:

No state costs. Local costs resulting from this bill are not reimbursable by the state because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates.

COMMENTS:

1. Purpose. The author seeks to improve transparency regarding fees collected pursuant to the Mitigation Fee Act. According to the author:

[This bill] will provide communities and business with greater sense of transparency into what their local governments are spending on using the money they collected from the collection of Mitigation Fees. This bill would ensure that the people have easy access to this information and that local agencies do their due diligence to maintain a level of transparency that is expected of them by the people of California.

1. Background. The Mitigation Fee Act governs fees a local agency may levy on a development project to mitigate the project's effects on the local community. These fees are commonly known as mitigation fees, impact fees, or developer fees.

The Mitigation Fee Act requires local officials, when establishing, increasing, or imposing a fee as a condition of approving a development project, to identify the fee's purpose, identify the fee's use, including the public facilities to be financed, determine a reasonable relationship between the fee's use and the development, and determine a reasonable relationship between the public facility's need and the development. The Mitigation Fee Act requires the local agency to deposit the fee in a separate capital facilities account or fund, and to make certain information about the account or fund for the fiscal year available to the public within 180 days after the last day of each fiscal year. 

This bill additionally requires a local agency, once every five years, to post this information for each account or fund for the preceding five years on the local agency’s website.

Since 2019, in an effort to improve local fee transparency, the Legislature has enacted a variety of laws requiring local agencies to post information regarding fees and other development standards on their websites.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

Christopher M. Ward, Chair

ABPCA Bill Id:AB 3276 (

Author:Ramos) – As Amended Ver:March 21, 2024

SUBJECT: Mitigation Fee Act: reports

SUMMARY: Requires local agencies to post on their internet websites specified information they must already provide to the public pursuant to the Mitigation Fee Act. Specifically, this bill:

1. Requires a local agency to post on its internet website the information it must provide to the public pursuant to the Mitigation Fee Act for each separate account or fund that a local agency establishes for the payment of development fees. This information includes the following, for the preceding five years:
   1. A brief description of the type of fee in the account or fund;
   2. The amount of the fee;
   3. The beginning and ending balance of the account or fund;
   4. The amount of the fees collected and the interest earned;
   5. An identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees; and
   6. Specified information on incomplete public improvements, interfund transfers or loans, and specified refunds.
2. Requires the information that must be posted on a local agency’s website pursuant to 1), to be posted on or before the last day of the 2029–30 fiscal year, and on or before the last day of each fifth fiscal year thereafter.

EXISTING LAW:

1. Establishes the Mitigation Fee Act, which governs fees local agencies may levy on development projects. (Government Code (GOV) Section 66000-66025)
2. Requires local agencies to deposit fees they collect with the other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency, except for temporary investments, and expend those fees solely for the purpose for which the fee was collected. Any interest income earned by moneys in the capital facilities account or fund shall also be deposited in that account or fund and shall be expended only for the purpose for which the fee was originally collected. (GOV 66006)
3. Requires a local agency to make the following information publicly available within 180 days of the last day of each fiscal year, and on or before the last day of each fiscal year: (GOV 66006)
4. A brief description of the type of fee in the account or fund;
5. The amount of the fee;
6. The beginning and ending balance of the account or fund;
7. The amount of the fees collected and the interest earned; and,
8. An identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees.
9. Requires a city, county, or special district that has an internet website to make information available on its internet website, including the current schedule of fees, exactions, and affordability requirements that will be imposed by that city, county, or special district, applicable to housing development projects. (GOV 65940.1)
10. Requires a city or county to request from a development proponent, upon certificate of occupancy or final inspection, whichever occurs last, the total amount of fees and exactions associated with the project, and post that information on its internet website. (GOV 65940.1)

FISCAL EFFECT: Unknown.

COMMENTS:

Author’s Statement: According to the author, “AB 3276 will provide communities and business with greater sense of transparency into what their local governments are spending on using the money they collected from the collection of Mitigation Fees. This bill would ensure that the people have easy access to this information and that local agencies do their due diligence to maintain a level of transparency that is expected of them by the people of California.”

The Mitigation Fee Act: Development fees serve many purposes and can be broadly divided into two categories: service fees and impact fees. Service fees cover staff hours and overhead, and are used to fund the local agency’s role in the development process such as paying for plan reviews, permit approvals, inspections, and any other services related to a project moving through various local departments. Impact fees refer generally to fees that offset the public costs of new infrastructure incurred by the larger community. In the wake of the passage of Proposition 13 in 1978 and the loss of significant property tax revenue, local governments have also turned to development fees as a means to pay for new infrastructure. According to the UC Berkeley Terner Center for Housing Innovation, between 2008 and 2015, California fees rose 2.5%, while the national average decreased by 1.2%.^[1] Development fees can comprise 17% of the total development costs of new housing, and in California in 2015, impact fees were nearly three times the national average.^[2]

The Mitigation Fee Act governs the imposition, collection, and use of impact fees collected by local governments when reviewing and approving development proposals.

Key aspects of the Mitigation Fee Act include:

1. Nexus Requirement: The Act requires a clear "nexus" or connection between the fee charged and the impact created by the development, typically established via a nexus study. This means that the fees collected must be used to address the specific impacts that the new development is expected to have on public facilities and services.
2. Proportionality: The fees charged must be proportional to the impact of the development.
3. Accountability: Local governments are required to establish separate accounts for the fees collected and to use the funds solely for the intended purposes. They must also provide annual reports on the status of the fees, including the balance and how the funds have been used.
4. Timing of Fee Payment: The Act specifies when fees can be collected, generally at the time of final inspection or when certificate of occupancy is issued, with some exceptions, as specified below in the “Collection of Impact Fees” section. This bill would remove those exceptions.
5. Refunds: If the fees collected are not used within five years, and specific findings are not made, the Act provides for the refund of the fees.

When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee’s amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an “essential nexus” between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

In the 1996 Ehrlich decision, the California Supreme Court distinguished between “legislatively enacted” conditions that apply to all projects and “ad hoc” conditions imposed on a project-by- project basis. Ehrlich applied the “essential nexus” test from Nollan and the “rough proportionality” test from Dolan to “ad hoc’ conditions. The Court did not apply the Nollan and Dolan tests to the conditions that were “legislatively enacted.” In other words, local officials face greater scrutiny when they impose conditions on a project-by-project basis.

However, in an April 2024 ruling in Sheetz v. El Dorado County, the U.S. Supreme Court ruled that exactions imposed legislatively are also subject to the Nollan/Dolan tests. This means that the court ruled that legislatively enacted conditions must also have an “essential nexus” between the proposed project’s impact and the associated exactions, and be “roughly proportional” to the impact.

Fee Transparency: In response to a 2019 Terner Center for Housing Innovation report that studied fee transparency, among other issues, AB 1483 (Grayson), Chapter 662, Statutes of 2019, required cities, counties, and special districts to post specified housing related information on their websites. This information included the following:

1. A current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts, of the city or county applicable to a proposed housing development project, which must be presented in a manner that clearly identifies the fees, exactions, and affordability requirements that apply to each parcel.
   
2. All zoning ordinances and development standards, which must specify the zoning, design, and development standards that apply to each parcel.
   
3. A list that cities and counties must develop under existing law of projects located within military use airspace or a low-level flight path.
   
4. Specified annual fee reports or specified annual financial reports.
   
5. An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

Since the passage of AB 1483, the information required to be posted on a local agency’s website has changed. SB 1473 (Senate Committee on Governance and Finance), Chapter 371, Statutes of 2020, required local agencies to separately post their schedule for connection fees and capacity charges, without being tied to specific parcels, and made technical fixes to ensure that special districts were properly accounted for by AB 1483. Additionally, AB 602 (Grayson), Chapter 347, Statutes of 2021, required local agencies, among other things, to do the following:

1. Post a written fee schedule or a link directly to the written fee schedule on its internet website.
   
2. Request from a development proponent, upon issuance of a certificate of occupancy or the final inspection, whichever occurs last, the total amount of fees and exactions associated with the project for which the certificate was issued. The city or county must post this information on its website, and update it at least twice per year. A city or county is not responsible for the accuracy of the information received by the development proponent.

Impact Fee Audit Requirements: Any person may request an independent audit of how impact fees have been collected and spent, including an assessment of whether the fees exceed the amount reasonably necessary to cover the costs of the stated projects or services. If a person makes that request, the local agency must retain an independent auditor to conduct the audit, provided that an audit has not been performed for the same fee within the previous 12 months and the requestor deposits the estimated cost for the audit with the local agency. A local agency must adjust its fees if the audit finds that the fees are set too high.

In response to reports of some local agencies not filing the annual impact fee reports in a timely fashion, the Legislature enacted SB 1202 (Stone) Chapter 357, Statutes of 2018, which required local agencies that do not complete their impact fee annual reports for three consecutive years to pay the costs of any requested audits.

This bill would require local agencies to post on their internet websites specified information they must already track and make available to the public pursuant to the Mitigation Fee Act. Making it a requirement for local governments to include this information on their website would help to increase transparency and clarity at the local level regarding the use of development impact fees, to ensure that the fees collected are used promptly, effectively, and appropriately.

Arguments in Support: None on file.

Arguments in Opposition: None on file.

Double Referred: This bill is double referred. It was heard in the Assembly Committee on Local Government and passed on a vote of 9-0 on April 17, 2024.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Dori Ganetsos / H. & C.D. / (916) 319-2085

1. Sarah Mawhorter, David Garcia and Hayley Raetz, It All Adds Up: The Cost of Housing Development Fees in Seven California Cities, Terner Center for Housing Innovation, March

   2018, https://ternercenter.berkeley.edu/research-and-policy/it-all-adds-up-development-fees ↑

2. IBID. ↑

Date of Hearing: April 17, 2024

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Juan Carrillo, Chair

ABPCA Bill Id:AB 3276 (

Author:Ramos) – As Amended Ver:March 21, 2024

SUBJECT: Mitigation Fee Act: reports

SUMMARY: Requires local agencies to post on their internet websites specified information they must already provide to the public pursuant to the Mitigation Fee Act. Specifically, this bill:

1. Requires, for each separate account or fund that a local agency must establish if it requires the payment of development fees, as specified, the local agency to post on its internet website the information it must provide to the public pursuant to the Mitigation Fee Act. This information includes the following, for the preceding five years:
   1. A brief description of the type of fee in the account or fund.
   2. The amount of the fee.
   3. The beginning and ending balance of the account or fund.
   4. The amount of the fees collected and the interest earned.
   5. An identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees.
   6. Specified information on incomplete public improvements, interfund transfers or loans, and specified refunds.
2. Requires the information that must be posted on a local agency’s website pursuant to 1), above, to be posted on or before the last day of the 2029–30 fiscal year, and on or before the last day of each fifth fiscal year thereafter.
3. Provides that no reimbursement is required by this bill pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this bill, within the meaning of Section 17556 of the Government Code.

EXISTING LAW:

1. Establishes the Mitigation Fee Act, which governs fees local agencies may levy on development projects. [Government Code (GOV) § 66000-66025]
2. Requires local agencies to deposit fees they collect with the other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency, except for temporary investments, and expend those fees solely for the purpose for which the fee was collected. Any interest income earned by moneys in the capital facilities account or fund shall also be deposited in that account or fund and shall be expended only for the purpose for which the fee was originally collected. (GOV §6606)
3. Requires a local agency to make the following information publicly available within 180 days of the last day of each fiscal year, and on or before the last day of each fiscal year (GOV §6606):
4. A brief description of the type of fee in the account or fund.
5. The amount of the fee.
6. The beginning and ending balance of the account or fund.
7. The amount of the fees collected and the interest earned.
8. An identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees.

FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.

COMMENTS:

1. Bill Summary and Author’s Statement. This bill requires local agencies to post on their internet websites specified information they must already provide to the public pursuant to the Mitigation Fee Act.

According to the author, “AB 3276 will provide communities and business with greater sense of transparency into what their local governments are spending on using the money they collected from the collection of Mitigation Fees. This bill would ensure that the people have easy access to this information and that local agencies do their due diligence to maintain a level of transparency that is expected of them by the people of California.”

1. Mitigation Fee Act. When approving development projects, counties and cities can require the applicants to mitigate the project's effects by paying fees-known as mitigation fees, impact fees, or developer fees. The California courts have upheld impact fees for sidewalks, parks, school construction, and many other public purposes.
   
   When establishing, increasing, or imposing a fee as a condition of approving a development project, the Mitigation Fee Act requires local officials to:
   1. Identify the fee's purpose.
   2. Identify the fee's use, including the public facilities to be financed.
   3. Determine a reasonable relationship between the fee's use and the development.
   4. Determine a reasonable relationship between the public facility's need and the development.

When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee's amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an "essential nexus" between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

In the 1996 Ehrlich decision, the California Supreme Court distinguished between "legislatively enacted" conditions that apply to all projects and "ad hoc" conditions imposed on a project-by- project basis. Ehrlich applied the "essential nexus" test from Nollan and the "rough proportionality" test from Dolan to "ad hoc' conditions. The Court did not apply the Nollan and Dolan tests to the conditions that were "legislatively enacted." In other words, local officials have generally faced greater scrutiny when they impose conditions on a project-by-project basis. As a result of these decisions and the Mitigation Fee Act, local agencies have conducted nexus studies to ensure any proposed impact fees meet these legal tests for most impact fees. Other requirements in the Mitigation Fee Act ensure that impact fees are appropriately levied and spent.

On April 12 of this year, the United States Supreme Court decided Sheetz v. County of El Dorado, California. The case involved the takings clause of the Fifth Amendment to the U.S. Constitution. An El Dorado County resident challenged the county's legislatively enacted traffic impact mitigation fee, arguing the county should only charge him based on the impact associated with his specific parcel. The main question was whether or not the same standards of "essential nexus" and "rough proportionality" apply to legislatively enacted fees as they do to ad-hoc fees.

In the Sheetz decision, the Court stated, "A legislative exception to the Nollan/Dolan test 'conflicts with the rest of our takings jurisprudence,' which does not otherwise distinguish between legislation and other official acts. Knick v. Township of Scott, 588 U. S. 180, 185 (2019)." The Court also proclaimed that, "...as we have explained, a legislative exception to the ordinary takings rules finds no support in constitutional text, history, or precedent. We do not address the parties' other disputes over the validity of the traffic impact fee, including whether a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development. The California Court of Appeal did not consider this point-or any of the parties' other nuanced arguments-because it proceeded from the erroneous premise that legislative permit conditions are categorically exempt from the requirements of Nollan and Dolan. Whether the parties' other arguments are preserved and how they bear on Sheetz's legal challenge are for the state courts to consider in the first instance."

In addition, Justice Kavanaugh filed a concurring opinion, in which Justices Kagan and Jackson joined saying that, "I join the Court's opinion. I write separately to underscore that the Court has not previously decided-and today explicitly declines to decide-whether 'a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development.' Ante, at 10-11. Importantly, therefore, today's decision does not address or prohibit the common government practice of imposing permit conditions, such as impact fees, on new developments through reasonable formulas or schedules that assess the impact of classes of development rather than the impact of specific parcels of property. Moreover, as is apparent from the fact that today's decision expressly leaves the question open, no prior decision of this Court has addressed or prohibited that longstanding government practice."

1. Fee Transparency. In response to a 2019 Terner Center for Housing Innovation report that studied fee transparency, among other issues, AB 1483 (Grayson), Chapter 662, Statutes of 2019, required cities, counties, and special districts to post specified housing related information on their websites. This information included the following:
   1. A current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts, of the city or county applicable to a proposed housing development project, which must be presented in a manner that clearly identifies the fees, exactions, and affordability requirements that apply to each parcel.
      
   2. All zoning ordinances and development standards, which must specify the zoning, design, and development standards that apply to each parcel.
      
   3. A list that cities and counties must develop under existing law of projects located within military use airspace or a low-level flight path.
      
   4. Specified annual fee reports or specified annual financial reports.
      
   5. An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

Since the passage of AB 1483, the information required to be posted on a local agency’s website has changed. AB 1473 (Senate Committee on Governance and Finance), Chapter 371, Statutes of 2020, required local agencies to separately post their connection fees and capacity charges, without being tied to specific parcels, and made technical fixes to ensure that special districts were properly accounted for by AB 1483. Additionally, AB 602 (Grayson), Chapter 347, Statutes of 2021, required local agencies, among other things, to do the following:

• 1. Post a written fee schedule or a link directly to the written fee schedule on its internet website.
     
  2. Request from a development proponent, upon issuance of a certificate of occupancy or the final inspection, whichever occurs last, the total amount of fees and exactions associated with the project for which the certificate was issued. The city or county must post this information on its website, and update it at least twice per year. A city or county is not responsible for the accuracy of the information received by the development proponent.

1. Impact Fee Audit Requirements. Any person may request an independent audit of how the impact fees have been collected and spent, including an assessment of whether the fees exceed the amount reasonably necessary to cover the costs of the stated projects or services. If a person makes that request, the local agency retains an independent auditor to conduct the audit, provided that an audit has not been performed for the same fee within the previous 12 months and the requestor deposits the estimated cost for the audit with the local agency. A local agency must adjust its fees if the audit finds that the fees are set too high.

In response to reports of some local agencies not filing the annual impact fee reports in a timely fashion, the Legislature enacted SB 1202 (Stone) Chapter 357, Statutes of 2018, which required local agencies that do not complete their impact fee annual reports for three consecutive years to pay the costs of any requested audits.

1. Previous Legislation. SB 602 (Grayson), Chapter 347, Statutes of 2021, added new requirements to impact fee nexus studies, required local agencies to request certain information from development proponents and required the Department of Housing and Community Development to develop a nexus study template.

SB 319 (Melendez), Chapter 385, Statutes of 2021, required that, when a local agency fails to comply with impact fee reporting requirements, as specified, a local agency must cover the cost of a requested audit that covers each year they failed to report.

AB 1473 (Senate Committee on Governance and Finance), Chapter 371, Statutes of 2020, required local agencies to separately post their connection fees and capacity charges, without being tied to specific parcels, and made technical fixes to ensure that special districts were properly accounted for by AB 1483.

AB 1483 (Grayson), Chapter 662, Statues of 2019, required local jurisdiction to disseminate publicly information about its zoning ordinances, development standards, fees, exactions, and affordability requirements, and required the Department of Housing and Community Development to develop and update a 10-year housing data strategy.

SB 1202 (Stone) Chapter 357, Statutes of 2018, required local agencies that do not complete their impact fee annual reports for three consecutive years to pay the costs of any requested audits.

1. Arguments in Support. None on file.
2. Arguments in Opposition. None on file.
   
3. Double-Referral. This bill is double referred to the Assembly Housing and Community Development Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Linda Rios / L. GOV. / (916) 319-3958