Bill Text: CA AB2729 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Development projects: permits and other entitlements.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Enrolled) 2024-09-13 - Enrolled and presented to the Governor at 4 p.m. [AB2729 Detail]

Download: California-2023-AB2729-Amended.html

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Amended  IN  Senate  August 21, 2024

Amended  IN  Senate  August 05, 2024

Amended  IN  Senate  June 05, 2024

Amended  IN  Assembly  April 25, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 2729

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Introduced by Assembly Member Joe Patterson
(Coauthors: Assembly Members Megan Dahle, Hoover, and Jim Patterson)

February 15, 2024

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An act to amend Section 66007 of, and to add Section 65914.6 to, 65914.4 to the Government Code, relating to land use.

LEGISLATIVE COUNSEL'S DIGEST

AB 2729, as amended, Joe Patterson. Development projects: permits and other entitlements: fees and charges. entitlements.

The Planning and Zoning Law requires each county and each city to adopt a comprehensive, long-term general plan for its physical development, and the development of specified land outside its boundaries, that includes, among other mandatory elements, a housing element. Existing law, the Permit Streamlining Act, among other things, requires a public agency that is the lead agency for a development project to approve or disapprove that project within specified time periods. Existing law extended by 18 months the period for the expiration, effectuation, or utilization of a housing entitlement, as defined, that was issued before, and was in effect on, March 4, 2020, and that would expire before December 31, 2021, except as specified. Existing law provides that if the state or a local agency extended the otherwise applicable time for the expiration, effectuation, or utilization of a housing entitlement for not less than 18 months, as specified, that housing entitlement would not be extended an additional 18 months pursuant to these provisions.

This bill would extend by 18 months the period for the expiration, effectuation, or utilization of a housing entitlement, as defined, that was issued before January 1, 2024, and that will expire before December 31, 2025, except as specified. The bill would toll this 18-month extension during any time that the housing entitlement is the subject of a legal challenge. By adding to the duties of local officials with respect to housing entitlements, this bill would impose a state-mandated local program. The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

Existing law prohibits a local agency that imposes fees or charges on a residential development for the construction of public improvements or facilities from requiring the payment of those fees or charges until the date of the final inspection or the date the certificate of occupancy is issued, whichever occurs first. However, under existing law, a local agency is authorized to collect utility service fees at the time an application for utility service is received, and a local agency is authorized to require payment sooner if the local agency determines that the fees or charges will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan prior to final inspection or issuance of the certificate of occupancy, or if the fees or charges are to reimburse the local agency for expenditures previously made.

This bill would limit the utility service fees authorized to be collected at the time an application for utility service is received to utility service fees related to capacity charge connections. The bill would specify the circumstances under which a local agency may require payment of fees or charges at earlier times for designated residential development projects, as defined, including authorizing the local agency to require the payment of those fees and charges at the time the local agency issues a permit if the local agency determines, and provides supporting documentation to the applicant establishing, that construction for the public improvement or facility for which the fee or charge is required has commenced or will commence within 24 months of the issuance of the permit, as specified.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.Section 65914.6 is added to the Government Code, to read:

65914.6.

SECTION 1.

 Section 65914.4 is added to the Government Code, to read:

65914.4.

 (a) Except as provided in subdivision (b), notwithstanding any law, including any inconsistent provision of a local agency’s general plan, ordinances, or regulations, the otherwise applicable time for the expiration, effectuation, or utilization of a housing entitlement that is within the scope of the timeframes specified in paragraphs (1) and (2) is extended by 18 months. For the purposes of this section, housing entitlements that are extended are entitlements where both of the following apply:

(1) It was issued prior to and was in effect on January 1, 2024.

(2) It will expire prior to December 31, 2025.

The otherwise applicable time for the utilization of a housing entitlement provided by this section includes any requirement to request the issuance of a building permit within a specified period of time.

(b) If the state or a local agency extends, on or after January 1, 2024, but before the effective date of the act adding this section, the otherwise applicable time for the expiration, effectuation, or utilization of a housing entitlement for not less than 18 months and pursuant to the same conditions provided in subdivision (a), that housing entitlement shall not be extended for an additional 18 months by operation of subdivision (a).

(c) For purposes of this section, the following definitions apply:

(1) “Housing entitlement” means any of the following:

(A) A legislative, adjudicative, administrative, or any other kind of approval, permit, or other entitlement necessary for, or pertaining to, a housing development project issued by a state agency.

(B) An approval, permit, or other entitlement issued by a local agency for a housing development project that is subject to Chapter 4.5 (commencing with Section 65920).

(C) A ministerial approval, permit, or entitlement by a local agency required as a prerequisite to issuance of a building permit for a housing development project.

(D) A requirement to submit an application for a building permit within a specified period of time after the effective date of a housing entitlement described in subparagraph (B) or (C).

(E) A tentative map, vesting tentative map, or parcel map for which a tentative map or vesting tentative map, as the case may be, has been approved.

(E)

(F) A vested right associated with an approval, permit, or other entitlement described in subparagraphs (A) to (D), (E), inclusive.

(2) For the purposes of this section, a housing entitlement does not include any of the following:

(A) A development agreement issued pursuant to Article 2.5 (commencing with Section 65864).

(B) An approved or conditionally approved tentative map that is extended for a minimum of 24 months pursuant to Section 66452.6 on or after January 1, 2024.

(C) A preliminary application as defined in Section 65941.1.

(3) “Housing development project” means a residential development or mixed-use development in which at least two-thirds of the square footage of the development is designated for residential use. Both of the following apply for the purposes of calculating the square footage usage of a development for purposes of this section:

(A) The square footage of a development shall include any additional density, floor area, and units, and any other concession, incentive, or waiver of development standards pursuant to Section 65915.

(B) The square footage of a development shall not include any underground space, including, but not limited to, a basement or underground parking garage.

(4) “Local agency” means a county, city, whether general law or chartered, city and county, school district, special district, authority, agency, any other municipal public corporation or district, or other political subdivision of the state.

(d) The extension granted pursuant to subdivision (a) shall be tolled during any time that the housing entitlement is the subject of a legal challenge.

(e) Nothing in this section is intended to preclude a local government from exercising its existing authority to provide an extension to an entitlement identified in this section.

(f) The Legislature finds and declares that ensuring planned housing projects can continue without delays due to expiring entitlements is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.

SEC. 2.Section 66007 of the Government Code is amended to read:

66007.

(a)Except as otherwise provided in subdivision (b), any local agency that imposes any fees or charges on a residential development for the construction of public improvements or facilities shall not require the payment of those fees or charges, notwithstanding any other provision of law, until the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first. However, utility service fees related to capacity charge connections may be collected at the time an application for utility service is received. If the residential development contains more than one dwelling, the local agency may determine whether the fees or charges shall be paid on a pro rata basis for each dwelling when it receives its final inspection or certificate of occupancy, whichever occurs first; on a pro rata basis when a certain percentage of the dwellings have received their final inspection or certificate of occupancy, whichever occurs first; or on a lump-sum basis when the first dwelling in the development receives its final inspection or certificate of occupancy, whichever occurs first. The amount of fees and charges shall be the same amount as would have been paid had the fees and charges been paid prior to the issuance of building permits and the local agency shall not charge interest or other fees on any amount deferred pursuant to this section.

(b)Except as provided in subdivision (c), a local agency may do any of the following:

(1)(A)Defer the collection of one or more fees up to the close of escrow.

(B)This paragraph does not apply to fees and charges levied pursuant to Chapter 6 (commencing with Section 17620) of Part 10.5 of Division 1 of Title 1 of the Education Code.

(2)(A)Require the payment of those fees or charges at an earlier time if either of the following conditions is met:

(i)The local agency determines that the fees or charges will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan prior to final inspection or issuance of the certificate of occupancy.

(ii)The fees or charges are to reimburse the local agency for expenditures previously made.

(B)Methods of complying with the requirement in clause (i) of subparagraph (A) that a proposed construction schedule or plan be adopted, include, but are not limited to, either of the following:

(i)The adoption of the capital improvement plan described in Section 66002.

(ii)The submittal of a five-year plan for construction and rehabilitation of school facilities pursuant to subdivision (c) of Section 17017.5 of the Education Code.

(C)For purposes of this paragraph, “appropriated” means authorization by the governing body of the local agency for which the fee is collected to make expenditures and incur obligations for specific purposes.

(3)All of the following apply to a designated residential development project:

(A)If a local agency imposes any fees or charges described in subdivision (a) on the development for the construction of public improvements or facilities, then all of the following conditions apply:

(i)The local agency may only require the payment of the fees or charges at the time the local agency issues a permit if the local agency determines, and provides supporting documentation to the applicant establishing, that construction for the public improvement or facility for which the fee or charge is required has commenced or will commence within 24 months of the issuance of the permit.

(ii)If the construction does not commence within the timeframe described in clause (i) and the local agency has collected moneys pursuant to clause (i), the local government shall return the moneys to the applicant and the fees or charges shall be due at the time of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first.

(iii)Notwithstanding clause (ii), the local agency shall not be required to return any moneys that meet either of the following conditions:

(I)The moneys are pledged to debt service.

(II)The moneys are needed to make required payments under a design or construction contract for the construction of the public improvements.

(B)Notwithstanding subparagraph (A), a local agency may require the payment of fees or charges described in subdivision (a) at the time the local agency issues a building permit if any of the following conditions apply:

(i)The fees or charges are to reimburse the local agency for expenditures previously made.

(ii)The fees or charges are pledged to debt service.

(iii)The fees or charges are to reimburse another developer under a reimbursement agreement pursuant to Section 66486.

(C)A local agency may require the payment of bond or other interest-bearing instrument fees or costs that are related to the development of public improvements or facilities at the time the local agency issues a building permit if the local agency provides evidence to the entity charged of the costs associated with the bond or other interest-bearing instrument at the time the local agency requires the payment.

(D)For the purposes of this paragraph, “designated residential development project” means a residential development project that meets any of the following conditions:

(i)The project dedicates 100 percent of units, exclusive of a manager’s unit or units, to lower income households, as defined by Section 50079.5 of the Health and Safety Code.

(ii)The project meets the requirements described in Section 65662.

(iii)The project is approved by a local government pursuant to Article 2 (commencing with Section 65912.110) or Article 3 (commencing with Section 65912.120) of Chapter 4.1.

(iv)The project meets the requirements described in subdivision (a) of Section 65913.4.

(v)The project meets the criteria described in subdivision (c) of Section 65913.16.

(vi)The project is entitled to a density bonus pursuant to subdivision (b) of Section 65915.

(vii)The project includes 10 or fewer units.

(E)This paragraph does not apply to fees and charges levied pursuant to Chapter 6 (commencing with Section 17620) of Part 10.5 of Division 1 of Title 1 of the Education Code.

(c)(1)Subdivision (b) does not apply to units reserved for occupancy by lower income households included in a residential development proposed by a nonprofit housing developer in which at least 49 percent of the total units are reserved for occupancy by lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined in Section 50053 of the Health and Safety Code, unless the fees and charges are levied pursuant to Chapter 6 (commencing with Section 17620) of Part 10.5 of Division 1 of Title 1 of the Education Code.

(2)In addition to the contract that may be required under subdivision (d), a city, county, or city and county may require the posting of a performance bond or a letter of credit from a federally insured, recognized depository institution to guarantee payment of any fees or charges that are subject to paragraph (1).

(3)Fees and charges described in paragraph (1) shall become immediately due and payable when the residential development no longer meets the requirements of that paragraph.

(d)(1)If any fee or charge specified in subdivision (a) is not fully paid prior to issuance of a building permit for construction of any portion of the residential development encumbered thereby, the local agency issuing the building permit may require the property owner, or lessee if the lessee’s interest appears of record, as a condition of issuance of the building permit, to execute a contract to pay the fee or charge, or applicable portion thereof, within the time specified in subdivision (a). If the fee or charge is prorated pursuant to subdivision (a), the obligation under the contract shall be similarly prorated.

(2)The obligation to pay the fee or charge shall inure to the benefit of, and be enforceable by, the local agency that imposed the fee or charge, regardless of whether it is a party to the contract. The contract shall contain a legal description of the property affected, shall be recorded in the office of the county recorder of the county and, from the date of recordation, shall constitute a lien for the payment of the fee or charge, which shall be enforceable against successors in interest to the property owner or lessee at the time of issuance of the building permit. The contract shall be recorded in the grantor-grantee index in the name of the public agency issuing the building permit as grantee and in the name of the property owner or lessee as grantor. The local agency shall record a release of the obligation, containing a legal description of the property, in the event the obligation is paid in full, or a partial release in the event the fee or charge is prorated pursuant to subdivision (a).

(3)The contract may require the property owner or lessee to provide appropriate notification of the opening of any escrow for the sale of the property for which the building permit was issued and to provide in the escrow instructions that the fee or charge be paid to the local agency imposing the same from the sale proceeds in escrow prior to disbursing proceeds to the seller.

(e)This section applies only to fees collected by a local agency to fund the construction of public improvements or facilities. It does not apply to fees collected to cover the cost of code enforcement or inspection services, or to other fees collected to pay for the cost of enforcement of local ordinances or state law.

(f)“Final inspection” or “certificate of occupancy,” as used in this section, have the same meaning as described in Sections 305 and 307 of the Uniform Building Code, International Conference of Building Officials, 1985 edition.

SEC. 3.SEC. 2.

 No reimbursement is required by this act 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 act, within the meaning of Section 17556 of the Government Code.