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AB-2722 Development fees and charges: deferral.(2019-2020)

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Date Published: 02/20/2020 09:00 PM
AB2722:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2722


Introduced by Assembly Member McCarty

February 20, 2020


An act to add Section 66007.5 to the Government Code, relating to land use.


LEGISLATIVE COUNSEL'S DIGEST


AB 2722, as introduced, McCarty. Development fees and charges: deferral.
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, except that the payment may be required sooner under specified circumstances.
This bill would similarly prohibit a noncompliant local agency, as defined, that imposes any fees or charges on a qualified development, as defined, from requiring the payment of those fees or charges until 20 years from the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first. The bill would authorize a noncompliant local agency that defers a fee or charge to 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 if the fee or charge is not fully paid before the issuance of a building permit for the construction of any portion of the qualified development encumbered by the fee or charge, as provided.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 66007.5 is added to the Government Code, to read:

66007.5.
 (a) Notwithstanding any other law, a noncompliant local agency that imposes any fees or charges on a qualified development shall not require the payment of those fees or charges until 20 years from the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first.
(b) (1) If any fee or charge deferred pursuant to subdivision (a) is not fully paid before the issuance of a building permit for the construction of any portion of the qualified development encumbered by the fee or charge, the noncompliant 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 within the time specified in subdivision (a).
(2) (A) The contract shall be in the form of a promissory note secured by a deed of trust on the qualified development.
(B) The deed of trust described in subparagraph (A) shall be subordinate in priority to construction and permanent loans used to construct the qualified development.
(3) The obligation to pay the fee or charge shall inure to the benefit of, and be enforceable by, the noncompliant local agency that imposed the fee or charge, regardless of whether it is a party to the contract.
(4) The contract may require the owner of the qualified development or lessee to provide appropriate notification of the opening of any escrow for the sale of the qualified development for which the building permit was issued and to provide in the escrow instructions that the fee or charge be paid to the noncompliant local agency that imposed the fee or charge from the sale proceeds in escrow before disbursing proceeds to the seller.
(c) Any fees or charges deferred pursuant to subdivision (a) may accrue interest at the applicable federal rate published by the United States Internal Revenue Service and in effect on the date the contract is entered into.
(d) Any fees or charges deferred pursuant to subdivision (a) shall become immediately due and payable if the qualified development is sold, refinanced, or no longer meets the requirements of this section.
(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) For purposes of this section, the following definitions shall apply:
(1) “Final inspection” or “certificate of occupancy” has the same meaning as described in Sections 305 and 307 of the Uniform Building Code, International Conference of Building Officials, 1985 edition.
(2) “Noncompliant local agency” means a local agency that did not meet its regional housing needs during the most recent complete regional housing needs assessment cycle and for the current regional housing needs assessment cycle, the local agency meets either of the following:
(A) The local agency has not submitted its latest production report to the department by the deadline set forth in Section 65400.
(B) The local agency has submitted its latest production report to the department by the deadline set forth in Section 65400 and that production report reflects that there were fewer units of low- or moderate-income housing issued building permits than were required for the regional housing needs assessment cycle for that reporting period.
(3) “Production report” means the information reported pursuant to subparagraph (H) of paragraph (2) of subdivision (a) of Section 65400.
(4) “Qualified development” means a mixed income residential rental development proposed by a nonprofit housing developer, including a limited partnership in which the managing partner is an eligible nonprofit corporation, in which at least 40 percent of the total units are reserved for occupancy by persons and families of low or moderate income, as defined in Section 50053 of the Health and Safety Code, at an affordable rent, as defined in Section 50053 of the Health and Safety Code.