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SB-318 Land use: development fee or charge: audit: auditor standards.(2021-2022)

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Date Published: 02/04/2021 09:00 PM
SB318:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 318


Introduced by Senator Melendez

February 04, 2021


An act to amend Section 66023 of the Government Code, relating to local government.


LEGISLATIVE COUNSEL'S DIGEST


SB 318, as introduced, Melendez. Land use: development fee or charge: audit: auditor standards.
Existing law, the Mitigation Fee Act, authorizes a local agency to retain an independent auditor if requested to conduct an audit to determine whether a fee or charge is reasonable, provided, among other conditions, that the person who requests the audit deposits with the local agency the amount of the local agency’s reasonable estimate of the cost of that audit, except as provided.
This bill would require that the independent auditor be a certified public accountant, as defined, or a firm, as defined, of certified public accountants. The bill would prohibit the local agency from retaining an independent auditor that the local agency contracted with for any reason during the preceding 10 years, as provided. The bill would also prohibit an independent auditor that is retained by a local agency to conduct the audit from soliciting or accepting employment from the local agency for 5 years following the completion of the audit and all subsequent challenges related to the audit. By imposing additional duties on local officials, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 66023 of the Government Code is amended to read:

66023.
 (a) Any person may request an audit in order to determine whether any fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of any product, public facility, as defined in Section 66000, or service provided by the local agency. If a person makes that request, the legislative body of the local agency may retain an independent auditor to conduct an audit to determine whether the fee or charge is reasonable, but is not required to conduct the audit if an audit has been performed for the same fee within the previous 12 months.
(b) To the extent that the audit determines that the amount of any fee or charge does not meet the requirements of this section, the local agency shall adjust the fee accordingly. This subdivision does not apply to a fee authorized pursuant to Section 17620 of the Education Code, or Sections 65995.5 and 65995.7.
(c) Except as otherwise provided in subdivision (h), (i), the local agency shall retain an independent auditor to conduct an audit only if the person who requests the audit deposits with the local agency the amount of the local agency’s reasonable estimate of the cost of the independent audit. At the conclusion of the audit, the local agency shall reimburse unused sums, if any, or the requesting person shall pay the local agency the excess of the actual cost of the audit over the sum which was deposited.
(d) Any audit conducted by an independent auditor to determine whether a fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of providing the product or service shall conform to generally accepted auditing standards.
(e) The procedures specified in this section shall be alternative and in addition to those specified in Section 54985.
(f) (1) A local agency shall not retain, for purposes of conducting an audit pursuant to this section, an independent auditor that has contracted with the local agency for any purpose in the preceding 10 years. A firm of certified public accountants shall also be disqualified if any individual hired by the firm would be disqualified as an individual, certified public accountant or was retained by the local agency conducting the audit for any purpose in the preceding 10 years as part of another firm of certified public accountants.
(2) The independent auditor retained by a local agency for an audit pursuant to this section shall not solicit nor accept employment from the local agency for five years following the completion of the audit and all subsequent challenges related to the audit. A certified public accountant who was retained as part of a firm for the audit shall also be prohibited from soliciting and accepting employment, as an individual or as a part of another firm, from the local agency under this paragraph.

(f)

(g) The Legislature finds and declares that oversight of local agency fees is a matter of statewide interest and concern. It is, therefore, the intent of the Legislature that this chapter shall supersede all conflicting local laws and shall apply in charter cities.

(g)

(h) This section shall not be construed as granting any additional authority to any local agency to levy any fee or charge which is not otherwise authorized by another provision of law, nor shall its provisions be construed as granting authority to any local agency to levy a new fee or charge when other provisions of law specifically prohibit the levy of a fee or charge.

(h)

(i) Notwithstanding subdivision (c), if a local agency does not comply with subdivision (b) of Section 66006 following the establishment, increase, or imposition of a fee, but requires payment of that fee in connection with the approval of a development project for three consecutive years, the local agency shall not require a deposit for an independent audit requested pursuant to this section and shall pay the cost of the audit.
(j) For purposes of this section, an “independent auditor” means a certified public accountant, as defined in Section 5033 of the Business and Professions Code, or a firm, as defined in Section 5035.1 of the Business and Professions Code, of certified public accountants.

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.