Impact fees, Section 66452.6, Timing of payment | Ask The Map Act Expert

Impact fees, Section 66452.6, Timing of payment

Ask The Map Act Expert

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California Surveyor
Spring 2010    Issue #161

ASK THE MAP ACT EXPERT

Question

Does a subdivider’s payment of local “impact fees” – collected to finance local and regional infrastructure/improvements – count toward the $178,000 threshold set forth in Subdivision Map Act section 66452.6 (the section allowing the extension of a tentative map through the filing of multiple (phased) final maps)?  And does the “timing” of the payment of such impact fees make any difference?

Answer

Yes, in my opinion, a subdivider’s payment of local and/or regional impact fees used to fund the construction of offsite infrastructure/improvements, qualifies toward the Subdivision Map Act’s $178,000 threshold.  And my answer does not change whether the impact fees are paid before or after final map approval, before or after building permit issuance, or before or after certificate of occupancy – in my opinion, as long as the payment of those impact fees is a subdivider requirement, then the timing of their payment is irrelevant.

Discussion

1.         The Payment of Regional Traffic Impact Fees
Counts Toward the Map Act’s $178,000 Threshold.

There are several different extensions available under the Map Act that can extend the life of a tentative map.  In fact, these different provisions are not mutually exclusive; a subdivider may secure multiple extensions of time under the many different Map Act extensions available.  (See, e.g., California Country Club Homes Association, Inc. v. City of Los Angeles, 18 Cal.App.4th 1425 (1993).)

Understanding this area of the law involves the Subdivision Map Act and Land Use statutes outside of the Map Act.  First, Map Act section 66452.6(a) provides in pertinent part:

. . . [I]f the subdivider is required to expend one hundred seventy-eight thousand dollars ($178,000) or more to construct, improve or finance the construction of public improvements outside the property boundaries of the tentative map, excluding improvements of public rights-of-way which abut the boundary of the property to be subdivided … each filing of a final map authorized by Section 66456.1 shall extend the expiration of the approved or conditionally approved tentative map by 36 months from the date of its expiration, as provided in this section, or the date of the previously filed final map, whichever is later. . . . The extensions shall not extend the tentative map more than 10 years from its approval… (Emphasis added.)

This Section was amended in 1985 “to increase the life of tentative maps in cases where the subdivider is required to make a substantial investment to provide public facilities outside of the project in order to have the subdivision approved.”  (Assembly Local Government Committee Report on AB 1624, April 30, 1985).  The legislation was sponsored by the California Building Industry Association in order to protect subdividers by extending the life of a tentative map for projects where the subdivider was required to make substantial offsite expenditures in order to have the project approved.

Second, the Mitigation Fee Act (Government Code §§ 66000 et seq.) controls the justification, adoption, imposition, payment, protest, etc. of “impact fees.”  Section 66000(b) of the Mitigation Fee Act defines an impact fee as follows:

“Fee” means a monetary exaction . . . that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project. . . .  (Emphasis added.)

Under the Mitigation Fee Act, impact fees “defray” the proportional cost of providing (constructing, etc.) public improvements (the Mitigation Fee Act defines “public facilities” as “public improvements, public services, and community amenities.”  (Gov. Code § 66000(d), emphasis added) necessitated by a particular project by providing the proportional funding source needed to finance the construction of such public improvements.  Many local ordinances mimic the provisions of the Mitigation Fee Act when they impose local and regional impact fees. 

Taken together, we know that Map Act section 66452.6(a) includes in its $178,000 threshold any expenditure to “finance the construction or improvement of public improvements” and we know that the Mitigation Fee Act treats the payment of an impact fee as an expenditure to “finance the construction or improvement of public improvements” (with “public improvements” including local and regional improvements such as traffic improvements).  Therefore, connecting the dots, the payment of an impact fee under the Mitigation Fee Act is by law for the financing of the construction or improvement of public improvements, and as such, must count toward the $178,000 threshold amount set forth in Map Act section 66452.6.

2.         Impact Fees Qualify Toward the $178,000
Threshold Even If Paid After the Final Map Approval.

The timing of impact fee payment again involves both the Map Act and the Mitigation Fee Act.  Under the Mitigation Fee Act, a city or county that imposes an impact fee on a residential development for the construction of public improvements or facilities cannot require the payment of those fees or charges until the date of final inspection or the date of issuance of the certificate of occupancy, whichever occurs first.  (Gov. Code § 66007(a).)  There are two exceptions to this rule:  (a) a local agency may require payment of the fees earlier if the fees are to be collected for public improvements for which an account has already been established and funds appropriated; and (b) if the fees or charges are to reimburse the local agency for expenditures previously made.  (Gov. Code § 66007(b).)

Map Act section 66452.6(a) simply provides that if a subdivider is required to expend $178,000 or more for off-site improvements, each filing of a final map extends the expiration of the tentative map by 36 months (for a maximum of 10 years).  The operative words from the Map Act are that a subdivider’s tentative map qualifies for the automatic extension “if the subdivider is required to expend” the threshold amount.  Instead of imposing a pre- or post final map approval timing requirement, the Legislature provided a readily available means of determining which tentative maps qualified for the mandatory extension under Section 66452.6(a):  those where the subdivider was required to expend the threshold amount, without regard to when that expenditure takes place.

A third statute, Government Code section 65961 (commonly known as the “one-bite-of-the-apple” rule) provides further support for this conclusion.  Section 65961 requires the imposition of all existing local laws as a condition to tentative map approval by setting a very high penalty for a city if such laws are not made conditions to the tentative map approval.  Section 65961 provides that

… upon approval or conditional approval of a tentative map for a subdivision … a city … shall not require as a condition to the issuance of any building permit any conditions that the city … could have lawfully imposed as a condition to the previously approved tentative map. …

As a result, the prohibition against enforcement of an existing law not made a condition to a tentative map works as follows:

(a)       First, the condition must be one that could have been legally imposed by the city at the time the tentative map was approved.

(b)       Second, the city must fail to impose the existing law as a condition on the tentative map at the time of its approval (“the missed condition”).

(c)        Third, the city must then impose that missed condition as a condition to issuance of building permits during the five-year period following recordation of the final map for the development.

When these three elements are present, Government Code section 65961 prohibits the enforcement of the missed condition.  Thus, if a city or county were to argue that the satisfaction of a condition—although in existence at the time of the tentative map approval—was in fact not made a condition to the tentative map, the city or county will not be able to enforce the condition at all:  Government Code section 65961 will prohibit satisfaction of the condition at the building permit issuance stage.  In other words, if a city or county did not impose the payment of impact fees as a condition to tentative map approval – even though the timing of the fees’ payment will be after the final map approval (pursuant to the Mitigation Fee Act) – then arguably the city or county would be barred from collecting such impact fees as part of building permit issuance (or any other permit issuance).  Presumably, therefore, in order to avoid such a problem, and to “harmonize” all of these statutes, a city or county will require the payment of impact fees as a tentative map condition of approval, but by law cannot collect the fee until that time allowed by the Mitigation Fee Act (usually Building Permit issuance).  Such a “harmonization” of the different statutes is a standard rule of legislative construction.

For these reasons, in my opinion, the obligation of the subdivider to pay impact fees must be made a condition to tentative map approval (under Section 65961’s “one-bite-of-the-apple” rule), must count toward Map Act section 66452.6(a)’s $178,000 threshold, and likely must be paid after the final map approval (pursuant to the Mitigation Fee Act), although timing of payment is ultimately irrelevant:  simply having the payment obligation means the subdivider’s map qualifies for the extension.

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