State Allocation Board Increases Level 1 Statutory School Fees

01.23.2020

On January 22, 2020, the State Allocation Board (SAB) adopted its biennial adjustment to the maximum Level 1 Statutory School Fees (also commonly referred to as “Developer Fees”).  Pursuant to Education Code Section 17620(a)(1), the governing board of any school district is authorized to levy a fee against any construction within its boundaries for the purpose of funding the construction or reconstruction of school facilities.  The Level 1 Statutory School Fee is adjusted every two years per Government Code Section 65995(b)(3).

This year, the SAB increased the Level 1 Statutory School Fee 7.64% for a new residential development fee of $4.08 and a new commercial/industrial development fee of $0.66.  In 2018, the SAB approved a residential development fee of $3.79 and a commercial/industrial development fee of $0.61. 

In order to take full advantage of the increase, school districts desiring to adopt the new Level 1 Statutory School Fee rate should follow the necessary steps, including:

• Development of a fee justification study which properly justifies assessment of school facilities fees at the newly increased rate;
• Publication and posting of a notice for a public hearing on the proposed Level 1 Statutory School Fee increase to be held at a regularly scheduled meeting of the school district’s governing board;
• Mailing of the public notice to any party that has requested, in writing, to receive notice of school fee increase proceedings;
• Making the school district’s fee justification study available to the public;
• Adopting a resolution approving the Level 1 Statutory School Fee increase after the required public hearing; and
• Providing notice of the adopted Level 1 Statutory School Fee increase and school district boundaries to the city and county agencies responsible for the issuance of building permits and/or collection of school facilities fees, as well as the Office of Statewide Health Planning and Development.

New Level 1 Statutory School Fee rates are effective sixty (60) days after a school district’s governing board’s adoption of a fee increase. 

Additionally, school districts should be aware of new legislation passed by the California Legislature relating to the levy of Statutory School Fees.  Assembly Bill 48 (O’Donnell) (AB 48) sets forth the parameters of a state general obligation bond for construction and modernization of education facilities (2020 GO Bond).  If the 2020 GO Bond is approved by the California voters during the March 3, 2020, statewide primary, AB 48 would enact a waiver of Statutory School Fees for multifamily housing developments that are located within 1/2 mile radius from a major transit stop.  A “major transit stop” is defined as a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.  AB 48 also applies a 20% reduction in Statutory School Fees for any multifamily housing development that is not constructed within a 1/2 mile radius from a major transit stop.

Since funding mechanisms for school districts are limited, this portion of AB 48 may impact those school districts that heavily rely upon Statutory School Fees from large multifamily developments to fund the construction or modernization of facilities to accommodate new students.

Should your school district desire assistance with regard to adoption, increasing, or collecting Level 1 Statutory School Fees, defending fee protests, negotiating mitigation agreements, or other facilities-related issues, please contact one of the attorneys listed above.