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CSDA is pleased to report that Assemblymember Tim Grayson amended two bills related to development impact fees to address concerns raised by CSDA. Development impact fees fund the infrastructure necessary to serve new housing developments and represent critical funding for many special districts to meet the needs of new residents. As originally introduced, AB 2186 (Grayson) and AB 2536 (Grayson) could have stymied the fire protection, parks, water, wastewater, and other public infrastructure needed to properly support growing communities.

CSDA thanks Assemblymember Grayson and the Assembly Local Government Committee for collaborating to address our concerns so that our state can promote needed housing development without underfunding the infrastructure future residents living in that housing will depend upon.

AB 2186 (Grayson) Housing Cost Reduction Incentive Program

AB 2186 would establish the Housing Cost Reduction Incentive Program for the purpose of reimbursing cities and counties, which have land-use authority, for development impact fee reductions provided to qualified housing developments. Upon appropriation, AB 2186 would require the California Department of Housing and Community Development to provide grants to applicants in an amount equal to 50 percent of the amount of a development impact fee reduced for a qualified housing development and grants to applicants in an amount equal to the accrued interested on a deferred development impact fee.

CSDA worked closely with the author’s office and the sponsors of the bill (California Housing Partnership) to secure amendments to the bill that ensure grant funds are used for the purposes for which the development impact fee would have been used. Furthermore, applicants must now secure the written consent of affected independent special districts for any grant application involving the reduction or deferral of fees related to that district’s services. The amendments ensure collaboration between the land-use authorities and special districts.  

AB 2186 has cleared policy committees in the Assembly and awaits consideration in the Assembly Committee on Appropriations.

AB 2536 (Grayson) Development Fees: Impact Fee Nexus Studies: Connection Fees and Capacity Charges

The Mitigation Fee Act regulates a variety of development impact fees, particularly fees supporting fire protection and park infrastructure. However, connection fees and capacity charges for water and wastewater infrastructure are governed by a different body of law. Most special districts undertake a significant evaluation process to determine the lawful and appropriate amount to impose for connection fees and capacity charges. As amended, AB 2536 intends to codify fundamental parameters for such a process.

CSDA met early on with the author's staff to raise our concerns with the version of the bill introduced February 17, 2022, as it would have imposed undue mandates on special districts that would have increased costs and liability associated with charges necessary for critical infrastructure. After convening meetings with a working group of CSDA members for feedback, CSDA was ultimately able to get behind amendments drafted by the Association of California Water Agencies (ACWA) to resolve our collective concerns. ACWA and CSDA negotiated with Assembly Member Grayson's office to amend the bill to the version now in print. 

AB 2536 was heard and passed by the Assembly Committee on Local Government on May 4, 2022 and awaits consideration on the Assembly Floor.

If you have any questions or concerns regarding these bills, contact Cole Querry at coleq@csda.net or by phone at (916) 442-7887.