Blogs

By: Sara Mares, Chief Operating Officer, NBS - Local Government Consultants

SB 499, authored by State Senator Henry Stern and sponsored by the California Association of Recreation and Park Districts, refines the rules under the Mitigation Fee Act related to when local governments may collect certain development impact fees during the construction process.

Enacted in 1987, the Mitigation Fee Act (Government Code §66000 et seq.) establishes the framework governing how local agencies impose fees on development projects to mitigate the impacts of growth. The Act requires local governments to identify the purpose and use of each fee, demonstrate a reasonable relationship (or “nexus”) between the fee and the development’s impact, and use collected funds for their intended public improvements within five years.

Over time, the Act has become a cornerstone of local infrastructure financing, particularly after property tax limitations imposed by Proposition 13 (1978) and subsequent measures constrained local revenue options. Because of these fiscal limits, local governments increasingly relied on development impact fees to fund infrastructure such as roads, schools, parks, and emergency facilities necessary to support new housing.

In 2024, SB 937 (Wiener) introduced significant restrictions on when and how local agencies can collect impact fees for designated residential development projects. The bill generally deferred payment of most impact fees until the issuance of the first certificate of occupancy to reduce developers’ upfront costs and support housing production. However, SB 937 allowed exceptions for fees funding certain facilities, including those related to fire, public safety, and emergency services, recognizing their essential role in community protection.

Park and Recreational Facilities

Building on SB 937, SB 499 clarifies and slightly expands the types of public improvements that qualify for early collection of fees. Specifically, it authorizes local agencies to require earlier payment of impact fees for parkland and recreational facilities when those facilities are identified for emergency purposes in either:

• The agency’s safety element of its general plan; or
• The local hazard mitigation plan (for the next five years).

The new law ensures that these facilities—used as evacuation centers, emergency staging areas, or wildfire fuel breaks—can be funded and constructed in advance of project completion, strengthening local preparedness and resilience.

As California continues to rebuild and develop in wildfire-prone and climate-impacted regions, park and recreation facilities play an increasingly critical role in emergency response. They often serve as cooling or heating centers, coordination sites for evacuations, and key components of wildfire mitigation strategies. By clarifying their eligibility for early impact fee collection, SB 499 enables faster investment in these dual-purpose facilities—supporting both recreation and public safety.

Utility Connection Fees and Capacity Charges

SB 499 also clarifies some inconsistencies in law that were created with the specific language in SB 937, ensuring that both utility connection fees and capacity charges may continue to be collected by water and sewer agencies. This clarification is technical in nature, but it provides certainty to the public agencies that provide water and sewer services and allows them to continue to collect these critical revenues without interruption or delay.

Supporters, including CSDA, partner statewide associations, numerous park and fire protection districts, and other local governments, view SB 499 as an essential step toward strengthening community resilience and disaster readiness. This new law represents a targeted adjustment to California’s evolving development related fee framework. It recognizes that any housing development needs infrastructure, including water and wastewater connections, and that park and recreational facilities can serve as vital emergency infrastructure, balancing the state’s dual priorities of expanding housing supply and enhancing community safety in the face of growing wildfire and climate risks.

This article was contributed by Sara Mares from NBS - Local Government Consultants, a CSDA Business Affiliate. CSDA members can contact NBS through the CSDA Buyer’s Guide at csda.net.

This communication is provided for general information only and is not offered or intended as legal advice. Readers should seek the advice of an attorney when confronted with legal issues and attorneys should perform an independent evaluation of the issues raised in these communications.

Take a look back at previous parts of the 2026 New Laws Series in CSDA eNews for more in-depth overviews of new laws affecting special districts:

Missed Part 3? Read it now: Certified Payroll Records Requests on Prevailing Wage Public Works Projects (AB 538)

Missed Part 2? Read it now: Additional CEQA Exemptions and Reforms

Missed Part 1? Read it now: CA Supreme Court Denies Elected Officials Right to Sue as “Employees” Under Whistleblower Statute

#Development Related Fees

#Local Revenue

#Infrastructure

#Public Works

#Prevailing Wage