California’s Local Agencies Levying Fees

On occasion, a reader may come across language in California legislation regarding the authority of local agencies to levy fees, thereby not requiring reimbursement by the state due to a state-mandated local program. In this type of bill, there is a disclaimer that reimbursement is not required. The following language would be found in the bill:

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.

Preceding this section of a bill is a legislative finding and declaration in a previous bill section. The following language would be found in the bill:

The Legislature finds and declares that Sections 65104 and 66014 of the Government Code provide local agencies with authority to levy fees sufficient to pay for the program or level of service mandated by this act.

This finding and declaration by the Legislature references two separate sections of the California Government Code regarding local agencies and their authority to levy fees. The first code section is found in Title 7, Division 1, Chapter 3, Article 1. Section 65104 was most recently amended in 1990 by Chapter 1572 and provides the following:

The legislative body shall provide the funds, equipment, and accommodations necessary or appropriate for the work of the planning agency. If the legislative body, including that of a charter city, establishes any fees to support the work of the planning agency, the fees shall not exceed the reasonable cost of providing the service for which the fee is charged. The legislative body shall impose the fees pursuant to Section 66016.

The section code section is found in Title 7, Division 1, Chapter 7. Section 66014 was most recently amended in 2002 by Chapter 963 and provides the following:

(a) Notwithstanding any other provision of law, when a local agency charges fees for zoning variances; zoning changes; use permits; building inspections; building permits; filing and processing applications and petitions filed with the local agency formation commission or conducting preliminary proceedings; or planning services; those fees may not exceed the estimated reasonable cost of providing the service for which the fee is charged, unless a question regarding the amount of the fee charged in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue.

(b) The fees charged pursuant to subdivision (a) may include the costs reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations.

As a result, this is language a reader will find in a bill where the local agencies have the ability to recover their costs by charging fees and so the state does not have to pay the local agencies for complying with the mandated program.