Attorney General’s Opinion on Level 3 Fees

Under Government Code section 65995.7(a), a part of Senate Bill 50, the State Allocation Board (SAB) shall notify the Legislature that ”…state funds are not available if the SAB is no longer approving apportionments for new construction… due to a lack of funds available for new construction.” This notification must be made before school districts can increase fees charged against local development. These increased assessments are known as ”level three fees,” and are designed to provide the full cost of needed school facilities through the assessments on development alone.

The Government Code states:

Upon making a determination that State funds are no longer available, the SAB shall notify the Secretary of the Senate and the Chief Clerk of the Assembly, in writing, of that determination and the date when state funds are no longer available…”

In July 2001, the SAB directed the Office of Public School Construction (OPSC) to file a formal request for an opinion from the Office of the Attorney General (AG) concerning the legislative notification requirements pursuant to Government Code section 65995.7. This issue has been debated and interpreted in many ways. The SAB’s intent for requesting an AG opinion is to ensure that it was not violating its own regulation. At its February 27, 2002 meeting, the SAB received a report, along with the AG’s opinion, that indicated the School Facility Program (SFP) Regulations state that the Legislature shall be notified by the SAB when State funds are unavailable for new construction projects. The AG’s opinion states:

The State Allocation Board is not authorized to notify the Secretary of the Senate and the Chief Clerk of the Assembly when new construction grant requests from school districts that are ready for apportionment exceed the state funds available for new school construction as long as the board continues to approve the apportionments.

The SAB continues to approve apportionments. The opinion of the Attorney General, filed February 13, 2002, effectively prohibits school districts from increasing school impact fees to Level III at this time.