The California Building Industry Association obtained a critical temporary restraining order against the State Allocation Board in connection with the Board’s 6-4 vote on May 25, 2016 finding, for the first time, that state funds for new school facility construction are not available.  Upon making that finding, the Board is obligated to notify the Secretary of the Senate and the Chief Clerk of the Assembly and that notice must be published in the journal of each house.  As soon as the notices are published, eligible school districts that already charge Level 2 fees may charge Level 3 school impact fees, which would immediately double the school fees in those districts.

CBIA filed suit the same day, seeking immediate injunctive and mandamus relief in the Sacramento Superior Court to prevent the SAB’s action from taking effect.  California Building Industry Association v. State Allocation Board (Case No. 34-2016-80002356, May 25, 2016).  The CBIA alleged, among other things, that Level 3 fees are not justified now because the SAB’s own records indicate that as of May 2016 the state has at least $150M available for new school facility construction.

On May 26, 2016, the trial court ruled in favor of CBIA, granting a temporary restraining order to prevent the SAB from (1) giving notice to the Secretary of the Senate or to the Chief Clerk of the Assembly, (2) taking any action to implement the finding regarding the availability of state funds for new school facility construction, and (3) purporting to authorize the imposition of Level 3 school impact fees.  The court also ordered the SAB to show cause why a preliminary injunction should not be issued with respect to each of those issues and set a July 1, 2016 hearing date.

Although the trial court’s temporary restraining order means that the statutory prerequisites to charging Level 3 fees have not been satisfied and Level 3 fees cannot legally be imposed, some school districts, including Dublin Unified School District and Fremont Unified School District, have already publicly announced their intention to consider adopting Level 3 fees.  The TRO should cause those districts to put their plans on hold.  If they do not, however, developers asked to pay Level 3 fees should exercise their right to “pay under protest” under the provisions of Government Code section 66020 and Education Code section 17621(d).

The SAB’s attempt to allow Level 3 fees comes in the face of the “Kindergarten Through Community College Public Education Facilities Bond Act of 2016,” a $9B bond measure that is qualified for the November ballot.  The measure is sponsored and funded by California’s Coalition for Adequate School Housing and the California Building Industry Association through an entity known as Californians for Quality Schools.  The measure includes $3B for construction of new school facilities and another $3B for modernization of school facilities, and is endorsed by, among others, the current and two former State Superintendents of Public Instruction, the California State PTA, and a laundry list of school districts throughout the state.