Contact: Jeff Barbosa
(916) 319-2020

SACRAMENTO – Assembly Majority Leader Alberto Torrico's (D-Newark) bill to encourage counties and cities to defer the collection of development impact fees to the close of escrow was signed into law today by Governor Arnold Schwarzenegger.

AB 2604, which excludes school impact fees, is aimed at assisting the construction industry in this economic downturn by delaying the payment of thousands of dollars of fees on each new home. The fees are for public facilities impacted by new homebuyers and are typically required at the time the final map is filed or when an individual permit is issued.

By encouraging local governments to defer the collection of development fees until the point of escrow, the bill will help ensure that homebuilders can better avoid a cash crunch and pay the fees associated with the development. Homebuilders have experienced great difficulty making fee payments before proceeds from home sales are available.

"By working together to have the fees deferred until close of escrow, homebuilders and local governments can help the construction industry in these very difficult times and possibly save some jobs in the process," Torrico said.

Due to the slumping economy, homebuilders have seen extraordinarily high cancellation rates on orders for new homes.

The bill easily passed the Legislature with bipartisan support and is supported by the California Association of Realtors, the California Building Industry Association and the California Apartments Association, among others.