How SB 543 Reforms Developer Fees Collected Against ADUs

12.23.2025

The Legislature is again modifying the law regarding Accessory Dwelling Units (“ADUs”).  Effective January 1, 2026, Senate Bill No. 543 (McNerney) (“SB 543”) amends and adds provisions to Government Code section 66311 et seq. regarding the creation of ADUs and junior accessory dwelling units (“JADUs”). 

Under existing law, Government Code section 66324 governed the ability of a “local agency, special district, or water corporation” to collect impact fees against ADUs and JADUs that had more than 750 square feet of interior livable space.  An “accessory dwelling unit” is defined as “an attached or a detached residential dwelling unit that provides complete independent living facilities for one or more persons and is located on a lot with a proposed or existing primary residence.”  A “junior accessory dwelling unit” is defined as a “unit that is no more than 500 square feet of interior livable space in size and [is] contained entirely within a single-family residence.”  (Emphasis added.)

Most school districts throughout California determined that existing law (i.e., Section 66324) did not apply to school district school fees (commonly referred to as “Developer Fees”) because school districts were neither a “local agency” nor “special district.”  The consensus was that the collection of Developer Fees was governed by Education Code section 17620 and Government Code section 65995.

SB 543 amended and renumbered the former Government Code section 66324 as the new Government Code section 66311.5.  Notably, SB 543 added the following provision to the new Section 66311.5:

“For the purposes of this section and Section 17620 of the Education Code, an accessory dwelling unit or junior accessory dwelling unit that contains less than 500 square feet of interior livable space shall, for the purpose of subparagraph (C) of paragraph (1) of subdivision (a) of Section 17620 of the Education Code, be considered other residential construction that does not increase assessable space by 500 square feet.”

This limitation likely alters the way school districts collect Developer Fees on detached ADUs and JADUs less than 500 square feet.  The law exempts the collection of Developer Fees on any ADU (attached or detached) or JADU that contains less than 500 square feet of interior livable space.  If the proposed ADU or JADU exceeds the 500-square-foot threshold, Developer Fees may be levied as either “new residential construction” or “other residential construction” as applicable under Education Code section 17620.  Importantly, school districts have always collected Developer Fees “proportionately in relation to the square footage of the primary dwelling unit” because Developer Fees are charged on a per-square-foot basis, so no modification is required on the basis of proportionality. 

This area of the law concerning ADUs and the impact to Developer Fees continues to evolve over time.  It is recommended that school districts analyze applications for payments of Developer Fees against ADUs or JADUs on a case-by-case basis.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

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