California Code, Public Resources Code - PRC § 30526

(a) Because of the intensity of development contemplated, the area's steep topography and highly erodible soils, and the demonstrated impacts from development despite the utilization of mitigation measures, the Legislature finds that the threat from development to wetlands in the City of San Diego requires that a mitigation fee program be included in the city's local coastal program. Therefore, the City of San Diego shall provide in its local coastal program for payment of a reasonable fee to the State Coastal Conservancy by applicants for a coastal development permit if the proposed development has, or is reasonably expected to have, a direct and significant effect on coastal resources within a specific geographic watershed in the coastal zone which can be mitigated through the incorporation of feasible onsite and offsite mitigation measures into the proposed development and through the mitigation fee program.

(b) Fees paid by an applicant pursuant to subdivision (a) shall be deposited in an account established by the State Coastal Conservancy.  1 None of the funds in the account shall be appropriated for any purpose not specified in this section. Except as provided in this section, any fee paid pursuant to this section may only be used to restore, replace, or improve resources or ecological systems which are adversely affected by the proposed development and with respect to which the fee constitutes partial or total mitigation. Any fees established pursuant to this section are not required for any development that is undertaken by a public agency for the purpose of providing resource enhancement or public recreation. In the event that mitigation of all development impacts cannot be feasibly carried out within the watershed, the conservancy may, with the approval of the local government and the commission, complete the mitigation for the development outside of the watershed.

(c) This section and Section 31108.5 apply only to the Los Penasquitos Lagoon area in the City of San Diego.