BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2530
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 2530  
          (Nielsen)As Amended  August 25, 2010
          Majority vote
           
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          |ASSEMBLY:  |     |(May 6, 2010)   |SENATE: |36-0 |(August 30,    |
          |           |     |                |        |     |2010)          |
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               (vote not relevant)

          Original Committee Reference:   L. GOV.  

           SUMMARY  :  Authorizes a county, until January 1, 2015, in any  
          fiscal year in which payments authorized for reimbursement to a  
          county for lost revenue from Williamson Act contracts is less  
          than one-half of the county's actual foregone general fund  
          property tax revenue, to revise the terms for new contracts.

           The Senate amendments  delete the Assembly version of this bill,  
          and instead:

          1)Provide that if, a county determines that the state's open  
            space subventions are less than one-half of the county's  
            actual foregone general fund property tax revenue, then a  
            county shall revise the term for new contracts.

          2)Provide that if the county makes such a determination,  
            contracts shall be for a term of no less than nine years for  
            contracts currently 10 years in length or 18 years for  
            contracts currently 20 years in length, as the case may be. 

          3)Specify that for new contracts entered into during a year in  
            which a county has made a determination pursuant to #1, the  
            initial contract length shall be either nine or 18 years. 

          4)Require each contract to provide, except in the initial year  
            of the determination, that on the anniversary date of the  
            contract or such other annual date as specified by the  
            contract, a year shall be added automatically to the initial  
            term unless notice of nonrenewal is given.

          5)Specify that, if additional revenues do not occur, two  
            additional years must be added to the contracts on their next  
            anniversary date to restore them to their full 10-year and  








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            20-year terms.

          6)Require, in any year in which the provisions of this measure  
            are implemented, a county to record a notice that states the  
            affected parcel number(s). 

          7)Require the assessor to value the property, consistent with  
            the restrictions on the property, based on the new contract. 

          8)Require the additional amount of tax revenue that results from  
            the decrease in restriction to be separately displayed on the  
            taxpayer's annual bill. 

          9)State that a landowner may elect to serve a notice of  
            nonrenewal instead of accepting a shortened contact.  

          10)Require a county to give timely written notice to Williamson  
            Act landowners regarding:

             a)   Hearings to adopt or rescind the contract and  
               revaluation provisions;

             b)   Decisions regarding the contract and revaluation  
               provisions; and,

             c)   The right to prevent contract amendments through  
               nonrenewal.

          11)Prohibit the increased valuation of the property from  
            exceeding 10% of the difference between the value that  
            reflects the property's restricted use and the property's fair  
            market value.

          12)State that if a property's fair market value is lower than  
            its restricted value, there is no revaluation.  

          13)Specify that the provisions of this measure do not apply to:

             a)   Contracts that have been nonrenewed;

             b)   Contracts with cities;

             c)   Open space or agricultural easements;

             d)   Scenic restrictions; and,








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             e)   Wildlife habitat contracts.

          14)Specify that a county cannot modify or revalue a contract  
            unless the landowner gets 90 days notice of the opportunity  
            for nonrenewal and the landowner fails to nonrenew.  

          15)State that a landowner's failure to provide notice of  
            nonrenewal is implied consent to the contract and revaluation  
            provisions for that year.

          16)Require that the increased revenues generated by properties  
            that are subject to the contract and revaluation provisions  
            established in this measure be allocated exclusively to the  
            county.

          17)Add a sunset provision, terminating the provisions of this  
            measure on January 1, 2015. 

           EXISTING LAW  :

          1)Authorizes, pursuant to Article 13, section 8 of the  
            California Constitution, the Legislature to promote the  
            conservation, preservation and continued existence of open  
            space lands and provides that when these lands are enforceably  
            restricted to recreation, enjoyment of scenic beauty, use or  
            conservation of natural resources, or production of food or  
            fiber, they must be valued for property tax purposes only on a  
            basis that is consistent with these restrictions and uses.

          2)Creates the Williamson Act, also known as the California Land  
            Conservation Act of 1965, which authorizes cities and counties  
            to enter into agricultural land preservation contracts with  
            landowners who agree to restrict the use of their land for a  
            minimum of 10 years in exchange for lower assessed valuations  
            for property tax purposes.  The Division of Land Resource  
            Protection in the Department of Conservation administers the  
            Act.

           AS PASSED BY THE ASSEMBLY  , this bill:

          1)Authorized an advisory board, in addition to advising on the  
            administration of the agricultural preserves in the county or  
            city, to advise the city or county on any matters relating to  
            Williamson Act contracts, including, but not limited to, the  








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            following:

             a)   Program benefits;

             b)   Costs; 

             c)   Amendments; and,

             d)   Landowner participation. 

          2)Stated that the advisory board process is not the only means  
            by which a board of supervisors (board) or city council  
            (council) may address agricultural preserve matters or receive  
            advice regarding agricultural preserve matters. 
          
           FISCAL EFFECT  :  None

           COMMENTS  :  The Williamson Act conserves agricultural and open  
          space land by allowing private property owners to sign voluntary  
          contracts with counties and cities, enforceably restricting  
          their land to agriculture, open space, and compatible uses.  In  
          return, county assessors must lower the assessed value of the  
          contracted lands to reflect their use as agriculture or open  
          space instead of the market value.  Making sure that private  
          property owners use their Williamson Act land appropriately is  
          essential to maintaining the statute's constitutional integrity.

          Approximately 16.6 million acres are under Williamson Act  
          contracts.  When the Governor's proposed 2003-04 Budget wanted  
          to save approximately $39 million by ending the state  
          subventions, the Legislative Analyst's Office recommended a  
          10-year phase-out.  The first cuts came in 2008-09 when a budget  
          trailer bill reduced the state subventions by 10%.  The  
          Legislature's 2009-10 Budget reduced the subventions to $27.8  
          million.  However, the Governor essentially eliminated the  
          subventions by cutting the appropriation to $1,000.

          Under a Williamson Act contract a property is valued on its  
          "restrictions and uses."  A property in a Williamson Act  
          contract has a specific agriculture use and the value of the  
          property is based on the property's agricultural income.  The  
          restriction is the length of time of the contract.  If a  
          landowner agrees to enter into a contract that is 10% shorter  
          than a standard Williamson Act contract, under the provisions of  
          this measure, they would forego 10% of their property tax relief  








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          and those monies would go back to the county. 

          Support arguments:  Supporters argue that with the potential  
          loss of state funding for the Williamson Act program for the  
          second straight year, many counties can no longer afford to  
          continue to offer Williamson Act contracts to farmers and  
          ranchers.  This measure offers the opportunity to renegotiate  
          the terms of a contract in order to preserve the program and  
          still provide counties with the ability to recoup some of their  
          lost revenues. 

          Opposition arguments:  Opposition may argue that the provisions  
          of this bill are not enough to save the Williamson Act.  Even if  
          all 53 participating counties use the bill's temporary program,  
          even if Williamson Act landowners continue with their contracts,  
          and even if county assessors can quickly revalue millions of  
          acres of contracted lands, the resulting revenues will not  
          replace the state subventions.  

          The subject matter of this bill has not been heard in any  
          Assembly policy committee this legislative session.

           
          Analysis Prepared by  :    Katie Kolitsos / L. GOV. / (916)  
          319-3958 


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