BILL ANALYSIS AB 2530 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2530 (Nielsen)As Amended August 25, 2010 Majority vote ----------------------------------------------------------------- |ASSEMBLY: | |(May 6, 2010) |SENATE: |36-0 |(August 30, | | | | | | |2010) | ----------------------------------------------------------------- (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 AB 2530 Page 2 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, AB 2530 Page 3 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 AB 2530 Page 4 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 AB 2530 Page 5 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 FN: 0006813