BILL ANALYSIS Ó
AB 1265
Page 1
Date of Hearing: May 4, 2011
REVISED
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 1265 (Nielsen) - As Amended: April 4, 2011
SUBJECT : Local government: Williamson Act: agricultural
preserves: advisory board.
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.
Specifically, this bill :
1)Provides that if, a county makes a determination 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)Provides 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)Specifies 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)Requires 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)Specifies that, if additional revenues do not occur, two or
three additional years must be added to the contracts on their
next anniversary date, as necessary, to restore them to their
full 10-year and 20-year terms.
6)Requires a county's actual foregone property tax revenue to be
based on the county's respective share of the general property
tax dollars as reflected in the most recent annual report
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issued by the State Board of Equalization or 20%, whichever is
higher.
7)Requires, 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) and current owner's name or,
alternatively, the same information for those parcels that are
not affected.
8)Requires an addition to the assessed value be conveyed to the
auditor, consistent with the 10% reduction in the length of
the restriction, equal to 10% of the difference between the
valuations.
9)Requires the additional amount of tax revenue that results
from the decrease in restriction to be separately displayed on
the taxpayer's annual bill.
10)Provides that a landowner may serve notice of nonrenewal at
any time; however, a landowner who withdraws that notice prior
to the effective date shall be subject to term modification
and additional assessed value.
11)States that a landowner may elect to serve a notice of
nonrenewal instead of accepting a shortened contact.
12)Requires a county to give timely written notice to Williamson
Act landowners regarding:
a) Initial 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.
13)Prohibits 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.
14)States that if a property's fair market value is lower than
its restricted value, there is no revaluation.
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15)Specifies 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;
e) Wildlife habitat contracts; and,
f) Atypical term contracts.
16)Specifies 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.
17)Provides that until February 1, 2012, the 90-day notice
requirement may be reduced to
60 days if the count adopts a procedure to allow landowners to
serve a notice of nonrenewal.
18)States that a landowner's failure to provide notice of
nonrenewal is implied consent to the contract and revaluation
provisions for that year.
19)Requires 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.
20)Adds 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
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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.
FISCAL EFFECT : Unknown
COMMENTS :
1)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.
2)Approximately 16.6 million acres are under Williamson Act
contracts. When Governor Schwarzenegger'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, Governor
Schwarzenegger essentially eliminated the subventions by
cutting the appropriation to $1,000.
3)Last year the Legislature passed AB 2530 (Nielsen), Chapter
391, Statutes of 2010, which contained an alternative funding
mechanism for Williamson Act, which is almost identical to the
provisions in AB 1265. Then in October 2010 during the
budget negotiations the Legislature passed SB 863 (Budget and
Fiscal Review Committee), Chapter 722, Statutes of 2010, which
made minor changes to the provisions of AB 2530. The budget
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actions in October 2010 also appropriated $10 million from the
General Fund for Williamson Act open space subventions to
counties in 2010-11. However, in March of this year the
Legislature passed SB 80 (Budget and Fiscal Review Committee),
Chapter 11, Statutes of 2011, which deleted the statutory
appropriation of $10 million from the General Fund for
Williamson Act open space subventions to counties in 2010-11.
SB 80 also repealed the alternative Williamson Act program,
which was added by AB 2530, and modified by SB 863. The
Committee may wish to consider if it is appropriate to add
back in the alternative funding provisions if the Legislature
just removed them.
4)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 and those monies would go back to the county. It
should be noted that if the Williamson Act programs were to
continue under the provisions of this measure the property tax
growth achieved through reassessment would only be apportioned
to counties rather than being apportioned to the counties,
schools, and special districts.
5)Support arguments: Supporters argue that with the loss of
state funding for the Williamson Act program for the third
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. Moreover,
the Committee may wish to consider if it is in fact prudent to
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add back in provisions of law that were just removed in March.
6)This bill is double-referred to the Committee on Agriculture.
REGISTERED SUPPORT / OPPOSITION :
Support
Alliance of Western Milk Producers
CA Association of Local Agency Formation Commissions
CA Cattlemen's Association
CA Farm Bureau
CA Grape & Tree Fruit League
CA Range Land Trust
CA State Association of Counties
Counties of Shasta and Yolo
Nisei Farmers League
Regional Council of Rural Counties
Resource Landowners Coalition
The Nature Conservancy
Wine Institute
Opposition
None on file
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958