BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1265|
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THIRD READING
Bill No: AB 1265
Author: Nielsen (R), et al
Amended: 6/30/11 in Senate
Vote: 27 - Urgency
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-0, 6/22/11
AYES: Wolk, DeSaulnier, Fuller, Hernandez, La Malfa, Liu
NO VOTE RECORDED: Huff, Hancock, Kehoe
ASSEMBLY FLOOR : 78-0, 5/19/11 (Consent) - See last page
for vote
SUBJECT : Local government: Williamson Act
SOURCE : Author
DIGEST : This bill creates a temporary program that
counties can use when the states open space subventions are
less than a specified level. This bill allows counties to
increase the assessed values of Williamson Act contracted
land and divert the resulting property tax revenues. The
provisions of this bill become effective in January 1, 2011
and sunset on January 1, 2016.
ANALYSIS :
Existing Law :
1.Authorizes, pursuant to Article 13, section 8 of the
California Constitution, the Legislature to promote the
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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 (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.
This bill creates a temporary program that counties can use
when the state's open space subventions are less than a
specified level. This bill allows counties to increase the
assessed values of Williamson Act contracted land and
divert the resulting property tax revenues.
1. Shorter contracts and revaluations . If the state's open
space subventions are less than half of a county's actual
foregone general fund property tax revenue, this bill
allows the county to implement shorter Williamson Act
contracts and increase the assessed values. The terms of
the participating county's 10-year Williamson Act
contracts must be nine years, and terms of its 20-year
Farmland Security Zone contracts must be 18 years. While
the program is in effect, new contracts must be for nine
or 18 years, respectively. After the initial year, one
year must be added to these contracts on their renewal
dates, unless the contracts are nonrenewed under existing
law. If additional revenues do not occur, two or three
additional years must be added to the contracts on their
next anniversary date to restore them to their full
10-year and 20-year terms.
In a county where the temporary program applies, an added
assessed value must be conveyed to the county auditor.
The added assessed value is equal to 10 percent of the
difference between the property's restricted value and
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its fair market value. If a property's fair market value
is lower than its restricted value, then the added amount
is zero. The increased property tax revenue that results
from this calculation must appear on the taxpayer's
annual bill.
Landowners can nonrenew their Williamson Act contracts
instead of accepting a shorter contract. In that
situation, the county assessor will not revalue the
property. A county that implements the bill's provisions
must annually record notices that state the affected
parcel numbers and their owners' names.
Counties must give timely written notice to Williamson
Act landowners of:
Hearings to adopt or rescind the contract and
revaluation provisions.
Decisions regarding the contract and revaluation
provisions.
The right to prevent contract amendments through
nonrenewal.
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. If a
county adopts procedures that allow landowners to give
nonrenewal notices, the county can reduce this notice
requirement to 60 days. A landowner's failure to
nonrenew is implied consent to the contract and
revaluation provisions for that year.
The temporary program created by this bill does not apply
to:
Contracts that have been nonrenewed.
Contracts with cities.
Open space or agricultural easements.
Scenic restrictions.
Wildlife habitat contracts.
Contracts with atypical terms.
2. Increased revenues . This bill requires that the revenues
generated by properties that are subject to the bill's
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contract and revaluation provisions must be paid
exclusively to the participating counties.
3. Automatic termination . The provisions of this bill
automatically terminate on January 1, 2016, unless the
Legislature extends them. However, the counties may
collect previously authorized subventions and property
tax payments after that date.
Background
Approximately 16.6 million acres are under Williamson Act
contracts. When the 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 Legislature's 2009-10 Budget reduced the
subventions to $27.8 million. However, Governor
Schwarzenegger essentially eliminated the subventions in
the 2009-10 budget by cutting the appropriation to $1,000.
There were several attempts to restore this funding in the
legislature in 2010. SB 863 (Senate Budget and Fiscal
Review Committee), Chapter 722, Statutes of 2010, restored
$10 million to subventions, along with allowing a revision
in Williamson Act contracts. SB 80 (Senate Budget and
Fiscal Review Committee), Chapter 11, Statutes of 2011,
among other items, eliminated the funding for SB 863.
According to the author, this bill simply restores the
provisions of SB 863, that were eliminated in SB 80. SB
863 was a compromise bill formed by a bi-partisan coalition
of landowners, agricultural groups and environmental
groups. Several counties are already operating under the
provisions created under SB 863. The author states that
this bill is crucial, in order to prevent confusion about
the status of the Williamson Act.
Supporters maintain that with the loss of state funding for
the Act for the third straight year, many counties can no
longer afford to continue to offer Act contracts to farmers
and ranchers. This bill offers the ability to renegotiate
the terms of a contract in order to preserve the program
and still provide counties with a path to recoup some lost
revenues.
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Related Legislation
AB 80(Senate Budget and Fiscal Review Committee), Chapter
11, Statutes of 2011, repeals existing law appropriating
$10 million from the General Fund (GF) to the Controller
for the 2010-11 fiscal year to make subvention payments to
counties under the Act, along with other budgetary action.
AB 781 (John A. Pérez), 2011-12 Session, authorizes a city,
county, or city and county to accept contributions from
public and private entities to compensate for a reduction
in state subvention payments for the Act.
SB 648 (Tom Berryhill), 2011-12 Session, provides an
alternative method of cancellation of an Act contract by a
landowner for contracts that are 10 or more years old, and
where the landowner has not received a lowered assessment
value on the land during the previous 10 consecutive years
based on the existence of a residence, including
agricultural laborer housing, on the land being valued.
This bill is currently in the Senate Governance and Finance
Committee.
SB 668 (Evans), 2011-12 Session, authorizes an open-space
district, a land-trust organization, or a nonprofit entity,
to enter into an Act contract with a landowner who has also
entered into an Act contract, upon approval of the city or
county that holds the Act contract, to keep that
landowner's land in contract under the Act, for a period of
up to 10 years, in exchange for the open-space district's,
land-trust organization's, or nonprofit entity's payment of
all or a portion of the foregone property tax revenue to
the county, where the state has failed to reimburse the
city or county for property tax revenues not received as a
result of Act contracts. This bill was heard on May 4,
2011 in the Senate Governance and Finance Committee and
passed out on a 9-0 vote.
SB 863(Senate Budget and Fiscal Review Committee), Chapter
722, Statutes of 2010, makes various changes to state laws
governing local government contracts entered into pursuant
to the Act and state laws governing community redevelopment
agencies.
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AB 2530 (Nielsen), Chapter 391, Statutes of 2010,
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 GF
property tax revenue, to revise the terms for new
contracts.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/30/11 - per Senate Governance and
Finance Committee analysis)
Alliance of Western Milk Producers
Association of California Egg Farmers
Audubon California
California Association of Local Agency Formation
Commissions
California Association of Wheat Growers
California Bean Shippers Association
California Cattlemen's Association
California Cotton Alliance
California Farm Bureau Federation
California Grain and Feed Association
California Grape and Tree Fruit League
California Native Plant Society
California Outdoor Heritage Alliance
California Pear Growers
California Rangeland Trust
California Seed Association
California State Association of Counties
California State Floral Association
California Warehouse Association
California Women for Agriculture
Counties of Merced, Shasta, Stanislaus, Sutter, Tulare, and
Yolo
Nisei Farmers League
Pacific Coast Renderers Association
Pacific Egg and Poultry Association
Regional Council of Rural Counties
Resource Landowners Coalition
Sierra Business Council
The Nature Conservancy
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Tom Kidwell, Madera County Assessor
Western Growers
Wine Institute
ASSEMBLY FLOOR :
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Alejo, Gorell
AGB:do 7/1/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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