BILL ANALYSIS Ó
AB 1265
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CONCURRENCE IN SENATE AMENDMENTS
AB 1265 (Nielsen)
As Amended June 30, 2011
2/3 vote. Urgency
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|ASSEMBLY: |78-0 |(May 19, 2011) |SENATE: |31-0 |(July 1, 2011) |
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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 :
1)Change the operative date from January 1, 2012 to January 1,
2011.
2)Change the sunset date from January 1, 2015 to January 1,
2016.
3)Add an urgency clause.
4)Make technical and clarifying changes.
EXISTING LAW :
1)Authorizes, pursuant to the California Constitution, Article
13, Section 8, 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
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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
Williamson Act.
AS PASSED BY THE ASSEMBLY , this bill:
1)Provided 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)Provided 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)Specified 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)Required 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)Specified 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)Required 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
issued by the State Board of Equalization or 20%, whichever is
higher.
7)Required, 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)Required an addition to the assessed value be conveyed to the
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auditor, consistent with the 10% reduction in the length of
the restriction, equal to 10% of the difference between the
valuations.
9)Required the additional amount of tax revenue that results
from the decrease in restriction to be separately displayed on
the taxpayer's annual bill.
10)Provided 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)Stated that a landowner may elect to serve a notice of
nonrenewal instead of accepting a shortened contact.
12)Required 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)Prohibited 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)Stated that if a property's fair market value is lower than
its restricted value, there is no revaluation.
15)Specified 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;
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d) Scenic restrictions;
e) Wildlife habitat contracts; and,
f) Atypical term contracts.
16)Specified 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)Provided 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)Stated that a landowner's failure to provide notice of
nonrenewal is implied consent to the contract and revaluation
provisions for that year.
19)Required 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)Added a sunset provision, terminating the provisions of this
measure on January 1, 2015.
FISCAL EFFECT : Unknown
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 Governor Schwarzenegger's proposed 2003-04
Budget he 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
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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.
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 this bill. 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 (Nielsen). The
budget 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 (Budget and Fiscal Review Committee) also repealed the
alternative Williamson Act program, which was added by AB 2530
(Nielsen), and modified by SB 863 (Budget and Fiscal Review
Committee). The Legislature may wish to consider if it is
appropriate to add back in the alternative funding provisions if
the Legislature just removed them.
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.
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
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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 Legislature may
wish to consider if it is in fact prudent to add back in
provisions of law that were just removed in March.
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958
FN: 0001458