BILL NUMBER: SB 618 AMENDED BILL TEXT AMENDED IN ASSEMBLY JULY 6, 2011 AMENDED IN ASSEMBLY JUNE 23, 2011 AMENDED IN SENATE MAY 11, 2011 AMENDED IN SENATE MAY 3, 2011 AMENDED IN SENATE APRIL 25, 2011 INTRODUCED BY Senator Wolk (Principal coauthor: Assembly Member V. Manuel Pérez) (Coauthor:Assembly Member: AlejoCoauthors: Assembly Members Alejo and Galgiani ) FEBRUARY 18, 2011 An act to add Section 51255.1 to, and to add Chapter 6.9 (commencing with Section 51190) to Part 1 of Division 1 of Title 5 of, the Government Code, and to amend Section 402.1 of the Revenue and Taxation Code, relating to local government. LEGISLATIVE COUNSEL'S DIGEST SB 618, as amended, Wolk. Local government: solar-use easement. (1) Existing law, the Williamson Act, authorizes a city or county to enter into 10-year contracts with owners of land devoted to agricultural use, whereby the owners agree to continue using the property for that purpose, and the city or county agrees to value the land accordingly for purposes of property taxation. Existing law authorizes the parties to a Williamson Act contract to mutually agree to rescind a contract under the act in order to simultaneously enter into an open-space easement for a certain period of years. This bill would authorize the parties to a Williamson Act contract to mutually agree to rescind the contract in order to simultaneously enter into a solar-use easement that would require that the land be used for solar photovoltaic facilities for a term no less than 10 years. This bill would require a county or city to include certain, and authorizes a county or city to include other, restrictions, conditions, or covenants in the deed or instrument granting a solar-use easement. This bill would provide that a solar-use easement would be automatically renewed annually, unless either party filed a notice of nonrenewal. This bill would provide that a solar-use easement may only be extinguished on all or a portion of the parcel by nonrenewal, termination, or by returning the land to its previous contract under the Williamson Act. This bill would require that if the landowner extinguishes the contract either by filing a notice of nonrenewal or by terminating the solar-use easement, the landowner shall restore the property to the conditions that existed before the easement by the time the easement terminates. This bill would authorize a landowner to terminate a solar-use easement by complying with certain procedures, and paying a termination fee based upon the termination value of the property, as determined by the county assessor. This bill would provide that specified parties may bring an action to enforce the easement if it is violated. (2) Existing law requires the county assessor to consider, when valuing real property for property taxation purposes, the effect of any enforceable restrictions to which the use of the land may be subjected. Under existing law these restrictions include, but are not limited to, zoning, recorded contracts with governmental agencies, and various other restrictions imposed by governments. This bill would also require the county assessor to consider, when valuing real property for property taxation purposes, solar-use easements. By changing the manner in which county assessors assess property for property taxation purposes, this bill would impose a state-mandated local program. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature hereby finds and declares all of the following: (a) The California Land Conservation Act of 1965 that has become known nationwide as the Williamson Act is critical to the welfare of the people of our state and nation. (b) The Williamson Act provides a statutory framework for local implementation of California's most effective farm and ranch land preservation program, protecting over 16.5 million acres or nearly one-third of all privately owned land in California. (c) The long-term conservation of agricultural and open-space land ensures that a steady supply of high-quality, low-cost fresh foods is available to urban residents, provides open-space uses that benefit the public seeking escape from the closeness of urban society, protects watersheds and vast areas of wildlife habitat, and conserves world-class agricultural soils. (d) On April 12, 2011, Governor Brown signed legislation that requires one-third of the state's electricity to come from renewable sources by December 31, 2020. (e) In establishing the 33 percent California Renewables Portfolio Standard Program (RPS program), there will be many important benefits to California, including new investment in green technologies in the state, job creation, improvements in local air quality, energy independence, and a reduction in greenhouse gas emissions. (f) Utility scale photovoltaic electrical energy production is crucial to achieving and hopefully exceeding California's RPS program goals. (g) Encouraging utility scale photovoltaic energy facilities on marginally productive or physically impaired land by providing expedited termination of Williamson Act contracts, without penalty, will protect the many statewide benefits of the program while providing significant economic incentives for new solar power development. (h) In enacting Section 3 of this act, it is the intent of the Legislature to provide an additional method for terminating a Williamson Act contract, in addition to those methods already authorized by statute, for the purpose of encouraging the development of utility scale solar photovoltaic facilities on marginally productive or physically impaired farmland. It is not intended to be the exclusive method of contract termination, nor of Williamson Act compliance for solar facilities, but merely another option that is consistent with the constitutional limitations of Section 8 of Article XIII of the California Constitution. SEC. 2. Chapter 6.9 (commencing with Section 51190) is added to Part 1 of Division 1 of Title 5 of the Government Code, to read: CHAPTER 6.9. SOLAR-USE EASEMENT Article 1. Definitions 51190. As used in this chapter, the following terms have the following meanings: (a) "Agricultural activities" has the same meaning as defined in subdivision (e) of Section 3482.5 of the Civil Code except for livestock production, notwithstanding the periodic use of the land for the production and utilization of forage. (b) "Marginally productive" means parcels consisting predominately of soil with significantly reduced agricultural productivity due to chemical or physical limitations. A parcel of land may be designated as marginally productive pursuant to this paragraph if both of the following apply: (1) The parcel was not irrigated for agriculturalpurposesactivities during the prior six years. (2) Use of the parcel is significantly limited for agricultural activities due to its topography, drainage, flooding, adverse soil conditions, or other physical reasons. (c) "Physically impaired land" means land with severely adverse soil conditions that are detrimental to continued agricultural cultivation and production. Severely adverse soil conditions may include, but are not limited to, contamination by salts or selenium, or other naturally occurring contaminants.The Secretary of Food and Agriculture may consult with the Secretary of the Natural Resources Agency and consider information from the agricultural commissioner in the county where the land is located.(d) A parcel shall be designated as marginally productive or physically impaired under this subdivision based on substantial evidence in the public record, and this designation shall be approved by the Director of Conservation. The Director of Conservation may consult with the Secretary of Food and Agriculture and consider information from the agricultural commissioner in the county where the land is located. (e) "City" means any city or city and county. (f) "Landowner" includes a lessee or trustee, if the expiration of the lease or trust occurs at a time later than the expiration of the restriction of the use of the land to photovoltaic solar facilities or any extension of the restriction. (g) "Solar-use easement" means any right or interest acquired by a county, or city in perpetuity or for a term of years on marginally productive or physically impaired lands pursuant to this chapter where the deed or other instrument granting the right or interest imposes restrictions that, through limitation of future use, will effectively restrict the use of the land to photovoltaic solar facilities for the purpose of providing for the collection and distribution of solar energy for the generation of electricity, and any other incidental or subordinate agricultural, open-space uses, or other alternative renewable energy facilities. A solar-use easement shall not permit any land located in the easement to be used for any other use allowed in commercial, industrial, or residential zones. A solar-use easement shall contain a covenant with the county, or city running with the land, either in perpetuity or for a term of years, that the landowner shall not construct or permit the construction of improvements except those for which the right is expressly reserved in the instrument provided that those reservations would not be inconsistent with the purposes of this chapter and which would not be incompatible with the sole use of the property for solar photovoltaic facilities. Article 2. General Provisions 51191. Any county or city may enter into an agreement with a landowner pursuant to Section 51255.1 to hold marginally productive or physically impaired land in a solar-use easement in the manner provided in this chapter. 51191.1. The execution and acceptance of a deed or other instrument described in subdivision (g) of Section 51190 shall constitute a dedication to the public of the use of the marginally productive or physically impaired lands for solar photovoltaic use for the term specified. Any such easement and covenant shall run for a term of not less than 10 years. A solar-use easement for a term of years shall provide that on the anniversary date of the acceptance of the solar-use easement, or on any other annual date as specified by the deed or other instrument described in subdivision (g) of Section 51190, a year shall be added automatically to the initial term unless a notice of nonrenewal is given as provided in Section 51192. 51191.2. (a) A county or city may require a deed or other instrument described in subdivision (g) of Section 51190 to contain any restrictions, conditions, or covenants as are necessary or desirable to restrict the use of the land to photovoltaic solar facilities. (b) The restrictions, conditions, or covenants may include, but are not limited to, the following: (1) Mitigation measures on the land that is subject to the solar-use easement. (2) Mitigation measures beyond the land that is subject to the solar-use easement. (3) Performance bonds or other securities to fund, upon the cessation of the solar photovoltaic use, the restoration of the land that is subject to the easement to the conditions that existed before the approval or acceptance of that easement by the time that the easement terminates. (4) Provision for necessary amendments by the parties provided that the amendments are consistent with the provisions of this chapter. (c) For term easements, the restrictions, conditions, or covenants shall include a requirement for the landowner to post a performance bond or other securities to fund the restoration of the land that is subject to the easement to the conditions that existed before the approval or acceptance of the easement by the time the easement terminates. 51191.3. No deed or other instrument described in subdivision (g) of Section 51190 shall be effective until it has been accepted or approved by resolution of the governing body of the county or city and its acceptance endorsed thereon. 51191.4. (a) During the term of the solar-use easement, the county or city shall not approve any land use that is inconsistent with the easement, and no building permit may be issued for any structure that would violate the easement. The county or city shall seek, by appropriate proceedings, an injunction against any threatened construction or other development or activity on the land that would violate the easement and shall seek a mandatory injunction requiring the removal of any structure erected in violation of the easement. If the county or city fails to seek an injunction against any threatened construction or other development or activity on the land that would violate the easement or to seek a mandatory injunction requiring the removal of any structure erected in violation of the easement, or if the county or city should construct any structure or development or conduct or permit any activity in violation of the easement, a person or entity may, by appropriate proceedings, seek an injunction. (b) The court may award to a plaintiff who prevails in an action authorized by this section his or her cost of litigation, including reasonable attorney's fees. (c) Nothing in this chapter shall limit the power of the state or any county, city, school district, or any other local public district, agency, or entity, or any other person authorized by law, to acquire land subject to a solar-use easement by eminent domain. 51191.5. Upon the acceptance or approval of any instrument creating a solar-use easement, the clerk of the governing body shall record the instrument in the office of the county recorder and file a copy with the county assessor. After the easement is recorded, it shall impart notice to all persons under the recording laws of this state. 51191.6. The parcel or parcels subject to a solar-use easement shall be assessed pursuant to Section 402.1 of the Revenue and Taxation Code during the term of the easement. 51191.7. The Department of Conservation may adopt regulations pursuant to the AdministrativeProceduresProcedure Act (Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2) for the implementation of this chapter. Article 3. Extinguishment of a Solar-Use Easement 51192. (a) A solar-use easement may be extinguished on all or a portion of the parcel only by nonrenewal, termination, or by returning the land to its previous contract pursuant to Article 3 (commencing with Section 51240) of Chapter 7. (b) (1) If either the landowner or the county or city desires in any year not to renew the solar-use easement on all or a portion of the parcel, that party shall serve written notice of nonrenewal of the easement upon the other party at least 90 days in advance of the annual renewal date of the solar-use easement. Unless written notice is served at least 90 days in advance of the renewal date, the solar-use easement shall be considered renewed as provided in Section 51191.1. (2) Upon receipt by the owner of a notice from the county or city of nonrenewal, the owner may make a written protest of the notice of nonrenewal. The county or city may, at any time prior to the renewal date, withdraw the notice of nonrenewal. (c) If the county, city, or the landowner serves notice of intent in any year not to renew the solar-use easement, the existing solar-use easement shall remain in effect for the balance of the period remaining since the original execution or the last renewal of the solar-use easement, as the case may be. 51192.1. In the case of a solar-use easement that is extinguished because of a notice of nonrenewal by the landowner or due to termination, the landowner shall restore the land that is subject to the easement to the conditions that existed before the approval of the easement by the time the easement terminates. 51192.2. (a) If all or a portion of the parcel held in a solar-use easement will no longer be used for the purposes outlined in the easement the landowner may petition the county or city to approve termination of the easement. (b) Prior to any action by the county or city giving tentative approval to the termination of any easement, the county assessor of the county in which the land is located shall determine the current fair market value of the parcel or parcels to be terminated as though the parcel or parcels were free of the easement restriction. The assessor shall certify to the county or city the termination valuation of the parcel or parcels for the purpose of determining the termination fee. At the same time, the assessor shall send a notice to the landowner and the Department of Conservation indicating the current fair market value of the parcel or parcels as though the parcel or parcels were free of the easement restriction and advise the parties, that upon their request, the assessor shall provide all information relevant to the valuation, excluding third-party information. If any information is confidential or otherwise protected from release, the department and the landowner shall hold it as confidential and return or destroy any protected information upon completion of all actions relating to valuation or termination of the easement on the property. The notice shall also advise the landowner and the department of the opportunity to request formal review from the assessor. (c) Prior to giving tentative approval to the termination of any easement, the county or city shall determine and certify to the county auditor the amount of the termination fee that the landowner shall pay the county treasurer upon termination. That fee shall be an amount equal to 121/2 percent of the termination valuation of the property. (d) If it finds that it is in the public interest to do so, the county or city may waive any payment or any portion of a payment by the landowner, or may extend the time for making the payment or a portion of the payment contingent upon the future use made of the parcel or parcels and the parcel or parcels economic return to the landowner for a period of time not to exceed the unexpired period of the easement, had it not been terminated, if both of the following occur: (1) The termination is caused by an involuntary transfer or change in the use which may be made of the land and the land is not immediately suitable, nor will be immediately used, for a purpose which produces a greater economic return to the owner. (2) The waiver or extension of time is approved by the Secretary of the Natural Resources Agency. The secretary shall approve a waiver or extension of time if the secretary finds that the granting of the waiver or extension of time by the county or city is consistent with the policies of this chapter and that the county or city complied with this article. In evaluating a request for a waiver or extension of time, the secretary shall review the findings of the county or city, the evidence in the record of the county or city, and any other evidence the secretary may receive concerning the abandonment, waiver, or extension of time. (e) When termination fees required by this section are collected, they shall be transmitted by the county treasurer to the Controller and deposited in the General Fund. (f) It is the intent of the Legislature that fees paid to terminate a contract do not constitute taxes but are payments that, when made, provide a private benefit that tends to increase the value of the property. SEC. 3. Section 51255.1 is added to the Government Code, to read: 51255.1. (a) Notwithstanding any other provision of this chapter, the parties may upon their mutual agreement rescind a contract for a parcel or parcels of marginally productive or physically impaired lands, as defined in Section 51190, in order to simultaneously enter into a solar-use easement pursuant to Chapter 6.9 (commencing with Section 51190). This action may be taken notwithstanding the prior serving of a notice of nonrenewal. (b) Nothing in this section limits the ability of the parties to a contract to seek nonrenewal, or petition for cancellation or termination of a contract pursuant to this chapter. This section is provided in addition to, not in replacement of, other methods for contract termination, Williamson Act compliance , or compatibility pursuant to this chapter. SEC. 4. Section 402.1 of the Revenue and Taxation Code is amended to read: 402.1. (a) In the assessment of land, the assessor shall consider the effect upon value of any enforceable restrictions to which the use of the land may be subjected. These restrictions shall include, but are not limited to, all of the following: (1) Zoning. (2) Recorded contracts with governmental agencies other than those provided in Sections 422 and 422.5. (3) Permit authority of, and permits issued by, governmental agencies exercising land use powers concurrently with local governments, including the California Coastal Commission and regional coastal commissions, the San Francisco Bay Conservation and Development Commission, and the Tahoe Regional Planning Agency. (4) Development controls of a local government in accordance with any local coastal program certified pursuant to Division 20 (commencing with Section 30000) of the Public Resources Code. (5) Development controls of a local government in accordance with a local protection program, or any component thereof, certified pursuant to Division 19 (commencing with Section 29000) of the Public Resources Code. (6) Environmental constraints applied to the use of land pursuant to provisions of statutes. (7) Hazardous waste land use restriction pursuant to Section 25240 of the Health and Safety Code. (8) A recorded conservation, trail, or scenic easement, as described in Section 815.1 of the Civil Code, that is granted in favor of a public agency, or in favor of a nonprofit corporation organized pursuant to Section 501(c)(3) of the Internal Revenue Code that has as its primary purpose the preservation, protection, or enhancement of land in its natural, scenic, historical, agricultural, forested, or open-space condition or use. (9) A solar-use easement pursuant to Chapter 6.9 (commencing with Section 51190) of Part 1 of Division 1 of Title 5 of the Government Code. (b) There is a rebuttable presumption that restrictions will not be removed or substantially modified in the predictable future and that they will substantially equate the value of the land to the value attributable to the legally permissible use or uses. (c) Grounds for rebutting the presumption may include, but are not necessarily limited to, the past history of like use restrictions in the jurisdiction in question and the similarity of sales prices for restricted and unrestricted land. The possible expiration of a restriction at a time certain shall not be conclusive evidence of the future removal or modification of the restriction unless there is no opportunity or likelihood of the continuation or renewal of the restriction, or unless a necessary party to the restriction has indicated an intent to permit its expiration at that time. (d) In assessing land with respect to which the presumption is unrebutted, the assessor shall not consider sales of otherwise comparable land not similarly restricted as to use as indicative of value of land under restriction, unless the restrictions have a demonstrably minimal effect upon value. (e) In assessing land under an enforceable use restriction wherein the presumption of no predictable removal or substantial modification of the restriction has been rebutted, but where the restriction nevertheless retains some future life and has some effect on present value, the assessor may consider, in addition to all other legally permissible information, representative sales of comparable lands that are not under restriction but upon which natural limitations have substantially the same effect as restrictions. (f) For the purposes of this section the following definitions apply: (1) "Comparable lands" are lands that are similar to the land being valued in respect to legally permissible uses and physical attributes. (2) "Representative sales information" is information from sales of a sufficient number of comparable lands to give an accurate indication of the full cash value of the land being valued. (g) It is hereby declared that the purpose and intent of the Legislature in enacting this section is to provide for a method of determining whether a sufficient amount of representative sales information is available for land under use restriction in order to ensure the accurate assessment of that land. It is also hereby declared that the further purpose and intent of the Legislature in enacting this section and Section 1630 is to avoid an assessment policy which, in the absence of special circumstances, considers uses for land that legally are not available to the owner and not contemplated by government, and that these sections are necessary to implement the public policy of encouraging and maintaining effective land use planning. Nothing in this statute shall be construed as requiring the assessment of any land at a value less than as required by Section 401 or as prohibiting the use of representative comparable sales information on land under similar restrictions when this information is available. SEC. 5. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.