BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 618
                                                                  Page  1

          Date of Hearing:   June 29, 2011

                          ASSEMBLY COMMITTEE ON AGRICULTURE
                              Cathleen Galgiani, Chair
                      SB 618 (Wolk) - As Amended:  June 23, 2011

           SENATE VOTE  :   39-0

           SUBJECT  :  Local government: solar-use easement.

           SUMMARY  :  This bill allows a city or county and a landowner to 
          concurrently rescind a Williamson Act (Act) contract on 
          marginally productive or physically impaired lands and enter 
          into a solar-use easement that restricts the use of land to 
          photovoltaic (PV) solar facilities.  Specifically,  this bill  :

          1)Makes legislative declarations and findings regarding the Act 
            and it's importance to preserving agricultural and open space 
            to the people of California

          2)Makes legislative declarations and findings that California 
            will require 33% of electricity to come from renewable sources 
            by 2020 and that renewable energy, in which PV produced 
            electricity plays an important part, will benefit California 
            by job creation, improving local air quality and improve 
            energy independence, along with other benefits.

          3)Makes legislative declarations and findings that encouraging 
            PV electricity production on marginally productive or 
            physically impaired land, by expediting the termination of Act 
            contracts without penalty,  will protect the benefits of solar 
            production and provide economic incentive for new solar power 
            development.

          4)Declares that it is the intent of the Legislature to provide 
            an additional, but not the exclusive, method of terminating an 
            Act contact to encourage the development of large scale solar 
            PV facilities on marginally productive or physically impaired 
            land.  

          5)Defines agriculture activities as all agriculture production 
            and agriculture related activities, excluding livestock 
            production.  Allows for the periodic use of land for the 
            production and use of forage, as specified.









                                                                  SB 618
                                                                  Page  2

          6)Defines marginally productive as parcels not irrigated for 
            agricultural purposes for the previous six years, and 
            consisting predominantly of soil with significantly limited 
            agricultural activities due to chemical or physical 
            limitations, as specified.

          7)Defines physically impaired land as land with severely adverse 
            soil conditions that are detrimental to continued agricultural 
            cultivation and production, as specified.  Allows the 
            Secretary of the California Department of Food and Agriculture 
            (CDFA) to consult with the Secretary of the California Natural 
            Resources Agency (CNRA) and consider information from the 
            county agriculture commissioner where the land is located

          8)Requires a designation of marginally productive or physically 
            impaired land to be based on substantial evidence and approved 
            by the Director (Director) of the Department of Conservation 
            (DOC) and allows the Director to consult with the Secretary of 
            CDFA and consider information from the county agriculture 
            commissioner where the land is located.

          9)Defines city to mean any city or city and county.

          10)Defines landowner to include a lessee or trustee, if the 
            lease or trust expires at a later date than the expiration of 
            the restriction of land use to PV solar facilities or any 
            extension of restriction.

          11)Defines solar-use easement (solar easement) as any rights or 
            interests acquired by a city or county in perpetuity or a term 
            of years that restricts the use of land to a solar facility, 
            with the purpose to provide for the collection and 
            distribution of solar energy for electricity generation, as 
            specified.

          12)Allows a city or county to enter into an agreement with a 
            landowner for a solar easement, as specified.

          13)Requires the term of a solar use easement to be at least ten 
            years and specifies that the contract automatically renews 
            each year unless notice of nonrenewal is given by either 
            party.   

          14)Allows a city or county to require a solar easement to have 
            any conditions, covenants or restriction (CCR) needed to 








                                                                  SB 618
                                                                  Page  3

            restrict the land use to solar facilities.  Allows the CCR to 
            include, but not be limited to:

             a)   Mitigation measures on the solar easement land.

             b)   Mitigation measures beyond the solar easement land.

             c)   Bonds or other securities to fund, upon ending the solar 
               easement, the restoration of the easement land, as 
               specified.

             d)   Requires any CCR to be consistent with this chapter.

          15)Requires for term easements that the CCRs require the 
            landowner to post bonds or other securities to fund, upon 
            ending the solar easement, the restoration of the easement 
            land, as specified.

          16)Requires acceptance or approval from the local governing body 
            before a solar easement is in effect.

          17)Prohibits a city or county, during the term of a solar 
            easement, from approving any land use that is inconsistent 
            with the easement, or issues building permits for structures 
            that would violate the easement.

          18)Requires a city or county, during the term of a solar 
            easement, to pursue injunctions, by appropriate proceedings, 
            against construction or development on easement land that 
            would violate the easement and pursue a mandatory injunction 
            to remove any structure built in violation of the easement.

          19)Provides that if a county or city fails to seek an injunction 
            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.

          20)Requires a solar easement to be officially recorded with the 
            county assessor, as specified.

          21)Requires the parcel or parcels in a solar easement to be 
            assessed, considering the effect upon value of restrictions to 
            which the use of the land is subjected.









                                                                  SB 618
                                                                  Page  4

          22)Allows DOC to adopt regulation pursuant to solar easements.

          23)Allows a solar easement to be ended on all or a portion of 
            the parcel by nonrenewal, termination, or reversion of the 
            land to its previous Act contract, as specified.

          24)Requires parties who wish to not renew a solar easement on 
            all or part of the parcel, to file a written notice 90 days 
            prior to the annual renewal date of the easement.

          25)Provides that unless written notice is served at least 90 
            days in advance of the renewal date, the Solar easement shall 
            be considered renewed.

          26)Allows an owner who receives a nonrenewal notice from a city 
            or county, to make a written protest of the nonrenewal and 
            allows the city or county, prior to the renewal date, to 
            rescind the notice of nonrenewal.

          27)Requires, upon nonrenewal, the solar easement to continue for 
            the balance of the term.    

          28)Requires the land be restored to its original condition by 
            the landowner if he or she initiates nonrenewal of a solar 
            easement or due to termination of the solar easement.

          29)Allows landowners to petition the city or county to terminate 
            a solar easement, if all or a portion of the parcel no longer 
            is used for the purpose of the easement.

          30)Requires, prior to any action by a city or county in the 
            termination of solar easement, the county assessor to 
            determine current fair market value of easement land being 
            terminated.

             a)   Requires the county assessor to certify to the city or 
               county the termination valuation of the easement land to 
               determine the termination fee.

             b)   Requires the county assessor to send a notice to the 
               landowner and DOC indicating the current fair market value, 
               advise the parties of their right to request all 
               information relative to the land valuation, and advise the 
               parties of the ability to request a formal review.  
               Requires confidential information to be protected, as 








                                                                  SB 618
                                                                  Page  5

               specified.

          31)Requires, prior to approval of a solar easement termination, 
            the city or county to determine and certify to the county 
            auditor the amount of the termination fee due to the county 
            treasure upon termination and requires the termination fee be 
            12.5% termination value of the property. 

          32)Allows the city or county, if it is in the public interest, 
            to waive payment or a portion of payment, or extend payment or 
            a portion of payment as specified, if all of the following 
            occur:

             a)   The termination is caused by an involuntary transfer or 
               change in use which the land is not suitable or can be used 
               for a greater economic return for the owner; and,

             b)   The Secretary of CNRA approves the waiver or extension 
               of time, as specified.

          33)Requires the termination fees collected by the county 
            treasurer be transferred to the controller and deposited in 
            the General Fund (GF).

          34)Declares the intent of the Legislature that the termination 
            fees do not constitute taxes, but are payments that provide a 
            private benefit, as specified.

          35)Allows parties, upon mutual agreement, to rescind Act 
            contracts on marginally productive or physically impaired land 
            to simultaneously enter into a solar easement.   

          36)Specifies that ending an Act contract by entering into a 
            solar easement is an addition to, not a replacement of, other 
            methods of ending an Act contract.

          37)Adds solar easements as an enforceable restriction that 
            effects land valuation, that assessors are required to 
            examine.

           EXISTING LAW:  

          1)Creates the Act, also known as the California Land 
            Conservation Act of 1965, which authorizes cities and counties 
            to enter into agricultural land preservation contracts with 








                                                                  SB 618
                                                                  Page  6

            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.  ŬGovernment Code Section (GOV) 
            51200-51207]

          2)Allows a landowner or a county to not renew an Act contract.  
            The Act contract then runs out in nine years.  After 
            nonrenewal, a county will increase the property's assessed 
            value to its market value by the end of the contract period 
            when the land use restrictions also end.  ŬGOV section 51245]

          3)Allows for a cancellation of an Act contract at the request of 
            the landowner.  Cancellation immediately ends the contract and 
            allows the landowner to use the property for another specified 
            use.  To cancel a contract, the county supervisors must find 
            that the cancellation is either consistent with the Act's 
            purposes or in the public interest.  The landowner must pay a 
            cancellation fee equal to 12.5% of the property's 
            nonrestricted value.  The revenues go to the state GF. ŬGOV 
            section 21250]

          4)Allows for the rescission of an Act contract.  Rescission 
            occurs when the county supervisors cancel an Act contract, but 
            the landowner simultaneously puts an agricultural conservation 
            easement on other land of equal or greater value.  ŬGOV 
            section 51255]

           FISCAL EFFECT  :  This bill has been keyed fiscal by Legislative 
          Counsel.

           COMMENTS  :  The Act conserves agricultural and open space land by 
          allowing private property owners to sign voluntary contracts 
          with counties and cities, 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 agricultural or open space instead of the market 
          value.  Making sure that private property owners use their Act 
          land appropriately is essential to maintaining the statute's 
          constitutional integrity.  Approximately 16.6 million acres are 
          under Act contracts.  

          At least 33% of retail energy sales in California must come from 
          renewable energy resources by December 31, 2020.  To meet this 
          goal, utility systems and private investors need locations to 
          build renewable energy facilities.  The California Energy 








                                                                  SB 618
                                                                  Page  7

          Commission is tracking 252 solar PV projects spread over 21 
          counties.  Many of these solar PV sites are in counties that 
          have Act contracts with landowners of thousands of acres of 
          farms, ranches, and open space.

          Although the Act recognizes the construction of electric 
          facilities as a compatible use, opinions differ over whether a 
          solar PV facility qualifies as a compatible use.  To avoid 
          lawsuits, landowners and county officials prefer to terminate 
          their Act contracts before building solar PV facilities.  Some 
          county supervisors have made the public interest findings and 
          cancelled Act contracts so that investors can build solar PV 
          facilities.  Others want to find a different method to terminate 
          Act contracts before building solar PV facilities.

          According to the author, this bill offers incentives to solar PV 
          developers who choose to develop on lands that are less suited 
          for agricultural use or have a lower habitat value.  The bill 
          defines "marginally productive and physically impaired lands" to 
          be those lands which have significantly reduced agricultural 
          value due to chemical or physical limitations and are unusable 
          for agricultural.

          Supporters state that this bill will provide a significant 
          alternative mechanism for Williamson Act lands, when designated 
          as marginally productive or physically impaired, that cannot 
          meet the principles of compatibility or the required findings 
          for contract cancellation.  Furthermore, supporters state this 
          bill will accomplish the goal of ensuring that solar projects 
          are located appropriately without undermining the Act and will 
          ensure that solar projects are implemented in a manner that 
          makes sense and balances multiple interests.

          The definition for physically impaired land includes allowing 
          the Secretary of CDFA to be the lead reviewer of the 
          designation.   This conflicts with requiring the Director to 
          approve the designation of marginally productive land and 
          physically impaired land.  The author's office stated that the 
          Director is the intended person to make these determinations.  
          The committee may wish to consider the following clarifying 
          amendment: on page 5, lines 15-18 strike "The Secretary of Food 
          and Agriculture may consult with the Secretary of Natural 
          Resources Agency and consider information from the agricultural 
          commissioner in the county where the land is located."









                                                                  SB 618
                                                                  Page  8

          The bill defines agriculture activities as production and 
          practices associated with farming as prescribed in current law.  
          As the definitions of marginally productive land and physically 
          impaired land in this bill only refer to agriculture production 
          or purposes, the committee may wish to consider a conforming 
          amendment as follows:  On page 5, lines 1, after the word 
          "agriculture", strike the word "purposes" and insert 
          "activities". 
          This bill was heard in the Assembly Committee on Local 
          Government on June 22, 2011, where it passed  out on a 9-0 vote.

           RELATED LEGISLATION  :

          SB 2 X1 (Simitian) Chapter 1, Statutes of 2011, increased 
          California's renewables portfolio standard to require all retail 
          sellers of electricity and all publicly owned utilities to 
          procure at least 33% of electricity delivered to their retail 
          customers from renewable resources by 2020. 

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Farm Bureau Federation
          California Public Utilities Commission
          California Women for Agriculture
          Defenders of Wildlife
          Environmental Defense Fund
          Maricopa Orchards, LLC
          Natural Resources Defense Council
          Planning and Conservation League
          The Nature Conversancy
          The Trust for Public Land
          Union of Concerned Scientists
           
            Opposition 
           
          None on file.

           Analysis Prepared by  :    Victor Francovich / AGRI. / (916) 
          319-2084 












                                                                  SB 618
                                                                  Page  9