BILL ANALYSIS Ó
SB 618
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Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 618 (Wolk) - As Amended: July 6, 2011
Policy Committee: Local
GovernmentVote:9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill allows a city or county and a landowner to jointly
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)Authorizes any county or city to enter into an agreement with
a landowner to hold marginally productive or physically
impaired land in a solar-use easement for a term of not less
than 10 years.
2)Requires a solar-use easement to be officially recorded with
the county assessor.
3)Authorizes the Department of Conservation to adopt regulations
regarding the implementation of the provisions of this
measure.
4)Requires every lead agency and responsible agency to expedite
its review for issuing any necessary permits for solar
photovoltaic facilities located on marginally productive or
physically impaired, or disturbed land.
5)Requires a parcel be designated as marginally productive or
physically impaired under this subdivision based on
substantial evidence in the public record, and requires the
designation be approved by the Department of Conservation.
FISCAL EFFECT
SB 618
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This bill will have a significant fiscal impact. There will be
a loss of cancellation fees from landowners that had would have
otherwise had their Williamson Act contracts cancelled. These
fees are deposited into the GF and a portion is used for the
support of the Department of Conservation for administering the
Williamson Act. The magnitude of the loss is difficult to
estimate, but a single project in Kern County resulted in the
payment of $800,000 in fees, so the loss is likely to be several
million dollars. In addition, the bill's requirement for a
priority review of solar PV project documents would put cost
pressure on state agencies.
Local governments could see an increase in property tax revenues
as land that is converted to solar is reassessed, although the
magnitude of the reassessment will be relatively small as the
land will be subject to an easement for solar and the
improvements are exempt from property tax under current law.
This increase in property tax, could lead to a decrease in GF
expenditures used to backfill local property taxes for schools.
The Department of Conservation will incur costs of approximately
$200,000 to implement the provisions of this bill.
The bill also contains a state reimbursed mandate for
requirements placed on the county assessor. The costs are
likely to be minor, approximately $50,000.
COMMENTS
1)Purpose. According to the author, SB 618 offers incentives to
solar PV developers who choose to develop on lands less suited
for agricultural use. The author notes the bill defines
marginally productive and physically impaired lands to be
those lands with significantly reduced agricultural value due
to chemical or physical limitations (drainage problems, poor
soil, etc.).
The author argues that as the state strives to meet its new,
ambitious, 33% renewable standard, counties and landowners are
left struggling to balance the competing needs of large-scale
solar PV development and protecting critical habitat and
farmland. The author states that SB 618 strives to protect
the integrity of the Williamson Act, by creating a
straightforward path for solar developments on lands less
suited for agriculture by allowing these lands to have their
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Williamson Act contract rescinded, avoiding the cancelation
fees and placing these lands in protective Solar-Use easements
with similar tax benefits.
2)Background . The Williamson 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 for the agreement to keep the land out of development,
the landowner benefits from reduced property tax assessments
based on the property's use rather than its market value.
When the term of the contract runs out after nine years, the
property is reassessed at its market value and land
restrictions end. County officials can cancel a Williamson
Act contract at a landowner's request if the board of
supervisors finds that cancellation is consistent with the
Act's purpose or in the public interest. A contract ends
immediately upon cancellation and payment of cancellation fees
by the landowner to the state in an amount equal to 12.5% of
the property's unrestricted value.
Although the Williamson 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 Williamson Act contracts before building solar
PV facilities. Some county supervisors have made the public
interest findings and cancelled Williamson Act contracts so
that investors can build solar PV facilities. Kern County,
for example, cancelled its Williamson Act contract on 6,047
acres
of fallow agricultural land for the Maricopa Sun Solar
Complex, a proposed 700-megawatt solar PV project near Taft.
The landowner will pay $755,714 in cancellation fees. Others
want to find a different method to terminate Williamson Act
contracts before they build solar PV facilities.
3)Renewable energy goals. At least 33% of retail energy sales
by investor owned utilities, local publicly owned utilities,
and energy service providers must come from renewable energy
resources by December 31, 2020 (SB 2x, Simitian, Chapter 1,
Statutes of 2011). To meet this goal, utility systems and
private investors need locations to build renewable energy
facilities. The California Energy Commission tracks more than
375 renewable energy projects, including 252 solar
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photovoltaic (PV) projects spread over 21 counties. Many of
these solar PV sites are in counties that have Williamson Act
contracts with landowners of thousands of acres of farms,
ranches, and open space.
4)Support. Supporters, including the California Farm Bureau
Federation, state that SB 618 will provide an important
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.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081