BILL ANALYSIS Ó SB 668 Page 1 Date of Hearing: June 15, 2011 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT Cameron Smyth, Chair SB 668 (Evans) - As Amended: May 10, 2011 SENATE VOTE : 39-0 SUBJECT : Local government: Williamson Act. SUMMARY : Allows a city or county, in order to compensate for a reduction in state subvention payments for the Williamson Act, to accept contributions from a nonprofit, a land-trust organization, a nonprofit entity, or a public agency for specific land that is under a Williamson Act contract to supplement the city or county's foregone property tax revenues. Specifically, this bill : 1)Allows a city or county to accept contributions from a nonprofit, a land-trust organization, a nonprofit entity, or a public agency for specific land that is under a Williamson Act contract to supplement the city or county's foregone property tax revenues. 2)Specifies that this authority applies if the state fails to make all or part of its subvention payments to the city or county. 3)Allows the contributor to contract with the owner of Williamson Act land, with the approval of the city or county, to keep the property under the Williamson Act contract in exchange for the contributor's payment to the city or county. 4)Requires that a contract between the contributor and the landowner be subject to any limitation in the contributor's power. 5)Prohibits the contract from allowing or requiring the land's conversion into a mitigation bank site. 6)Provisions of the measure sunset on January 1, 2016, unless the Legislature extends or repeals that date. 7)Specifies that the contract between the contributor and the SB 668 Page 2 landowner remains in effect until it terminates, for up to 10 years. EXISTING LAW : 1)Authorizes, pursuant to Article 13, section 8 of the California Constitution, 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 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. FISCAL EFFECT : None COMMENTS : 1)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. 2)Approximately 16.6 million acres are under Williamson Act contracts. When Governor Schwarzenegger's 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 first cuts came in 2008-09 when a budget trailer bill reduced the state subventions by 10%. The Legislature's 2009-10 budget reduced SB 668 Page 3 the subventions to $27.8 million. However, Governor Schwarzenegger essentially eliminated the subventions by cutting the appropriation to $1,000. This funding was removed from the 2010-11 budget. 3)Last year the Legislature passed AB 2530 (Nielsen), Chapter 391, Statutes of 2010, which contained an alternative funding mechanism for the Williamson Act. 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. 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 and repealed the alternative Williamson Act program. 4)According to the author's office the loss of General Fund subventions to backfill local government property tax revenue losses on land under Williamson Act contract threatens the continuation of those contracts. SB 668 clarifies that local governments may accept contributions from non-profits and land trusts to help offset the reduction in state subventions. 5)Support arguments: Supporters argue that by authorizing greater funding flexibility at the local government level, this bill helps achieve several primary objectives necessary for the long-term conservation of our agricultural and open-space lands. Opposition arguments: None at this time. 6)This bill is double-referred to the Committee on Agriculture. REGISTERED SUPPORT / OPPOSITION : Support None on file Opposition None on file SB 668 Page 4 Analysis Prepared by : Katie Kolitsos / L. GOV. / (916) 319-3958