Amended in Senate September 3, 2013

Amended in Senate August 13, 2013

Amended in Senate July 9, 2013

Amended in Senate June 25, 2013

Amended in Assembly May 24, 2013

Amended in Assembly April 29, 2013

Amended in Assembly April 9, 2013

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 551

Introduced by Assembly Member Ting

(Coauthor: Assembly Member Alejo)

February 20, 2013

An act to add Chapter 6.3 (commencing with Section 51040) to Part 1 of Division 1 of Title 5 of the Government Code, and to amend Section 402.1 of, and to add Section 422.7 to, the Revenue and Taxation Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 551, as amended, Ting. Local government: urban agriculture incentive zones.

(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 enact the Urban Agriculture Incentive Zones Act and would authorize, under specified conditions begin insert and until January 1, 2019 end insert , a city, county, or city and county and a landowner to enter into a contract to enforceably restrict the use of vacant, unimproved, or otherwise blighted lands for small-scale production of agricultural crops and animal husbandry. The bill would require a contract entered into pursuant to these provisions to, among other things, be for a term of no less than 5 years and to enforceably restrict property that is at least 0.10 acres in size.

(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 require the county assessor to value property that is enforceably restricted by a contract entered into pursuant to the Urban Agriculture Incentive Zones Act at the rate based on the average begin delete per acre end delete begin insert per end insert begin insert -acre end insert value of irrigated cropland in California, adjusted proportionally to reflect the acreage of the property under contract, as most recently published by the National Agricultural Statistics Service of the United States Department of Agriculture. The bill would also require the State Board of Equalization to post the begin delete per acre end delete begin insert per end insert begin insert -acre end insert land value as published by the National Agricultural Statistics Service of the United States Department of Agriculture on its Internet Web site within 30 days of publication, and to provide the rate to county assessors no later than January 1 of each assessment year.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Chapter 6.3 (commencing with Section 51040)
is added to Part 1 of Division 1 of Title 5 of the Government Code,
to read:

 

Chapter  6.3. Urban Agriculture Incentive Zones

 

51040.  

This chapter shall be known, and may be cited, as the
Urban Agriculture Incentive Zones Act.

51040.1.  

The Legislature finds and declares that it is in the
public interest to promote sustainable urban farm enterprise sectors
in urban centers.

The Legislature further finds and declares the small-scale, active
production of marketable crops and animal husbandry, including,
but not limited to, foods, flowers, and seedlings, in urban centers
is consistent with, and furthers, the purposes of this act.

51040.3.  

For purposes of this chapter, the following terms have
the following meanings:

(a) “Urban” means an area within the boundaries of an urbanized
area, as that term is used by the United States Census Bureau, that
includes at least begin delete 50,000 end delete begin insert 250,000 end insert people.

(b) “Urban Agriculture Incentive Zone” means an area within
a county or a city and county that is comprised of individual
properties designated as urban agriculture preserves by the county
or the city and county for farming purposes.

(c) “Agricultural use” means farming in all its branches
including, but not limited to, the cultivation and tillage of the soil,
the production, cultivation, growing, and harvesting of any
agricultural or horticultural products, the raising of livestock, bees,
fur-bearing animals, dairy-producing animals, and poultry,
agricultural education, the sale of produce through field retail
stands or farms stands as defined by Article 5 (commencing with
Section 47030) of Chapter 10.5 of Division 17 of the Food and
Agricultural Code, and any practices performed by a farmer or on
a farm as an incident to or in conjunction with farming operations.
For purposes of this chapter, the term “agricultural use” does not
include timber production.

51042.  

(a) (1) (A) A county or city and county may, after a
public hearing, establish by ordinance an Urban Agriculture
Incentive Zone within its boundaries for the purpose of entering
into enforceable contracts with landowners, on a voluntary basis,
for the use of vacant, unimproved, or blighted lands for small-scale
agricultural use.

(B) A city may, after a public hearing and approval from the
board of supervisors of the county in which the city is located,
establish by ordinance an Urban Agriculture Incentive Zone within
its boundaries for the purpose of entering into enforceable contracts
with landowners, on a voluntary basis, for the use of vacant,
unimproved, or blighted lands for small-scale agricultural use.

(2) Following the adoption of the ordinance pursuant to
paragraph (1), a city, county, or city and county that has established
an Urban Agriculture Incentive Zone within its boundaries may
adopt rules and regulations consistent with the city, county, or city
and county’s zoning and other ordinances, for the implementation
and administration of the Urban Agriculture Incentive Zone and
of contracts related to that Urban Agriculture Incentive Zone.

(A) The city, county, or city and county may impose a fee upon
contracting landowners for the reasonable costs of implementing
and administering contracts.

(B) The city, county, or city and county shall impose a fee equal
to the cumulative value of the tax benefit received during the
duration of the contract upon landowners for cancellation of any
contract prior to the expiration of the contract, unless the city,
county, or city and county makes a determination that the
cancellation was caused by extenuating circumstances despite the
good faith effort by the landowner.

(b) Following the adoption of the ordinance as required by
subdivision (a), a city, county, or a city and county may enter into
a contract with a landowner to enforceably restrict the use of the
land subject to the contract to uses consistent with urban
agriculture. Any contract entered into pursuant to this chapter shall
include, but is not limited to, all of the following provisions:

(1) An initial term of not less than five years.

(2) A restriction on property that is at least 0.10 acres begin insert , and not
more than three acres end insert .

(3) A requirement that the entire property subject to the contract
shall be dedicated toward commercial or noncommercial
agricultural use.

(4) A prohibition against any dwellings on the property while
under contract.

(5) A notification that if a landowner cancels a contract, a city,
county, or city and county is required to assess a cancellation fee,
pursuant to subparagraph (B) of paragraph (2) of subdivision (a).

(c) A contract entered into pursuant to this chapter shall not
prohibit the use of structures that support agricultural activity,
including, but not limited to, toolsheds, greenhouses, produce
stands, and instructional space.

(d) A contract entered into pursuant to this chapter that includes
a prohibition on the use of pesticide or fertilizers on properties
under contract shall permit those pesticides or fertilizers allowed
by the United States Department of Agriculture’s National Organic
Program.

begin insert

(e) A city, county, or city and county shall not enter into a new
contract, or renew an existing contract pursuant to this chapter
after January 1, 2019. Any contract entered into pursuant to this
chapter on or before January 1, 2019, shall be valid and
enforceable for the duration of the contract.

end insert begin delete

(e)

end delete

begin insert (f) end insert  Property subject to a contract entered into pursuant to this
chapter shall be assessed pursuant to Section 422.7 of the Revenue
and Taxation Code during the term of the contract.

begin delete

(f)

end delete

begin insert (g) end insert  A county or a city and county shall not establish an Urban
Agriculture Incentive Zone within any portion of the spheres of
influence of a city unless the legislative body of the city has
consented to the establishment of the Urban Agriculture Incentive
Zone.

begin delete

(g)

end delete

begin insert (h) end insert  A city, county, or city and county shall not establish an
Urban Agriculture Incentive Zone in any area that is currently
subject to, or has been subject to within the previous three years,
a contract pursuant to the Williamson Act (Article 1 (commencing
with Section 51200) of Chapter 7 of Part 1 of Division 1 of Title
5).

SEC. 2.  

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, 422.5, and 422.7.

(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. This statute shall not 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. 3.  

Section 422.7 is added to the Revenue and Taxation
Code, to read:

422.7.  

(a) For purposes of this section, the term “open-space
land” includes land subject to contract for an urban agricultural
incentive zone, as defined in subdivision (b) of Section 51040.3
of the Government Code. For purposes of this section, open-space
land is enforceably restricted within the meaning of Section 8 of
Article XIII of the California Constitution if it is subject to an
urban agriculture incentive zone contract.

(b) (1) Open-space land subject to contract for an urban
agricultural incentive zone pursuant to Section 52010.3 shall be
valued for assessment at the rate based on the average begin delete per acre end delete
begin insert per-acre end insert value of irrigated cropland in California, adjusted
proportionally to reflect the acreage of the property under contract,
as most recently published by the National Agricultural Statistics
Service of the United States Department of Agriculture.

(2) Notwithstanding the published rate, the valuation resulting
from the section shall not exceed the lesser of either the valuation
that would have resulted by a calculation under Section 110, or
the valuation that would have resulted by a valuation under Section
110.1, as though the property was not subject to an enforceable
restriction in the base year.

(c) The State Board of Equalization shall post the begin delete per acre end delete
begin insert per end insert begin insert -acre end insert land value as published by the National Agricultural
Statistics Service of the United States Department of Agriculture
on its Internet Web site within 30 days of publication, and shall
provide the rate to county assessors no later than January 1 of each
assessment year.