BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                        AB 551|
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                                    THIRD READING

          Bill No:  AB 551
          Author:   Ting (D), et al.
          Amended:  9/3/13 in Senate
          Vote:     21

           SENATE GOVERNANCE & FINANCE COMMITTEE  :  7-0, 7/3/13
          AYES:  Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 8/30/13
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg

           ASSEMBLY FLOOR  :  75-0, 5/29/13 - See last page for vote

           SUBJECT  :    Local government:  urban agriculture incentive zones

           SOURCE  :     San Francisco Urban Agriculture Alliance

           DIGEST  :    This bill authorizes, until January 1, 2019, a county  
          to establish, by ordinance, an "Urban Agriculture Incentive  
          Zone" (Zone) and allows landowners to enter into voluntary  
          contracts restricting the use of the land to agricultural  
          purposes in exchange for reduced property tax assessments.

           ANALYSIS  :    Existing law, the Williamson Act, which allows  
          landowners to contract with counties to conserve their  
          properties as farmland and open space, is comprised of three key  

          1.Landowners and counties voluntarily sign and enter into  
            contracts for a period of ten years.  Landowners give up the  


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            right to develop their farms, ranches, and open space lands.   
            In return, counties must assess the contract lands to reflect  
            these enforceable restrictions.

          2.County assessors rely on constitutional authority and  
            statutory formulas to determine "use value" preferential tax  
            assessments for contracted lands 

          3.The state General Fund provides counties with subventions to  
            replace property tax revenues that local governments forgo  
            because of the preferential tax assessments.  The state  
            General Fund also pays indirect subventions to school  
            districts to replace property tax revenues that are lost due  
            to lower property tax assessments on Williamson Act contracted  

          In efforts to address the state's budget deficit, Governor  
          Brown's 2011-12 Budget eliminated Williamson Act subventions.

          The Mills Act (1972) authorizes cities and counties to enter  
          into contracts with an owner of a qualified historic property.   
          The owner pledges to restore, maintain, and protect the  
          historical and architectural character of the property in  
          exchange for property tax relief.  Mills Act contracts are ten  
          years with automatic yearly extensions and stay with the  
          property when transferred.

          This bill establishes the "Urban Agriculture Incentive Zones  

          This bill authorizes a city or county, after a public hearing,  
          to establish by ordinance, a Zone within its boundaries for the  
          purpose of entering into voluntary enforceable contracts with  
          landowners, for the use of vacant, unimproved, or blighted lands  
          for small-scale production of agriculture crops and animal  

          A city or county that has established a Zone within its  
          boundaries can adopt rules and regulations to implement and  
          administer the Zone and contracts related to the Zone.

          This bill authorizes the city or county to impose a fee on  
          contracting landowners for the reasonable costs of implementing  
          and administering contracts.



                                                                     AB 551

          The city or county must 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.   
          After a county adopts the ordinance, it can enter into a  
          contract with a landowner to enforceably restrict the use of  
          land, subject to the contract, to uses consistent with urban  

          This bill requires the contract to include all of the following  

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

          2.A requirement that the entire property subject to the contract  
            must be dedicated to agricultural use.

          3.A prohibition against any dwellings on property while under  

          4.A restriction on property that is at least 0.10 acres and not  
            more than three acres.

          5.A notification that if a landowner cancels a contract, a city  
            or county will assess a cancellation fee.

          This bill prohibits a contract from prohibiting the use of  
          structures that support agricultural activity, including  
          toolsheds, greenhouses, produce-stands, and instructional space.

          The bill provides that a contract that prohibits the use of  
          pesticide or fertilizers on properties under contract must  
          permit pesticides or fertilizers allowed by the U.S. Department  
          of Agriculture's National Organic Program.

          Property subject to a contract must be assessed pursuant to  
          state law that requires how an assessor must consider the effect  
          on value of any enforceable restriction when assessing land.

          This bill prohibits a county from establishing a Zone within any  
          portion of the city's sphere of influence, unless that city has  
          consented to the establishment of the Zone.

          This bill also requires an assessor, when assessing land, to  



                                                                     AB 551

          consider the effect on the value of any enforceable restriction  
          to which the use of the land may be subjected, including a  
          contract entered to the Urban Agriculture Incentive Zones Act.

          This bill sunsets the authority for a city or county to approve  
          new contracts on January 1, 2019.

          This bill defines the following terms:

          1."Urban" means an area within the boundaries of an urbanized  
            area, as that term is used by the U.S. Census Bureau, which  
            includes at least 250,000 people.
          2."Urban Agriculture Incentive Zone" is an area within a county  
            or a city and county comprised of individual properties,  
            designated as urban agriculture preserves by the county or the  
            city and county for farming purposes.

          3."Agriculture use" means the cultivation and tillage of soil;  
            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; sale of products through  
            retail and farm stands; and any farming practices incident to  
            or in conjunction with farming.

          This bill makes clarifying and conforming changes to Revenue and  
          Taxation Code.

          This bill makes findings and declarations to support its  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

           Unknown General Fund impact, likely less than $1 million in  
            increased school aid annually in future years, related to  
            reductions in assessed value of land placed under contract in  
            a Zone.  Approximately half of all losses in property tax  
            revenues would accrue to K-14 schools.  In general, any  
            property tax proceeds diverted from schools results in an  
            equivalent General Fund cost, pursuant to Proposition 98's  
            minimum funding guarantees. 



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           Likely minor Board of Equalization costs to annually publish  
            the per acre land value of irrigated cropland in California,  
            and provide it to county assessors.

           SUPPORT  :   (Verified  8/30/13)

          San Francisco Urban Agriculture Alliance (source)
          Alchemist Community Development Corporations, Sacramento 
          American Planning Association
          California Board on Food and Agriculture President, Craig  
          City of Berkeley
          City Slicker Farms, Oakland 
          Committee for Green Foothills 
          Community Alliance with Family Farmers 
          CUESA, San Francisco
          Elysian Valley Community Garden, Los Angeles
          Hunger Action Los Angeles 
          Little City Gardens, San Francisco 
          Los Angeles Community Garden Council 
          Mission Pie, San Francisco 
          Oakland Food Policy Council 
          Oakland Roots:  The School of Urban Sustainability 
          Ocean Beach People's Organic Food Market, San Diego 
          Phat Beets Produce, Oakland 
          Planting Justice, Oakland 
          Project New Village, San Diego
          PUENTES, Stockton
          Sacramento Housing Alliance 
          Sacramento Natural Foods Co-Op 
          San Diego Hunger Coalition 
          San Francisco Supervisor, David Chiu
          Santa Clara Open Space Authority 
          Slow Food California Region 
          Social Justice Learning Institute, Inglewood 
          Soil Born Farms, Sacramento 
          SPUR, San Francisco 
          Sustainable Agriculture Education Center, Berkeley 
          Sustainable Economies Law Center, Oakland 
          Ubuntu Green, Oakland 
          Victory Gardens, San Diego 
          Women Organizing Resources Knowledge and Services, Los Angeles 



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           OPPOSITION  :    (Verified  8/30/13)

          California Assessors' Association

           ASSEMBLY FLOOR  :  75-0, 5/29/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,  
            Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gorell,  
            Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Jones,  
            Jones-Sawyer, Levine, Logue, Lowenthal, Maienschein, Mansoor,  
            Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,  
            Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel  
            Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,  
            Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams,  
            Yamada, John A. Pérez
          NO VOTE RECORDED:  Bigelow, Gordon, Holden, Linder, Vacancy

          AB:ej  9/3/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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