BILL ANALYSIS Ó AB 707 Page 1 Date of Hearing: April 15, 2015 ASSEMBLY COMMITTEE ON AGRICULTURE Henry T. Perea, Chair AB 707 Wood - As Amended April 6, 2015 SUBJECT: Agricultural land: Williamson Act contracts: cancellation. SUMMARY: This bill removes the ability of a land owner and the California Department of Conservation (DOC) to negotiate Williamson Act (Act) cancellation fees, if the land in an Act contract is within a county that has a local cancellation assessment for Act contract lands. 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 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. 2)Provides for a 12.5% cancellation fee, based on the value of the land, for canceling an Act contract, as specified. AB 707 Page 2 3)Allows DOC and the landowner may agree on a cancellation valuation of the land. 4)Allows a city or county to pass an ordinance that requires an additional cancellation penalty fee that goes to the local jurisdiction. FISCAL EFFECT: Unknown. 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 other 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. When the 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 Legislature's 2009-10 budget reduced the subventions to $27.8 million. The subventions were essentially eliminated in the 2009-10 budget by cutting the appropriation to $1,000. There were several attempts to restore this funding by the Legislature in 2010, which were unsuccessful. AB 707 Page 3 Due to the elimination of subvention payments, some local jurisdictions passed ordinances that impose an additional cancellation penalty fee. If a property owner wanted to cancel an Act contract before the ten year period, the landowner must petition the local board or council to terminate a contract. The board/council may grant cancellation if certain statutory findings are met. If the local government approves the cancellation, the landowner is required to pay a cancellation fee equal to 12.5% of the cancellation valuation of the property to the state. Merced County and Humboldt County (Humboldt) are the only counties to have local cancellation fees, in addition to the state cancellation fee. Humboldt's local cancellation fee is 12.5%. According the author, this bill is needed to address situations where a local government has imposed an Act cancellation fee in addition to the state Act cancellation fee. The need was demonstrated by the following incident: On August 21, 2011, the Ambrosini Dairy Property (Riverside Ranch), in Humboldt, requested to cancel their Act contract. The cancellation was initiated by the Western Rivers Conservancy (WRC), who purchased the land. The request for cancellation triggered Humboldt County Assessor Office to begin to determine the fair market value of the land, which determines the Act cancellation fee. The WRC requested a waiver to the Humboldt's fee. The Humboldt's Act Advisory Committee recommended to the Board of Supervisors that the local cancellation fee not be waived. On April 23, 2012, the DOC sent a letter to Humboldt informing the local jurisdiction that WRC and the DOC had reached an agreement on a cancellation valuation, as allowed by current law. This AB 707 Page 4 negotiation between the DOC and WRC took place without the Humboldt's input. This bill addresses this issue by allowing the county, if it has a local cancellation fee, to be part of the discussion of land valuation. REGISTERED SUPPORT / OPPOSITION: Support County of Humboldt (sponsor) California State Association of Counties Rural County Representative of California Opposition None on file Analysis Prepared by:Victor Francovich / AGRI. / (916) 319-2084 AB 707 Page 5