BILL ANALYSIS Ó
AB 707
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
707 (Wood) - As Amended April 6, 2015
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| |Local Government | |9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill amends a provision in the Williamson Act with respect
to cancellation fees, removing the ability of the Department of
Conservation (DOC) and a land owner to agree on a cancellation
valuation if the contracted land is in a city, or a county that
includes its own cancellation fee.
FISCAL EFFECT:
AB 707
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Negligible fiscal impact to DOC.
COMMENTS:
1)Purpose. In general, property owners may cancel Williamson
Act contracts upon approval from the local city council or
county board and payment of a cancellation fee of 12.5% of the
"cancellation value" to the state. The cancellation value is
intended to reflect the fair market value of the property,
however, the landowner and DOC may agree on a cancellation
value notwithstanding any other valuation process, including
assessment by a county.
According to the author, the elimination of Williamson Act
subvention payments from the state resulted in some local
jurisdictions imposing their own additional cancellation fees
based on cancellation value. Yet, agreement on cancellation
value need not involve any input or representation from the
local jurisdiction. Supporters, led by Humboldt County, argue
agreements over cancellation value can result in significantly
lower cancellation fees, potentially harming the local
jurisdiction's interests. Currently, only Merced and Humboldt
counties have local cancellation fees.
2)Williamson Act Contracts. The Williamson Act permits private
landowners to voluntarily agree with cities and counties to
restrict their land use to agriculture, open space, and
compatible uses. In return for preservation of open space,
county assessors must reduce the assessed value of the
contracted lands. Approximately 16.6 million acres are under
Williamson Act contracts. The state historically provided
subvention payments from the General Fund to counties to
compensate for lost county funds related to Williamson Act
AB 707
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contracts, but these subvention payments were ended during the
budget crises of 2008-2010.
3)Humboldt Cancellation. According to the author, an incident
involving the cancellation of a Williamson Act property in
Humboldt County gave rise to the present bill. In that
situation, a dairy property was sold to the Western Rivers
Conservancy (WRC), which intended to conserve the land as a
critical natural habitat. WRC requested a cancellation of the
Humboldt County cancellation fee, but this request was denied.
Subsequently, WRC and DOC agreed on a cancellation value
significantly below the Humboldt County Assessor's determined
fair market value, resulting in a significantly lower fee paid
to Humboldt County. The agreed land value did not involve
input from the county. This bill is intended to remedy
similar situations by removing the ability of DOC and the
landowner to agree on cancellation value if a city or county
has established its own cancellation fee.
4)A Step Too Far? The provision allowing DOC and landowners to
agree on cancellation value facilitates contract cancellations
where the fair market value does not reflect the intended use
of the land after cancellation, or would otherwise frustrate
the interests of the landowner and the state with respect to
ending a Williamson Act contract.
The situation cited by the author is such a case, where the
dairy farm owner wished to sell to a non-profit land
conservancy that intended to preserve the land instead of
using it for commercial purposes. In such instances, the fair
market value of the land, reflecting the commercial potential
of the land, may be too high to allow the parties to agree to
the sale, essentially frustrating the owner, the purchaser,
and the state.
AB 707
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The author's proposed solution in this bill removes the
ability of the landowner and DOC to agree on a lower
cancellation value in cases where the local jurisdiction also
has a cancellation fee, which may effectively prevent sales in
circumstances like the above example. The author and
Committee may wish to consider whether this solution leaves
too few options for future agreements, and whether a local
jurisdiction's interest would be better served by being made
party to the agreement on the cancellation value, permitting
the state, local jurisdiction, and landowner to collectively
agree on a cancellation value when their interests align.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081