BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        AB 707|
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                                   THIRD READING 


          Bill No:  AB 707
          Author:   Wood (D)
          Amended:  8/24/15 in Senate
          Vote:     21  

           SENATE GOVERNANCE & FIN. COMMITTEE:  7-0, 6/17/15
           AYES:  Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,  
            Pavley

          SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  74-0, 5/22/15 (Consent) - See last page for  
            vote

           SUBJECT:   Agricultural land:  Williamson Act contracts:   
                     cancellationAgricultural land: Williamson Act  
                     contracts: cancellation.


          SOURCE:    County of Humboldt


          DIGEST:  This bill establishes a process for cities and counties  
          to provide comments on some Williamson Act cancellation  
          valuations negotiated by the Department of Conservation (DOC).




          Senate Floor Amendments of 8/24/15 establish this comment  
          process, instead of prohibiting the DOC and landowner from  
          agreeing on a cancellation value in some counties.


          ANALYSIS:   








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          Existing law:


          1)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 DOC administers the Williamson Act.


          2)Provides for a 12.5% cancellation fee, based on the value of  
            the land, for canceling a Williamson Act contract, as  
            specified.  


          3)Allows DOC and the landowner to agree on a cancellation  
            valuation of the land.


          4)Allows a city or county to pass an ordinance that requires an  
            additional cancellation fee that goes to the local  
            jurisdiction.


          This bill:


          1)Requires DOC to notify the county assessor and applicable city  
            council or board of supervisors 60 days before DOC plans to  
            cancel a Williamson Act contract in a city or county that has  
            imposed an additional local cancellation fee.  At that time,  
            DOC must provide a preliminary cancellation valuation and a  
            rationale for the selection of that valuation.


          2)Allows the county assessor and city council or board of  
            supervisors to provide comments to DOC on the valuation.









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          3)Requires DOC to consider those comments before determining the  
            final cancellation valuation of the land.


          Background


          The California Land Conservation Act of 1965, also known as the  
          Williamson Act, is a program administered by DOC to conserve  
          agricultural and open space land.  The Williamson Act allows  
          private property owners to sign voluntary contracts with  
          counties and cities that restrict their land to agriculture,  
          open space, and compatible uses for the next 10 years.   
          Williamson Act contracts automatically renew each year, so that  
          the term is always 10 years in the future.  In return for these  
          voluntary contracts, county assessors lower the value of  
          Williamson Act contracted lands to reflect the value of their  
          use as agriculture, or open space instead of their market value  
          under Proposition 13.  Historically, the state made subvention  
          payments to counties in order to make up for a portion of the  
          resulting losses in local property tax revenue.  These payments  
          totaled about $35 million to $40 million each year from 1994 to  
          2008.  However, the state stopped making subvention payments in  
          Fiscal Year 2009-10 in response to budgetary pressures.


          A landowner wants to develop land restricted by a Williamson Act  
          contract has two options.  The normal way to end a Williamson  
          Act contract is for either the landowner or local officials to  
          give "notice of nonrenewal," which stops the automatic annual  
          renewals and allows the contract to run down over the next 10  
          years.  Alternatively, local officials can cancel a contract at  
          the request of the landowner.  To do so, local officials must  
          make findings that cancellation is in the public interest and  
          that cancellation is consistent with the purposes of the  
          Williamson Act.  In addition, the landowner must pay a  
          cancellation fee that is equal to 12.5% of the "cancellation  
          valuation" of the property.  Typically, the county assessor  
          determines the cancellation valuation, which is set at the  
          property's unrestricted market value.  However, a landowner and  
          DOC can separately agree on a cancellation valuation for the  








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          land, which takes the place of the value identified by the  
          county assessor.  According to DOC, this process has only been  
          used once: in 2012 for a property in Humboldt County.  Local  
          officials may approve or deny a cancellation once the  
          cancellation value is determined.  


          Revenues from this cancellation fee are remitted to the state.   
          However, the Williamson Act also allows local jurisdictions to  
          levy their own cancellation fees in addition to the state  
          cancellation fee.  The local government retains revenues from  
          the local cancellation fee.  So, some local jurisdictions  
          established fees in response to the loss of subvention payments  
          in 2009-10.  Merced County and Humboldt County are the only  
          counties to have local cancellation fees, in addition to the  
          state cancellation fee.  Humboldt's local cancellation fee is  
          12.5% of the cancellation value of the land.  Since the  
          cancellation value of the land can affect how much revenue the  
          city or county receives from their own cancellation fees, some  
          counties want greater say over determining the cancellation  
          value than is afforded by the current process.


          Comments


          Purpose of the bill.  AB 707 enhances local control by ensuring  
          that local governments that have established their own  
          Williamson Act cancellation fees have the opportunity to weigh  
          in on decisions that affect their communities and revenues.   
          Local governments have specific knowledge about the value of the  
          land under contract, the circumstances on the ground, and other  
          factors that should be considered when setting the cancellation  
          valuation of the land.  However, current law can leave counties  
          out of this discussion.  For example, in 2011, DOC agreed on a  
          cancellation valuation significantly below the County Assessor's  
          determined fair market value for a property in Humboldt County,  
          resulting in a significantly lower cancellation fee than would  
          have otherwise occurred.  Significantly reducing the  
          cancellation fee undermines the financial disincentive to  
          terminate Williamson Act contracts and undermines the goal of  
          preserving open space.  AB 707 remedies this defect in current  








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          law by requiring DOC to consult with counties prior to  
          determining a final cancellation valuation for the land.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          SUPPORT:   (Verified8/25/15)


          County of Humboldt (source)
          California State Association of Counties
          Rural County Representatives of California


          OPPOSITION:   (Verified8/25/15)


          None received

          ASSEMBLY FLOOR:  74-0, 5/22/15
          AYES:  Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla,  
            Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau,  
            Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,  
            Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, Patterson, Perea, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark  
            Stone, Thurmond, Ting, Wagner, Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Alejo, Jones, O'Donnell, Olsen, Waldron,  
            Weber

          Prepared by:Anton Favorini-Csorba / GOV. & F. / (916) 651-4119
          8/26/15 12:23:12


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