BILL ANALYSIS Ó AB 707 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 707 (Wood) As Amended August 24, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | 74-0 | (May 22, |SENATE: |40-0 |(August 31, | | | |2015) | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: AGRI. SUMMARY: Requires the Department of Conservation (DOC) to provide a preliminary valuation of the Williamson Act (Act) contract land to the county assessor and the city council or board of supervisors (local government) at least 60 days prior to the effective date of the agreed upon cancellation valuation if the contract includes additional local cancellation fees. The Senate amendments: 1)Delete the provision that removes the ability of a land owner and DOC to negotiate Act cancellation fees, if the land in an Act contract is within a county that has a local cancellation assessment for Act contract lands. 2)Require the DOC, if an Act contract has additional local AB 707 Page 2 government cancellation fees, to provide to the county assessor and local government preliminary valuation of the land with the reason for the cancellation value, as specified. 3)Allow the county assessor to provide information on the preliminary valuation to the local government and allow the local government to provide comments to DOC on the preliminary valuation and cancellation value. EXISTING LAW: 1)Creates the Act, also known as the California Land Conservation Act of 1965, which authorizes local governments 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 DOC administers the 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. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. AB 707 Page 3 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. Due to the elimination of state subvention payments to the counties, 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 to 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 the Humboldt County Assessor's 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 AB 707 Page 4 valuation, as allowed by current law. This negotiation between the DOC and WRC took place without 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. This bill is substantially similar to the version passed by the Assembly. Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084 FN: 0001576