BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Dave Cox, Chair
BILL NO: AB 715 HEARING: 6/16/10
AUTHOR: Caballero FISCAL: Yes
VERSION: 6/9/10 CONSULTANT: Detwiler
WILLIAMSON ACT SUBVENTIONS
Background and Existing Law
The Williamson Act conserves agricultural and open space
land under a three-part scheme that involves voluntary
contracts that restrict land uses, reduced property tax
assessments, and state subventions to make up the
difference.
About 16.6 million acres are under Williamson Act
contracts. Counties get $5 for each acre of prime
agricultural land and $1 an acre for other land. When the
Governor's proposed 2003-04 Budget wanted to save about $39
million by ending the state subvention payments, the
Legislative Analyst's Office recommended a ten-year
phase-out. The first cuts came in 2008-09 when a Budget
trailer bill reduced the state subventions by 10% (AB 1389,
Assembly Budget Committee, 2008). The Legislature's
2009-10 Budget reduced the subventions to $27.8 million.
However, Governor Schwarzenegger essentially eliminated the
subventions by cutting the appropriation to $1,000.
On March 3, 2010, the Senate Local Government Committee
held an oversight hearing on the Williamson Act. Counties,
landowners, and conservation groups urged legislators to
find other revenue sources to replace the State General
Funds to pay for the state subventions to counties.
Without subventions, counties told legislators that they
are unlikely to continue participation in the Williamson
Act.
Proposition 1E, the Disaster Preparedness and Flood
Prevention Bond Act of 2006, authorized $4.09 billion in
state general obligation bonds for:
Flood control & levee repairs & improvements$3 billion
Flood control projects outside the Central Valley$500
million
Stormwater projects outside the Central Valley$300
million
AB 715 -- 6/9/10 -- Page 2
Flood protection corridors, bypasses & mapping$290
million
The State Department of Water Resources can spend the $290
million on seven activities:
Acquiring easements for flood corridors and
bypasses while preserving the properties' agricultural
uses.
Building new levees for flood corridors and
bypasses.
Setting back and strengthening existing flood
control levees.
Relocating or flood proofing structures.
Acquiring interests in or providing incentives for
maintaining agricultural uses in flood plains.
Acquiring easements to protect flood corridors for
wildlife values.
Flood plain mapping.
Some conservation groups want to use the money that
Proposition 1E set aside for providing incentives for
maintaining agriculture in flood plains to replace some of
the state's direct Williamson Act subventions to counties.
Proposed Law
Assembly Bill 715 appropriates to the State Controller $11
million from the funds that Proposition 1E set aside for
acquiring interests in or providing incentives for
maintaining agricultural uses in flood plains to pay for
the state subventions to counties for land enrolled in the
Williamson Act.
AB 715 requires the State Controller to use the bill's
schedule that identifies the number of acres in each county
that are both under Williamson Act contract and within the
100-year flood plain.
If the appropriation is not adequate to provide full
funding, the bill allows each county to receive a pro-rata
share. AB 715 declares that these subventions are one-time
payments and not subject to repayment by the counties.
The bill contains extensive legislative findings and
declarations.
AB 715 -- 6/9/10 -- Page 3
Comments
1. Of time and money . Tough fiscal times require tough
budget choices. Compared to the State Budget shortfall,
the state's direct subventions to counties are a small
price to pay for conserving half of California's farmland;
one-third of all private real estate. While restoring the
full $38 million subvention amount is politically
infeasible, legislators might come up with just enough
money in 2010-11 to keep counties in the Williamson Act
program. Keeping a shaky coalition intact can buy enough
time for legislators to find a permanent funding source and
adopt program reforms. The $11 million that AB 715
appropriates won't fill the whole gap, but it's a start.
When the voters approved Proposition 1E, they signaled
their willingness to spend state bond money on incentives
to keep flood plains in agricultural use.
2. Can we? Should we ? Can legislators legally spend
Proposition 1E bond funds for one-year subventions to
counties? Assembly Member Caballero has asked the
Legislative Counsel for a written opinion which may be
available before the Committee hears AB 715 at its June 16
hearing. While the general rule is that public officials
should not spend long-term bond money to pay for short-term
costs, the language that the voters approved when they
passed Proposition 1E may allow the spending proposed by AB
715. Legal limits aside, legislators face policy
questions. When faced with more demands than money,
legislators must set priorities. When they spend scarce
state bond money for one purpose, they aren't spending it
on other purposes. By spending some of the Proposition 1E
money on one-time incentives to counties for keeping flood
plains in agricultural use, AB 715 diverts funds that could
be used to pay property owners for permanent agricultural
easements or even fee title for agricultural land within
flood plains. The bill's incentive payments go to county
governments; property owners get the money when the state
buys easements or fee title. The Committee may wish to
consider what won't be achieved if legislators spend
long-term bond funds to pay for one year of subventions.
What's the opportunity cost?
3. Patterns on the land . The distribution of funds under
AB 715 -- 6/9/10 -- Page 4
AB 715 geographically differs from the payments made under
the existing Williamson Act subvention program. The
existing subvention formulas look at the amount of prime
and nonprime land that each county has under Williamson Act
contracts. AB 715 looks at the amount of this Williamson
Act land lies within 100-year flood plains. Marin County,
for example, has over 100,000 acres subject to Williamson
Act and Farmland Security Zone contracts, but only 46 acres
of that land are within flood plains. In contrast, 292,575
acres of Kings County's 680,000 acres of Williamson Act and
FSZ land qualify under AB 715. Some counties that got
Williamson Act subventions in previous years, don't get
money under AB 715 because none of their contracted land
lies within flood plains; Orange and San Bernardino
counties are examples.
4. What we heard . After reviewing the presentations and
written materials from the recent oversight hearing, the
Committee's staff reached eight findings:
County officials, conservation groups, and
landowners generally support the Williamson Act's
voluntary contracts, the use-value property tax
assessments, and the state subventions to county
governments.
Governor Schwarzenegger's near-elimination of the
state subventions in 2009-10 makes it tough for
counties to remain in Williamson Act contracts.
Unless the Legislature restores the subventions in
2010-11 --- wholly or partially --- more counties will
follow Imperial County's example and nonrenew their
Williamson Act contracts.
If contract nonrenewals spread, it may be
impossible to replace Williamson Act contracts on
millions of acres of agricultural and open space land.
Legislators want to explore other revenue sources
to replace the State General Funds to pay for the
state subventions to counties.
Some legislators want to consider statutory changes
to the Williamson Act that will focus attention on
farm and ranch land of statewide importance.
Some legislators worry about landowners who
transfer or sell their water rights from Williamson
Act contracted land, making the property less
productive.
Some legislators want to explore other long-term
ways to preserve agricultural and open space lands,
AB 715 -- 6/9/10 -- Page 5
possibly income tax relief for the landowners as an
alternative to use-value property tax relief.
5. Gut and amend . Until the May 10, 2010 amendments, AB
715 would have changed the requirements for publishing city
and county ordinances. The Senate Local Government
Committee heard the bill in that form last year, but didn't
act.
6. Back to Rules . After the May 10 amendments, the Senate
Rules Committee directed the Senate Local Government
Committee to return AB 715 to the Rules Committee if the
bill passes on June 16. Because AB 715 affects the
allocation of Proposition 1E funds, the Senate Rules
Committee may re-refer the bill to the Senate Natural
Resources and Water Committee which has policy jurisdiction
over those bond programs.
Assembly Actions
Not relevant to the June 9, 2010 version of the bill.
Support and Opposition (6/10/10)
Support : California Council of Land Trusts, Audubon of
California, California Cultural Resource Preservation
Alliance Inc., California Outdoor Heritage Alliance, Land
Conservancy of San Luis Obispo County, Land Trust of Santa
Cruz County, Marin Agricultural Land Trust, Mendocino Land
Trust, Muir Heritage Land Trust, Peninsula Open Space
Trust, Planning and Conservation League, Northcoast
Regional Land Trust, Solano Land Trust, The Land
Conservancy, Tri-Valley Conservancy.
Opposition : Association of California Water Agencies,
California Central Valley Flood Control Association,
California Farm Bureau Federation.