BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           715 (Caballero)
          
          Hearing Date:  08/12/2010           Amended: 06/28/2010
          Consultant: Mark McKenzie       Policy Vote: L Gov 3-1
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  AB 715 would appropriate $36 million from the  
          General Fund for state subventions to counties that have lands  
          under Williamson Act contracts.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           Appropriation          $36,000                          General
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:  SUSPENSE FILE.
          
          The California Land Conservation Act of 1965, otherwise known as  
          the Williamson Act, allows landowners to voluntarily contract  
          with counties to conserve their property as farmland and open  
          space in exchange for reduced property tax assessments for lands  
          under 10 or 20 year contracts that renew annually.  The  
          contracts can be ended by nonrenewal by either party, or  
          cancellations, which are subject to steep fees.  Under current  
          law, the state General Fund provides a subvention to counties  
          (and a few cities) through a Budget Act appropriation to cover  
          their losses related to the foregone property tax revenues.  The  
          subventions provide $5 for each acre of prime agricultural land  
          under contract and $1 for other land.  In 2007, the total amount  
          eligible for subvention claims was approximately $37.7 million.   
          The Legislature's 2009-10 Budget reduced the subvention payments  
          to $27.8 million, but the Governor cut the appropriation to  
          $1,000.  The Governor's proposed 2010-11 Budget only includes  
          the token $1,000 appropriation for Williamson Act subventions.   
          The near elimination of subventions presents challenges to the  
          program as a whole, as evidenced by Imperial County's action to  
          non-renew Williamson Act contracts in its jurisdiction.

          AB 715 would appropriate $36 million from the General Fund to  
          the State Controller for 2010-11 subvention payments to counties  










          for lands under Williamson Act contracts.  If the amount is  
          insufficient to fully cover subvention payments, each county  
          will receive a pro rata amount based on the proportion of land  
          under contract in each county.

          Staff notes that any General Fund appropriation exacerbates the  
          budget deficit, which is currently projected at over $19 billion  
          for the budget year.