BILL ANALYSIS
SB 671
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Date of Hearing: July 15, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 671 (Runner) - As Amended: May 11, 2009
Policy Committee:
AgricultureVote:7-0
Natural Resources 9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes a county assessor to require a deposit from
a landowner to cover the costs of conducting a formal review of
the fair market value of agricultural land subject to a
Williamson Act contract proposed for cancellation.
FISCAL EFFECT
No significant effect on state revenues or expenditures.
COMMENTS
1)Background . Under the Williamson Act, landowners can sign
contracts with counties and cities, restricting their land to
agriculture, open space, and compatible uses for the next 10
years. Williamson Act contracts automatically renew each
year. In return, county assessors must lower the property's
assessed valuation to reflect its restricted use value instead
of its market value based on its best and highest use.
A Williamson Act contract is normally concluded through
nonrenewal, allowing the contract to run down over the next 10
years. Alternatively, local officials can immediately cancel
a contract if the landowner proposes a development project and
the officials make various findings. In this case, the
landowner must pay a cancellation fee that is equal to 12.5%
of the property's unrestricted fair market value. The
cancellation fees go into the State Soil Conservation Fund,
managed by the Department of Conservation, to help pay for the
state's agricultural land conservation programs.
SB 671
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The county assessor determines the property's unrestricted
fair market value, which then serves as the basis for the
cancellation fee. If the landowner and/or Department of
Conservation disagree with the assessor's cancellation
valuation, they can agree on their own cancellation valuation,
or either party can ask the assessor to conduct a formal
review. The assessor can recover the reasonable costs of the
formal review through a deduction from the landowner's
cancellation fee. But if no cancellation takes place, the
assessor is faced with potentially large unreimbursed
expenses.
2)Rationale . This bill is intended to ensure that county
assessors are reimbursed for potentially lengthy and expensive
reviews of cancellation valuations. According to the author,
challenges by landowners and the Department of Conservation
create an unfair burden on the assessor, who is charged with
placing a proper valuation on property, while placed between
competing interests - one (the state) that wants a high
valuation and the other (the landowner) that wants a low one.
The California Assessor's Association, sponsor of this bill,
cites examples in Merced and Riverside Counties where the
assessor was unable to recover the costs of a formal review
because the cancellation ultimately did not occur. In
Riverside County, a housing developer reportedly requested a
formal review of a cancellation valuation. After presumably
receiving an unfavorable review, the developer sued the county
but later dropped the suit after the recent demise of the real
estate market. Since the cancellation never occurred, the
county was unable to deduct its review costs from cancellation
fees.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081