BILL ANALYSIS �
AB 1265
Page 1
Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON AGRICULTURE
Cathleen Galgiani, Chair
AB 1265 (Nielsen) - As Amended: April 4, 2011
LOCAL GOVERNMENT (9-0)
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|Ayes:|Smyth, Alejo, Bradford, | | |
| |Campos, Davis, Gordon, | | |
| |Hueso, Knight, Norby | | |
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SUBJECT : Local government: Williamson Act: agricultural preserves:
advisory board.
SUMMARY : Authorizes a county, in any fiscal year in which payments
authorized for reimbursement to a county for lost revenue from
Williamson Act (Act) contracts is less than one-half of the county's
actual foregone general fund property tax revenue, to revise the
terms for new contracts. Specifically, this bill :
1)Allows a county to revise the term for new contracts, if a county
makes a determination that the state's open space subventions are
less than one-half of the county's actual foregone general fund
property tax revenue.
2)Allows contract's terms to be reduced to nine, or 18 years for
contracts that are currently 10 or 20 years, respectively.
3)Provides that each contract, except in the initial year of the
determination, that on the anniversary date of the contract or
such other annual date as specified by the contract, a year shall
be added automatically to the initial term unless notice of
nonrenewal is given.
4)Provides that, if additional revenues do not occur (per part six
and seven below), two or three additional years must be added to
the contracts on their next anniversary date, as necessary, to
restore them to their full 10-year and 20-year terms.
5)Requires a county's actual foregone property tax revenue to be
based on the county's respective share of the general property tax
dollars as reflected in the most recent annual report issued by
the State Board of Equalization, or 20%, whichever is higher.
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6)Requires, in any year in which the provisions of this measure are
implemented, a county to record a notice that states the affected
parcel number(s) and current owner's name, or alternatively, the
same information for those parcels that are not affected.
7)Requires an addition to the assessed value be conveyed to the
auditor, consistent with the 10% reduction in the length of the
restriction, equal to 10% of the difference between the
valuations.
8)Requires the additional amount of tax revenue that results from
the decrease in restriction to be separately displayed on the
taxpayer's annual bill.
9)Allows a landowner to serve notice of nonrenewal at any time;
however, a landowner who withdraws that notice prior to the
effective date shall be subject to contract term modification and
additional assessed value.
10)Allows a landowner to elect to serve notice of nonrenewal instead
of accepting a shortened contract.
11)Requires a county to give timely written notice to Act landowners
regarding:
a) Initial hearings to adopt or rescind the contract and
revaluation provisions;
b) Decisions regarding the contract and revaluation provisions;
and,
c) The right to prevent contract amendments through nonrenewal.
12)Prohibits the increased valuation of the property from exceeding
10% of the difference between the value that reflects the
property's restricted use and the property's fair market value.
13)Provides that, if a property's fair market value is lower than
its restricted value, there is no revaluation.
14)Specifies that the provisions of this measure do not apply to:
a) Contracts that have been nonrenewed;
b) Contracts with cities;
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c) Open space or agricultural easements;
d) Scenic restrictions;
e) Wildlife habitat contracts; and,
f) Atypical term contracts.
15)Provides that a county cannot modify or revalue a contract unless
the landowner is given
at least a 90 day notice of the opportunity for nonrenewal and the
landowner fails to nonrenew.
16)Allows, until February 1, 2012, the 90-day notice requirement to
be reduced to
60 days if the county adopts a procedure to allow landowners to
serve a notice of nonrenewal.
17)States that a landowner's failure to provide notice of nonrenewal
is implied consent to the contract and revaluation provisions for
that year.
18)Requires that the increased revenues generated by properties that
are subject to the contract and revaluation provisions established
in this measure be allocated exclusively to the county.
19)Adds a sunset provision, terminating the provisions of this
measure on January 1, 2015.
EXISTING LAW
1)Creates the 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.
�Government Code (GOV) Sections 51200 - 51207]
20)Creates Farmland Security Zones (FSZ) which authorizes cities and
counties allows agricultural land preservation contracts with
landowners who agree to restrict the use of their land for a
minimum of 20 years in exchange for lower-assessed valuations for
property tax purposes. The lowered assessed value, under FSZ, is
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greater than under the Act. �GOV section 51296 - 51297.4]
FISCAL EFFECT : This bill has been keyed nonfiscal by Legislative
Counsel.
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 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.
Approximately 16.6 million acres are under Act contracts. When the
proposed 2003-04 budget wanted to save approximately $39 million by
ending the state subventions, the Legislative Analyst's Office
recommended a 10-year phase-out. The Legislature's 2009-10 Budget
reduced the subventions to $27.8 million. However, Governor
Schwarzenegger essentially eliminated the subventions in the 2009-10
budget by cutting the appropriation to $1,000. There were several
attempts to restore this funding in the legislature in 2010. SB 863
(Senate Committee on Budget and Fiscal Review), Chapter 722,
Statutes of 2010 (SB 863), restored $10 million to subventions,
along with allowing a revision in Act contracts. SB 80 (Senate
Committee on Budget and Fiscal Review), Chapter 11, Statutes of 2011
(SB 80), among other items, eliminated the funding for SB 863.
According to the author, this bill simply restores the provisions of
SB 863, that were eliminated in SB 80. SB 863 was a compromise bill
formed by a bi-partisan coalition of landowners, agricultural groups
and environmental groups. Several counties are already operating
under the provisions created under SB 863. The author states that
this bill is crucial, in order to prevent confusion about the status
of the Act.
Supporters maintain that with the loss of state funding for the Act
for the third straight year, many counties can no longer afford to
continue to offer Act contracts to farmers and ranchers. This bill
offers the ability to renegotiate the terms of a contract in order
to preserve the program and still provide counties with a path to
recoup some lost revenues.
RELATED LEGISLATION: AB 80 repealed existing law appropriating $10
million from the General Fund (GF) to the Controller for the 2010-11
fiscal year to make subvention payments to counties under the Act,
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along with other budgetary action.
AB 781 (John A. P�rez) of 2011 authorizes a city, county, or city
and county to accept contributions from public and private entities
to compensate for a reduction in state subvention payments for the
Act.
SB 648 (Tom Berryhill) of 2011 provides an alternative method of
cancellation of an Act contract by a landowner for contracts that
are 10 or more years old, and where the landowner has not received a
lowered assessment value on the land during the previous 10
consecutive years based on the existence of a residence, including
agricultural laborer housing, on the land being valued. This bill
is currently in the Senate Committee on Governance and Finance.
SB 668 (Evans) of 2011 authorizes an open-space district, a
land-trust organization, or a nonprofit entity, to enter into an Act
contract with a landowner who has also entered into an Act contract,
upon approval of the city or county that holds the Act contract, to
keep that landowner's land in contract under the Act, for a period
of up to 10 years, in exchange for the open-space district's,
land-trust organization's, or nonprofit entity's payment of all or a
portion of the foregone property tax revenue to the county, where
the state has failed to reimburse the city or county for property
tax revenues not received as a result of Act contracts. This bill
was heard on May 4, 2011 in the Senate Committee on Governance and
Finance and passed out on a 9-0 vote.
SB 863 made various changes to state laws governing local government
contracts entered into pursuant to the Act and state laws governing
community redevelopment agencies.
AB 2530 (Nielsen), Chapter 391, Statutes of 2010, authorized a
county, until January 1, 2015, in any fiscal year in which payments
authorized for reimbursement to a county for lost revenue from
Williamson Act contracts is less than one-half of the county's
actual foregone GF property tax revenue, to revise the terms for new
contracts.
REGISTERED SUPPORT / OPPOSITION :
Support
Alliance of Western Milk Producers
CA Association of Local Agency Formation Commissions
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CA Cattlemen's Association
CA Farm Bureau
CA Grape & Tree Fruit League
CA Range Land Trust
CA State Association of Counties
Counties of Shasta and Yolo
Nisei Farmers League
Regional Council of Rural Counties
Resource Landowners Coalition
The Nature Conservancy
Wine Institute
Opposition
None on file.
Analysis Prepared by : Victor Francovich / AGRI. / (916) 319-2084