BILL ANALYSIS �
AB 2351
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Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 2351 (Gordon) - As Amended: April 16, 2012
SUBJECT : Williamson Act: cancellation: fees.
SUMMARY : Requires a landowner wishing to cancel a Williamson
Act contract to pay a refundable five percent cancellation fee.
Specifically, this bill :
1)Requires a landowner wishing to cancel any contract pursuant
to the Williamson Act to pay five percent of the total
cancellation fee, as specified, within 30 days of the county
board of supervisors' or city council's decision to grant
tentative approval of the cancellation of the contract.
2)Requires, upon the cancellation of a contract, the payment to
be applied toward the total cancellation fee, as specified.
3)Requires, upon notification, that the cancellation of a
contract will not be completed, the payment to be returned to
the landowner.
4)Makes other clarifying and non-substantive changes.
EXISTING LAW :
1)Authorizes, pursuant to Article XIII, section 8 of the
California Constitution, the Legislature to promote the
conservation, preservation and continued existence of open
space lands and provides that when these lands are enforceably
restricted to recreation, enjoyment of scenic beauty, use or
conservation of natural resources, or production of food or
fiber, they must be valued for property tax purposes only on a
basis that is consistent with these restrictions and uses.
2)Creates the Williamson Act (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.
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3)Requires the Division of Land Resource Protection in the
Department of Conservation to administer the Act.
4) Authorizes a landowner to petition the board or council
of a city or county to cancel a contract entered into under
the Act, and requires the landowner to pay a cancellation
fee, as specified.
5) Provides various ways to end Williamson Act contracts,
including nonrenewal, cancellation, and rescission, as
follows:
a) Nonrenewal occurs when either the landowner or the
county decides to not renew the contract, which then runs
out in nine years. After nonrenewal, the county may
increase the property's assessed value to its market value
by the end of the contract period when the land use
restrictions also end;
b) Rescission occurs when the county board votes to cancel
a Williamson Act contract, but the landowner simultaneously
puts an agricultural conservation easement on other land of
equal or greater value; and,
c) Cancelation can occur when a land owner requests that
the county cancel a Williamson Act, immediately ending the
contract and allowing the landowner to use the property for
another specified use. To cancel a contract, the county
supervisors must find that the cancellation is either
consistent with the Act's purposes or in the public
interest. The landowner must pay a cancellation fee equal
to 12.5% of the property's nonrestricted value. The
revenues go to the state General Fund, not to the county.
6)Authorizes a county board of supervisors or city council to
grant tentative approval of the cancellation after the county
assessor of the county in which the land is located has
determined the current fair market value of the land as though
it were free of the contractual restriction, and the board or
council calculates the cancellation fee.
7)Sets the cancellation fee at 12.5% of the cancellation value
of the property.
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FISCAL EFFECT : Unknown. This bill is keyed fiscal.
COMMENTS :
1)The Williamson Act conserves agricultural and open space land
by allowing private property owners to sign voluntary
contracts with counties and cities, enforceably 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 agriculture or
open space instead of the market value. Making sure that
private property owners use their Williamson Act land
appropriately is essential to maintaining the statute's
constitutional integrity. Although landowners enter into
Williamson Act contracts with local jurisdictions, the
Department of Conservation (the Department) oversees the
contracts for the state. As of January 2009, approximately 15
million reported acres in 53 counties were enrolled under the
Williamson Act statewide. This is an author-sponsored bill.
2)According to the author, "�u]nder the Act, landowners pay
lower property taxes - based on the farming or open space uses
rather than full market value - in exchange for agreeing not
to develop their lands for ten years or more. Each year the
contract automatically extends for another year, unless one of
the parties provides notice of nonrenewal or the landowner
seeks cancellation.
Currently, when a landowner seeks to cancel a Williamson Act
contract, he or she provides notification and the specified
proposed alternative use of the land to the local jurisdiction
with which they have a contract. At that point, the
Department and the local jurisdiction work on dual tracks to
determine the appropriateness of cancellation.
The county assessor must determine the fair market value of the
land as if it were free from contractual restriction. The
assessor sends the valuation to the landowner and Department
for comment. If there are no objections to the valuation, the
local jurisdiction provides notice of a hearing on the matter
to surrounding landowners.
In the case of the Department, staff largely looks at science
and usefulness of the land, including but not limited to
review of soil information and �f]armland �m]apping, analysis
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for water availability, review of crop and yield information,
review of water quality information, consulting with the US
Dept. of Ag�riculture], addressing �California Environmental
Quality Act] issues, if any, �and] advising the local
jurisdiction regarding the petition.
A council/board may grant a tentative approval based on a
finding that the cancellation is consistent with the purposes
of the Williamson Act and is in the public interest.
Upon certification of a final valuation, the landowner is
assessed a 12.5% cancellation fee which is due upon completion
of the cancellation. This cancellation fee is paid to the
state and helps fund the Department's Division of Land
Resource Protection. However, if the cancellation?is not
completed, the Department is not reimbursed for its workload
associated with a cancellation review. Over the five year
period ending in November 2011, there were 285 tentative
cancellations, but only 57 of those requests proceeded to a
cancellation." The average length of time between a tentative
and final cancellation is unknown.
3)According to the author, "this bill would require a refundable
deposit of five percent of the total estimated cancellation
fee to be paid when a tentative cancellation is approved. By
providing a deposit, the bill would likely reduce the number
of tentative cancellations and therefore unreimbursed work.
However, the deposit will not interfere with projects that are
both expected to meet the criteria for cancellation and are
likely to proceed to cancellation."
As an example, if a property owner under current law sought
tentative approval from a county board of supervisors to
cancel a Williamson Act contract with a theoretical
cancellation value of $1,000,000, the cancellation fee (12 %)
would be $125,000, due upon final cancellation. Under this
measure, upon receiving the tentative approval of cancellation
from the board, the property owner would have 30 days to
tender a deposit payment totaling five percent of that
$125,000 cancellation fee, or $6,250. If the cancellation
proceeds to finalization, the property owner would be credited
for the five percent ($6,250) deposit, and need only pay the
remaining 95% ($118,750). However, if the cancellation is not
completed (i.e., the property remains under the Williamson Act
contract), then the five percent ($6,250) deposit is returned
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to the property owner.
Because the property owner will either have the deposit credited
towards the cancellation or returned, this bill poses no
additional financial risk to the property owner. The
disincentive at work is simply the inconvenience of having to
tender potentially thousands of dollars to the county that
will be unavailable for use until the cancellation process is
resolved.
4)SB 618 (Wolk), Chapter 596, Statutes of 2011, authorizes a
city or county and a landowner to rescind a contract under the
Act on agricultural lands of limited agriculture value and
enter into a solar-use easement that restricts the use of land
to photovoltaic solar facilities. That bill was heard in this
Committee on June 22, 2011, and was approved on a 9-0 vote.
5)Support arguments : According to the author, this bill "would
likely reduce the number of tentative cancellations and
therefore unreimbursed work" related to cancellations of
Williamson Act contracts.
Opposition arguments : This bill arguably deters landowners
from cancelling contracts in order to shift the use of the
land to a marginally more productive application.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Hank Dempsey / L. GOV. / (916) 319-3958