BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2351 HEARING: 6/13/12
AUTHOR: Gordon FISCAL: Yes
VERSION: 4/16/12 TAX LEVY: No
CONSULTANT: Lui
WILLIAMSON ACT CANCELLATION FEES
Requires a landowner seeking to cancel a Williamson Act
contract to pay a refundable 5% cancellation fee.
Background and Existing Law
In 1965, the Legislature passed the California Land
Conservation Act, also known as the Williamson Act, to
preserve agricultural and open-space lands. Under the
Williamson Act, landowners can sign contracts with
counties, agreeing to restrict the use of their property to
agriculture, open space, or compatible uses for the next 10
years. These contracts automatically renew each year so
that the termination date is always a decade away. In
return for the landowner's agreement to not develop the
land, county officials must assess the property based on
its use, not its market value. The use-value assessment
method lowers the landowner's property tax bills.
County officials can cancel a Williamson Act contract at
the landowner's request, 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% of the property's nonrestricted value upon
completing the cancellation. The revenues go to the State
General Fund, not to the county.
Last year, the Legislature allowed landowners and local
officials to rescind a Williamson Act contract to enter
into easements that allow photovoltaic solar facilities on
marginally productive or physically impaired lands (SB 618,
Wolk, 2011).
AB 2351 -- 4/16/12 -- Page 2
Landowners may submit multiple tentative cancellation
requests to the Department of Conservation's Land Resource
Protection Division, which is funded through Williamson Act
cancellation fees. Division staff must analyze and review
each tentative cancellation request. However, some
tentative cancellations never proceed to complete
cancellation, and Division staff is not compensated for
their work.
From November 2006 to November 2011, only 57 of the 285
tentative cancellation requests proceeded to a complete
cancellation. Due to decreasing numbers of complete
cancellations, 40% of Division staff has been reassigned,
leaving around 17 of the original 28 staff. The author
would like to reduce the Division's uncompensated work.
Proposed Law
Assembly Bill 2351 requires a Williamson Act landowner to
pay five percent of the total cancellation fee within 30
days of the board or council's decision to grant tentative
approval of the cancellation of the contract.
AB 2351 provides that upon the cancellation of the
contract, the payment must be applied towards the total
cancellation fee.
The bill requires that the payment must be returned to the
landowners upon notification that the cancellation of a
contract will not be completed.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . By requiring a refundable 5%
deposit of the total estimated cancellation fee, AB 2351
deters non-serious landowners from issuing multiple
tentative cancellation requests. Forcing landowners to
tender possible thousands of dollars to the county, which
won't be available for use until the cancellation process
AB 2351 -- 4/16/12 -- Page 3
is resolved, will reduce the number of tentative
cancellations, and therefore, unreimbursed work. AB 2351
provides no added financial risk to the landowner and does
not interfere with projects that are expected to meet
cancellation criteria and are likely to proceed to
cancellation.
2. Another alternative . Funding for the Land Resource
Division, which protects Williamson Act lands, with
Williamson Act cancellation fees appears to be
insufficient. Division staff is not compensated for the
average 64 hours of work per cancellation request if the
request does not proceed to complete cancellation. When
researching a cancellation request, Division staff analyzes
a parcel's soil information, water availability, water
quality, farmland mapping, and California Environmental
Quality Act issues. The Division also advises the local
jurisdiction regarding the petition. Because the
Administration has not provided any new subventions for
contracts in the last three years, there are discussions of
a possible new funding mechanism. The Committee may wish
to consider amending the bill to require a nonrefundable
fee due at the time of the tentative cancellation.
Assembly Actions
Assembly Local Government:7-1
Assembly Appropriations: 12-5
Assembly Floor: 49-24
Support and Opposition (6/7/12)
Support : Unknown.
Opposition : Unknown.