BILL ANALYSIS �
AB 2241
Page 1
Date of Hearing: April 2, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2241 (Eggman) - As Introduced: February 21, 2014
SUBJECT : Local government: agricultural land.
SUMMARY : Modifies rescission provisions for property subject to
a Williamson Act contract or a Farmland Security Zone contract
if parties to the contract mutually agree to rescind and enter
into a solar-use easement. Specifically, this bill :
1)Raises, from 6.25% to 10%, the rescission fee for exiting a
Williamson Act (WA) contract to enter into a solar-use
easement, based on the fair market value of the property under
the contract.
2)Lowers, from 12.5% to 10%, the rescission fee for land
designated as a Farmland Security Zone (FSZ) exiting a WA
contract to enter into a solar-use easement, based on the fair
market value of the land under the contract.
3)Allows counties to keep 50% of the amount of the rescission
fee for exiting a WA or FSZ contract (current law specifies
that 100% of the rescission fee goes to the state's General
Fund).
EXISTING LAW :
1)Establishes the Williamson 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 the
land for a minimum of 10 years in exchange for lower assessed
valuations for property tax purposes.
2)Creates the option of Farmland Security Zones, which offers
landowners greater property tax reduction by limiting the
value of the property under contract to 65% of its WA
valuation or 65% of its Proposition 13 valuation, whichever is
lower, and specifies that the minimum initial term of a
Farmland Security Zone is 20 years.
3)Allows the parties to a WA contract to mutually agree to
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rescind the contract in order to simultaneously enter into a
solar-use easement, as specified.
4)Defines solar-use easement to mean any rights or interests
acquired by a city or county in perpetuity or a term of years
that restricts the use of land to a solar facility, with the
purpose to provide for the collection and distribution of
solar energy for electricity generation, as specified.
5)Defines land eligible for a solar-use easement under the Act,
as meeting the following criteria:
a) The land meets either of the following:
i) Land consisting predominately of soil with
significantly reduced agriculture productivity for
agriculture activities, as specified; and,
ii) Land that has severely adverse soil conditions that
are detrimental to agricultural activities and
production, as specified.
b) Requires the parcel to not be located on prime farmland,
unique farmland, or land of statewide importance as
determined by the Farmland Mapping and Monitoring Program
of the California Natural Resources Agency (NRA), unless
the Department of Conservation determines that the parcel
is eligible for a solar-use easement based on circumstances
that cause limited agricultural use for the parcel.
Requires lands designated as important farmland not to be
reclassified due to irrigation status.
6)Requires the city or county to charge the property owner a
rescission fee of 6.25% of the fair market value of the
property at the time of the rescission, if the property was
under a WA contract, and 12.5% of the fair market value of the
property at the time of the recession if the land was held
under a contract designating the property as FSZ.
7)Requires the rescission fees to be deposited in the state's
General Fund, as specified.
FISCAL EFFECT : This bill is keyed fiscal.
COMMENTS :
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1)Purpose of this bill . This bill makes several changes to the
rescission provisions for property subject to a WA contract or
a FSZ contract, if the parties to the contract mutually agree
to rescind and enter into a solar-use easement. The bill
raises the rescission fee for WA properties from 6.25% to 10%
of the fair market value of the property under the contract,
and lowers, from 12.5% to 10%, the rescission fee for land
designated as an FSZ. The bill also allows counties to keep
50% of the rescission fees. Under existing law 100% of the
fees go to the state's General Fund. The bill is sponsored by
the California Farm Bureau Federation.
2)Background on Williamson Act and Farmland Security Zones . The
California Land Conservation Act, better known as the
Williamson Act, has been the state's premier agricultural land
protection program since its enactment in 1965. The Act
creates an arrangement whereby private landowners agree with
counties and cities to voluntarily restrict land to
agricultural and open-space 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. The minimum initial contract term is 10 years.
In 1998, another option within the Act was created - the
Farmland Security Zone designation. Farmland Security Zone
contracts offer landowners greater property tax reduction than
regular Williamson Act contracts. Land designated as a
Farmland Security Zone is valued for property assessment
purposes at 65% of its Williamson Act value or 65% of its
Proposition 13 valuation, whichever is lower. The minimum
initial term is 20 years.
3)Solar-use easements . SB 618 (Wolk), Chapter 596, Statutes of
2011, authorized a city or county and a landowner to rescind a
contract under the Act on agricultural lands of limited
agricultural value and enter into a solar-use easement that
restricts the use of land to photovoltaic solar facilities.
This bill revises language in SB 618 (Wolk) related to the
percentage of fair market value to be charged as a rescission
fee for property held under Williamson Act contract and
property designated as a Farmland Security Zone. The bill
additionally gives a city or county 50% of such fees, instead
of what was specified in SB 618 that granted 100% of the fees
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to the state.
4)Author's statement . According to the author, "To date, the
implementation of solar use easements has not been widely
embraced. WA contract cancellations continue on prime
farmland and one county has decided to allow utility scale
solar developments as a compatible use based solely on the
county's determination of the soil capability, regardless of
its soil classification or the WA's definition of prime
farmland."
"AB 2241 proposes to change the rescission fee for solar use
easements to 10% for both WA and FSZ contracts and allows the
counties to retain half of the fee. This would provide a
significant financial incentive for counties to implement the
solar use easement program."
5)Policy considerations . There are currently several cities in
California that have Williamson Act contracts, however, the
provisions of the bill are unclear as to whether these cities
would retain the rescission fees, should a property within the
city's boundaries exit the Williamson Act contract and enter
into a solar-use easement. The current provisions of the bill
allow the county to retain 50% of the rescission fees.
Also, given the differences between WA contracts and Farmland
Security Zone contracts, the Committee may wish to consider
the policy rational for making the rescission rate the same
(at 10%). The Legislature has previously supported the
treatment of these two types of agricultural preservation
contracts differently with different rescission fee rates (6
% for WA contracts, and 12 % for FSZ contracts).
6)Arguments in support . Supporters argue that this bill further
encourages the use of solar-use easements by allowing counties
to retain a portion of the required rescission fee, thereby
continuing to allow marginally productive or physically
impaired land that is restricted by Williamson Act contracts
to be converted for the sole purpose of siting a large-scale
solar facility.
7)Arguments in opposition . None on file.
8)Double-referral . This bill was heard by the Agriculture
Committee on March 26, 2014, and passed on a 6-0 vote.
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REGISTERED SUPPORT / OPPOSITION :
Support Opposition
California Farm Bureau Federation None on file
Rural County Representatives of California
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958