BILL ANALYSIS �
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THIRD READING
Bill No: AB 2241
Author: Eggman (D)
Amended: 5/23/14 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 6/18/14
AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu, Walters
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 76-0, 5/28/14 - See last page for vote
SUBJECT : Local government: agricultural land
SOURCE : Author
DIGEST : This bill, until January 1, 2020, changes the
rescission fee charged by a city or county when land under the
Williamson Act (WA) contract or land designated as a farmland
security zone (FSZ) enters into a solar-use easement, to 10% of
the fair market value of the property. This bill requires 50%
of the rescission fees collected to be deposited in the state
General Fund (GF).
ANALYSIS : The California Land Conservation Act of 1965, also
known as the WA, allows a landowner to voluntarily enter into an
agricultural land preservation contract with a city or county
for a minimum of 10 years. In exchange for restricting the use
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of their land, property owners pay lower taxes as a result of
their land's lower assessed value. In 1998, the Legislature
created an option of establishing a FSZ which offers landowners
a greater property tax reduction for a minimum 20 year contract.
In 1971, the Open Space Subvention Act, provided state
subvention payments to the counties to help offset the counties
loss in property tax revenue as a result of their participation
in WA and FSZ contracts. However, due to the recession,
subvention payments were eliminated in the 2009-2010 Budget.
Existing law (SB 618, Wolk, Chapter 596, Statutes of 2011)
allows a property owner and a city or county to mutually agree
to rescind the WA or FSZ contract on marginally productive or
physically impaired land to enter into a solar-use easement
contract. The Department of Conservation (DOC), in consultation
with the Department of Food and Agriculture, must review and
approve all solar-use easements. SB 618 encourages solar
generation to meet California's Renewable Standard goals and
provides a lower rescission fee to rescind WA or FSZ contracts
on marginally productive or physically impaired land. The
rescission fee is 6.25% of the fair market value of the land on
the WA contract and 12.5% on the FSZ contract. The county
collects the fee and deposits the revenue in the GF.
This bill increases the rescission fee for a WA contract from
6.25% to 10% of the fair market value of the property and
decreases the rescission fee for a FSZ contract from 12.5% to
10% of the fair market value of the property when the parties
mutually agree to rescind the contract and enter into a
solar-use easement contract.
This bill also allows the county to retain 50% of the rescission
fee and deposit the remaining 50% to the GF.
This bill sunsets on January 1, 2020.
Comments
This bill provides a financial incentive to counties to
facilitate solar-use easement contracts on marginally productive
or physically impaired farmland. WA and FSZ contract rescission
under SB 618 has not been widely embraced, despite the growing
interest in large-scale solar projects. Farmland is an ideal
location for large-scale solar facilities due to the open space,
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level terrain, and sunshine. Cities and counties are cancelling
WA and FSZ contracts by paying a fee (greater than the
rescission fee) to invest in solar facilities without regard to
prime farmland. According to the DOC staff, 50% of the
cancellations each year are due to an interest in solar
projects. The purpose of SB 618 and this bill is to preserve
prime farmland to ensure food production, and encourage solar
projects on only marginally productive or physically impaired
land. This bill encourages solar-use easements by changing the
rescission fee to 10% for both WA and FSZ and allowing counties
to retain 50% of the rescission fee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Unknown overall impact on rescission fee revenues since this
bill increases the fees related to WA contract conversions to
solar-use easement contracts and decreases the rescission fees
for FSZ conversions.
Unknown, potentially significant revenue decreases to the
General Fund and Soil Conservation Fund, and corresponding
increases to counties, related to counties retaining 50% of
rescission fees. However, to the extent this bill
incentivizes the conversion of more WA and FSZ contracts to
solar-use easement contracts, and the mix of those
conversions, this bill could result in an overall increase in
rescission fees, which could mitigate some of the losses of
state revenues.
Negligible impact on the DOC.
SUPPORT : (Verified 8/15/14)
California Farm Bureau Federation
Rural County Representatives of California
ARGUMENTS IN SUPPORT : 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
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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.
Current law set rescission fees for moving land from WA or FSZ
contracts to solar easements at 6.25 % and 12.5% of the fair
market value of the property, respectively. Currently these
fees go in to the state General Fund.
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. This bill has a 5 years sunset.
ASSEMBLY FLOOR : 76-0, 5/28/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Ch�vez, Chesbro, Conway, Cooley, Dababneh,
Dahle, Daly, Dickinson, Eggman, Fong, Fox, Beth Gaines,
Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Grove,
Hagman, Hall, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Bigelow, Donnelly, Frazier, Vacancy
AB:k 8/16/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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