BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1353|
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THIRD READING
Bill No: SB 1353
Author: Nielsen (R)
Amended: As introduced
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 4/2/14
AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu, Vidak
SENATE APPROPRIATIONS COMMITTEE : 5-0, 4/28/14
AYES: De Le�n, Gaines, Hill, Lara, Steinberg
NO VOTE RECORDED: Walters, Padilla
SUBJECT : Local government: Williamson Act
SOURCE : Author
DIGEST : This bill repeals the January 1, 2016, sunset date in
statutes that allow counties to increase the assessed values of
Williamson Act land, and divert the resulting property tax
revenues to counties.
ANALYSIS : In 2007, when 15.6 million acres were eligible for
state subventions, local officials claimed $37.7 million in
direct General Fund payments. The 2008-09 State Budget
agreement reduced the state subventions by 10% and the 2009-10
State Budget essentially eliminated the subventions by cutting
the appropriation to $1,000.
When farmers, ranchers, conservation groups, and local officials
asked the Legislature to come up with a temporary program to
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replace the lost state subventions, legislators enacted AB 2530
(Nielsen, Chapter 391, Statutes of 2010), which allows county
officials to increase the assessed values of Williamson Act
contracted land and divert the resulting property tax revenues.
After practitioners found problems with that statute, the
Legislature reenacted it, added an urgency clause, and
appropriated $10 million to partially replace the counties'
subventions (SB 863, Senate Budget & Fiscal Review Committee,
Chapter 722, Statutes of 2010). In March 2011, the Legislature
repealed the prior year's statute and eliminated the $10 million
appropriation (SB 80, Senate Budget & Fiscal Review Committee,
Chapter 11, Statutes of 2011). Before the March 2011 repeal,
eight counties began to implement the statute that allowed
county officials to increase the assessed values of Williamson
Act contracted land and prepared to divert the resulting
property tax revenues. To allow county officials to continue to
implement the program and to allow other counties to
participate, the Legislature reenacted the statute without any
appropriation (AB 1265, Nielsen, Chapter 90, Statutes of 2011).
AB 1265 directed that if the state's open space subventions are
less than half of a county's actual foregone general fund
property tax revenue a county can implement shorter Williamson
Act contracts and increase the assessed values. The terms of
the participating county's 10-year Williamson Act contracts must
be nine years, and terms of its 20-year Farmland Security Zone
contracts must be 18 years. After the initial year, one year
must be added to these contracts on their renewal dates, unless
the contracts are nonrenewed under existing law. If additional
revenues do not occur, two or three additional years must be
added to the contracts on their next anniversary date to restore
them to their full 10-year and 20-year terms.
In a county where the temporary program applies, an added
assessed value must be conveyed to the county auditor. The
added assessed value is equal to 10% of the difference between
the property's restricted value and its fair market value. If a
property's fair market value is lower than its restricted value,
then the added amount is zero. The increased property tax
revenue that results from this calculation must appear on the
taxpayer's annual bill.
Landowners can nonrenew their Williamson Act contracts instead
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of accepting a shorter contract. AB 1265's provisions
automatically terminate on January 1, 2016.
This bill repeals the January 1, 2016, expiration dates in
statutes that allow counties to increase the assessed values of
Williamson Act land, and divert the resulting property tax
revenues to counties, making those statutes effective
indefinitely.
Comments
According to the Department of Conservation, 11 counties have
chosen to participate in the alternative funding program enacted
by AB 1265: Butte, Kings, Lassen, Madera, Mendocino, Merced,
Shasta, Stanislaus, Sutter, Tulare, and Yolo. Land Conservation
Act contracts protect millions of acres of land within those 11
counties. Allowing AB 1265's provisions to expire could provoke
county officials to leave the land conservation program. If
counties cannot afford the property tax breaks that landowners
enjoy, they will nonrenew the contracts and let them wind down
over the next nine (or 18) years. That will end the nearly
50-year effort which affects about half of California's
farmland. This bill leaves in place a fix that replaces enough
of the lost state subventions to discourage counties from
abandoning the program. Counties still will be allowed to
shorten contracts by 10% and keep the revenues that result from
the corresponding 10% increase in property valuations.
Landowners will continue to benefit from preferential tax
valuations. The public interest will be served by keeping
farms and ranches undeveloped and in open space. This bill buys
more time until improved fiscal conditions allow the state to
restore subvention payments or until public officials,
conservation groups, and landowners agree on other approaches to
California's open space conservation efforts.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, no immediate
state revenue impacts because schools would receive the same
amount of property taxes whether or not counties exercise the
authority to reduce the duration of Williamson Act contracts and
retain an increased property tax allocation. Shorter contracts
may allow schools to receive property tax revenue increases
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sooner if a contract is not renewed, which could result in
future reductions in General Fund expenditures pursuant to
Proposition 98 minimum funding guarantees.
SUPPORT : (Verified 4/29/14)
American Planning Association, California Chapter
California Assessors' Association
California Farm Bureau Federation
California State Association of Counties
Family Winemakers of California
Rural County Representatives of California
Yolo County Board of Supervisors
AB:nl 4/29/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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