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HomeMy WebLinkAboutMINUTES - 06202000 - D7 � TO: BOARD OF SUPERVISORS ` tCentra FROM: DENNIS M. BARRY, AICP a ` Costa COMMUNITY DEVELOPMENT DIRECTOR County DATE: JUNE 20, 2000 SUBJECT: STATUS REPORT ON INTERDEPARTMENTAL REVIEW OF THE WILLIAMSON ACT PROGRAM AND THE NEW FARMLAND SECURITY ZONE ("SUPER WILLIAMSON ACT") SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. Accept status report and background information for the in-progress interdepartmental program review of the Williamson Act Program and feasibility of enacting the new Farmland Security Zone ("Super Williamson Act"). 2. Accept staff recommendation that in-progress review be coordinated with the re-established Contra Costa County Agricultural Task Force. 3. Provide staff with guidance and direction on the in-progress review, as necessary. FISCAL IMPACT None. CONTINUED ON ATTACHMENT: _X_YES SIGNATURE RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON June 20, 2000 APPROVED AS RECOMMENDED XL._OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND -XX—UNANIMOUS(ABSENT- - ) CORRECT COPY OF AN ACTION TAKEN AND AYES:_NOES:__NOES: ENTERED ON THE MINUTES OF THE BOARD OF ABSENT: ABSTAIN: SUPERVISORS ON THE DATE SHOWN Contact: Patrick Roche,Adv.Planning(925)335-1242 ATTESTED June 20, 2000 cc: Louis Rivara,Office of County Assessor PHIL BATCHELOR, CLERK OF THE BOARD OF Diana Silver,Office of County Counsel SUPERVISORS AND COUNTY ADMIN€NISTRATOR Lara DeLaney,CAO BY <—,DEPUTY June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 2 BACKGROUND / REASONS FOR RECOMMENDATION On March 28, 2000, the Board of Supervisors directed the Community Development Department to assume a lead role in an interdepartmental review of the County's current Williamson Act Program and to investigate the feasibility of expanding the program to include the new Farmland Security Zone or"Super Williamson Act" program. The following is a status report and background information on the interdepartmental review: I. An Overview of the Williamson Act Program In Contra Costa County The California Land Conservation Act (Williamson Act) was enacted in 1965 by California State Legislature to preserve the state's agricultural land by providing tax relief to landowners in return for commitment to preserve that land in agricultural use for a certain period of time. This was in response to increasing land values for agricultural land and market pressures to convert the land to non-agricultural uses that often resulted in property taxes which were uneconomically high for land maintained in agricultural use. The Williamson Act was designed to give bona fide farmers and ranchers, who desire to maintain their land for agricultural production, an opportunity to have their property tax stabilized. Contra Costa County has been implementing the Williamson Act since 1968 when the Board of Supervisors adopted Ordinance 68-53 which authorized the creation of Agricultural Preserves and the execution of Land Conservation Agreements pursuant to state law. At present, Contra Costa County has 131 Agricultural Preserves, and there are now approximately 43,800 acres of agricultural land in Contra Costa County under Williamson Act contracts.) Three County departments are directly involved in the administration of the Williamson Act program. The Community Development Department has lead departmental responsibility in processing requests from landowners for Williamson Act contracts and establishment of Agricultural Preserves. The County Counsel's office provides legal review and advice on Williamson Act contracts and Agricultural Preserve Zoning matters to the Community Development Department and the Board of Supervisors. The County Assessor's role has been to establish the property tax rate for subject parcels under contract based on a restricted tax rate according to provisions of the Williamson Act and the Revenue and Taxation Code. The County Assessor is also responsible for annually submitting the Open Space Subvention Report to the State Controller for reimbursement of fees to the County for properties brought out of the Williamson Act. 1. Source: Contra Costa County Open Space Subvention Report for 1999, prepared by County Assessor. June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 3 As background on the Williamson Act Program, attached to this report is a description of the Land Conservation (Williamson Act) Contract standards that have been implemented over the last 32 years of the program (see attachment labeled as Exhibit "A").N In the early years of the Williamson Act program many property owners, primarily cattle ranchers, sought to place their properties under contract with the County. Over the past fifteen years interest by property owners in enrolling in the Williamson Act program has lessened with an average of about one contract being executed in any given year. For example, in 1999 the County entered into one Williamson Act Contract and so far this year, the Department is working on a contract that could bring approximately a 772-acre parcel in the Delta region into the program. On the other hand, between two or three property owners annually initiate the formal non-renewal process to take a property out of the Williamson Act. III. Farmland Security Zone or "Super Williamson" Act Changed conditions since 1965 make the traditional Williamson Act contracts less attractive to many ranchers and farmers, and consequently, enrollment into the program has declined from its historic levels in the 1970's in Contra Costa County and in other counties in the state. The owners of prime farmland and land used for high value crops believe that they have not realized sufficient property tax reductions under the traditional Williamson Act contracts to justify restricting their land to agricultural purposes. The California Farm Bureau has maintained that this was due to the method of calculating value under the Williamson Act, and the effect on certain agricultural land values by the passage of Proposition 13. Land subject to a Williamson Act contract is valued on a yearly basis by the County Assessor according to its income producing ability. In general terms, the Assessor values the land by taking the fair rental value based on typical rentals received in the area for similar land, as well as actual rent being paid (if any) on the subject land. Then, the fair rental value is divided into a capitalization rate specified by law. In many areas, the rental value of agricultural land actually meets or exceeds the value of land for development purposes. In such cases, the landowner will not derive much benefit from entering into a traditional Williamson Act contract. Proposition 13 has exacerbated this problem, which made property taxes dependent on acquisition value rather than its fair market value. As a result, some farmlands that have not changed hands for many years already enjoyed a low factored base-year value, which in some cases was lower than the Williamson Act value. - y r— YJ June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 4 According to the California Farm Bureau, this phenomenon was most prominent with prime row-crop lands with high rental value, typically in the Central Valley. They and others in agricultural community believe that these conditions served to undercut the state's policy of preserving a maximum amount of its agricultural land. In response to this situation, the State Legislature passed Senate Bill 1182 (authored by Senator Jim Costa, D-Fresno) in 1998 which amended the Williamson Act to provide for the establishment of the "Farmland Security Zones". This law sponsored by the California Farm Bureau went into effect in August 1998. It enables a County the option of enacting a "Super Williamson Act" program. The new program allows an agricultural landowner with an existing Williamson Act contract to convert their 10-year contract term to a new 20-year term called a Farmland Security Zone (FSZ) contract. In order to qualify, the land must be prime farmland, farmland of statewide significance, or farmland of local importance. The California Department of Conservation recommends using the County Map of Important Farmlands, prepared by the state for each county, to identify lands that meet such qualifications. A landowner without an existing Williamson Act contract may petition the Board of Supervisors to enter into a FSZ contract for qualifying agricultural land. Once a FSZ contract has been established, land subject to a FSZ contract is valued for assessment purposes at 65 percent of its former Williamson Act value, or its Proposition 13 value, whichever is lower. The other key feature of the new program requires that new special taxes for urban- related service be levied at an unspecified reduced rate on land enrolled in a FSZ contract, unless the tax directly benefits the land or the living improvement on the land. In addition the new law prohibits the annexation of land enrolled in a FSZ contract to a city, or special district that provides urban services, or for use as a public school site. LAFCC is prohibited from annexing or otherwise obtaining control of land subject to a FSZ contract. The State Legislature enacted this new law with the hope that it would encourage owners of agricultural land to put their property into Farmland Security Zones. To date, about ten of the 58 counties in the state have opted to enact this new program, and in the 1998 tax year approximately 200,000 acres statewide were enrolled in FSZ contracts.2 It is the speculation of staff at the Division of Land Resource Protection, California Department of Conservation, that the reason the so few counties have enacted the program is that not enough is known about it and/or many counties have taken a wait and see response. 2 Source: Personal communication with Tim Bryant, Program Analyst, CA Dept. of Conservation.The ten counties that have enacted the Farmland Security Zone program are EI Dorado, Glenn, Kern, Kings, Lassen, Madera, Monterey, Plumas, San Joaquin, and Ventura counties. June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 5 111. Analysis of Differences between Williamson Act and Farmland Security Zone The following table compares the key differences in provisions between the Williamson Act and the Farmland Security Zone: Ai l D i URITY Z ' ACT Program Eligibility Any agricultural land Must be in an existing Williamson determined by Board that Act or petition the Board of should be kept agricultural Supervisors to enroll new land. use. Term of Contract Ten (10)years, annually self- Twenty(20)years, annually self - renewable, as provided renewable, as provided under under Govt. code. Govt. code. Minimum Preserve Size/ 100 contiguous acres as It retains the 100 contiguous acre Minimum Parcel Size 3 provided under Govt. Code requirement for an Agricultural to establish an Agricultural Preserves in FSZ as provided Preserve, except that Board under Govt. Code. County would may approve applications for retain same latitude to enact local Agricultural Preserves of less procedures for smaller sized than 100 acres if it finds that preserves, if it finds that smaller smaller preserves are preserves are necessary due to necessary due to the unique the unique characteristics of the characteristics of the agricultural enterprise. agricultural enterprise. In Contra Costa County, the Minimum parcel size within an only situation where a FSZ Agricultural Preserve could preserve of under 100 acres be established at 20 acres, or is permitted is in the area less, if County wants to include covered by the Fast Contra less acreage for minimum parcel Costa and Bethany Irrigation size to maintain contiguity of an Districts in which 35 acres is FSZ Agricultural Preserve. the minimum. Minimum parcel size permitted within an Agricultural Preserve is 20 acres, but County may offer to include less acreage for maintaining contiguity of an Agricultural Preserve. 3 The Subdivision Map Act requires the retention of a minimum parcel size of 10 acres of prime agricultural land and minimum parcel size of 40 acres of non-prime agricultural when a subdivision of land subject to Williamson Act contract is under consideration. However, 20 acres is the minimum parcel size as established in the County's A-4: Ag Preserve Zoning District . �7 June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 6 KEY ROV'119 ,; WIL LIAMS ACT Land Eligibility Criteria Land in commercial To be eligible for inclusion in agricultural production FSZ, the land must be prime designated with Agricultural farmland or farmland of statewide Preserve zoning. significance or local importance. Map of Important Farmland prepared by CA Dept. of Conservation is recommended to determine eligible land. Land Uses Allowed and Land use is limited and Land use is limited and controlled Compatible Uses controlled by Agricultural by Agricultural Preserve Zoning Preserve Zoning Ordinance, Ordinance, which includes all which includes all types of types of agriculture. agriculture. Compatible land uses in Compatible land uses in addition addition to those permitted to those permitted under under ordinance must be ordinance must be negotiated negotiated between between landowner and County landowner and County to be to be specified in the contract. specified in the contract. Withdrawal or Contract Cancellation can take place There does not appear to be Cancellation by mutual agreement similar authority in FSZ to cancel between landowner and a contract. It seems that this was County, after a public the intent of the sponsors of the hearing and determination by new law. the Board that such a cancellation is in the public interest and necessary findings have been made. Contract Non-Renewal A formal process of Contract Provides the same "rolling" Non-Renewal, in which aspect to FSZ. The Contract Non- landowner files a notice Renewal process is essentially remove a property from the the same as the Williamson Act. Williamson Act. The assessed value of property gradually ratchets up over a 9-10 year period when the contract formally expires. `7 June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 7 FARMLAND SECURITY ZONE KEY PROVISION WILLIAMSON A+ � AC's" 9-10 year period when the Contract Ikon-Renewal contract formally expires. (continued) Unless Notice of Non- Renewal is filed, the contract "rolls"automatically extending contract in one- year increment every year the landowner does not file a non-renewal notice. Annexations An Agricultural Preserve and Prohibits the annexation of land contract shall remain in in FSZ contract to a city or special effect following annexation of district (urban services) or for use the land area. as a public school site. Attached for information and labeled as Exhibit °S" is a copy of the chaptered provisions in the Government Code dealing with the Williamson Act for the FSZ. IV. Issues Under Review Through Interdepartmental Review Since the Farmland Security Zone legislation passed in late 1998, there has been only limited experience throughout the state in implementing the program. As previously noted ten counties in the state are now implementing the FSZ and it appears that many counties are taking a wait and see approach to the new program. The reasons for this reluctance may have to do with certain requirements under FSZ and legal concerns with the legislation. The interdepartmental review of the feasibility of implementing the FSZ is still in progress. The following issues are under review: Farmland Security Zones (FSZ) • How many existing Williamson Act contracts in Contra Costa County are in prime agricultural land and would be eligible for FSZ? Note: The location of existing Williamson Act contract in Contra Costa County are being mapped on the Map of Important Farmland prepared by the California Department of Conservation. • What would be potential fiscal impact on Contra Costa County if the FSZ were June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 8 • What are the potential legal risks to Contra Costa County in enacting the FSZ? Note: The legal authority for the basis of taxation granted under the legislation that established FSZ has been called into question by several legal experts. County Counsel has provided some background material regarding issues raised in other counties about the legal basis for taxation under FSZ. Williamson Act Program • Should the minimum acreage requirement to establish an Agricultural Preserve be lower than the current standard of 100 acres? Note: The Govt. Code provides that a minimum of 100 contiguous acres be used to establish an Agricultural Preserve, except that the Board of Supervisors may approve applications for less than 100 acres if it finds that smaller preserves are necessary due to the unique characteristics of the agricultural enterprise. In Contra Costa County, the only situation where a preserve of under 100 acres that has been permitted by the Board of Supervisors are the areas covered by the East Contra Costa and Bethany Irrigation Districts in which a minimum of 35 acres is allowed to establish a preserve. • What are the changed circumstances for agricultural enterprises in Contra Costa County which necessitate the establishment of smaller Agricultural Preserves? Note: The Board of Supervisors would need to make findings about changed circumstances for the County's agricultural enterprises to establish lower minimum acreage for an Agricultural Preserve. • What should be the new minimum acreage requirement for an Agricultural Preserve (Williamson Act or FSZ)? • Should the minimum parcel size to be placed in a Agricultural Preserve be lower than the current requirement of 20 acres? • Should the new minimum acreage requirement for an Agricultural Preserve be applied countywide or focused on a geographic area? • Should the minimum acreage requirement be applied across the wide spectrum of agricultural uses in the County, or, should new acreage requirement be focused on a particular form of agricultural enterprise? June 20, 2000 Board of Supervisors Status Report on Review of Williamson Act Program Page 9 The investigation into these issues will not only require review and input from the three County departments involved in the administration of the Williamson Act program, but also from the agricultural community and the County Agricultural Commissioner. Staff recommends that the interdepartmental review of the Williamson Act Program be coordinated with the soon to be re-established Contra Costa County Agricultural Task Force. Attachments t21 Exhibit "A": Contra Costa County Land Conservation (Williamson Act) Contract Standards Exhibit "B": Copy of the chaptered provisions in the Government Code dealing with the Williamson Act for the Farmland Security Zones DMB/PR:h:prochlboardorder\williamsonactboardorder Exhibit "A" Contra Costa County Land Conservation Contract (Williamson Act) Standards CONTRA COSTA COUNTY LAND CONSERVATION CONTRACT STANDARD 1. Minimum preserve Size. 100 contiguous acres, except that the Board of Supervisors may approve applications for a preserve of minimum size of 35 acres within the East Contra Costa and the Byron-Bethany Irrigation Districts. 2. Minimum parcel Size. Twenty (20} acres, with the exception that the county may offer to include on its own initiative acreage of any size within a preserve and offer a contract to the owner of said parcel when it is deemed necessary to provide for the conti- guity and integrity of the preserve. 3. Term of Contract. Ten (10) years, renewable annually, as .provided in Section 51244 of the Government Code. 4. Land Use Allowed and Compatible Uses. See agricultural preserve zoning ordinance. S. parcel Defined. A parcel of property shall be defined as that contiguous property under common fee ownership. . 6. Liquidated Damages. In the case of-material breach of contract which renders the use of• the land unfit for- commercial Agri-cul-to-=a1-- purposes the damages shall be equivalent to 100 per cent, expressed in dollars, of the equalized assessed value of the property, as established by the County Assessor on the lien date next following the date of breach. 7. Withdrawal from Contract. In the event that a mutually agreeable withdrawal and/or cancellation of a contract occurs, deferred taxes equivalent to 50 per cent of the equalized assessed value of the land under such contract basid upon unrestricted value, shall be levied against the landowner. 8°. Division of pro erty. Division of any property under contract may be construed as notice of non-renewal by the property owner. 9. Boundaries of Agricultural' Preserves and Lands Under Contract. All lands included within an agricultural preserve must also be under a land conservation contract. 10. Eligibility of Lands within One 1) Mile of a City. Land within one (1) mile of the city limits of an incorporated city may be included in an agricultural preserve and placed under contract only if such city does not file an objection in the manner provided by Section 51243.5 of the Government Code. 11. Agricultural Preserves shall include only those lands whose primary use is commercial agricultural production. 42 Exhibit "S" Copy of the Chaptered Provisions In the Government Code dealing with the Williamson Act for the Farmland Security Zones a CA Codes (gov:51296) Page 1 of 2 13 c t't GOVERNMENTCODE '$ SECTION 51296 51296. (a) The Legislature finds and declares that it is desirable to expand options available to landowners for the preservation of agricultural land. It is therefore the intent of the Legislature in enacting this article to encourage the creation of longer term " voluntary enforceable restrictions within agricultural preserves. r.; . (b) A landowner or group of landowners may petition the board to rescind a contract or contracts entered into pursuant to this chapter ;,. in order to simultaneously place the land subject to that contract z ; or those contracts under a new contract designating the property as a l .. i farmland security zone. (1) Before approving the rescission of a contract or contracts entered into pursuant to this chapter in order to simultaneously place the land under a new farmland security zone contract, the board shall create a farmland security zone, pursuant to the requirements ' of Section 51230, within an existing agricultural preserve. (2) No land shall be included in a farmland security zone unless expressly requested by the landowner. Any land located within a city' s sphere of influence shall not be included within a farmland security zone, unless the creation of the farmland security zone within the sphere of influence has been expressly approved by resolution by the city with jurisdiction within the sphere. (3) If more than one landowner requests the creation of a farmland security zone and the parcels are contiguous, the county shall place those parcels in the same farmland security zone. (4) A contract entered into pursuant to this section shall be for an initial term of no less than 20 years. Each contract shall provide that on the anniversary date of the contract or on another annual date as specified by the contract, a year shall be added automatically to the initial term unless a notice of nonrenewal is given pursuant to Section 51245. (5) Upon termination of a farmland security zone contract, the farmland security zone designation for that parcel shall simultaneously be terminated. (c) doth of the following shall apply to land within a designated farmland security zone: (1) The land shall be eligible for property tax valuation pursuant to Section 423.4 of the Revenue and Taxation Code. (2) Notwithstanding any other provision of law, any special tax approved by the voters for urban-related services' on or after January 1, 1999, on the land or any living improvement shall be levied at a reduced rate unless the tax directly benefits the land or the living improvements. (d) Notwithstanding any provision of the Cortese-Knox Local Government Reorganization Act of 1965 (Division 3 (commencing with Section 56000) ) , a local agency formation commission shall not approve a change of organization or reorganization that would result in the annexation of land within a designated farmland security zone to a city. However, this subdivision shall not apply under any of the following circumstances: (1) If the farmland security zone is located within a designated, delineated area that has been approved by the voters as a limit for existing and future urban facilities, utilities, and services. (2) If annexation of a parcel or a portion of a parcel is necessary for the location of a public improvement, as defined in Section 51290.5, except as prpvided in subdivision (f) or (g) of this t http://w w✓.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=51001-52000&file=51296 12/22/99 A Codes (gov:51296) Page 2 of 2 section. k (3) If the landowner consents to the annexation. (e) Notwithstanding any provision of the Cortese-Knox Local Government Reorganization Act of 1985 (Division 3 (commencing with Section 56000) ) , a local agency formation commission shall not approve a change of organization or reorganization that would result u` . 'in the annexation of land within a designated farmland security zone to a special district that provides sewers, nonagricultural water, or , y streets and roads, unless the facilities or services provided by the special district benefit land uses that are allowed under the NNi4contract and the landowner consents to the change of organization or .y j•, reorganization. r {f) Notwithstanding Article 5 (commencing with Section 53090) of Chapter 1 of Division 2 of Title 5, a school district shall not render inapplicable a county zoning ordinance to the use of land by the school district if the land is within a designated farmland 1 security Zone. (g) Notwithstanding any provision of law, a school district shall lk not acquire any land that is within a designated farmland security rsf?'f' zone. (h) The board shall not approve any use of land within a -i" designated farmland security zone based on the compatible use provisions contained in subdivision (c) of Section 51238.1. (i) This section shall only apply to land that is designated on the Important Farmland Series maps, prepared„pursuant to Section 65570 as predominantly one or more of the following: (1) prime farmland. (2) Farmland of statewide significance. (3) Unique farmland. (4) Farmland of local importance. If the proposed farmland security zone is in an area that is not .'. designated on the Important Farmland Series maps, the land shall qualify if it is predominantly prime agricultural land, as defined in subdivision (c) of Section 51201. (j) Nonrenewal of a farmland security zone contract shall be pursuant to Article 3 (commencing with Section 51240) , except as otherwise provided in this article. (k) All of the provisions of Article 6 (commencing with Section 51290) shall apply to farmland security zones created pursuant to this article except as specifically provided in this article. (1) No state agency, as defined in Section 65934, or local agency, as defined in Section 65930, shall require any land to be placed under a farmland security zone contract as- a condition of the issuance of any entitlement to use or the approval of a legislative or adjudicative act involving, but not limited to, the planning, use, or development of real property, or a change of organization or reorganization, as defined in Section 56021 or 56073. No contract shall be executed as a condition of an entitlement to use issued by an agency of the United States government. (m) Subdivisions (d) and (e) shall not apply during the three-year period preceding the termination of a farmland security zone contract. http://www.leginfo.ca.gov/cgi-bin/displayeode?section=gov&group=51001-52000&file=51296 12/22/99