Legislation

• Reform the fiscal relationship between state and local governments to empower local governments and agencies to take greater responsibility for local land use planning and investment needs

• Fully fund state agencies and departments with responsibility for oversight and permitting of local and regional projects and plan

• Prioritize smarter land use through state budget allocations, agency budgets, and departmental priorities

• Permanently fund Williamson Act programs through the legislative or electoral process

Case Study: Williamson Act

In 1965 the California Legislature passed the California Land Conservation Act, more commonly known as the Williamson Act. The act was designed to preserve agriculture and open space by enabling local governments to enter into land contracts with private landowners who agree to forego development of their land for 10 years in exchange for reduced property taxes.

The Williamson act requires a partnership between private landowners, local government and the state government. Instead of paying taxes based on a land’s market value, landowners pay a tax based on the land’s agricultural value. The local government agrees to relinquish a portion of expected property taxes, but retains assurance that agricultural lands will remain in production or as open space for at least ten years. The state pays a subsidy to local government agencies to compensate them for reduced tax revenues resulting from lower land taxes.

The 10-year contract allows landowners to decrease their property taxes. Local government agencies determine eligibility based on criteria such as minimum parcel size, land use, and farm income. Significant tax penalties result for the landowner if the contract is cancelled. Since its inception, approximately 16 million acres have been enrolled under Williamson Act contracts. In counties within the SOSA region from 1991-2003, the number of acres actively enrolled in Williamson Act contracts has remained fairly constant, fluctuating around 7.2 million acres.

However, a number of Sierra Nevada regions have experienced challenges and limitations of the Williamson Acts along with benefits. Enrollment incentives for landowners had decreased because many already received substantially lower tax rates than offered by the Williamson Act due to Proposition 13. One facet of the proposition was to set property value by its acquisition value rather than market value, which kept property taxes for long-term landowners.

In 1998, the Farmland Security Zone legislation provided new property tax incentives for landowners. Their land value would be assessed at 65 percent of its Williamson Act value or at its Proposition 13 value whichever is lower. In return, landowners must agree to a 20-year contract. Landowners are also subject to stricter entrance requirements and penalties for cancellation. The FSZ program prohibits annexation of land enrolled in FSZ 20-year contracts to a city, special district providing non-agricultural services, or for use as a public school.

By 2004, all the California counties in the Sierra Nevada regions except for Alpine, Inyo, and Yuba counties participated in the Williamson Act. Far fewer counties also participate in the Farmland Security Zone (FSZ) program, sometimes referred to as the Super Williamson Act. Lassen, Plumas, Tehama, Sierra, Placer, El Dorado, Madera, Fresno, and Tulare counties have lands enrolled in both the Williamson Act and Farmland Security Zone programs.

The amount of agricultural land enrolled in Williamson Act, Farmland Security Zone and other agricultural conservation easements within SOSA California counties has fluctuated from 7,224,348 acres in 1991 to 7,241,070 acres in 2003. In 1996, two years before the Farmland Security Zone legislation passed, enrolled acres in the region hit a low of 7,164,971 acres.

Between 1999-2003, Sierra Nevada counties enrolled 703,619 acres in the Farmland Security Zone program. However, the vast majority of these lands, 61 percent occurred in Kern County. Statistics are kept for the entire county, and significant portions of Kern County lie outside of the SOSA region.

Download data Total Enrollment in Williamson Act (1991-2003) SOSA CA

Download data Williamson Act Total Acres

Reducing property tax rates for agriculturalists enrolled in either the Williamson Act or Farmland Security Zone cut the tax revenue base for local governments. In order to reimburse local governments for the loss of revenue, the Open Space Subvention Act of 1971 created a fund so that replacement revenues to local governments could be appropriated within the General Fund.

The act created a fund, but not an appropriations mechanism. Each year the California Legislature must appropriate money from the General Fund to reimburse local governments. The money is not guaranteed. In fact, in 2002, Governor Gray Davis recommended eliminating $39 million of Williamson/Farmland Security Zone subvention money from the 2003-2004 state budget. The Legislative Analyst’s Office recommended phasing out funding over a 10-year period.

SBC believes permanently funding Williamson/Farmland Security Zone programs through the legislative or electoral process would provide annual financial stability.

Reimbursement is broken down by several factors. Counties receive $5/acre for prime agricultural land enrolled in the Williamson Act and $1/acre for nonprime agricultural land. Lands enrolled in the Farmland Security Zone program are reimbursable on a different scale. Prime and nonprime agricultural lands in urban areas receive $8/acre, non-urban prime agriculture land receives $5/acre, and non-urban nonprime agriculture land receives $1/acre.

Download data Wiliamson Act Subvention Payments