Tulare County Supervisors Tuesday will consider implementing a new state law that authorizes a county to shorten 10 year Williamson Act contracts to nine years (20 year Farmland Security Zone contracts would become 18 year contracts) which has the effect of reducing a contracted landowner’s tax benefit by 10 percent. The action has the support of the California Farm Bureau.
The board will conduct a public hearing on the matter at approximately 9:30 a.m. in the board chambers in Visalia.

The Williamson Act, created 45 years ago, currently protects about 16.5 million acres of farmland. Farmers and ranchers who enroll in the program enter into 10-year or 20-year contracts with the County, by which they promise to keep the land in agriculture rather than opting for some other land use, such as commercial or residential development.

In exchange, the land is taxed based on its agricultural income, its acquisition value under Proposition 13 or its current market value, whichever is lower. The contracts automatically renew each Jan. 1, unless counties vote not to renew them.

Historically, counties received an annual subvention payment of forgone property tax revenues from the State for program participation. Tulare County historically received in excess of $3.5 million annually. Due to the State budget crisis, Gov. Arnold Schwarzenegger removed all but $1,000 of Williamson Act subvention funding state-wide from the budget. That resulted in Tulare County receiving only $98 in fiscal year 2009-2010.

Senate Bill 863 was developed in response to the lost subvention payments as financially-strapped counties were considering whether to continue participation in the Williamson Act program. The Farm Bureau worked closely on the legislation.

The new law provides that farmers would give up 10 percent of their property tax saved by being in the Williamson Act in exchange for the term of the contract being reduced by 10 percent from 10 to nine years. The landowner still retains 90 percent of the benefit of the contract and the County is able to backfill lost revenue due to the loss of State subventions. SB 863 also allows contracted landowners to “opt out” of the program by non-renewing their Williamson Act contracts instead of accepting the shorter contract term.

The law is temporary and sunsets in January, 2015. It does include $10 million in one-time Williamson Act subvention funding state-wide for fiscal year 2010-2011. Tulare County’s share is estimated to be $900,000 or more.

In order to implement the reduced term contracts for the fiscal year 2011-2012 tax rolls, the Board has to take action Tuesday. The County Planning Department has sent hearing notices to the 9,000 Williamson Act and Farmland Security Zone contract holders which involves approximately 1 million acres of property.

 
After the hearing another notice will be sent out to contract holders, as to their options under the new modified program (if adopted by the County). Landowners who take no action will automatically be enrolled in the modified SB 863 program, and those who wish to exit their contract may proceed with a non-renewal procedure until March 1, 2011. Other counties in the State are also considering whether to implement the legislation for the upcoming tax year.

 
In a somewhat related matter, the board will hold two public hearings regarding two other Williamson Act matters. The first is to allow a Williamson Act contract on 174 areas near Alpaugh where a 20 megawatt solar power facility is planned and to cancel the contract on two parcels totalling 640 acres owned by the Atwell Island Water District near Alpaugh where another 20-megawatt solar power facility is planned.