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Williamson Act gains funding in new budget

Issue Date: October 27, 2010
Kate Campbell

By signing a budget “trailer” bill last week, Gov. Schwarzenegger assured interim funding for the Williamson Act farmland-conservation program.

Senate Bill 863, a follow-up bill to the recently approved state budget, contains $10 million in funding that will go toward reimbursements for counties that participate in the Williamson Act program in the 2010-11 fiscal year.

The California Farm Bureau Federation worked with legislators and the Schwarzenegger administration to develop program alternatives and the interim funding that CFBF President Paul Wenger called key to the program’s survival.

“We appreciate, in a very tight budget year, that Governor Schwarzenegger recognized that the agricultural community stepped to the plate and provided an interim solution for maintaining this program and keeping it going with interim funding until the state budget situation gets better,” Wenger said.

SB 863 also contained technical changes to the previously adopted Assembly Bill 2530 by Assemblyman Jim Nielsen, R-Gerber. The new law essentially replaces AB 2530 and adds an urgency clause, allowing counties to move forward in implementing it for 2011.

Because Williamson Act funding had been virtually deleted from the previous state budget, some counties have considered not renewing their contracts and exiting the program.

In 2008, state general fund contributions for reimbursements to counties with a Williamson Act program amounted to about $33 million. Last fiscal year, the program funding was a mere $1,000.

The 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.

Wenger said the program modification contained in the new law provides flexibility and gives counties a way to recoup some of their lost revenue from the drastically reduced state reimbursements.

SB 863 allows counties voluntarily to implement new contracts that can be 10 percent shorter in duration—in return for a 10 percent reduction in the landowner’s property tax relief.

Adoption of the new, shorter contracts will require a majority vote of county supervisors and the program modification will only be allowed in years when counties receive replacement funds of less than one-half of their foregone property tax revenue related to the program.

“Farm Bureau sponsored this alternative funding approach in order to save a very successful land conservation program that not only provides farmers with significant property tax relief, but also the certainty that they can continue to farm without incompatible, non-farm uses coming in next to them,” said John Gamper, California Farm Bureau taxation and land use director.

For growers, the new law is an important development, Wenger said.

“If you’re in the Williamson Act, this legislation means that rather than losing 100 percent of your benefit, you’ll keep 90 percent of it,” he said. “If this solution had not been developed, many counties would not have renewed the program and taxes on agricultural property would have skyrocketed at rates not seen in many years.”

Although the new law provides immediate support, Wenger noted it includes a four-year sunset provision. That means the agricultural community will need to be engaged in maintaining the Williamson Act program into the future, he said.

“Maintaining this program is important,” Wenger said. “What most people don’t realize is that there is going to be a lot of land transitioning from one generation to the next. When that happens, the land will be reappraised. The values placed on that land at transfer will make the taxes cost-prohibitive. It’s imperative that this land conservation tool be available, because I see more land needing to be enrolled in the Williamson Act, rather than less.”

Wenger said county Farm Bureaus have been instrumental in supporting the recently signed legislation. He said Farm Bureau would encourage members to become involved in their counties to see it implemented. The revamped program will work, he said, if properly implemented.

“This legislation offers a proactive solution,” Wenger said.

(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at kcampbell@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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