November 23, 2010
Williamson Act & State Subvention SB 863 Fiscal Impact Recommendation 2
Enables local governments to enter into contracts with landowners for the purpose of restricting specific parcels of land to agricultural or related open space use. Landowners receive property tax assessments which are much lower than normal as opposed to full market value. Local governments receive an annual subvention of foregone property tax revenues. 3
State budget has included over $37 million in Williamson Act subvention funding. Fiscal year State budget included only $1,000 of Williamson Act subvention funding. On October 19, 2010, Governor Schwarzenegger signed SB 863. SB 863 provides a method for counties to offset a portion of the loss if counties receive less than one-half of their foregone General Fund property tax revenue. 4
Shorten its 10-year Williamson Act contracts to 9 years (20-year Farmland Security Zone contracts would become 18- year contracts). 10 percent reduction in the length of the contract will recapture 10 percent of the participating landowners’ property tax savings. Sunsets on January 1,
County must first determine that the State provided less than one-half of the County’s foregone property tax revenues in the prior fiscal year. The foregone property tax revenues in fiscal was approximately $2.6 million. The State allocated $1,000 in subvention funding statewide, of which San Joaquin County received $53. 6
Implementation of SB 863 would generate approximately $1.3 million per fiscal year. Partial subvention funds in fiscal year only, estimated at approximately $447,800. Notifying the contracted landowners is approximately $3,600. 7
Determine that the County received less than one- half of the foregone property tax revenue. Set a public hearing on December 7, 2010 to consider the implementation of the provisions authorized in SB 863. Direct staff to notify all Williamson Act and Farmland Security Zone contracted landowners of the December 7, 2010 public hearing. 8