1. November 23, 2010

2.  Williamson Act & State Subvention  SB 863  Fiscal Impact  Recommendation 2

3.  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

4.  State budget has included over $37 million in Williamson Act subvention funding.  Fiscal year 2009-10 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

5.  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, 2015. 5

6.  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 2009-10 was approximately $2.6 million.  The State allocated $1,000 in subvention funding statewide, of which San Joaquin County received $53. 6

7.  Implementation of SB 863 would generate approximately $1.3 million per fiscal year.  Partial subvention funds in fiscal year 2010- 11 only, estimated at approximately $447,800.  Notifying the contracted landowners is approximately $3,600. 7

8.  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