WILLIAMSON ACT – FARMLAND SECURITY ZONE FAQs
What is the Williamson Act?
The California Land Conservation Act of 1965, commonly referred to as the Williamson Act, enables local governments to enter into ten year, evergreen contracts with private landowners for the purpose of restricting specific parcels of land to agricultural or related open space use. In return, landowners receive property tax assessments which are generally lower than normal because they are based upon farming and open space uses as opposed to full market value. Local governments have historically received annual subvention payments of forgone property tax revenues from the State via the Open Space Subvention Act of 1971.
How is a Farmland Security Zone Contract Different from a Williamson Act Contract?
A Farmland Security Zone Contract is a 20 year evergreen contract that has similar restrictions as Williamson Act Contracts for land use. In recognition of the longer term Farmland Security Zones offer landowners greater property tax reduction. Land restricted by a farmland security zone contract is valued for property assessment purposes at 65% of its Williamson Act restricted valuation, or 65% of its Proposition 13 valuation, whichever is lower.
What is Subvention?
Counties have for many years received subvention from the State for all contracted property that is valued on a restricted basis. The payment of subvention by the State was in recognition of the property tax loss counties experienced due to lower assessments of contracted lands. In past years, subvention payments to Kings County range between 2.4 & 2.8 million dollars.
In order to help manage its budget the State cut subvention to Counties for the 2008-2009 budget year by 10%. The following year Governor Schwarzenegger blue penciled the total subvention to all counties down to $1000.00. Kings County’s allocation of the $1000.00 appropriation was $75.19.
What is AB 2530 & SB 863?
As a result of Governor Schwarzenegger’s decision to eliminate State financial support for the Williamson Act program, two bills were passed providing a short-term solution to fund the program without using State dollars. AB 2530, signed by the Governor on September 25, 2010, and subsequently replaced by SB 863, signed on October 19, 2010, provides an opportunity for Counties to offset a portion of the loss of Williamson Act Subvention funds by reducing the term of the Williamson Act contracts from ten years to nine years and twenty years to eighteen years for Farmland Security Zone contracts. The reduction in contract term would also reduce a landowner’s property tax savings and allow the resulting increased revenues to be transferred directly into the County’s General Fund to help partially offset the lost revenue to the County. SB 863 is a temporary solution that will sunset in 2015.
How Does SB 863 Effect A Contracted Landowner?
In its simplest terms each contracted landowner whose property is assessed at it’s restricted value will receive an additional assessment on their annual tax bill. That additional assessment will be calculated by applying a 1% tax rate to 10% of the difference between the proposition 13 factored base year value and the Williamson Act or Farmland Security Zone calculated restricted value. The additional tax will be a separate line item on your tax bill.
The Williamson Act and Farmland Security Zone calculations are unpredictable and the resulting values can vary greatly from year to year. As a result, it is impossible to say with any degree of certainty what impact SB 863 will have on an individual parcel in years to come. In order to help property owners get an idea of what the potential SB 863 added tax might be, we have provided a worksheet that will at least tell you what the additional increment would be if SB 863 had been implemented for this year. It is important to remember that changes in ownership, the addition or deletion of growing improvements and other factors will change this number in subsequent years.
You will need to have your Assessor’s Parcel Number to access the appropriate information for your property. The number(s) is included in the notice for the proposed implementation of SB 863, that you received from the Kings County Community Development Agency and of course it can be found on your annual tax bill.
Click here to access the Estimate of Additional SB-863 Assessment Worksheet. Adobe reader is required to access this document. If Adobe Reader is not installed on your computer you may download a free copy by clicking the link at left.
How Can A Landowner Avoid The Additional Assessment Under SB 863?
In order to avoid the additional tax assessment under SB 863 a landowner must file for non-renewal of their contracted land by February 22, 2011 to be effective for the 2011 – 2012 tax roll.
Procedures and forms for filing non-renewal can be found on the Community Development Department's page by clicking here or by calling (559) 582-3211, Ext-2670. Questions regarding the tax impact of filing non-renewal should be directed to the Assessor’s Office at (559) 582-3211, Ext-2486