The County of Monterey is moving toward more rigorous monitoring and enforcement of Williamson Act contracts. The Williamson Act was adopted in 1965 to combat urban sprawl by giving tax breaks to agricultural property owners who entered into long-term contracts with their county to keep their lands in agricultural production or open space. When a county enters into a Williamson Act contract, it incurs a property tax loss. County coffers have historically been partially back-filled by State subvention funds.
Not surprisingly, the State of California has targeted subvention funds as an easy budget-cutting measure for the past several years. In August 2009, Governor Schwarzenegger used the line item veto to eliminate subvention funds. The 2010-11 budget year looks no better. This has left rural counties “holding the bag.” Some counties are sponsoring legislation for alternative funding, while others are making efforts to reduce the number of contracts they hold. Imperial County has voted to phase out all of their Williamson Act contracts through non-renewal.
Monterey County has over 500 active Williamson Act contracts, the third highest number in California. The County estimates these contracts reduce County property tax revenue by about $3 million per year. While the County is continuing to accept new contract applications, at least for now, steps are being taken to identify properties that may not be complying with the terms of the Williamson Act contract. Among the measures being considered is the adoption of new “Guidelines” that could result in greater scrutiny and eventual termination of some Williamson Act contracts.
The draft Guidelines provide that the County will send a “notice of potential breach of contract” to any property owner who fails to submit income information as requested by the County Assessor. The County also proposes to review each property to verify whether the property is fully compliant with the terms of its contract. The County will initiate non-renewal of the contract in some cases, such as where “non-compatible” land uses are found.
Under the draft Guidelines, owners will be given an opportunity to correct contract breaches, and/or appeal any County initiated non-renewal. Non-renewed contracts are phased out over the term of the contract, typically 10 or 20 years, during which time the property tax is ratcheted back up to what it would have been in the absence of the Williamson Act contract. This year, the County initiated non-renewal of seven contracts. The Board of Supervisors is expected to discuss enforcement issues related to the Williamson Act at its September 21, 2010 meeting.
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