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With Decline of Williamson Act, SALC Represents New Hope for Ag Preservation

Martha Bridegam on
Mar 10, 2015

The new Sustainable Agricultural Lands Conservation (SALC) program only has $5 million so far, but land preservation and farm groups greeted approval of its opening guidelines with enthusiasm � especially given the fact that the Williamson Act was defunded in 2009.

The California Climate and Agriculture Network (CalCAN) gushed: "Applause erupted yesterday in response to the unanimous vote of the Strategic Growth Council..." Then it quoted Natural Resources Secretary and SGC member John Laird: "All speakers essentially said yes to the program, only sooner and bigger."

Ag preservation optimists are looking past that opening $5 million at the strong possibility that SALC has permanent dibs on 1% of the Greenhouse Gas Reduction Fund, which is expected to swell from new cap-and-trade auction proceeds.

SALC is also one of the few fresh moves available to a state government that in recent years has run short of ways to either buy or mandate agricultural land preservation.

Traditionally, the Williamson Act was the state's major ag preservation program. Created in 1965, the Williamson Act program fosters agreements in which landowners agree to continue agricultural uses for fixed periods in exchange for reduced property taxes. In turn, the state backfilled lost property taxes to the counties.

But the program was already losing effectiveness when it lost state funding in 2009. As Napa County Planning Director David Morrison noted, rising land prices, and the advantage of low Prop 13 assessments for long-term owners, have outgrown the modest tax breaks the Williamson Act can offer. 

From 1972 until 2009, the state payments to counties averaged $23.3 million per year and for some rural counties became an important source of unrestricted funds. Without subvention payments, counties have to decide again each year whether to keep up the program while carrying the cost of carrying the whole tax expenditure themselves. The program is still popular in agricultural areas, so most counties have stayed with it, but it is doing little in the urban peripheries where conversion to urban use is most likely.

Last year, Assemblymenber Susan Eggman, D-Stockton, got little traction for two bills that would have used regulatory mandates to slow agricultural land conversion. AB 823 would have required local lead agencies to require mitigation easements or in-lieu payments from developers proposing to convert ag land. It hit resistance from the building industry, business groups, water and utility districts, and the California State Association of Counties (CSAC). AB 1961, which also failed, would have required the Governor's Office of Planning and Research (OPR) to add agricultural land preservation rules to its general plan guidelines.

CSAC opposed AB 823 on local control grounds and opposed AB 1961 as an unreimbursed mandate. CSAC lobbyist Karen Keene said, "The policy we typically voice at hearings is supporting policies that preserve ag land but when the state is considering new policies affecting ag land preservation that they really should consider the individual plans of the counties."

Where the money is

To see the trouble with ag preservation, Ed Thompson said to look at the empty circles around the cities. Thompson, who is the American Farmland Trust's director for California, meant the detailed maps that the state Department of Conservation (DOC) prepares to show lands contracted under the Williamson Act.

Contracted areas are thick in the Central Valley agribusiness heartland: prime agricultural lands under 9- to 10-year contracts marked in green, and "Farmland Security Zone" properties under 18-to-20-year contracts, marked in yellow. "Non-prime" protected rangelands appear in brown along the hot dry slopes of inland foothills. 

But in much of California's core farming country, when there's a pink spot of "Urban and Built-Up Land," it's surrounded by a thinned-out welt of bare space. (Zoom in on this mid-density statewide map to see the effect.) Contracts are likewise patchy in coastal farming areas near urban development. The Salinas Valley is an urgently cited example. 

John Lowrie, the DOC Assistant Director who heads the Division of Land Use Protection administering the Williamson Act program, knew that Thompson tells people to look at the circles: "Ed likes to do that. I have no reason to disagree with his analysis." The closer you get to metro areas in the Central Valley, "the less prevalent you will find Williamson Act contracted land on the periphery."

The reason is opportunity cost where development potential raises land prices. Further, Morrison said a lot of land on urban peripheries is optioned or owned by developers thinking 30 to 50 years ahead.

Meanwhile, California continues to lose agricultural land every year. Thompson put the figure at 38,000 acres a year. Some estimates pick 30,000. Either way, a lot. 

Counties trudging on

This is what Natural Resources Secretary John Laird has meant by saying, repeatedly, that the Williamson Act is "hanging by a thread." While it may not be about to drop all at once, it's fraying. 

Lowrie said counties and landowners have not dropped out of the program as quickly as some feared at first. Only Imperial County has withdrawn from the program fully. Several counties stopped entering new contracts but former Sonoma County Planning Director Pete Parkinson wrote that some of those "have started up again" and "home-grown support will likely sustain the program." (Both Parkinson and Morrison commented at the suggestion of CSAC's Keene.)

The Department of Conservation's 2012 status report on Williamson Act said local governments claimed $71.71 million in unpaid subvention payments during 2010 and 2011. (A March 3, 2010 legislative hearing documented the state of the program then.) Because some counties have not reported to DOC, it's unclear how much contracted acreage is gone. Between 2008 and 2011, counties that continued to report lost 24,479 acres. 

The Legislature has made a few adjustments to keep landowners interested. 

In 2011 counties got the option to set contract durations at nine and 18 years instead of 10 years for standard contracts and 20 for Farmland Security Zones. Last year SB 1353 extended this option past 2016. By then 11 counties had taken the 9/18 choice.

Last year the Legislature also passed Eggman's AB 2241, which allows owners of lower-quality agricultural land to convert Williamson Act contracts to solar-use easements for photovoltaic panels. AB 551, by Assemblyman Phil Ting, D-San Francisco, added "urban agriculture incentive zones" to the Act's possibilities.

'Hanging by a thread' and what comes next

Secretary Laird's most recent "hanging by a thread" speeches about the Williamson Act were comments at the SGC meetings in the context of the new SALC program's design. He came back to the phrase on June 3 and July 10 and again on October 6. (He said it before that elsewhere too.) 

He hinted at looking for ways to connect the old program to the new one. In July he said: "The Williamson Act that we have, as I keep saying, is hanging by a thread, and we have to figure out what is coming next in terms of it morphing, it continuing, a new thing being put in its place." He said it served the cap-and-trade goal of GHG emissions reduction to prevent conversion of prime agricultural land to urban use, "And because counties are making their decisions about continuing to participate, time is really important." 

It was also last July he said, "I also don't want to sit at any budget hearings next spring without having done something significant on this." 

SALC prospects

The focus for now is on SALC, and the $5 million in its 2014-15 budget. Of that, $1 million goes to grants for local public-private planning, and the rest to buy easements on "strategically located, highly productive, and critically threatened agricultural land."

Morrison said good farmland in Yolo County a year ago cost $15,000 an acre, while a high-quality Napa vineyard acre could cost $400,000. "So, four million dollars may get you 200 acres? It's an eyedrop."

Except, that eyedrop could become a significant funding stream. 

SALC's funding flows from last summer's SB 862 budget bill allocating cap-and-trade auction proceeds to the SGC-administered Affordable Housing and Sustainable Communities (AHSC) program. AHSC received $130 million for 2014-15 but  SB 862 promised it 20% of the Greenhouse Gas Reduction Fund in each subsequent year. The 2015-16 state budget proposal presumes AHSC's 20% in the coming year will be $202 million. Lowrie said the $5 million was an artifact of early discussions in which the total AHSC budget was to have been $100 million, of which SALC would receive 5%. For the coming year, he said $10 million was being discussed as SALC's share -- again about 5% of AHSC's total. That works out to dibs on 1% of the growing cap-and-trade fund. 

SALC builds on the Department of Conservation's existing California Farmland Conservancy Program (DOC-CFCP). That program already uses Proposition 84 bond money to help nonprofits buy agricultural easements and is working to mitigate ag land effects of the High-Speed Rail line. Lowrie said frequent references to DOC-CFCP in an early draft of the SALC guidelines were dropped to avoid "confusion" but so much has in fact been borrowed from existing practices that "sometimes it's confusing for us too." 

To Lowrie the major differences between the two programs are SALC's primary statutory goal of reducing greenhouse gas emissions and its effort to choose the most urgent needs. He said SALC emphasized local control but he named some areas of focus: "There's a great deal of effort and thought" going into balancing farming and urban needs in the Salinas, Santa Maria and Pajaro Valleys, he said. Likewise, he said, the San Joaquin Valley, Sonoma and Mendocino.

Other directions

Without major state spending, and with state mandates limited, other ag land preservation approaches involve mitigation requirements, economic agreements among local players or outright land use restrictions.

Lowrie said the Department of Conservation had become "really curious" about data on local ag land conservation measures such as mitigation requirements and growth ordinances. He said: "We're starting to see some real progress in thoughtfully defining growth boundaries for cities," including in Tulare County and the San Joaquin Valley. He said the efforts were to "start to shape those growth boundaries accurately" where some boundaries "were larger than they needed to be to accommodate the anticipated growth" over the next 40-50 years.

Thompson said local agency formation commissions (LAFCOs) contributed to sprawl if they approved unnecessarily large spheres of influence � though Parkinson suggested that "these bloated spheres were approved because they were consistent with� sprawl-based general plans," a situation which might not recur.

While Thompson focused on the value of land that mitigation easements could protect, Morrison said with one acre's mitigation for one acre of development, "you by definition lose 50% of your farmland." 

Discussing relatively prosperous Napa, Sonoma and Yolo Counties, Morrison said outright voter-controlled growth restrictions and sharp growth boundaries work where they are supported by local political wil. In Yolo County, where his work included the county Climate Action Plan, he described a mixed approach: development boundaries under the general plan, strategic purchases of conservation easements to guide growth, and urban limit lines fixed by popular vote. He said Solano County uses urban growth buffers and "very aggressive city-county agreements" limiting development to cities but sharing tax revenue with counties.

Other recent recommendations on ag land preservation include a project involving Thompson, the "Greenprint: State of the Valley" report by the San Joaquin Valley Greenprint Steering Committee, and a "call to action" issued in July 2014 by the California Roundtable on Agriculture and the Environment.