The Williamson Act, also known as the California Land Conservation Act of 1965, allows an owner of agricultural land to enter into a contract restricting the use of land to agricultural purposes and eliminates possible subdivision of the land. The Act in return provides a reduction in the land’s assessed value which decreases the property tax owed on the property. This is important if you have agricultural land because it may help you reduce the amount you pay on property taxes.
What is the Williamson Act?
The Act itself is contained in California’s Government Code section 51200 et seq. This Act allows landowners to enter into a contract with the government restricting use of their land. It also empowers local governments to create agricultural preserves. These types of contracts are renewable annually and restrict the land to open space usage for at least ten years at a time. (Gov. Code § 51246.) The contracts must be minimum 10 years to prevent people using it as a way to get tax benefits. The length of the contracts also ensures the Act is imposing an actually enforceable restriction. (Cal. Const., art. XVIII, § 8)
The Act also provides terms so these contracts can be cancelled where they no longer serve the public interest. (Gov. Code §§ 51280 et seq.) These are narrow exceptions though, otherwise the Act would not be useful as a land-use control device.
The Act offers property tax benefits as an incentive. Tax assessments are usually based on the land’s development potential. As such, property tax assessment for agricultural land tends to raise costs and makes agricultural uses unprofitable for farmers. Under the Act, agricultural land is eligible for special property tax assessment standards which reduce the amount of tax owed. (Sierra Club v. City of Hayward (1981) 28 Cal.3d 840, 851-852.)
The land’s usage is the most important consideration under this Act. The Act is meant to eliminate socio-economic problems due to urban sprawl, consistent with local environmental and community needs. (Kelsey v. Colwell (1973) 30 Cal.App.3d 590, 595.) The use must also be compatible with long term productive agricultural capability. (County of Colusa v. California Wildlife Conservation Bd. (2006) 145 Cal.App.4th 637, 653.) For example, subdividing land designated as permanent open space was not allowed where the residential development is not incidental to the agricultural use. (Cleveland National Forest Foundation v. County of San Diego (2019) 37 Cal.App.5th 1021, 1050.) As such, acceptable uses under the Act are agricultural or land preservation usage. Uses like residential development would violate a Williamson Act contract.
How can these contracts be renewed?
When a contract is renewed, the county can revise the length of a contract and have the property assessed according to that length of time. The Act provides for automatic renewal and a year will automatically be added to the contract term unless the landowner or government gives notice of nonrenewal. (Gov. Code § 51244.) Because the contract is renewed each year, laws enacted after the original contract date may be considered. (County of Marin v. Assessment Appeals Bd. (1976) 64 Cal.App.3d 319, 327.)
How can these contracts be terminated?
These contracts are in response to imminent urban development, as such they may not be terminated just because development is desirable or profitable to the landowner. (Lewis v. City of Hayward (1986) 177 Cal.App.3d 103, 113.) When a contract is up for renewal a landowner can begin the cancellation process. (County of Humboldt v. McKee (2008) 165 Cal.App.4th 1476, 1494.) Either the landowner or government must give written notice of nonrenewal in advance of the annual renewal date. (Gov. Code § 51245.) A contract may also be cancelled if public interest outweighs the purpose of the Act. (Save Panoche Valley v. San Benito County (2013) 217 Cal.App.4th 503, 531.) Where there is a compelling need to use the land for a non-agricultural purpose and there is no proximate, suitable, noncontracted land available a contract may be cancelled. (Friends of East Willits Valley v. Mendocino (2002) 101 Cal.App.4th 191, 204.)
A landowner may need to pay a fee to cancel a contract if termination is not otherwise permitted. In accordance with the Act, an assessor will determine the cancellation value. (People ex rel. Dept. of Conservation v. Triplett (1996) 48 Cal.App.4th 233, 253-254.) This fee may be deferred taxes or a percentage of the valuation at the time of cancellation. (Gov. Code § 51283.)
What are some examples of how this act might apply?
For example, Shawn owns a large plot of land designated for a rural or agricultural purpose, like a field. This land would fall under the Williamson Act. Shawn could enter into a contract with his local government for a minimum of ten years promising to not develop his land. This would give him tax breaks on the property tax.
If Shawn was approached by developers who wanted to put up an apartment building on the land, he would not be able to do so under his contract with the government. If the contract was up for renewal, Shawn could give notice to not renew the contract and subsequently develop the property. Alternatively, Shawn could try to terminate the contract. However, residential development of open space and agricultural land is something the Act seeks to prevent. Shawn would need to show the public interest was no longer being served by the contract or that public interest would be served by the development.
If the residential development was somehow incidental to the property’s agricultural use it may be permitted. A use that would be more likely to be approved is low-income housing. If Shawn could show a community need for low-income housing and no similar property available for that housing, the development may be permitted under the Act.
Conclusion
Long term restrictions like contracts under the Williamson act may impact future sales and interests in property. If you are experiencing a dispute regarding your interest or liability on property, partition may be a solution. At Underwood Law, our partition attorneys can help you navigate your partition action efficiently and with care. We are here to help.
