Proposition 13, The Williamson Act & The Farmland Security
Zone Act
Proposition 13
Proposition 13 was an initiative passed by the voters on November
7, 1978. It called for a limitation on increases in property
taxes. Consequently, at the time of acquisition of real property,
a Proposition 13 "base year value" of the total property
is established, which becomes the initial taxable value of the
property. The base year value can be increased each year by a
maximum of 2%. The value derived each year after acquisition
is called the "factored base year value." The taxable
value of property can never be greater than the Prop 13 "factored
base year value."
The Williamson Act
In 1965, the Legislature passed the California Land Conservation
Act, commonly known as the "Williamson Act." The landowner
and the county enter into a contract, which, each year, automatically
renews ten years into the future. The owner of the property promises
not to develop the property, and the landowner typically benefits
from lower property taxes.
The land and any growing improvements (trees and vines) are
valued on their income earning ability. Valuation of the land
and growing improvements is done by a formula called the Restricted
Value formula, which, in simplified form, states: "Value
is equal to net income divided by a capitalization rate."
If the net income to land is $5,000 per year, and the cap rate
is 5% (.05), the land value will be $100,000. The net income
of any growing improvements is based on production and price
less expenses for that commodity. Land rents are obtained from
a variety of sources, while the capitalization rate is determined
by the State Board of Equalization.
Though Prop 13 says that taxable value
cannot increase more than 2% from one year to the next,
there is no such protection under the Williamson Act.
The land and growing improvement values can vary greatly
from year-to-year because the components of the formula
can change every year. However, any non-living improvements,
like a pump, or barn, are assessed under and protected
by Proposition 13. If a property is enrolled in the
Williamson Act, the taxable value is the lower of the
Prop 13 factored base year value or Restricted Value.
As shown in the graph which follows, a property enrolled
in the Williamson Act during the years 2001 and 2002
has a Restricted Value lower than its Proposition 13
value. Therefore, the Restricted Value would be the
taxable value for those two years. In 2003, however,
the Proposition 13 value is lower than the Restricted
Value. Therefore, the Proposition 13 value would be
taxable value for 2003.
Farmland Security Zone Act
The Farmland Security Zone Act (FSZ) was passed by the Legislature
in 1999, to ensure that long-term farmland preservation is a
part of public policy.
Under the provisions of the act, the landowner
applies for FSZ status, and enters into a contract with the county,
which, each year, automatically renews twenty years into the
future. The owner of the property promises not to develop the
property into alternative non-agricultural uses, in return for
a further 35 percent reduction in the taxable value of land and
growing improvements.
In the chart below, if a property were newly enrolled in the
Farmland Security Zone in 2004, the taxable value would be a
35% reduction in the land and growing improvement values below
the Williamson Act value. As is the case under the Williamson
Act, non-living improvements are assessed and protected under
the provisions of Proposition 13. For the year 2005, however,
since the Williamson Act Restricted Value is higher than Prop
13, the Prop 13 factored base year value is the basis for the
reduction. The taxable value of land and trees would be a 35%
reduction below the Prop 13 value.
In each succeeding year until 2008, the Restricted
Value calculation of the Williamson Act would be the basis for
the 35% reduction.
Can I build a residence or other structure on my Williamson
Act or FSZ parcel?
The passage of AB 1492 in 2003 further defines a “material
breach” of contract relating to structures on restricted
properties, and establishes provisions for substantial fines
for such breaches. To avoid a material breach new buildings
must be directly related to a commercial agricultural operation.
For further information please see the links to the State
Department Of Conservation’s web site below.
Where Do I Apply?
In Madera County, applications for the Williamson Act and
the Farmland Security Zone can be obtained from the Clerk
of the Board of Supervisors. Complete instructions are
included in the packet provided. If you need further information,
please contact our Agricultural Appraisal Division.
Additional Resources
 |
The State Department of Conservation maintains several
web pages with information related to the Williamson
Act |
Farmland & Open Space Resources
Division of Land Resource Protection
Contains information and resources on the Division of Land
Resource Protection. DLRP provides information to guide land
use planning decisions and programs that allow agricultural and
open space landowners to voluntarily protect their land.
http://www.consrv.ca.gov/dlrp/index.htm
Land Conservation Act
The California Land Conservation Act of 1965--commonly referred
to as the Williamson Act--enables local governments to enter
into 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 much lower than normal because
they are based upon farming and open space uses as opposed
to full market value. Local governments receive an annual
subvention of forgone property tax revenues from the state
via the Open Space Subvention Act of 1971.
http://www.consrv.ca.gov/dlrp/lca/index.htm
Easement Exchanges
Williamson Act easement exchange legislation became effective
January 1, 1998. It provides a voluntary rescission process
for local entities and landowners to cancel a Williamson
Act (WA) contract and simultaneously dedicate a permanent
agricultural conservation easement on other land.
http://www.consrv.ca.gov/DLRP/lca/easement_exchanges/index.htm
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Contacting Us  |
Madera County Assessor's Office
200 W. 4th Street
Madera, CA 93637
Telephone: (559) 675-7710
Fax: (559) 675-7654
Office Hours: 8:00 AM to 5:00 PM
Monday through Friday
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