Contacts     |     Agency & Departments     |     Services     |     Login

You are here: Home Tax Savings Tax Reductions Farmers and Ranchers
January 12, 2011 Written by 

Farmers / Ranchers

Williamson Act

Assessment of Living Improvements – Vines & Orchards

Owners of agricultural land can agree to restrict their land to agricultural use in exchange for restricted property tax assessment under the provisions of the California Land Conservation Act of 1965. The California Land Conservation Act, commonly known as the Williamson Act, is a state agricultural land preservation program in which each local jurisdiction can elect to participate. Santa Clara County as well as some local cities currently participate in this program.

 

What Is The Williamson Act?

The intended purpose of the Williamson Act is to encourage property owners to preserve the agricultural use of their land instead of converting it for non-agricultural uses. To do so, the assessment of agricultural land is restricted in exchange for long-term contractual commitment to agricultural use.

Santa Clara County has actively used the Williamson Act as an agricultural and open space preservation tool since it was enacted in 1965. Currently, there are more than 362,704 acres of land under Williamson Act contracts in Santa Clara County. This constitutes approximately 43% of the land area in the county.

Land Conservation Contracts

The Williamson Act is implemented through voluntary contracts between landowners and a city or county. Landowners agree to retain their lands for agriculture or other open space uses for a minimum of ten years, and in return receive property tax relief on the lands under contract. Property tax relief is provided through a restriction on the assessment of these lands to the amount of their income-producing value rather than their market value, which may be considerably higher.

Contracts have ten-year terms that are automatically renewed each year on a common anniversary date of January 1 unless they are cancelled or notice of non-renewal is given. If notice of non-renewal is given by either party, the non-renewal process begins on the following January 1, with nine years remaining on the contract. During this process, property taxes increase gradually on the lands according to a formula throughout the remaining term of contract until they are at the same rate as lands not under the Williamson Act at the end of the contract.

Land values of property contracted under the Williamson Act are derived annually from an income approach to value (rollover here with “pursuant to Section 423 of the California Revenue and Taxation Code”). In order to establish income, the Assessor’s Office issues an annual market rent survey in December for which a response is mandatory. Failure to respond by April 10 may result in an investigation by the Planning Office/Division of Agriculture and/or a non-renewal of the contract from the county.

Program Administration

The Williamson Act program is administered by several departments within Santa Clara County. Each department plays a vital role in ensuring that the exchange of restricted land use for restricted assessment is met by the parties to each contract.

The Assessor’s Office calculates the appropriate assessed value for each property encumbered by Williamson Act contract. Assessment of existing improvements and new construction on contracted land is made pursuant to Sections 51 and 70 of the California Revenue and Taxation Code. As such, the assessment practices of improvements on contracted land are no different than the assessment of improvements on non-contracted land.

The County Planning Department and the Agriculture Department jointly monitor property under contract to ensure agricultural use. The annual survey issued by the Assessor’s Office is the primary monitoring tool ensuring compliance with contract terms. The County also actively reviews all restricted lands on a regular basis to ensure contract compliance.

The Board of Supervisors formulates the Ordinance governing the County’s participation in the Williamson Act.  The Clerk of the Board’s Office maintains the contracts and administers initiation of new agreements, non-renewal of contracts and contract cancellations. 

 

Assessment of Living Improvements - Vines & Orchards

The California Constitution requires Assessors to assess for property taxation purposes living improvements, such as grapevines, and fruit and nut trees, as well as associated property such as trellises and irrigation equipment. 

Article 13 of the Constitution requires that the Assessor recognize that these crops provide no beneficial use until mature, and where appropriate exempt them from taxation for a limited time period. Specifically, the law states that the exemption lasts, “until 4 years after the season in which they were planted in orchard form and grape vines until 3 years after the season in which they were planted in vineyard form.”

Property owners are required to annually complete the Assessor’s Agricultural Property Income and Production questionnaire regarding the living improvements, including removals and new plantings on their property. A PDF of the questionnaire is below. Information provided to the Assessor’s Office is confidential and will not be used to value your home or change prior year assessments.

Additionally, and consistent with the Assessor’s constitutional responsibility to assess all real and business personal property, the office performs regular discovery programs of businesses, homeowners and non-profit organizations to ensure that all taxable property is identified and assessed according to state mandates. As part of that effort, taxpayers who the Assessor’s Office believes possess living improvements will receive an Agricultural Property Income and Production questionnaire. If you have no living improvements, please indicate that on the questionnaire as the Assessor’s Office may make a value estimate of the living improvements if no information is provided, as authorized by Revenue and Taxation Code Section 501.

Valuation of the living improvements will be dependent on the productivity of the improvements and the value of the product. Those interested in the valuation methods used by Assessors are encouraged to review the State Board of Equalization’s Assessor’s Handbook 521, referenced here:   http://www.boe.ca.gov/proptaxes/pdf/ah521final2003.pdf.

Williamson Act assessment questions should be directed to Frank Giordano This email address is being protected from spambots. You need JavaScript enabled to view it. .

For more detailed information, see Related Attachments and Links below. 

Related Attachments:

Related Links:

 



Real Property Division

County Government Center
East Wing, 5th 
Floor
70 West Hedding Street
San Jose, CA 95110
Phone: 408-299-5300
Fax: 408-299-3015
Email us, the fastest way to contact us