by William W. Abbott and Robert T. Yamachika

The Governor recently signed AB 2370 which amends portions of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (“LAFCo law”). This legislation takes effect on January 1, 2003, but does not apply to changes of organization or reorganization initiated prior to January 1, 2003. In a nutshell, AB 2370 prohibits local agency formation commissions (“LAFCos”) from approving a change of organization or reorganization or a change in the sphere of influence of a local government agency that would result in the annexation to cities or special districts, land that is subject to a farmland security zone (“FSZ”) contract or Williamson Act contract except under specified conditions. Thus, the net effect of the legislation is to further protect contracted lands from conversion to urban type uses.

The California Legislature passed the Williamson Act in 1965 to preserve agricultural and open-space lands by discouraging premature and unnecessary conversion to urban uses. The Williamson Act creates an arrangement whereby private landowners contract with counties and cities to voluntarily restrict their land to agricultural and compatible open-space uses. The vehicle for these agreements is a rolling term 10-year contract (i.e., unless either party files a “notice of nonrenewal,” the contract is automatically renewed for an additional year). In return, restricted parcels are assessed for property tax purposes at a rate consistent with their actual use, rather then potential market value.

Similarly, a FSZ contract is a contract between a private landowner and a county that restricts land to agricultural or open-space uses. The minimum initial term is 20 years. Like a Williamson Act contract, FSZ contracts self-renew annually, thus unless either party files a “notice of nonrenewal” the contract is automatically renewed each year for an additional year.

Existing Law

Existing law prohibits LAFCos from approving a change of organization or reorganization that would result in the annexation of land within a FSZ to a city unless the property is within an urban limit line, needed for public improvement, or if the landowner consents. This prohibition does not apply during the final three years of an FSZ contract. (Gov. Code, § 51296.3.)

State law also prohibits LAFCos from approving a change of organization or reorganization that would result in the annexation of FSZ land to a special district that provides sewers, nonagricultural water, or streets and roads. However, LAFCos may approve the annexation of FSZ land to a special district if the district’s facilities or services benefit the land uses allowed under the FSZ contract and the landowner consents. (Gov. Code, § 51296.4.)

AB 2370 Amendments

Currently, the statutory ban on annexations mentioned above only applies to land under FSZ contracts and not to land under standard Williamson Act contracts. AB 2370 changes the current law by providing similar prohibitions on annexations to Williamson Act contracted lands and for spheres of influence. Specifically, AB 2370 makes the following three substantive amendments to the LAFCo law:

1. AB 2370 prohibits LAFCos from approving a change to a local governmental agency’s sphere of influence to include FSZ contracted land if the agency provides facilities or services related to sewers, nonagricultural water, or streets and roads, unless the facilities and services benefit the land uses allowed under the FSZ contract and the landowner consents.

2. AB 2370 prohibits LAFCos from approving a change to a local governmental agency’s sphere of influence to include Williamson Act contracted land if the agency provides facilities or services related to sewers, nonagricultural water, or streets and roads, unless the facilities and services benefit the land uses allowed under the contract and the landowner consents. Nevertheless, LAFCos can approve the change to a sphere of influence if the LAFCos finds either: (1) that the change would facilitate planned, orderly, and efficient patterns of land use or provision of services, and the public interest in the change substantially outweighs the public interest in the current continuation of the contract beyond its current expiration date; or (2)that the change is not likely to adversely affect the continuation of the contract beyond its current expiration date. This prohibition does not apply to Williamson Act contracts in nonrenewal, contracts with tentative cancellations, or when the contracting county or city and the landowner approve.

3. AB 2370 also prohibits LAFCos from approving a change of organization or reorganization that would result in the annexation of Williamson Act contracted land to a city or special district that provides facilities or services related to sewers, nonagricultural water, or streets and roads, unless the facilities and service benefit the land uses allowed under the contract. Nevertheless, LAFCos can approve a change of organization or reorganization if the LAFCo finds any of the following: (1) that the city or county administering the contract after annexation has adopted policies and feasible implementation measures ensuring the continuation of agricultural use and other uses allowable under the contract on a long-term basis; (2) the change of organization or reorganization encourages and provides planned, well-ordered, and efficient urban development patterns that include appropriate consideration of the preservation of open-space lands; (3) the change of organization or reorganization is necessary to provide services to planned, well-ordered, and efficient urban development patterns.

The changes in law made by AB 2370 do not apply to any change of organization or reorganization initiated prior to January 1, 2003. A similar exception does not exist to those portions of AB 2370 which pertain solely to spheres of influence.

Conclusion

AB 2370 prohibits LAFCos from approving annexations to, or a change in the sphere of influence of cities or special district that would include lands subject to a FSZ contract or Williamson Act contract. However, LAFCos can approve a change to a sphere of influence to include FSZ contracted land if the facilities and services benefit the land uses allowed under the contract and the landowner consents.

Similarly, while LAFCos are prohibited from approving a change to a sphere of influence to include Williamson Act contracted land unless the facilities and services benefit the land uses allowed under the contract and the landowner consents. However, LAFCos can approve such a change if it finds either: that the change would facilitate planned, orderly, and efficient patterns of land use or provision of services, and it is public interest to make the change; or the change is not likely to adversely affect the continuation of the contract.

AB 2370 prohibits LAFCos from approving the annexation of Williamson Act contracted land to a city or special district unless the facilities and services benefit the land uses allowed under the contract. However, LAFCos can approve such a change if it finds either: that city or county administering the contract after annexation has adopted policies and feasible implementation measures ensuring the continuation of the agricultural and other allowable uses on a long term basis; or the change encourages or is necessary to provide planned, well-ordered, and efficient urban development patterns that include appropriate consideration of the preservation of open-space lands.

The bottom line is that LAFCos will now be prohibited from annexing or changing a sphere of influence to include FSZ contract lands or Williamson Act contract lands to a city or special district that provides facilities or services related to sewers, nonagricultural water, or streets and roads, unless the facilities or services benefit the land uses allowed under the contract and landowner consents. It is still possible to approve such a change that does not meet these requirements, however, LAFCos must then make the specified findings detailed above. Therefore, any annexation or changes to a sphere of influence by LAFCos may require additional findings not previously required prior to January 1, 2003.

William W. Abbott is a partner and Robert T. Yamachika is an associate with Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, environmental and planning issues contact Abbott & Kindermann at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.