Are Solar Farms Compatible with the Williamson Act?

Are Solar Farms Compatible with the Williamson Act?

David H. Blackwell and Michael Patrick Durkee[1]

The Williamson Act[2], enacted to protect agricultural land from premature urban development through contracts between the local government and landowner, applies to half of all agricultural land and nearly one-third of all privately held land in California.  Solar farms, often to be sited in California’s rural areas, are confronting these Williamson Act contracts.  This article addresses whether solar farms could be considered a “compatible use” under the Williamson Act.

For years, regulators and energy providers have ignored Section 51238(a)(1)[3] of the Act, which provides that electric facilities are statutorily-recognized compatible uses.  As a result, energy providers have historically arranged for the “cancellation” of Williamson Act contracts, believing that this complicated and costly process was a prerequisite to building energy facilities throughout California.

The authors of this article assert that this often-repeated approach of ignoring the express provisions in the Williamson Act is misguided, and that electric facility projects, whether traditional or renewable in nature, should be recognized as compatible uses, as the Legislature intended.  Thus, when siting a solar project on Williamson Act lands, it is error to automatically assume that contract cancellation is required or that a case-by-case review regarding an energy project’s compatibility pursuant to Section 51238.1 is necessary.

When the Williamson Act was adopted in 1965, California’s need for renewable sources of energy was not part of the legislative process.  The world has obviously changed during the last 45 years, and recent federal and state mandates have pushed renewable energy to the forefront.  There now exists a tension between two laudable but competing goals: the preservation of agricultural land and setting aside land for the production of clean energy.  If state and local agencies continue to apply the Williamson Act in a manner that frustrates the siting of renewable energy projects on agricultural lands, then legislative action may be necessary to reflect this new paradigm.

Brief Background of the Williamson Act

Before the Williamson Act, the California Constitution required that individual property tax assessments be made according to the market value of the assessed property.[4] As a result, the County Assessor was required to consider the highest and best use to which the property was naturally adapted, and could not limit consideration only to the property’s present use.[5] Therefore, agricultural lands adjoining urban areas could be subject to higher property assessments and taxes, thereby forcing agricultural landowners to discontinue farming and sell or convert their land to urban development.[6]

The Williamson Act was adopted to address this problem.  “The Williamson Act is a legislative effort to preserve open space and agricultural land through discouraging premature urbanization and, at the same time, to prevent persons owning agricultural and/or open lands near urban areas from being forced to pay real property taxes based on the greater value of that land for commercial or urban residential use, a factor which would force most landowners to prematurely develop.”[7]

The Act empowers local governments to establish “agricultural preserves” consisting of lands devoted to agricultural uses and other uses compatible therewith.[8] Preserves are “established for the purpose of defining the boundaries of those areas within which the city or county will be willing to enter into contracts pursuant to this act.”[9] The Act authorizes local governments to adopt rules and restrictions governing the administration of agricultural preserves and to ensure that the land within the preserve is maintained for agricultural, open space or other compatible uses.[10] Local rules regarding compatible uses must be consistent with the principles set forth in Section 51238.1, discussed in detail below.[11]

Once an agricultural preserve is established, the local agency may offer to owners of agricultural land within the preserve the opportunity to enter into annually-renewable Williamson Act contracts that restrict the land to agricultural uses and compatible uses for at least ten years.[12] The contract “may provide for restrictions, terms, and conditions, including payments and fees, more restrictive than or in addition to those required by” the Act.[13] Every contract must exclude uses that are not agricultural and that are not compatible with agricultural uses, and this exclusion must remain in effect for the duration of the contract.[14]

The Act’s Legislative History of Compatible Uses

As initially chaptered in 1965, the Williamson Act allowed the city or county to determine what was a “compatible use,” but also provided that the following were recognized as compatible uses by statute: “the erection, construction, alteration, or maintenance of gas, electric, water, or communication utility facilities, unless the governing board makes a finding after notice and hearing that any or all such facilities are not a compatible use.”[15]

At the same time, the Legislature defined “agricultural preserve” to mean “an area devoted to agricultural and compatible uses as designated by a city or county….”[16] In 1978, AB 1625 removed “compatible uses” from the “agricultural preserve” definition, thereby requiring that agricultural preserves be established solely on the basis of the agricultural, open space or recreational use of the land in question, and not based upon a compatible use.[17] The apparent concern was that some jurisdictions were establishing agricultural preserves on properties where only a compatible use, as defined by the jurisdiction, was occurring.  AB 1625 provided that once a proper agricultural preserve was established, in addition to the Legislatively-defined compatible uses, the city or county may then enumerate the compatible uses that will be permitted within the preserve.[18] Thus, compatible uses were allowed to exist within a preserve, but could not serve as the basis for the formation of the preserve.

Apparently, there was a concern that cities and counties were allowing “compatible uses” beyond those identified in the Act, which some believed were not consistent with the agricultural and open space preservation goals of the Act.  In response, the Legislature adopted AB 2663 in 1994, which required that if a city or county allows compatible uses in agricultural preserve beyond those expressly identified by the Act, those uses normally must be consistent with the three “principles of compatibility” enumerated in Williamson Act Section 51238.1 (added by AB 2663, and explained in more detail below).

Legislative History of Electric Facilities as Compatible Uses

In 1969, AB 1178 modified the “compatible use” definition of Section 51201(e) and renumbered it to new Section 51238:

Notwithstanding any determination of compatible uses by the county or city pursuant to this article, unless the board or council after notice and hearing makes a finding to the contrary, the erection, construction, alteration, or maintenance of gas, electric, water, or communication utility facilities are hereby determined to be compatible uses within any agricultural preserve.  No land occupied by gas, electric, water, or communication utility facilities shall be excluded from an agricultural preserve by reason of said use.[19]

In 1991 and 1992, the California Department of Conservation introduced legislation that would have replaced Section 51238 with provisions that would require a local agency to submit any draft adopted or amended compatible use ordinance to the Department for review and comment regarding its compliance with new principles of compatibility set forth in new Section 51238.1.[20] Notwithstanding these limitations, proposed new Section 51238.2 essentially replicated the statutorily-enumerated compatible uses from 1969’s AB 1178, thereby underscoring the Department’s recognition that the statutorily-enumerated compatible uses such as electric facilities were not subject to any principles of compatibility.[21] Also noteworthy is that during the amendment process, there was an attempt to limit Section 51238 to facilities related to the transmission of gas, electric, water and communication services, but that attempt was withdrawn, and there remains no qualifier that the uses in Section 51238 be limited to transmission facilities.  Both bills died on November 30, 1992.[22]

AB 2663[23] went through six versions before it was signed into law in 1994, and established the current relevant provisions of compatible use law, including the three “principles of compatibility” in new Section 51238.1.  Each version of the bill contained a provision maintaining the statutory compatible use status of electrical facilities.  The last amended version[24] of AB 2663 also introduced the separate compatibility standards for non-prime lands[25] that was the compromise that made passage of the bill possible.  In addition, the final bill included uncodified intent language (Section 8) stating that “the goal of preserving the maximum amount of non-prime agricultural land can be met by allowing other compatible uses, in compliance with Section 51238.1(c) … that sustain the economic viability of these lands while maintaining their open space quality.”

In 1999, AB 1505 renumbered the subparagraphs of Section 51238 into (a)(1), (a)(2), and (b), reflecting its current structure.[26]

Application of the Act’s Current Compatible Use Provisions to Electric Facilities

Section 51201(e)[27] expressly recognizes that a compatible use may be either established: (1) by a city or county, so long as it meets the Act’s compatible use parameters; or (2) by the Act itself, including agricultural, open space, or recreational uses, and those uses identified in Section 51238(a)(1), which identifies electric facilities as statutory compatible uses.[28] As reflected in the legislative history, statutory compatible uses such as electric facilities are separate from, and are not subject to, the separate “principles of compatibility” set forth in Section 51238.1.

An interesting issue arises if the city council or county board of supervisors determines at a noticed public hearing that electric facilities are not “by law” compatible uses, as provided in Section 51238(a)(1).  The authors are unaware of any local legislative body that has made such a determination, thus there is no case study available regarding the character of such an action.  If the local body determined that all electric facilities were prohibited and therefore expressly not compatible uses, then one might assume that local agency would then refuse to apply the principles of compatibility to an individual electric facility project.  Even if that local agency applied the principles of compatibility, it is unlikely that the agency would determine that the project was compatible.  The legality of a local agency’s categorical prohibition against electric facilities is dubious in light of the Williamson Act’s express recognition of electric facilities as compatible uses since the inception of the Act.  The better practice, assuming that the local agency made the “contrary finding” to accepting electric facilities as “by law” compatible uses, is to provide the agency with the ability to review new applications on a case-by-case basis while applying the principles of compatibility to that application.  This provides the local government with the necessary flexibility to consider and approve projects that the agency determines is compatible with the Williamson Act and beneficial to the community.[29]

Under Section 51238.1,[30] the typical analysis is to first determine if the use is consistent with the three principles of compatibility set forth in subsection (a) of Section 51238.1; if so, that ends the inquiry.  If the use does not satisfy subsection (a), the next level of analysis is to determine whether conditions could be imposed on the use in order to make it comply, as provided in subsection (b).  If the use cannot be considered a compatible use after applying subsections (a) and (b), and if the use is located on non-prime land, then the final step in the analysis is to determine whether or not the use complies with the requirements of subsection (c).  Compatibility determinations pursuant to Section 51238.1 must be made on a case-by-case basis.

Electric Facilities, Including Solar Projects, Should be Recognized as Statutory Compatible Uses

Despite the Act’s clear recognition of electric facilities as compatible uses, state and local agencies have historically ignored Section 51238 and have focused, if at all, on the separate compatibility requirements of Section 51238.1.  Concerned that the facility may displace existing agricultural activities, the agencies have usually determined that the use is not compatible with the Act, and have required that the Williamson Act contract be cancelled as to that area of the contracted property covered by the proposed development.  Knowing this, many energy developers have initiated cancellation proceedings without further inquiry.  Cancellation is not a simple process, and it should only be used for “extraordinary situations.”[31] It requires that specific findings be made by the board of supervisors following a noticed public hearing, and involves an increasingly complex process for determining the unrestricted value of the property at issue, upon which the contracting owner must pay 12.5% of that value to the state General Fund.[32]

Instead of continuing the unwarranted practice of avoiding Section 51238, state and local agencies should follow the letter of the law.  If those agencies refuse to do so, a legislative remedy may be necessary, including amending the Act to expressly define “electric facilities” (not defined in the Act) to include solar power facilities, and to limit a local agency’s ability to prohibit the construction of electric facilities on Williamson Act property.

Preservation of agricultural land still remains an important statewide goal, but the realities of the current environmental and economic climate require that the production of renewable energy facilities not play a subservient role.  Some counties are seeking ways to remove themselves from the Act as the budget crises has severely reduced State subvention payments to local agencies for administering the Act.  These local agencies may see a brighter future through increased renewable energy development, and should take the steps necessary to make it a reality.

ENDNOTES


[1] Michael Patrick Durkee is Co-Chair of Allen Matkins’ California Land Use Practice.  He is a resident in the firm’s Walnut Creek office, where he focuses his practice on land use, elections, and local government law in both administrative and judicial proceedings.  He can be reached at mdurkee@allenmatkins.com.

David H. Blackwell is a partner in Allen Matkins’ Walnut Creek office where he practices real estate law with an emphasis on land use entitlements and litigation.  He can be reached at dblackwell@allenmatkins.com.

[2] Also known as the California Land Conservation Act of 1965.  Gov. Code § 51200.

[3] All statutory references are to the California Government Code unless otherwise noted.

[4] Dorcich v. Johnson (1980) 110 Cal.App.3d 487, 492.

[5] Id.

[6] Id.

[7] Honey Springs Homeowners Ass’n v. Board of Supervisors (1984) 157 Cal.App.3d 1122, 1130.

[8] § 51230.

[9] Id.

[10] § 51231.

[11] Id.

[12] §§ 51240, 51242, 51244.

[13] § 51240.

[14] § 51243(a).

[15] § 50201(e), Ch. 1443, p. 3378 (1965 Regular Session).

[16] § 50201(d), Ch. 1443, p. 3377 (1965 Regular Session).

[17] Ch. 1120, p. 3426 (1977-78 Regular Session).

[18] § 51231.

[19] AB 1178, Ch. 1372, p. 2809 (1969 Regular Session).

[20] AB 1770, AB 3406 (1991-1992 Regular Session).

[21] Id.

[22] Id.

[23] Ch. 1251 (1994 Regular Session).

[24] August 25, 1994.

[25] § 51238.1(c).

[26] Ch. 967 (1999 Regular Session).

[27] § 51201(e):  “Compatible use” is any use determined by the county or city administering the preserve pursuant to Section 51231, 51238 or 51238.1 or by this act to be compatible with the agricultural, recreational, or open-space use of land within the preserve and subject to contract.  “Compatible use” includes agricultural use, recreational use, or open-space use unless the board or council finds after notice and hearing that the use is not compatible with the agricultural, recreational or open-space use to which the land is restricted by contract pursuant to this chapter.  (Underscoring added.)

[28] § 51238(a)(1):  Notwithstanding any determination of compatible uses by the county or city pursuant to this article, unless the board or council after notice and hearing makes a finding to the contrary, the erection, construction, alteration, or maintenance of gas, electric, water, communication and agricultural laborer housing facilities are hereby determined to be compatible uses within any agricultural preserve.

(2)  No land occupied by gas, electric, water, communication, or agricultural laborer housing facilities shall be excluded from an agricultural preserve by reason of that use.

(b)  The board of supervisors may impose conditions on lands or land uses to be placed within preserves to permit and encourage compatible uses in conformity with Section 51238.1, particularly public outdoor recreational uses.  (Underscoring added.)

[29] Section 51238(b), for example, allows the legislative body to “impose conditions on lands or land uses to be placed within preserves to permit and encourage compatible uses in conformity with Section 51238.1….”

[30] § 51238.1(a):  Uses approved on contracted lands shall be consistent with all of the following principles of compatibility:

(1)  The use will not significantly compromise the long-term productive agricultural capability of the subject contracted parcel or parcels or on other contracted lands in agricultural preserves.

(2)  The use will not significantly displace or impair current or reasonably foreseeable agricultural operations on the subject contracted parcel or parcels or on other contracted lands in agricultural preserves.  Uses that significantly displace agricultural operations on the subject contracted parcel or parcels may be deemed compatible if they relate directly to the production of commercial agricultural products on the subject contracted parcel or parcels or neighboring lands, including activities such as harvesting, processing, or shipping.

(3)  The use will not result in the significant removal of adjacent contracted land from agricultural or open-space use.

In evaluating compatibility a board or council shall consider the impacts on noncontracted lands in the agricultural preserve or preserves.

(b)  A board or council may include in its compatible use rules or ordinance conditional uses which, without conditions or mitigations, would not be in compliance with this section.  These conditional uses shall conform to the principles of compatibility set forth in subdivision (a) or, for nonprime lands only, satisfy the requirements of subdivision (c).

(c)  In applying the criteria pursuant to subdivision (a), the board or council may approve a use on nonprime land which, because of onsite or offsite impacts, would not be in compliance with paragraphs (1) and (2) of subdivision (a), provided the use is approved pursuant to a conditional use permit that shall set forth findings, based on substantial evidence in the record, demonstrating the following:

(1)  Conditions have been required for, or incorporated into, the use that mitigate or avoid those onsite and offsite impacts so as to make the use consistent with the principles set forth in paragraphs (1) and (2) of subdivision (a) to the greatest extent possible while maintaining the purpose of the use.

(2)  The productive capability of the subject land has been considered as well as the extent to which the use may displace or impair agricultural operations.

(3)  The use is consistent with the purposes of this chapter to preserve agricultural and open-space land or supports the continuation of agricultural uses, as defined in Section 51205, or the use or conservation of natural resources, on the subject parcel or on other parcels in the agricultural preserve.  The use of mineral resources shall comply with Section 51238.2.

(4)  The use does not include a residential subdivision.

For the purposes of this section, a board or council may define nonprime land as land not defined as “prime agricultural land” pursuant to subdivision (c) of Section 51201 or as land not classified as “agricultural land” pursuant to subdivision (a) of Section 21060.1 of the Public Resources Code.

Nothing in this section shall be construed to overrule, rescind, or modify the requirements contained in Sections 51230 and 51238 related to noncontracted lands within agricultural preserves.  (Underscoring added.)

[31] Sierra Club v. City of Hayward (1981) 28 Cal.3d 840.

[32] §§ 51280-51287.

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