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Committee advances SB 5 to prevent tax‑increment financing from subsidizing development on lands under Williamson Act contracts
Summary
The Assembly Local Government Committee voted to advance SB 5, which would bar enhanced infrastructure financing districts and similar tax‑increment mechanisms from using tax increment derived from parcels under Williamson Act farmland contracts until those parcels have been formally released and rezoned.
The Assembly Local Government Committee advanced SB 5, a measure intended to close a financing loophole that can allow tax‑increment infrastructure districts to capture revenues on parcels that remain protected by Williamson Act farmland contracts.
The sponsor said the bill protects the integrity of the Williamson Act, the state’s principal farmland conservation program, by ensuring parcels under active agricultural contracts or farmland security zones cannot be included in enhanced infrastructure financing districts (EIFDs) or community revitalization and investment areas (CRIAs) for tax‑increment allocations until contracts are cancelled and lands are rezoned for non‑agricultural use. Jordan Grimes of Greenbelt Alliance and Daniel Jones of the California Farm Bureau urged the committee to support SB 5. Grimes said EIFDs should not be able to leverage “artificially low property tax assessments created through conservation incentives to subsidize infrastructure for future development.”
Supporters argued the change prevents a double subsidy—first via reduced tax assessments to support farmland preservation and then via public investment to subsidize development that undermines that preservation. Opponents were limited; the California Building Industry Association registered opposition but said it was engaged in negotiation with the author. Committee members asked for clarification on mechanics and whether included parcels could be added in future assessment cycles if a contract is cancelled; the author and supporters confirmed the bill permits inclusion only after cancellation or rezoning and in a later assessment cycle, preserving local flexibility while protecting farmland.
The committee voted to move SB 5 forward (motion: do pass). Supporters said the bill balances farmland conservation with responsible use of tax‑increment financing tools and maintains flexibility if landowners and local governments decide to release contracted land for redevelopment.
Why it matters: The bill protects agricultural lands enrolled in the Williamson Act from being used as a vehicle to capture public infrastructure funding for development, addressing concerns that conservation contracts could be indirectly undermined by financing structures.
