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Item No. 2 PC: 4-9-92 GP-89-11 Page 5 WILLIAMSON ACT CONTRACT CANCELLATIONS: Approximately 70 percent, or 3243 acres, of the land within the project is under Williamson Act Contract. Of this total, 2920 acres of contracted land is under the applicant's control. This fact has important implications for the project, especially as it relates to phasing. Under the Williamson Act, a landowner may enter into a contract with the County to limit the use of his land to an agricultural (or open space) use for a period of at least ten years. In return, the land is given preferential tax treatment. Normally, this results in a lowering of taxes, since property taxes on the contracted land are assessed based on actual agricultural use rather than on market value. If the landowner wishes to terminate the contract on his property, he may either issue a Notice of Nonrenewal or apply for contract cancellation. Under a Notice of Nonrenewal, the period of time before the contract expires is lengthy - nine years. During this time, conversion of the land to a nonagricultural use is delayed until the end of the nine-year phaseout of the contract. Cancellation provides a more immediate termination of the contract than the Notice of Nonrenewal process, although it is often a difficult process. Approval of the cancellation is made by the Board of Supervisors after conducting a public hearing on the matter. To approve the cancellation,the Board must find either that the cancellation is'consistent with the purposes of the Williamson Act'or that'cancellation is in the public interest.' Consistency with the Williamson Act requires the following general findings to be made by the Board: 1. Cancellation is for land on which a Notice of Nonrenewal has been served. 2. An alternative use is specified which is consistent with the General Plan. 3. The removal of adjacent lands from agriculture is not likely to result. 4. Discontinuous urban development will not result. 5. There is no nearby non-contracted land available for the alternative use. The Board will base its decision on whether or not to approve the cancellation based upon all of the evidence before it. If the Board approves the cancellation request, the applicant must satisfy specified conditions and contingencies that are deemed necessary to begin the project and pay the cancellation penalty (equal to 12.5 percent of the current market value of the land) before the cancellation of the contract is finalized. If the cancellation penalty is not paid within a year of the Board's approval of the cancellation request, the fee is recomputed. As noted above, the project has a substantial amount of acreage under contract. As part of the cancellation request, Notices of Nonrenewal on all 2920 acres under the project proponent's control have been filed. Even if contract cancellation is not pursued by the project proponents or granted by the Board of Supervisors, the Notices of Nonrenewal themselves would result in the expiration of the contracts in either 1998 or 1999. The project proponents have indicated, however, that they wish to pursue cancellation on all 2920 acres to afford them maximum flexibility in determining where they wish to begin Phase I development. Action on the cancellation request would be expected to occur after approval of