Gov. Newsom Signs SB 539, Clarifying Proposition 19 Implementation
In November of 2020, California voters approved Proposition 19, a Constitutional amendment intended in part to limit tax benefits for children and grandchildren who do not use inherited property as their primary residence (using it instead, for instance, as vacation or rental property). In addition to “family homes,” Prop. 19 also impacted how property taxes are assessed on transferred “family farms.” The intergenerational transfer provisions of Prop. 19 went into effect on February 16 – even as many aspects of the law remained ambiguous.
On Thursday, Governor Gavin Newsom signed Senate Bill 539 (Hertzberg), a law which seeks to clarify previously-ambiguous provisions of Prop. 19. Most importantly for California’s ranchers, the law clarifies what constitutes a “family farm.”
For parent-child and grandparent-grandchild transfers of a primary residence or the “family farm,” Prop.19 required an upward adjustment in the transferee’s property tax assessment if the assessed value of the primary residence or “family farm” is greater than the factored base year value, or taxable value, plus $1 million. Unfortunately, Prop. 19 did not define what constitutes the “family farm,” leaving a great deal of uncertainty as to how the proposition would impact ranching families. As explained in a February CCA webinar about Prop. 19, if “family farm” were defined broadly as all transferred agricultural lands, the tax implications could be devastating for ranching families; on the other hand, if “family farm” were defined on a smaller scale – such as at the parcel level – Prop. 19 could result in tax savings compared to prior law for a transferor inheriting multiple parcels.
Fortunately, SB 539 designates “each legal parcel” as a “family farm” for assessment purposes under Prop. 19, presenting the best-case scenario for ranchers impacted by the Constitutional amendment. The bill also clarifies that a “family home” and a “family farm” parcel upon which the family home is located are eligible for individual exclusions from property tax reassessment under Prop. 19.
If the Howard Jarvis Taxpayers Association has its way, this change in the law may be short-lived: that organization has proposed an initiative for the 2022 ballot which would eliminate many of Prop. 19’s provisions relating to intergenerational transfers, reverting back to the law as it existed prior to Prop. 19 (the initiative would also increase the value of real property other than the transferor’s principal residence which is exempt from reassessment from $1 million to $2.4 million).
USDA Announces $3 Billion Investment in Agriculture, Animal Health and Nutrition and New Climate Partnership Initiative
On Wednesday, United States Department of Agriculture (USDA) Secretary Tom Vilsack announced an extensive set of investments to address ongoing agricultural challenges nationwide. The investments include assistance to address challenges and costs associated with drought, animal health and market disruptions for agricultural commodities.
The funds from the investment package will be coming from the Commodity Credit Corporation. The funds include $500 million to support drought recovery and encourage efficient water management practices and $500 million for agricultural market disruption relief, among other priorities. The drought relief package will likely focus on the impacts of the drought on ranchers, including loss of hay for cattle and other losses that ranchers have had to mitigate due to the drought. In light of the COVID-19 crisis and the lowered economy, the market disruption relief will likely focus on challenges such as transportation and availability of materials.
These funds and the resulting programs are aimed at complementing USDA COVID-19 relief programs already in existence, such as the Department’s Pandemic Assistance for Producers initiative and the Build Back Better initiative, to provide further relief to producers during multiple ongoing crises.
Secretary Vilsack also announced the Climate Partnership Initiative to promote environmentally friendly agricultural practices, and USDA has stated that the initiative will support pilot projects that provide incentives to implement sustainable conservation practices on working lands.
USDA has published a Request for Information for public comment on the structure of the new initiative. Comments can be provided here by 11:59 p.m. EST on November 1. Comments are encouraged from farmer organizations and livestock producer groups, and CCA will partner with other organizations to ensure that rancher interests are included in the initiative process.
RFPs for Grazing Lease on Bobcat Ranch Being Accepted
The Bobcat Ranch in Winters, Calif., owned by Audubon California, is currently accepting requests for proposals (RFP) for a grazing lease of 3,640-acres. The lease will be for one-season and is expected to begin at the start of January and last up to June 1, 2022.
“In recent years, the Ranch has supported 175-250 cow-calf pairs for 6-8 months,” the announcement for the RFP states. “Due to extreme drought and fire conditions, Bobcat Ranch is being offered primarily as winter/spring ‘finishing’ grounds, and may be better suited to stocker-steer operations.”
Click here to download a PDF document with full details about the RFP and the process for applying. Any questions regarding the RFP can be sent to firstname.lastname@example.org.
Virtual AB 589 Water Measurement and Reporting Course Scheduled for Nov. 4
The University of California Cooperative Extension (UCCE) has announced that it will offer a virtual water measurement and reporting course as authorized by CCA-sponsored Assembly Bill 589 (2017) on Thursday, November 4 from 9:00am-12:30pm. Those interested in attending the virtual course can pre-register and pay for the course here. It is likely the last training being held in 2021, so early pre-registration is encouraged.
Senate Bill 88 (2015) requires all water right holders who divert more than 10 acre-feet of water per year to annually measure and report their water diversion (detailed information on the regulatory requirements is available here). As originally written, the legislation required diverters of 100-acre feet or more annually to have a measuring device installed and certified by an engineer, contractor or other professional. AB 589 amended that require by allowing any diverter who has successfully completed a UCCE instructional course to be considered a qualified individual when installing a measurement device.
At the workshop you will: clarify reporting requirements for ranches; understand what meters are appropriate for different situations; learn how to determine measurement equipment accuracy; develop an understanding of measurement weirs; and learn how to calculate and report volume from flow data.
Should you have any questions about this training, please contact Larry Forero at email@example.com or Sara Jaimes at firstname.lastname@example.org, or call the Shasta UCCE office at (530) 224-4900.
CCA Wraps Up Wildfire Risk Management Education Series; Recordings Available
Last week, CCA held its fifth and final workshop on Wildfire Risk Management under a grant provided by the Western Extension Risk Management Education Center and USDA’s National Institute of Food and Agriculture. The series covered topics including federal relief and recovery programs, pre-fire precautions and prevention efforts for ranchers to employ, emergency ranch access and livestock evacuation, considerations for federal lands permittees and information on prescribed fire.
All workshops were recorded in hopes they could inform producers not able to join the live events. A YouTube playlist of all five workshops is available at CCA’s YouTube channel, here.
Based on content from these workshops and the input of other fire experts, CCA is currently working on a Ranchers Wildfire Handbook which can act as a resource before, during and after a wildfire. CCA will notify ranchers via Legislative Bulletin when that resource becomes available on the CCA Website.
SWRCB Updates Lower Russian River Curtailment Order
On Friday the State Water Resources Control Board (SWRCB) updated the curtailment status of certain water rightsholders in the Lower Russian River watershed due to evaluations of water demand for October.
Information on your curtailment status for the Lower Russian River watershed can be found on the SWRCB Russian River Drought website. If your curtailment status has been updated, there may be water available for diversion. Make sure to comply with the specifications provided for your water right.
If you have any questions about curtailment orders, please contact Victoria Rodriguez at the California Cattlemen’s Foundation at (916) 444-0845.
CCA Calls on Governor to Authorize Emergency Livestock Grazing on State Lands
Late last month, CCA sent a letter to California Governor Gavin Newsom asking that he authorize emergency livestock grazing on state-owned lands to mitigate the drought-induced feed shortage confronting California’s livestock producers.
Specifically, the letter asks that the Governor “direct the California Natural Resources Agency (CNRA) to evaluate grazing grounds and livestock feed opportunities that could be made available on state-owned and -managed lands where those activities are consistent with the ecological needs of those lands.”
On August 15, the Western Governors Association wrote to President Biden asking that he declare a FEMA drought disaster throughout the west, allowing western states to access additional resources to address the drought crisis. In the letter signed by Governor Newsom, Governors of western states also asked that President Biden direct the Secretaries of Agriculture and Interior to “evaluate grazing grounds and livestock feed opportunities that could be made available for emergency situations where lands can support the additional use” to help alleviate drought impacts on agricultural producers.
CCA’s letter to Governor Newsom simply asks him to take the very action on state-owned lands that he has advocated on federally managed public lands.
While CCA’s letter calls for emergency (that is, temporary) access to livestock forage on state-owned lands, CCA continues to advocate policies to permanently expand livestock grazing on state-owned lands as an ecologically sound land management tool. For instance, CCA has sponsored Assembly Bill 434 (R. Rivas), which will be considered during the 2022 Legislative Session.
CCA will continue to press the Governor, CNRA and the California Department of Food & Agriculture to take swift action to mitigate the drought’s impacts on California ranchers and will keep members apprised of any developments on this front.
SWRCB Releases Lists of Non-Compliant Water Users for Sacramento-San Joaquin Delta Watersheds
On September 24, the State Water Resources Control Board (SWRCB) issued two lists of rightsholders in non-compliance with the August 20 emergency curtailment regulation that curtailed thousands of water rights in the Sacramento-San Joaquin Delta watershed.
The emergency regulation required recipients to submit a Compliance Certification Form for all their water rights or claims of right by September 10, regardless of their curtailment status. Additionally, the emergency regulation required water rightsholders whose diversions in 2018 or 2019 had a face value or reported diversion of 5,000 acre-feet or more to submit enhanced reporting information monthly. The first enhanced reporting forms were due September 17.
As of September 23, Delta Watershed Compliance Certification Forms have not been submitted for the water rights and claims listed here. These rightsholders are officially considered out of compliance.
Also as of Thursday, September Enhanced Reporting of Prior Diversions and Projected Demands Forms for water rights of 5,000 acre-feet or more have not been submitted for the rights listed here.
CCA encourages all ranchers in the Sacramento-San Joaquin Delta watershed to review the non-compliance list and to take corrective action if your name or diversion appears on the list.
Failure to submit a Compliance Certification Form is a violation of the regulation and violators may be subject to enforcement action, including an Administrative Civil Liability Complaint that has potential fines of up to $500 per day per water right for each day of non-compliance. You can submit each form online on the Water Rights Form and Survey Submittal Portal with the login information provided on the curtailment order you received in the mail. Tutorials for completing the Compliance Certification Form and Monthly Enhanced Reporting Forms are available on the Delta Drought webpage under the “Reporting Requirements and Resources” tab.
For assistance completing the Compliance Certification forms, ranchers may contact the Rancher Technical Assistance Program at (916) 406-6902 or email@example.com. Any questions may also be directed to Bay-Delta@waterboards.ca.gov or the Delta Drought phone line at (916) 319-0960.
LAST CALL: Oct. 12 is the Deadline for CFAP 2
Earlier this year, The United States Department of Agriculture’s Farm Service Agency (FSA) announced that October 12 is the deadline by which all eligible agricultural producers must apply for or modify their applications under Round 2 of the Coronavirus Food Assistance Program (“CFAP 2”).
As previously reported in Legislative Bulletin
, FSA reopened applications under CFAP beginning April 5. CFAP 2 provides payments of $55 per head for a producer’s highest inventory of eligible livestock owned between April 16 and August 31, 2020. Cull cattle and breeding stock are ineligible for the per-head payment. More information on CFAP 2 can be found here
Stories from California Cattle Country Podcast Launches
The California Cattle Council and the California Cattlemen’s Foundation have launched Stories from California Cattle Country—a new podcast that takes listeners to some of the most beautiful parts of this diverse state to learn more about the people and practices of ranches and dairies. Follow our host, Ryan as he darts around the state meeting cattle ranchers and dairy farmers learning about the animals and land they care for everyday.
The podcast’s first episode is from Koopmann Ranch in Sunol, California. In the episode, Tim Koopmann a third generation rancher discusses how Koopmann Ranch has been sustained for over 100 years while navigating the federal inheritance tax and how a small salamander among other vulnerable species helped save his ranch from insolvency. Later on the episode, Tim’s son and daughter-in-law, Clayton & Natalie Koopmann discuss the future of the ranch and their newly formed retail operation.
To listen now, search “Stories from California Cattle Country” on your preferred platform for streaming podcast episodes or click on one of the following links to go straight to it: Apple Podcasts, Google Podcasts and Spotify.