Merced County Municipal Code Ch. 9.30 Agricultural Mitigation

The purpose of this chapter is to implement the agricultural land conservation policies contained in the Merced County general plan related to permanently protecting agricultural land within the county. The intent of this chapter is specified as follows:

A. Agricultural Resource Protection. It is the intent of the board of supervisors that the valuable agricultural resources of the county be preserved and protected to the extent possible while recognizing the need for accommodating population growth and economic diversification in the county, and that it is within the county's police power to regulate the use of land to protect and promote the public health, safety, and welfare of its residents, as recognized by Article XI, Section 7 of the California Constitution.

B. Intergovernmental Coordination. It is the policy of Merced County to work cooperatively with the cities within the county and with the Local Agency Formation Commission of Merced County (LAFCO), and to encourage them to adopt agricultural preservation policies and ordinances which are consistent with this chapter in order to undertake an integrated, comprehensive countywide approach to preservation. It is the ultimate goal of the county that all six cities and LAFCO participate in or adopt an agricultural mitigation ordinance that is the same as or substantially similar to the ordinance codified in this chapter.

(Ord. 1943 § 2, 2016)

The following words and phrases, as used in this chapter, are defined as follows:

"Adjustment for inflation"

means for costs other than the purchase price of agricultural easements, adjustment for inflation refers to adjustment to reflect increases in the Consumer Price Index applicable to Merced County. For the purchase price of agricultural easements, adjustment for inflation refers to adjustment to reflect increases in the House Price Index applicable to Merced County, as compiled by the Office of Federal Housing Enterprise Oversight.

"Agricultural designation"

means the "Agricultural" and "Foothill Pasture" designations as identified in the 2030 Merced County General Plan Land Use Diagram.

"Agricultural easement"

means a perpetual easement or servitude, comparable to a conservation easement, as provided for in Sections 815 to 816 of the Civil Code, or an open space easement, provided for in Sections 51070 to 51097 of the Government Code, limiting the use of the encumbered land to agricultural and accessory uses, which easement or servitude is used to satisfy the mitigation obligation imposed by this chapter.

"Agricultural land"

means land that is either currently in agricultural use or substantially undeveloped and capable of agricultural use.

"Agricultural use"

means use of land to produce food, fiber, or livestock for commercial purposes.

"Agricultural zone"

means the A-1 (General Agricultural), A-1-40 (General Agricultural), and A-2 (Exclusive Agricultural) Zones as identified in the Merced County Zoning Code (Title 18).

"Applicant"

means the project proponent who applied for the land use entitlement leading to the conversion of agricultural land subject to mitigation.

"CEQA"

means the California Environmental Quality Act, Section 21000 et seq., of the California Public Resources Code and the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, Section 15000 et seq.

"Conversion"

means those conversions of land requiring mitigation as identified in Section 9.30.030(A).

"Discretionary application"

means when the act of permitting a project involves the judgment of a government official or governing body, such as for an administrative or a conditional use permit.

"Equivalent agricultural land"

means land encumbered by an agricultural easement or under an alternative mitigation option that contains the same agricultural soil quality, or combination of soil quality, as the soil quality of the land subject to conversion. Such equivalent agricultural land would meet the definition of "productive agricultural land" defined herein.

"Legal parcel"

means a parcel of land lawfully subdivided in accordance with the Subdivision Map Act, whether or not a certificate of compliance has been issued for the parcel. The existence of a distinct Assessor's Parcel Number for a parcel does not, by itself, demonstrate that it is a legal parcel.

"Legislative body"

means the Merced County board of supervisors.

"Mitigation land"

means land encumbered by an agricultural easement or under an alternative mitigation option approved by the legislative body pursuant to Section 9.30.040 to satisfy the mitigation obligation imposed by this chapter.

"Productive agricultural land"

means land designated "Prime Farmland," "Farmland of Statewide Importance," and "Unique Farmland" by the State Department of Conservation as shown on their latest Important Farmland Map, prepared in accordance with the Farmland Mapping and Monitoring Program.

"Qualified entity"

means an entity qualified and approved to hold agricultural easements in compliance with Section 9.30.060 of this chapter.

(Ord. 1943 § 2, 2016)

A. Conversion of Land Requiring Mitigation. Each of the following actions shall require mitigation as described in subsection B:

1. A general plan amendment that changes the designation of any land from an agricultural designation to a non-agricultural land use designation.

2. Rezoning of land in an agricultural zone to any zone other than an agricultural zone.

3. Conversion to a non-agricultural or non-agricultural related use of any productive agricultural land with an agricultural designation or zoning as the result of approval of a discretionary application.

4. Conversion of agricultural land within the boundary of a community plan where the county previously required mitigation through a certified environmental impact report.

B. Required Mitigation.

1. As mitigation for the conversion of productive agricultural land, the applicant shall arrange for the imposition of an agricultural conservation easement on no less than one acre of mitigation land for each acre of land proposed for conversion. The applicant shall convey, or arrange for the conveyance of, such agricultural easement to a qualified entity. The mitigation land shall be of equivalent quality to the land proposed for conversion, as provided in section 9.30.050.

2. For purposes of calculating the mitigation obligation under subsection (B)(1), the area requiring mitigation shall be the area of the parcel or parcels being converted that contains productive agricultural land.

3. At its sole option, an applicant may choose to arrange for the imposition of an agricultural easement on a larger area of land than the area of land proposed for conversion. However, this option would not result in any mitigation credit acknowledged or accepted by the county.

4. Administrative Fee.

a. The applicant shall pay to the qualified entity an administrative fee sufficient to compensate for all administrative costs incurred by the entity in acquiring and holding the agricultural easement, including all of the following:

i. Establishment of an endowment to provide for monitoring, administration, enforcement, and all other services necessary to ensure that the conservation purposes of the agricultural easement are maintained in perpetuity;

ii. The qualified entity's administrative costs in evaluating the mitigation land and reviewing and accepting the agricultural easement; and

iii. Merced County's administrative costs in reviewing and approving the applicant's proposed mitigation.

b. Establishment of the Administrative Fee.

i. Merced County shall conduct a study to estimate the amount of the administrative fee components provided for in subsection (B)(4)(a). Such study shall be prepared in consultation with a qualified entity on a case by case basis unless the qualified entity provides sufficient evidence to justify their administrative fee, or unless the board has previously adopted the resolution provided for in subsection (B)(4)(b)(ii).

ii. As an alternative to case-by-case establishment of the administrative fee, the legislative body may adopt a resolution establishing a generally applicable per-acre administrative fee. Such generally applicable fee shall include an annual adjustment for inflation.

c. After receiving the administrative fee, Merced County shall remit the portions described in subsection (B)(4)(a) to the qualified entity holding the agricultural easement. Alternatively, the administrative fee may be paid directly by the applicant to the qualified entity.

5. It is the applicant's responsibility to identify and propose for approval mitigation land that satisfies the requirements of Section 9.30.050(B). It is also the applicant's responsibility to arrange for imposition of an agricultural easement that satisfies the requirements of Section 9.30.050(C). The applicant may utilize the assistance of a qualified entity in the identification of qualifying mitigation land and in the implementation of the agricultural easement.

6. Nothing in this chapter shall be construed to compel an applicant for conversion to convey to Merced County or to a qualified entity an agricultural easement in property owned by the applicant.

C. Exemptions.

1. Small Parcels.

a. The mitigation obligation set forth in subsection B shall not apply to a legal parcel that is less than five acres in area. However, this exemption shall not apply to a parcel that is one phase or portion of a larger project or where the impact to agricultural resources was identified as a significant impact in the environmental document prepared for the project.

b. The legislative body may disallow use of this exemption if it finds that the subject property has been subdivided into five-acre or smaller parcels in whole or in part to avoid the mitigation obligation.

2. Public Uses. The following public uses are exempt from the mitigation obligation imposed by this chapter: public facilities such as fire stations, public parks or public recreational facilities, permanent natural open space, and trails and developed open space that is open to the public. However, public parks dedicated as part of a residential subdivision project in compliance with Chapter 17.44 of the Merced County Code are not exempt from the mitigation obligation.

3. Habitat Conservation. Projects designed solely to preserve, create, or enhance wildlife habitat on agricultural land shall be exempt from the mitigation obligation in subsection B.

(Ord. 1943 § 2, 2016)

As an alternative to providing the mitigation required by Section 9.30.030(B), the applicant may choose to seek approval to implement one of the following alternative mitigation options.

A. In-Lieu Fee. An applicant for conversion may satisfy the mitigation obligation set forth in Section 9.30.030(B) by paying to a qualified entity a fee in lieu of conveying an agricultural easement. If a qualified entity is unwilling or unable to accept the in-lieu fee and acquire an agricultural easement, the in-lieu fee may be paid to Merced County.

B. Establishment of In-Lieu Fees.

1. The county shall establish the amount of in-lieu fees on a case-by-case basis unless the applicant for conversion has reached agreement on the fee amount with a qualified entity, or unless the county has previously adopted the resolution provided for in subsection (B)(5).

2. Any in-lieu fee shall include each of the following components:

a. The purchase price of an agricultural easement in mitigation land that complies with all of the requirements in Section 9.30.050. This component shall be adjusted for inflation based on estimate of the time required to acquire mitigation land following payment of the fee.

b. All transaction costs associated with acquisition of the agricultural easement.

c. An amount sufficient to endow the cost of monitoring, administering, and enforcing the agricultural easement in perpetuity.

d. The applicant's pro rata share of Merced County's administrative costs in implementing the in-lieu fee program, including the cost of the study prepared in accordance with subsection (B)(3).

e. A reasonable amount to cover additional contingencies.

3. Study. Merced County may conduct a study to estimate the amount of the in-lieu fee components provided for in subsection (B)(2). Such study shall be prepared in consultation with a qualified entity.

4. In no event shall the in-lieu fee established pursuant to this section exceed a reasonable estimate of the total of: (a) the cost of acquiring and managing the agricultural easement that the applicant would otherwise be required to create to satisfy its mitigation obligation under this chapter; and (b) the cost of administering the in-lieu fee.

5. Resolution. As an alternative to case-by-case establishment of in-lieu fees, the board may adopt a resolution establishing a generally applicable per acre in-lieu fee to be applied in all cases in which an applicant seeks to pay an in-lieu fee as mitigation. Such a generally applicable fee shall comply with the requirements of this subsection and shall include an annual adjustment for inflation.

C. Use of In-Lieu Fees.

1. In-lieu fees received by Merced County shall be maintained in a separate account.

2. In-lieu fees shall be expended solely for the purpose of acquiring and managing agricultural easements in mitigation land that meet the criteria set forth in Section 9.30.050 and funding Merced County's cost of implementing the in-lieu fee program.

3. Merced County may either expend the in-lieu fees directly to acquire and manage agricultural easements or remit the fees to a qualified entity for that purpose.

D. Applicant-Designed Mitigation Options. The applicant proposing conversion may propose an alternative method of mitigation for review and approval by the county subject to the requirements of this section.

1. To qualify as mitigation under this chapter, proposed alternative mitigation must satisfy all of the following criteria:

a. The proposed mitigation must result in permanent protection of mitigation land;

b. The applicant must bear all costs of reviewing, approving, managing, and enforcing the mitigation;

c. The proposed mitigation must be in substantial compliance with the requirements for mitigation land and agricultural easements set forth in Section 9.30.050; and

d. The proposed mitigation must be in all respects at least as protective of agricultural land as the mitigation required by this chapter.

E. The mitigation obligation imposed by this chapter is that set forth in Section 9.30.030. Each alternative mitigation option in this section is wholly optional and made available solely for the applicant's convenience. Under no circumstances shall Merced County require any applicant to implement any such alternative mitigation option.

(Ord. 1943 § 2, 2016)

A. Agricultural easements on mitigation land shall be held in perpetuity by a qualified entity which operates in Merced County, or by Merced County on a temporary basis until transferred to a qualified entity.

B. The county shall not approve proposed mitigation easements unless it finds that the mitigation land complies with each of the following requirements:

1. Location. The mitigation land is located within Merced County.

2. Land Uses. The mitigation land is subject to an agricultural designation in the general plan and zoned for agricultural use, and is located outside a city sphere of influence as adopted by the Local Agency Formation Commission of Merced County. The type of agricultural related activity allowed on the mitigation land is specified in the easement and is at least as restrictive as the requirements of the agricultural zoning district. The agricultural easement prohibits all residential, commercial, or industrial development and any land uses or activities that substantially impair or diminish the agricultural productive capacity of the mitigation land or that are otherwise inconsistent with the conservation purposes of this chapter. Any legal nonconforming use of the mitigation land has been or will be abandoned prior to execution of the agricultural easement, or if maintained, will not interfere with agricultural use of the mitigation land.

3. Parcel Size. The mitigation land consists of one or more legal parcels of at least 20 net acres in size, exclusive of the area occupied by any existing home and the area of any road or right-of-way easement.

4. Soil Quality. The soil quality of the mitigation land has the agricultural productive capacity equivalent to or better than that of the land proposed for conversion.

5. Water Supply. The available water supply for the mitigation land is at least equal to that of the land proposed for conversion in terms of quantity, quality, and security. The water supply on the agricultural mitigation land shall be protected in the farmland conservation easement or other document evidencing the agricultural mitigation.

6. Existing Interests and Encumbrances. The mitigation land is not already subject to an encumbrance or interest that would legally or practicably prevent converting the land, in whole or in part, to a nonagricultural use, such as a conservation easement, open space easement, flowage easement, avigation easement, long term agricultural lease, profit, or an interest in the subsurface estate that would preclude development of the surface estate. A contract entered pursuant to the Williamson Act shall not constitute an encumbrance for purposes of this section.

7. Physical Limitations. There are no physical conditions or contamination on the mitigation land that would legally or practicably prevent converting the land, in whole or in part, to a nonagricultural use.

8. Existing Home. The mitigation land has no existing home, unless the land proposed for conversion includes an existing home.

9. Public Ownership. The mitigation land may be owned by a public agency if it is managed for compatible agricultural use in perpetuity similar to an agricultural easement placed on privately owned land.

10. Permanently Preserve. The mitigation land should conform to the perpetuity requirements contained in Internal Revenue Service Code Section 170(h) to ensure the land will satisfy the intent of this ordinance to permanently preserve the agricultural land placed under easement.

C. In addition to the provisions in subsection B, the county shall not approve proposed mitigation unless it finds that the agricultural easement complies with each of the following requirements:

1. The agricultural easement will be either obtained from a willing seller or voluntarily conveyed by the applicant, or involves land already under control of a qualified entity.

2. Any existing easement, other than a right-of-way easement, deed of trust, or other servitude or encumbrance on the mitigation land shall be subordinated to the agricultural easement.

3. The agricultural easement shall be approved by the qualified entity that will hold the easement and executed by all parties with an interest in the mitigation land.

4. The agricultural easement is in recordable form and contains an accurate legal description of the mitigation land.

5. The agricultural easement names Merced County as an intended third party beneficiary and authorizes Merced County to enforce all terms of the easement.

6. The agricultural easement recites that it is intended to satisfy the mitigation obligation imposed by this chapter and that it is subject to the requirements set forth in this chapter.

7. The agricultural easement provides that if the qualified entity holding the easement ceases to exist, ownership of the easement shall pass to another qualified entity, or if no other qualified entity is available, to Merced County.

8. The agricultural easement has been approved as to form by Merced County.

a. Subsection C does not prevent inclusion in an agricultural easement of requirements that are more protective of agricultural use than the requirements set forth in this section.

b. Before approving any alternative mitigation option, the legislative body shall determine that such option is consistent with the requirements set forth in sections subsections B and C.

c. Amendments. After the county has approved an agricultural easement, the easement shall not be amended without further approval by the county.

d. Extinguishment. If a court issues a judgment declaring that the purposes of this chapter and of an agricultural easement can no longer be fulfilled by enforcement of that easement, the qualified entity holding that easement may extinguish the easement by selling it to the fee owner of the mitigation land, if the following requirements are met:

i. Either: (A) the action was contested and the judgment was not entered pursuant to stipulation, or (B) Merced County was a party to the action and stipulated to the judgment; and

ii. The qualified entity uses the proceeds of sale to acquire an agricultural easement in other mitigation land in compliance with this chapter.

(Ord. 1943 § 2, 2016)

A. To be considered a qualified entity, an entity must: (1) be a nonprofit public benefit corporation operating within Merced County that is qualified to hold conservation easements under Section 815.3 of the Civil Code; and (2) be approved by the legislative body for the purpose of holding and managing agricultural easements.

B. Approval Criteria. In considering whether to approve an entity as a qualified entity, the legislative body shall consider the following criteria:

1. Whether the entity's principal purpose is holding and administering easements for the purposes of conserving and maintaining lands in agricultural production;

2. Whether the entity has an established record of holding and administering easements for the purposes of conserving and maintaining lands in agricultural production;

3. The extent and duration of the entity's involvement in agricultural land conservation within Merced County; and

4. Whether the entity has adopted the Land Trust Alliance's "Standards and Practices" and is operating in compliance with those Standards and Practices;

5. Whether the entity has been accredited by the Land Trust Accreditation Commission; and

6. Whether the entity is a member in good standing of a California statewide association of land trusts.

C. Although Merced County may hold agricultural easements, it is the intent of Merced County to transfer most, if not all, of the easements that are received under this chapter to a qualified entity for monitoring, management, and enforcement.

D. No qualified entity shall sell, lease, hypothecate, or encumber any interest in any mitigation land without the prior approval of the county.

E. Expenditure of Fees. A qualified entity shall use fees provided by Merced County solely for purposes of acquiring, administering, monitoring, and enforcing agricultural easements acquired pursuant to this chapter located within Merced County.

F. Termination of Qualified Entity. If a qualified entity intends or reasonably expects to cease operations, it shall assign any agricultural easements it holds to another qualified entity or to Merced County.

G. Monitoring and Enforcement. The qualified entity shall monitor the use of all mitigation land subject to agricultural easements held by the entity and enforce compliance with the terms of those agricultural easements.

H. Reporting. On or before December 31st of each year after a qualified entity is approved by the legislative body, the entity shall provide to the Merced County director of community and economic development an annual report describing the activities undertaken by the entity under this chapter. That report shall describe the status of all mitigation land and agricultural easements held by the entity, including a summary of all action taken to enforce its agricultural easements, and an accounting of the use of administrative (endowment) and in-lieu fees remitted to it by Merced County.

(Ord. 1943 § 2, 2016)

A. All mitigation proposed by an applicant to comply with this chapter, including any alternative mitigation option proposed by the applicant, shall be reviewed by the community and economic development department for consistency with the terms and purposes of this chapter.

B. If a conservation easement is to be entered into with the county, the community and economic development director shall recommend approval, conditional approval, or disapproval to the board of supervisors. The community and economic development director shall not recommend approval of the proposed mitigation unless the mitigation is found to be consistent with the requirements for mitigation land and agricultural easements set forth in Section 9.30.050.

C. The board of supervisors shall consider the community and economic development director's recommendation and shall either approve, conditionally approve, or disapprove the proposed conservation easement.

D. Completion of Mitigation.

1. The applicant for conversion must complete all required mitigation prior to the earliest of: (a) approval of any parcel map or final subdivision map; or (b) issuance of any building or encroachment permit for development projects not involving a subdivision map; or (c) initiation of any site grading in compliance with a county approved set of improvement plans.

2. Mitigation shall be deemed complete when any agricultural easement has been recorded and the applicant has paid the required administrative fee, or where evidence is provided in writing from a qualified entity that it has received full payment for the easement and administrative fees from the applicant. However, if the applicant elects to seek approval of an alternative mitigation option, mitigation shall be deemed complete when Merced County provides the applicant with a letter indicating that mitigation is complete.

(Ord. 1943 § 2, 2016)