Stanislaus County’s Farmland Mitigation Program Upheld

In Building Industry Association of Central California v. County of Stanislaus (2010) 190 Cal.App.4th 582 , the Fifth Appellate District of the Court of Appeal upheld the County of Stanislaus Farmland Mitigation Program against an attack brought by the Building Industry Association. The Farmland Mitigation Program (FMP) was designed to mitigate for the loss of farmland due to residential development in the County. In essence, the scheme requires mitigation for loss of agricultural land at a 1:1 ratio and requires anyone proposing to develop agricultural land to acquire agricultural conservation easements over an equivalent area of comparable farmland prior to development. The Building Industry Association (BIA) argued that this requirement violates the restrictions in Civil Code section 815.3, which specifically prohibits an agency from conditioning an entitlement on an “applicant’s granting of a conservation easement.” The Court held that the FMP complied with this provision because, under the County’s scheme, “applicant” was not charged solely with granting an easement on its own property, but could also acquire it from a willing seller.

In late 2007, Stanislaus County adopted an update to the agricultural element of its general plan. One component of that element was the FMP. The object of the FMP is to aid in mitigating the loss of farmland from residential development by requiring the permanent protection of farmland through agricultural conservation easements granted in perpetuity. The developer is charged with acquiring such easements from willing sellers in most cases, although for developments less than 20 acres in size compliance may be through payment of an in-lieu fee.

BIA challenged this provision on its face, and originally prevailed in the trial court. The trial court concluded that: (1) the FMP conflicts with state law (Civil Code section 815.3) prohibiting local governments from conditioning land use approvals on the granting of conservation easements; (2) the county failed to demonstrate a reasonable relationship between the mitigation requirement and any adverse public impacts attributable to new residential development; and (3) the FMP requirements were in excess of the county’s police power.

The court of appeal reversed on all counts, and upheld the FMP against the facial challenge. First, the court considered trial court’s conclusion that the county failed to demonstrate a reasonable relationship between the mitigation requirement and any adverse public impacts attributable to new residential development. The trial court had reasoned that the loss of developed farmland is permanent, and the preservation of comparable land does not result in new farmland to replace the lost farmland. The court concluded that the trial court improperly placed the burden on the county to demonstrate the validity of the FMP, when in fact the court should have presumed its validity. BIA was charged with demonstrating that it is invalid. The court found that FMP mandates bear a reasonable relationship to the loss of farmland to residential development. Agriculture is the county’s leading industry, valued at in excess of a billion dollars each year. While the agricultural land is a finite and irreplaceable resource, it is also subject to development pressure to provide affordable housing within commuting distance to major employment centers. The FMP was designed to balance those competing demands, to allow some residential development to go forward, but assuring that at least half of the agricultural land in the county was preserved in perpetuity. Although lost farmland is not replaced, an equivalent area of comparable farmland is permanently protected from a similar fate. The court concluded: “To meet the reasonable relationship standard it is not necessary to fully offset the loss. The additional protection of farmland that could otherwise soon be lost to residential development promotes the County’s stated objective to conserve agricultural land for agricultural uses. Further, the requirement of rough proportionality between the mitigation measure and the impact of the development project is met.”

Second, the court summarily dismissed the trial court’s conclusion that the FMP requirements were in excess of the county’s police power. “Since a reasonable relationship exists between the FMP requirements and the impacts of converting farmland to residential development, the trial court also erred in concluding that the FMP was not authorized by the County’s police power. Land use regulation, such as the FMP, is a function of local government under the constitutional grant of police power.”

Finally, the court considered whether the FMP was consistent with Civil Code section 815.3. The court held that Civil Code section 815.3 applied to easements of the sort proposed by the County, but that the County’s scheme was consistent with section 815.3. That section provides in relevant part:

Only the following entities or organizations may acquire and hold conservation easements: [¶]

(b) the state or any city, county, city and county, district, or other state or local governmental entity, if otherwise authorized to acquire and hold title to real property and if the conservation easement is voluntarily conveyed. No local governmental entity may condition the issuance of an entitlement for use on the applicant’s granting of a conservation easement pursuant to this chapter.

(Civ. Code, § 815.3, subd. (b) [emphasis added by court].) The issue for the court was whether the FMP guidelines conflict with that section.

The court looked to the words and intent of section 815.3 to resolve this issue. The court noted that section 815.3, subdivision (b), specifically limits the conservation easement prohibition to situations in which the “applicant” is granting the easement. The Legislature did not extend this prohibition to all circumstances in which an easement is granted. Thus, by its plain and ordinary terms, the provision did not apply to the FMP.

The court concluded that the FMP was also consistent with the conservation easement chapter, thus the overall statutory scheme, which includes section 815.3. The intent of that scheme is to encourage landowners to voluntarily convey conservation easements to qualified organizations. In fact, Civil Code section 816 states that the provisions of the chapter should be liberally construed to effectuate this policy. Interpreting section 815.3 narrowly to include only those prohibitions expressly stated effectuates that policy. Thus, section 813.5, subdivision (b), prevents a governmental entity from requiring an involuntary conveyance of a conservation easement, and thus protects the landowner from an unreasonable taking of his property rights. Under the FMP, however, no landowner is required to grant an easement on its own property. Rather, a developer may satisfy the policy by purchasing easements from willing sellers. Thus, “the FMP promotes the public policy of encouraging the conveyance of easements without running afoul of section 815.3, subdivision (b).