SB 390 prevents territory that is subject to agricultural, open-space, or conservation restrictions from being included in or annexed to a community facilities district (CFD) that would provide sewers, nonagricultural water, or streets and roads unless the landowner agrees. The bill creates a limited exception for certain parcels in the regional shoreline of San Mateo County that already have development entitlements or are built out.
The measure also bars a landowner and a local agency from terminating an easement or canceling a contract affecting land included in a CFD until that land is released from any CFD liens tied to sewer, nonagricultural water, or streets and roads that did not benefit uses allowed under the easement or contract, with several enumerated exceptions. SB 390 explicitly lists the kinds of easements and contracts covered, tying the rule to existing statutory vehicles such as Williamson Act contracts, open-space easements, and conservation easements.
At a Glance
What It Does
Requires landowner consent before including or annexing land subject to specified agricultural/open-space/conservation restrictions into a CFD that finances sewers, nonagricultural water, or streets and roads, with a narrow San Mateo shoreline exception. It also prevents termination or cancellation of covered easements or contracts affecting land in a CFD until related CFD liens are cleared, subject to enumerated carve-outs.
Who It Affects
Landowners subject to Williamson Act contracts, open-space or conservation easements, local agencies that form CFDs, developers seeking Mello-Roos financing for infrastructure in or adjacent to conserved lands, and land trusts that hold restrictive interests.
Why It Matters
It closes a pathway that local governments and developers have used to roll conserved land into debt-financed infrastructure projects, raising the legal and financial bar for converting protected parcels. That shifts negotiation leverage toward easement holders and increases due diligence and lien-clearance work for agencies and financers.
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What This Bill Actually Does
SB 390 creates two linked protections for land encumbered by conservation-style restrictions when a local agency proposes to add that land to a community facilities district that would provide sewers, nonagricultural water, or streets and roads. First, the bill makes landowner consent the default gate—local agencies cannot include or annex territory with qualifying easements or contracts into such CFDs without the landowner’s agreement.
Second, if the landowner does consent, neither the landowner nor the local agency can terminate the underlying easement or cancel a contract affecting the land until the parcel is released from any CFD liens that arose for infrastructure that did not serve the land uses authorized by the easement or contract.
The statute draws a careful list of what counts as “territory that is dedicated or restricted to agricultural, open-space, or conservation uses,” anchoring the rule to existing statutory tools: open-space easements under specified California code chapters, California Land Conservation Act (Williamson Act) contracts, farmland security zone contracts, Civil Code conservation easements, and several agricultural conservation easement provisions. That list narrows the protection to canonical conservation and agricultural restriction devices rather than to any informal restriction or neighborhood covenant.SB 390 also builds in exceptions.
Most notably, it permits the inclusion or annexation of restricted territory without landowner consent where the parcel lies within the County of San Mateo’s regional shoreline and already has development entitlements or is already developed. The bill further enumerates circumstances in which the lien-release prohibition does not apply, such as preexisting conservation easements executed before January 1, 2003, certain Williamson Act situations tied to tentative maps or cancellations, land already in a CFD before the restriction was imposed or before 2003, and where the restriction expressly waives the lien-release rule.Operationally, local agencies will need to add new clearance steps before forming or amending CFDs that would touch protected land: verify whether a parcel is subject to a qualifying restriction, confirm whether the San Mateo shoreline exception applies, secure explicit landowner consent when required, and ensure either that CFD liens are addressed or that an applicable statutory exception is present before terminating easements or contracts.
The provision is concrete about the covered infrastructure types—sewers, nonagricultural water, and streets and roads—so agencies cannot avoid the rule simply by offering a different facility type in the CFD.
The Five Things You Need to Know
SB 390 bars including or annexing land subject to specified agricultural, open-space, or conservation restrictions into a CFD that would provide sewers, nonagricultural water, or streets and roads unless the landowner consents.
The consent rule does not apply to restricted parcels within the County of San Mateo’s regional shoreline if a parcel already has development entitlements or is already developed — in those narrow cases inclusion or annexation may proceed without the landowner’s consent.
If a landowner consents, the bill forbids the landowner and any local agency from terminating an easement or finally canceling a contract affecting the land until the land is released from all CFD liens for sewer, nonagricultural water, or road improvements that did not benefit uses allowed under the easement or contract.
The lien-release protection does not apply to (a) certain Williamson Act contracts tied to tentative maps or tentative cancellations, (b) conservation easements executed before January 1, 2003, (c) land included in a CFD before a listed restriction was imposed or before January 1, 2003, or (d) restrictions that expressly waive the requirement.
The statute defines covered restrictions by referencing specific statutory authorities (open-space easements under Chapters 6.5 and 6.6, Williamson Act contracts, farmland security zone contracts, Civil Code conservation easements, and agricultural conservation easement statutes), which limits the rule to established legal instruments.
Section-by-Section Breakdown
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Landowner consent requirement for protected territory
This provision sets the core rule: territory subject to specified agricultural, open-space, or conservation restrictions cannot be included in or annexed to a CFD that would provide sewers, nonagricultural water, or streets and roads unless the landowner consents. Practically, that forces local agencies to secure written consent from the legal owner before moving forward with CFDs that would finance those three infrastructure categories for restricted parcels.
San Mateo shoreline exception for entitled or developed parcels
This clause carves out an exception limited to the County of San Mateo’s regional shoreline: landowner consent is not required if a parcel in the restricted territory either already has entitlements for commercial/residential/industrial development or is already developed with those uses. The result is a geographically narrow pathway for development-driven CFDs in San Mateo that bypasses the consent default when entitlement or build-out is already present.
Prohibition on terminating easements/contracts before lien release
If a landowner gives consent to include or annex restricted land into a CFD, subdivision (b) prevents the landowner and any local agency from terminating an easement or finally canceling a contract affecting the land until that land is released from CFD liens tied to sewer, nonagricultural water, or streets and roads improvements that did not benefit the land uses allowed by the easement or contract. This creates a transactional lock: an easement cannot be stripped away to enable conversion of the land unless outstanding CFD liabilities that would unfairly burden the parcel are cleared first.
Statutory exceptions to the lien-release prohibition
Subdivision (c) lists four categories where the lien-release protection in (b) does not apply: certain Williamson Act (California Land Conservation Act) contracts connected to tentative maps or cancellations; conservation easements recorded before January 1, 2003; land that was already in a CFD before the imposition of an enforceable restriction or before January 1, 2003; and restrictions that explicitly waive subdivision (b). Those carve-outs reduce the statute’s reach for older or already-processed transactions and where parties contract around the rule.
Definition of territory 'dedicated or restricted' to protected uses
Subdivision (d) enumerates precisely what counts as protected territory by citing the statutory sources of covered instruments: specified open-space easements, Williamson Act contracts, farmland security zone contracts, Civil Code conservation easements, and two agricultural conservation-easement provisions in the Public Resources and statute sections. By tying the protection to these authorities, the bill excludes informal or uncodified restrictions and channels disputes toward courts and agencies familiar with those statutes.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Landowners holding conservation, open-space, or Williamson Act contracts: they gain a veto over adding their parcels to CFDs that would finance sewers, nonagricultural water, or roads, and protection against losing an easement or contract while still bearing unrelated CFD liens.
- Land trusts and easement holders: the bill strengthens the durability of statutory easements by limiting a common municipal route—CFD-financed infrastructure followed by cancellation—to convert protected land.
- Neighborhoods and local conservation advocates near restricted parcels: the rule reduces a financial lever that could be used to justify converting open-space or farmland to development, preserving local land-use expectations.
- Municipalities and counties prioritizing open-space preservation: the statute gives those jurisdictions clearer legal footing to resist CFD strategies that would undermine conservation objectives.
Who Bears the Cost
- Local agencies that form CFDs (cities, counties, special districts): they must add consent-gathering, title review, and lien-clearance steps, slowing projects and raising transaction costs for CFDs involving restricted land.
- Developers seeking Mello-Roos financing for infrastructure adjacent to conserved land: the consent and lien-clearance requirements increase negotiation friction and can make CFD-backed financing infeasible or more expensive.
- Municipal finance teams and bond underwriters: greater due diligence is required to ensure CFDs do not encroach on protected territories or that liens are properly allocated and released, which can increase underwriting complexity and legal risk.
- County of San Mateo administration and applicants for shoreline development: the San Mateo exception concentrates disputes and entitlement verification work in that county, and developers seeking to use the exception may trigger litigation or political pushback.
Key Issues
The Core Tension
The central dilemma SB 390 confronts is the trade-off between protecting long-standing conservation and agricultural restrictions from being undermined by debt-financed infrastructure and preserving local and private flexibility to convert or service land when development is legitimately entitled; protecting easements strengthens conservation but can lock in constraints that make sensible redevelopment or infrastructure funding more difficult and more costly.
SB 390 aims to prevent the financial conversion of conserved land by inserting landowner consent and lien-release mechanics into the CFD process, but the statutory mechanics invite implementation complexity. Verifying whether a parcel is subject to a covered restriction will require robust title and covenant searches; determining whether a CFD lien “did not benefit” allowed uses creates an allocation problem that could require expensive engineering, accounting, or litigation to resolve.
Agencies and financers will need procedures to trace improvements and pro rata benefits—questions that municipal bond practice does not routinely litigate.
The San Mateo shoreline exception and the temporal carve-outs (pre-2003 instruments, land already in CFDs, and certain Williamson Act scenarios) undercut the statute’s uniformity. Those exceptions create line-drawing issues—what qualifies as the county’s regional shoreline, when a parcel is “already developed” or “has entitlements,” and how tentative maps or cancellations interact with the lien rule.
Parties can also contract around subsection (b) by including explicit waivers in restrictions, meaning the statute preserves a negotiated escape hatch that sophisticated parties can exploit.
Finally, the bill shifts bargaining power: easement holders gain leverage that could prevent consensual conversions but may also block economically viable reuse when public priorities change. Because the measure focuses on three infrastructure categories, local agencies might respond by using different financing mechanisms or by recharacterizing improvements to avoid the rule, creating potential circumvention strategies that will test administrative and judicial interpretation.
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