BILL ANALYSIS Ó
AB 654
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 654 (Hueso)
As Amended June 28, 2011
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |57-18|(May 23, 2011) |SENATE: |23-14|(August 18, |
| | | | | |2011) |
-----------------------------------------------------------------
Original Committee Reference: W., P. & W.
SUMMARY : Requires historical properties subject to Mills Act
contracts, which restrict the use of the property in exchange
for lower tax assessment values, to be inspected prior to a new
agreement and every five years thereafter; requires that any fee
charged by the local agency to administer the program not exceed
the reasonable cost of providing the services for which the fee
is charged; and, requires local agencies to take actions to
enforce the contracts.
The Senate amendments :
1)Delete the authority and remove the role in existing law for
the Department of Parks and Recreation (DPR) and the State
Board of Equalization (BOE) to conduct periodic examinations
of historical properties subject to local Mills Act contracts.
2)Require that the city or county conduct an inspection of the
interior and exterior of the property prior to a new agreement
being entered and every five years thereafter.
3)Delete a requirement that the property owner notify the Office
of Historic Preservation and instead just require the owner to
record the contract with the county.
4)Authorize but do not require the local agency to charge the
property owner a fee not to exceed the reasonable costs of
providing the service for which the fee is charged.
5)Make other technical conforming amendments.
EXISTING LAW :
1)Authorizes cities and counties, under the Mills Act, to enter
AB 654
Page 2
into contracts with owners of qualified historical properties
that restrict the use of the property in exchange for lowered
property assessment values. Requires that the contracts be
for a minimum period of ten years and to provide for periodic
examinations of the premises by the assessor, DPR and BOE, as
necessary.
2)Requires the owner of the historical property to provide
written notice of the contract to the Office of Historic
Preservation.
3)Authorizes the city or county entering into the contract to
charge the owner a fee not to exceed the reasonable cost of
administering the program.
4)Authorizes the local agency to cancel a contract if it
determines the owner breached a condition of the contract or
allowed the property to deteriorate to the point that it no
longer qualifies. Authorizes the local agency or the owner to
bring an action in court to enforce the contract as an
alternative to cancellation.
AS PASSED BY THE ASSEMBLY , this bill, in addition to requiring
inspections to be conducted prior to a new agreement and every
five years thereafter, authorized periodic examinations by DPR
and BOE as necessary, and provided that the legislative body of
the local agency would determine the party to conduct the
inspection; required the owner to both provide written notice to
the Office of Historic Preservation and record the contract with
the county; required the city or county to charge a fee
sufficient to cover but not exceed the reasonable costs of
administering the program, as specified; and, required the local
agency, if it determines that the owner has breached a condition
of the contract or allowed the property to deteriorate to the
point it no longer qualifies, to either cancel the contract or
bring an action in court to enforce the contract.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : The author indicates this bill is needed to ensure
that a property tax break is not given to a historical property
owner without the property owner's compliance. Under existing
law known as the Mills Act, owners of historical properties can
enter into a contract with a city or county under which the
AB 654
Page 3
owner agrees to restrict the use of the property in exchange for
a lowered property assessment value. The law sets forth
requirements for the contracts and provides for periodic
inspections of the property for compliance as needed.
Enforcement and administration of Mills Act contracts has varied
significantly between counties. This bill as amended will
require the local agency entering the contract to inspect the
properties prior to a new agreement and every five years
thereafter, and require the local agency to take steps to
enforce the contracts by either cancelling a contract or
bringing an action in court to enforce a contract in the event
of a breach of contract conditions.
Analysis Prepared by : Diane Colborn/W., P. & W.
/(916)319-2096
FN: 0001757