BILL ANALYSIS �
AB 654
Page 1
Date of Hearing: March 22, 2011
ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
Jared Huffman, Chair
AB 654 (Hueso) - As Introduced: February 16, 2011
SUBJECT : Historical Property
SUMMARY : Requires historical properties subject to historic
preservation contracts to be inspected prior to entering into a
new contract and every five years. Specifically, this bill :
1)Requires that contracts for preservation of historical
properties include a provision providing for an inspection of
the interior and exterior of the premises by the county
assessor, Department of Parks & Recreation (DPR), and the
State Board of Equalization (BOE) prior to a new agreement and
every five years thereafter to determine the owner's
compliance with the contract.
2)Requires the owner of the property to record the contract with
the county in which the property is located.
3)Requires that the administrative fee the owner of the property
is required to pay under existing law include the cost of
processing designation requests, contracts, monitoring, and
enforcement.
EXISTING LAW : Authorizes cities and counties to enter 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 provide for periodic
examinations of the premises, as necessary, by the assessor, DPR
and BOE. Requires that the owner provide written notice of the
contract to the Office of Historic Preservation. The city or
county entering into the contract is required to charge the
owner a fee not to exceed the reasonable cost of administering
the program.
FISCAL EFFECT : Unknown
COMMENTS : The author indicates this bill is needed to ensure
that a property tax break is not given to a property owner
without the property owner's compliance. Under existing law
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known as the Mills Act, owners of historical properties can
enter into a contract with a city or county under which the
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 calls for periodic
inspections of the property for compliance as needed. According
to the author, the inspections are not specifically required and
do not always occur. In addition, while the current law
requires the city or county to charge the property owner an
administrative fee, the fee is not necessarily sufficient to
recover all administrative costs of the program.
This bill would require the local government entering into the
contract to inspect the property at the time of a new contract
and every five years thereafter. This bill would also require
DPR and BOE to inspect the property prior to a new agreement and
every five years thereafter. The author and committee may wish
to consider whether it is necessary that inspections be
conducted by all three entities - the local government, DPR and
BOE -- every five years, or whether five year inspections by one
or more of these entities would suffice.
The author also indicates that the intent of the bill is to
ensure that the fee charged to the landowner by the local
government is sufficient to allow the local government to
recover all costs associated with administering the program.
However, it is not clear that this bill as currently drafted
will completely accomplish this objective since the language
still says that the property owner shall pay a fee not to exceed
the reasonable costs of administering this program. The
language does clarify that administrative costs include but are
not limited to processing of designation requests, contracts,
monitoring and enforcement.
Since this bill will require inspections every 5 years, and to
ensure that the costs of the inspections are covered, the author
and committee may also wish to consider an amendment clarifying
that the fee shall also cover the costs of inspections.
In addition, although the local government may recoup its costs
of administering the program through levying fees, this bill
would mandate state DPR and BOE inspections every five years on
each property in the program. This bill does not include a
mechanism for these state agencies to be reimbursed for their
inspection costs. According to information provided by the
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author, over 2,000 properties are registered as historic
properties under the Mills Act, though this number may not be
accurate due to underreporting. This bill would also require
the owner to record the contract with the county.
Suggested amendments :
Amend Section 50281(b)(2) on page 2 to read as follows:
(2) For an inspection of the interior and exterior of the
premises by the assessor, the Department of Parks and
Recreation, and the State Board of Equalization prior to a new
agreement, and every five years thereafter, to determine the
owner's compliance with the contract. Periodic examinations may
also be conducted by the Department of Parks & Recreation and
the State Board of Equalization as may be necessary.
Amend Section 50281.1 on page 3 to read as follows:
50281.1 The legislative body entering into a contract described
in this article shall require that the property owner, as a
condition of entering into the contract, pay a fee sufficient to
cover but not to exceed the reasonable cost of administering
this program, including, but not limited to, the processing of
designation requests, contracts, monitoring, inspections , and
enforcement, as needed.
Amend Page 3, lines 17 through 21 to read as follows:
this section. Each contract shall also provide that after five
years, and every five years thereafter, the assessor , the
Department of Parks and Recreation, and the State Board of
Equalization shall conduct an inspection to determine the
owner's continued compliance with the contract. If the property
owner or the
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
AB 654
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None on file
Analysis Prepared by : Diane Colborn / W., P. & W. / (916)
319-2096