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SITE NAVIGATION

Historic Preservation

Mills Act Program

Historic Preservation

Mills Act Program

City of Sacramento Mills Act historical property contract program

About the program

The Mills Act Contract program is an incentive that reduces property taxes for historic properties in exchange for an owner agreeing to preserve and maintain their historic building. The Mills Act is the single most important economic incentive program in California available for owners of historic properties. Enacted in 1972, the California Mills Act legislation grants participating local governments (cities and counties) authority to enter into contracts with owners of qualified historic properties. The City of Sacramento amended the Mills Act Section of the City Code (17.604.720) in 2018 to clarify and streamline the process of applying for and obtaining a Mills Act contract.

Application Deadline: Applications are due by July 1st each year. Applications received after that date, will be processed in the next calendar year.

FORMS

Potential tax savings

The assessment of a property under a Mills Act agreement, usually, but not always results in tax relief for the property owner. Since the city is not directly involved in the tax assessment process, specific questions about property tax valuation should be directed to a tax professional or the Sacramento County Assessor’s office. For more information, the State Board of Equalization has published “Guidelines for the Assessment of Enforceably Restricted Historical Properties.”

How to apply step-by-step

Step 1. Check to see if your property is eligible. Check the address to determine if the property is a historic landmark or a contributor to a historic district by visiting the Planning Land Use Information portal. In some cases, properties are listed in the state or national historic register. Any property listed on the local, state, or national register is eligible to apply for a contract. Contact Planning if you are unsure if your property is listed in the state or national register.

Step 2. Gather the necessary documents. An owner of a qualified historical property must submit the following items to the Planning Department to be considered for a Mills Act contract:

Completed Mills Act Application
Copy of the property’s grant deed
Copy of the most recent property tax bill
Clear color photos, labeled, minimum size 3”x5”. The photos should include all exterior sides of the structure or areas of the property, interior photos of relevant areas where work may be proposed, both overall and detail views.
Proposed work plan

Step 3. Submit application and supporting material online. Visit the Citizen Permit Portal to submit the application. Application fees will be invoiced within 1-2 business days and will be payable through your Citizen Permit Portal account.

Note: Applications are processed once a year. Once a contract is recorded by the County Recorder, it will be reassessed by the County Assessor the following calendar year. The first tax assessment will occur in November of the year after a contract is recorded.

Mills act fees

There are several fees associated with Mills Act contracts. Fees include an application fee ($234), a contract fee ($1170-$1989), and a reporting and inspection fee every five years ($351).

Under most circumstances, these fees will be greatly offset by the benefits received in the form of reduced property taxes.

Reports and inspection

Every five years, the owner of a property subject to a Mills Act agreement is required to complete and submit the city’s reporting form and pay the contract administration fee. At that time, the city will conduct in-person inspections on an as-needed basis. Planning staff will contact property owners with instrictions when the five-year reports are due.

Basic contract terms

Mills Act contracts are subject to the requirements in California Government Code, Article 12, Sections 50280 – 50290, which can be found by visiting, Guidelines for the Assessment of Enforceably Restricted Historical Property.

Evaluating an application

City Staff

No more than 12 applications will be recommended for approval at one time. Applications not recommended for approval will be considered during the next application cycle. Staff will evaluate applications considering applicable criteria, which include:

The property is significant due to its historic value, location, or other attribute
The applicant has the ability to preserve and, when necessary, restore and rehabilitate the property
The preservation and, when necessary, restoration and rehabilitation of the property will enhance the city’s inventory of historic and cultural resources

City Council

City council may choose to approve, approve with conditions, or deny the Mills Act agreement. If the city council does not act on a Mills Act application within one year, the application is deemed denied. If a Mills Act application is not approved by city council, the applicant must wait one calendar year before reapplying for a Mills Act contract again. Once a contract is signed, accepted, and recorded by the County Recorder, the property is assessed under Article 1.9, section 439.2 of the California Revenue and Taxation Code on the ensuing lien date

Non-renewal

The city or property owner may elect to not renew a contract at any time by serving a written notice of non-renewal in advance of the annual renewal date. The notice of non-renewal shall be effective only if served by the owner upon the city at least 90 days prior to the renewal date, or if served by the city upon the owner at least 60-days prior to the annual renewal date. If the city or owner serve a notice of non-renewal the contract will remain in effect for the balance of the remaining term (/- 9 years). No penalty will result if a property owner elects not to renew a contract.

Under rare circumstances, the city may cancel a Mills Act contract, or bring a lawsuit to enforce the contract. Notice and a public hearing are required to cancel a contract. To cancel a contract, the city must find during the public hearing that the owner has breached the conditions of the agreement. If the contract is cancelled, state law entitles the city to require a cancellation fee equal to 12 ½ percent of the property’s current fair market value as determined by the County Assessor.

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