HB 2697
In CommitteeHouse
Historic preserv. prop. tax
Expanding the eligibility for historic preservation property tax special valuation.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill expands the existing historic preservation property tax relief program by allowing qualifying properties in small, distressed cities to receive up to 24 years of special low valuation instead of the current 10 years. It adds eligibility requirements tied to location and population, and sets a firm expiration date for extensions in 2057.
- Extends the maximum duration of the historic preservation property tax special valuation from 10 to up to 24 years—10 years initially, plus two 7-year extensions.
- Allows extensions only for properties in cities with populations under 20,000 located in counties designated as distressed areas by the state employment security department.
- Requires property owners to apply for extensions at least 90 days before the current valuation ends, using forms provided by the county assessor and reviewed by a local board.
- States that after the special valuation ends, the cost of improvements made during the valuation period will be treated as new construction for future property tax assessments.
- Sets a sunset date of January 1, 2057, after which no extensions may be granted.
- Includes a legislative policy statement affirming the goal of promoting historic property revitalization and requiring a future review to decide whether to extend the program beyond 2057.
Who is affected
- Property owners of historic buildings in small, distressed cities — Owners of historic properties in small cities (under 20,000 people) in designated distressed areas may qualify for extended tax relief, reducing their property tax burden for up to 24 years (10 years + two 7-year extensions).
- Local governments (counties and cities) — Counties and cities with historic properties may see lower property tax revenue during the special valuation period, but could benefit long-term from increased investment and revitalization of historic neighborhoods.
- State and local tax administrators — The Department of Revenue and local county assessors must administer application processes, review extensions, and track eligibility—adding administrative responsibilities.
- Historic preservation groups and advocates — Historic preservation organizations and advocates may benefit indirectly as the bill encourages continued maintenance and restoration of historic buildings through tax incentives.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Property owners of historic buildings in small, distressed cities can receive up to 24 years of reduced property tax liability, significantly lowering housing costs and improving affordability for long-term residents who maintain historic homes.
HousingPeopleRef: Sec. 1(1), Sec. 1(4)(a)Extended tax relief improves cash flow for small property owners (e.g., single-family historic home dwellers, small landlords), enabling reinvestment in maintenance and repairs—reducing risk of deterioration or abandonment.
FinancialPeopleRef: Sec. 1(1), Sec. 1(4)(a)By targeting distressed cities under 20,000 people, the bill prioritizes communities most in need of revitalization, potentially slowing outmigration and supporting retention of low- and middle-income residents.
HousingPeopleRef: Sec. 1(4)(a)(i)Treating improvement costs as new construction after the valuation period ends helps prevent speculative overvaluation and ensures future tax assessments reflect actual market value—not inflated historical investment—protecting long-term affordability.
HousingPeopleRef: Sec. 1(3)The legislative finding that historic preservation promotes revitalization supports broader community benefits—e.g., reduced blight, increased tourism, and neighborhood pride—which can improve safety and quality of life.
Public SafetyLean peopleRef: Sec. 2(3)
Potential Concerns (5)
Local governments in distressed areas will experience reduced property tax revenue for up to 24 years per qualifying property, which may strain budgets for schools, roads, and emergency services—especially in already fiscally stressed jurisdictions.
Local GovernmentPeopleRef: Sec. 1(4)(a)(i)Reduced local tax revenue may limit funding for public safety services (e.g., police, fire, EMS) in small, distressed cities already facing resource constraints, potentially worsening outcomes for residents.
Public SafetyPeopleRef: Sec. 1(4)(a)(i)The 2057 sunset creates uncertainty for long-term preservation planning; owners and communities may delay investments if they anticipate the program ending before full benefit realization.
HousingLean peopleRef: Sec. 1(4)(d)The 20,000-population and distressed-county eligibility criteria exclude many small cities and historic properties outside formal distressed-designation zones, limiting the program’s reach and potentially leaving some distressed communities without relief.
Business & EmploymentLean peopleRef: Sec. 1(4)(a)(ii)Local review boards (often volunteer or under-resourced) must now evaluate extension applications, adding administrative burden to already-stretched local governments without additional funding.
Local GovernmentLean peopleRef: Sec. 1(4)(c)
Who Is Most Affected
Low- and middle-income owners of historic homes in small cities benefit significantly from reduced property taxes, helping them afford maintenance and avoid displacement—but only if they own the property outright or have equity.
Local governments face reduced tax revenue during the valuation period, which may pressure budgets in already-strained rural or distressed counties—though long-term revitalization may offset losses if property values rise.
County assessors and local review boards gain administrative duties without new funding, increasing workload—but the state’s data collection mandate may improve transparency and future policy evaluation.
Historic preservation advocates benefit from expanded incentives, but the narrow geographic and population criteria limit broader impact—most preservation work remains outside the targeted zones.
Tenants in historic buildings may indirectly benefit from improved building conditions and reduced owner turnover—but if owners pass savings to tenants via lower rent, the effect is likely modest and unguaranteed.