BILL NUMBER: AB 1153 CHAPTERED 07/30/07 CHAPTER 166 FILED WITH SECRETARY OF STATE JULY 30, 2007 APPROVED BY GOVERNOR JULY 30, 2007 PASSED THE SENATE JULY 16, 2007 PASSED THE ASSEMBLY JULY 20, 2007 AMENDED IN SENATE JULY 11, 2007 AMENDED IN SENATE JUNE 14, 2007 AMENDED IN SENATE MAY 31, 2007 AMENDED IN ASSEMBLY MARCH 29, 2007 INTRODUCED BY Assembly Member Garcia FEBRUARY 23, 2007 An act to amend Sections 18050 and 18070.3 of the Health and Safety Code, relating to housing. LEGISLATIVE COUNSEL'S DIGEST AB 1153, Garcia. Mobilehome dealers: occupational licensing. The Mobilehomes-Manufactured Housing Act of 1980 makes it unlawful for a person to act as a manufacturer, distributor, dealer, or seller of mobilehomes, manufactured homes, or commercial coaches, as defined, without an appropriate occupational license or temporary permit issued by the Department of Housing and Community Development. This bill would require every applicant for these occupational licenses to submit fingerprints and related information, as specified, to the Department of Justice for the purposes of obtaining federal summary criminal history information from the Federal Bureau of Investigation for compilation and dissemination to the Department of Housing and Community Development, and would make a conforming change. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 18050 of the Health and Safety Code is amended to read: 18050. (a) Every applicant for an occupational license shall make application to the department for a license containing a general distinguishing number. (b) The applicant shall submit all information as may be reasonably required by the department in carrying out the provisions of this chapter, including, but not limited to, proof of successful completion within the previous six months of the appropriate department examination and proof of his or her status as a bona fide manufacturer, distributor, dealer, dealer branch, or salesperson. (c) The applicant shall submit an application to the department on the forms prescribed by the department. The applicant shall provide the department with information as to the applicant's character, honesty, integrity, and reputation, as the department may consider necessary. The department, by regulation, shall prescribe what information is required of the applicant for the purposes of this subdivision. (d) (1) In conjunction with the license application, the applicant shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purposes of obtaining information as to the existence and content of a record of state or federal convictions, and state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her recognizance pending trial or appeal. (2) Upon receipt of the fingerprint images and related information described in paragraph (1) from the applicant, the Department of Justice shall forward to the Federal Bureau of Investigation a request for federal summary criminal history information. (3) Upon receipt of federal summary criminal history information from the Federal Bureau of Investigation, the Department of Justice shall review that information and compile and disseminate a response to the Department of Housing and Community Development pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code. (4) The Department of Housing and Community Development shall request subsequent arrest notification service from the Department of Justice, as provided under Section 11105.2 of the Penal Code, for the applicant. (5) The Department of Justice shall charge a fee sufficient to cover the cost of processing the requests described in this subdivision. (e) Upon receipt of a complete application for a license that is accompanied by the appropriate fee, the department shall, within 120 days, make a thorough investigation of the information contained in the application. SEC. 2. Section 18070.3 of the Health and Safety Code is amended to read: 18070.3. (a) When any person (1) who has purchased a manufactured home for a personal or family residential or investment purpose or (2) who has sold a manufactured home for a personal or family residential or investment purpose, obtains a final judgment against any manufactured home manufacturer, manufactured home dealer or salesperson, or other seller or purchaser, and the judgment is based on the grounds of (1) failure to honor warranties or guarantees, (2) fraud or willful misrepresentation related to any financial provision, (3) fraud or willful misrepresentation of the kind or quality of the product sold or purchased, (4) conversion, (5) any willful violation of any other provision of this part, including the provisions regulating escrow accounts, or regulations adopted pursuant to this part, or (6) violation of Chapter 3 (commencing with Section 1797) of Title 1.7 of Part 4 of Division 3 of the Civil Code, resulting in an actual and direct loss directly arising out of any transaction that occurs on or after January 1, 1985, the person, upon termination of all proceedings, including appeals, may file a claim with the department for an order directing payment out of the fund for the amount of actual and direct loss in the transaction. (b) If any person either purchases a manufactured home used for a personal or family residential or investment purpose from, or sells a manufactured home used for a personal or family residential or investment purpose to, a person or entity who is or has been the subject of a bankruptcy proceeding, the person may file a claim with the department for an order directing payment out of the fund for the actual and direct loss in the transaction based on (1) the failure to honor warranties or guarantees, (2) fraud or willful misrepresentation related to any financial provision, (3) fraud or willful misrepresentation of the kind or quality of product purchased or sold, (4) conversion, (5) willful violation of any other provision in this part, including the provisions regulating escrow accounts, or (6) violation of Chapter 3 (commencing with Section 1797) of Title 1.7 of Part 4 of Division 3 of the Civil Code, resulting in an actual and direct loss directly arising out of any transaction that occurs on or after January 1, 1985. (c) (1) The total amount of the claim shall not exceed the amount of actual and direct loss that remains unreimbursed from any source. (2) The maximum payment ordered under this section, with respect to any one sales transaction on a new or used manufactured home, shall be the amount of the actual and direct loss, as determined by the department based on information in the possession of the department and information provided by the claimant or claimants. In no event shall the actual payment relating to a single transaction exceed seventy-five thousand dollars ($75,000). (3) Notwithstanding any other provision of this chapter, a person who purchases or sells a manufactured home for an investment purpose may receive payment from the fund for that purpose only once. A person who has received payment from the fund for the purchase or sale of a manufactured home for an investment purpose shall henceforth be ineligible to make a claim under this chapter, either as a natural person or as a member of a partnership, as an officer or director of a corporation, as a member of a marital community, or in any other capacity. (d) Prior to payment of any claim against the fund, the claimant or claimants shall have first: (1) If the claim is based on a final judgment, diligently pursued collection efforts against all the assets of the judgment debtor, or presented evidence satisfactory to the department that the debtor is judgment proof, or demonstrated evidence satisfactory to the department that the costs of collection are likely to be in excess of the amounts that could be collected. This evidence may include, but is not limited to, a description of the searches and inquiries conducted by or on behalf of the claimant with respect to the judgment debtor's assets liable to be sold or applied to the satisfaction of the judgment, an itemized valuation of the assets discovered, and the results of actions by the claimant to have assets applied to satisfy the judgment. (2) If the claim is not based on a final judgment, presented evidence satisfactory to the department of either of the following: (A) That the person or entity is or has been the subject of bankruptcy proceedings and, for purposes of any civil litigation or claims in bankruptcy proceedings, has assigned to the department any interest in the actual and direct loss described in subdivision (c) in the amount that the claimant or claimants recover from the fund. (B) That the claimant's claim is consistent with this chapter and the claimant had presented evidence satisfactory to the department that the debtor is judgment proof, or demonstrated evidence satisfactory to the department that the costs of collection are likely to be in excess of the amounts that could be collected. This evidence may include, but not be limited to, a description of searches and inquiries conducted by or on behalf of the claimant with respect to the judgment debtor's assets eligible to be sold or applied to the satisfaction of the judgment, an itemized valuation of the assets discovered, and the results of actions by the claimant to have the assets applied to satisfaction of the judgment. (3) If the claim is based upon a violation of a provision within a warranty provided pursuant to Chapter 3 (commencing with Section 1797) of Title 1.7 of Part 4 of Division 3 of the Civil Code, demonstrated evidence satisfactory to the department that the claimant has been denied full compensation or correction under the warranty after the claimant has attempted to exercise his or her rights pursuant to the warranty. (e) A claim against the fund shall be filed with the department within the following time periods: (1) If the claim is based on a final judgment, within two years from the date of the judgment. (2) If the claim is not based on a final judgment, within two years from the termination of bankruptcy proceedings or two years from the date of sale as determined by subdivision (a) of Section 18070.2, or within two years of discovery of the violations causing actual and direct losses pursuant to this article but no longer than five years after the date of sale as determined by subdivision (a) of Section 18070.2, whichever event occurs later. (f) When any person files a claim for an order directing payment from the fund, the claimant shall mail, by first-class mail, a copy of that claim to the last known address of the judgment debtor. The department shall conduct a review of the application and other pertinent information in its possession, and it may issue an order directing payment out of the fund as provided in subdivisions (a) to (e), inclusive, subject to the limitations of subdivisions (a) to (e), inclusive, if the claimant or claimants show all of the following: (1) That he or she is not a spouse of the judgment debtor, the bankrupt person or entity, or a person representing the spouse. (2) That he or she is making an application within the time specified in subdivision (e). (3) That the claimant has satisfied the applicable requirements of subdivision (d). (4) That, if the claimant is a seller of a manufactured home used by the seller for personal, family, or household purposes, the claimant made a good faith effort to adequately secure the debt resulting from the sale of the manufactured home and with respect to which the claim is made. For purposes of this paragraph, a good faith effort to secure the debt may be demonstrated by, but shall not be limited to, providing the department with a promissory note signed by the debtor and which, pursuant to the terms thereof, is secured by collateral with a reasonable value at least equal to the debt evidenced by the promissory note. (g) Upon an order of the department directing that payment be made out of the fund, the Controller is authorized to draw a warrant for the payment of the amount of the claim approved by the department pursuant to this section. (h) In dispersing moneys from the fund, the department is authorized to give priority to claimants who have attempted to purchase or sell a manufactured home for a personal or family residential purpose. (i) All claims to the fund that are received on or after January 1, 1993, shall be processed, and a determination made, within one year of submission of a properly completed application. (j) The department, upon request by a Member of the Legislature, shall provide the following information: the number of claims to the fund, number of claims processed and decided within one year of their application date and submission of a properly completed application, the amount of fund money paid to claimants, and the amount of fund money allocated for the department's costs.