BILL ANALYSIS Ó
AB 585
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Date of Hearing: May 2, 2011
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Henry T. Perea, Chair
AB 585 (Fong) - As Amended: April 25, 2011
Majority vote. Fiscal committee.
SUBJECT : Property taxation: manufactured homes: information
sharing.
SUMMARY : Requires the Department of Housing and Community
Development (HCD) to furnish to the county assessor a complete
list of all manufactured homes sited within the county, as
provide. Specifically, this bill :
1)Requires HCD, by March 1, 2012, to furnish to the county
assessor of the county, in which a manufactured home is sited,
a complete list of all manufactured homes sited within that
county.
2)Specifies that the list shall include manufactured homes, not
subject to property tax, that pay an "in lieu" fee to HCD.
3)Requires HCD to furnish the information in a standard text or
comma delimited format that can be imported into internal
application.
EXISTING LAW :
1)Subjects to property tax all manufactured homes and
mobilehomes sold new on or after July 1, 1980, and allows the
owner of a manufactured home or mobilehome sold new prior to
July 1, 1980 to elect to be subject to property tax. This
election, once made, is permanent. ÝRevenue and Taxation Code
(R&TC) Section 5801].
2)Requires manufactured homes and mobilehomes not subject to
property tax to pay an annual license fee to HCD ÝHealth and
Safety Code (H&SC) Section 18115 and 18116] and annual
registration fees to HCD (H&SC Section 10875.5).
3)Requires all manufactured homes and mobilehomes subject to
property tax to pay registration fees to HCD at the time of
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original registration and upon any subsequent sale, resale, or
transfer of title (H&SC Section 10875.5).
4)Requires HCD, upon the original registration of a manufactured
home or mobilehome, to establish a permanent title record and
issue a certificate of title to the legal owner and a
registration card to the registered owner (H&SC Section
18090.5).
5)Requires HCD to furnish to the county assessor of the county
in which a manufactured home is sited, on or before the last
day of each calendar month, a listing of all new registrations
and titles to manufactured homes sited, or to be sited, in
that county (R&TC Section 5841).
6)Requires HCD to report twice a year, on or after January 1 and
on or after July 1, to the auditor of each county the address
of each manufactured home and mobilehome within the county for
which license fees were paid to HCD during the preceding
six-month period and the amount paid.
7)Requires the Franchise Tax Board, the Department of Motor
Vehicles, the HCD, and any county assessor to exchange or
otherwise provide to one another any information relevant to
the regulations, titling and taxation of manufactured homes
(R&TC Section 5842).
FISCAL EFFECT : Unknown.
COMMENTS :
1)Author's Statement . The author states that, "In a period of
time when every penny counts, it's important that we look at
all avenues to ensure our schools and local governments are
getting the revenues that are due to them. In addition, we
need to protect the rights of California's manufactured
homeowners and extend all possibilities of fairness when
exercising our duties sending out tax bills. Instead of these
homeowners receiving one large, burdensome, and lump sum tax
bill, they deserve the assurance that they will receive their
annual tax bill. AB 585 will stop the bleeding of unpaid
taxes and back taxes on manufactured homes by ensuring that
local assessors have all the necessary and up-to-date
information on changes of ownership. We have to catch taxes
that falling through the cracks because in essence, this is
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money for our schools and local governments we are letting
slip through our fingers."
2)Arguments in Support . The proponents of this bill argue that
the information provided by HCD to local assessors "will help
identify those manufactured homes that have not been reported
to the county, or may have been reported to the wrong county
for property tax purposes." The proponents assert that
assessors need a full listing of manufactured homes, including
newly registered and pending transfers, in order to streamline
the assessment of property taxes. Finally, the proponents
state that this bill is necessary to protect taxpayers from
unexpected multiple year property tax bills that would result
from inadvertent escape assessments, and to ensure timely
revenue to local governments and schools.
3)Background . Under existing law, all new manufactured homes
must initially register with HCD, and the registration must be
renewed upon changes in ownership. For manufactured homes
that are subject to a license fee, the registration must be
renewed annually. Most mobilehomes in California are subject
to the local property tax, but some mobilehomes are still
subject to a license fee "in lieu" of property tax. County
assessors are in charge of administering the local property
taxes, including those applicable to mobilehomes. On the
other hand, HCD is responsible for the registration and
titling of all mobilehomes and is required to inform the
county assessor of all new registrations and titles to
mobilehomes sited within the county. Because of the
overlapping jurisdictions in this area, cooperation and
exchange of information between the state and counties are
critical.
Existing law requires, HCD to provide a monthly listing of all
new registration and titles to manufactured homes sited, or to
be sited, in the county. However, the monthly lists provided
by HCD to county assessors sometimes are incomplete, which
resulted in some mobilehomes escaping local property tax. In
2010, AB 2526 (Fong), sponsored by the Santa Clara County
Assessor, attempted to address the issue of information
sharing by stating the intent of the Legislature to enact
legislation to require owners and operators of mobilehome
parks to provide, upon the request of the county assessors, a
statement containing the decal number, registered owner, situs
address, and mailing address of all mobilehomes located in the
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park. In pursuing the legislation, the sponsor discovered
that park owners do not necessarily have this information, but
HCD does. The HCD agreed to provide a one-time list to each
county assessor of all mobilehomes within the county, both
those that should be paying property tax and those that pay
the "in lieu" fee to HCD, that could be used to bring the
local tax roll up to date. AB 2526 was never referred to a
committee because the author decided not to move forward with
the bill.
In the fall of 2010, HCD provided the information to county
assessors in PDF format. However, such a format could not have
been imported into assessors' databases and the assessors
would have had to go manually through the list and compare it
with the local tax roll. For counties in which there are
thousands of mobilehomes, this process would be time-consuming
and cumbersome. Thus, the assessors approached HCD again and
asked for the data to be provided in Excel or some other
standard text or comma delimited format, similar to the format
in which HCD provides the bi-monthly updates to assessors on
new titles and registrations, but HCD was unwilling to do so.
Consequently, this bill was introduced to compel HCD to
provide the information in the required format.
4)The Purpose of this Bill . This bill would require HCD to
provide each county assessor, by March 1, 2012, with a list of
all mobilehomes within the county, both those subject to
property tax and those that pay the "in lieu" fee to HCD, in a
standard text or comma delimited format that can easily be
imported into assessors' internal systems. The list would
allow assessors to cross-check the accuracy of the local tax
roll and make sure that all mobilehomes that should be paying
property tax are being billed. Committee staff understands
that HCD has agreed to change the format in which the data
could be provided to accommodate the assessors' request.
5)Escape Assessments . An "escape assessment" is a retroactive
assessment intended to rectify an omission or error committed
by a county assessor in not assessing, or under-assessing,
taxable property. As explained by the Board of Equalization
(BOE) staff in its analysis of this bill, if property escapes
assessment, "the assessor is required to value the property
upon discovery for the appropriate valuation date, enroll the
appropriate value on the roll being prepared, process any
necessary corrections to the current roll, and process
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appropriate escape assessments for prior years within the
statute of limitations." The applicable statute of limitation
is four years (RT&C Section 532). However, if a person
willfully conceals, fails to disclose, removes, transfers or
misrepresents tangible personal property to evade taxation, a
penalty equal to 25% of additional value must be imposed and
the statute of limitation is extended to eight years.
According to the sponsor, currently, some manufactured homes
have not been assessed because the assessors have not yet
received pertinent information from HCD. Eventually, when
assessors have access to that information, they will add those
currently unassessed manufactured homes to the property tax
roll and will require the owners of those homes to pay several
years of back property taxes. As noted by the BOE staff,
should the "data matching project uncover a significant number
of previously escaping mobilehomes or previously undiscovered
changes in ownership? the resulting tax bill could be
significant to these mobilehome owners." At the same time,
the longer it takes for the assessors to discover and rectify
the problem, the less likely it is that the assessors would be
able to assess and collect all of the back taxes due to the
statute of limitations applicable to escape assessments.
6)Double referred : This bill was doubled-referred with the
Assembly Committee on Housing and Community Development, and
passed out of that Committee with a 7-0 vote on April 26,
2011. For additional discussion of this bill, please refer to
that committee's analysis.
REGISTERED SUPPORT / OPPOSITION :
Support
California Assessors' Association (sponsor)
Western Manufactured Housing Communities Association
County of Santa Clara, Office of the Assessor
Opposition
None on file
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098
AB 585
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