BILL ANALYSIS Ó SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 585 SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: fong VERSION: 4/25/11 Analysis by: Carrie Cornwell FISCAL: yes Hearing date: June 14, 2011 SUBJECT: Property taxation: mobilehomes DESCRIPTION: This bill requires that by March 1, 2012, the Department of Housing and Community Development (HCD) provide each county assessor a complete list of all mobilehomes within the county in a specified format. ANALYSIS: Existing law makes each new mobilehome sold on or after July 1, 1980 subject to property tax. The owner of a mobilehome sold new prior to July 1, 1980 may elect to be subject to property tax. This election, once made, is permanent. Mobilehomes that are not subject to the property tax pay instead a vehicle license fee (VLF), which is an in lieu of a personal property tax imposed at a rate based on the taxable value of the mobilehome. The taxable value of the mobilehome is established by the purchase price of the vehicle, depreciated annually according to a statutory schedule. Historically, the VLF rate was two percent of value but currently is one percent. At the time of an original registration of a mobilehome, HCD establishes a permanent title record and issues a certificate of title to the legal owner and a registration card for the registered owner. Those mobilehomes subject to property tax pay registration fees to HCD at the time of original registration and upon any subsequent sale, resale, or transfer of title, and those not subject to property tax pay annual registration fees and VLF to HCD. AB 585 (FONG) Page 2 Existing law requires HCD to furnish to the county assessor of the county in which a mobilehome 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. Existing law also requires HCD, the Franchise Tax Board, the Department of Motor Vehicles, and any county assessor to exchange or otherwise provide to one another any information relevant to the regulations, titling, and taxation of mobilehomes. This bill requires HCD, by March 1, 2012, to provide each county assessor in the state a complete list of all mobilehomes sited within that county, including those that pay VLF rather than property tax. Further, the bill requires that HCD provide this information in "standard text or comma delimited format that can be imported into internal applications." COMMENTS: 1.Purpose . According to the proponents, mobilehomes exist that should be on local tax rolls, but HCD has not reported to the county or has reported them to the wrong county. Such mishaps in reporting can cause some assessments to be unreported, which can result in undue financial hardship to taxpayers as they may have to pay several years of back taxes. The author notes specifically that when HCD fails to report a change of ownership to a local assessor, the mobilehome owner is responsible for paying up to four years of back taxes. If a homeowner neglects to update change of ownership information with HCD, then the homeowner is responsible for up to eight years of back taxes, even though the homeowner could have missed paying for more years than that. In this situation, the sponsor notes that local revenue due to the schools and other local entities is lost. To remedy these types of errors, the sponsor argues that assessors need a full listing of mobilehomes that should be on the county tax roll and that HCD is the only entity that has the information. This bill requires HCD to provide this information once by March of next year in a specified format AB 585 (FONG) Page 3 that the assessors can easily import and work with in their systems. 2.Necessary ? This bill arose when the author on behalf of the Santa Clara County Assessor asked HCD to provide a complete list of mobilehomes in Santa Clara County to that county's assessor. HCD did so for Santa Clara and for the other 57 counties but provided the information in a PDF format, which the assessors found difficult and intensely time consuming to import and work with in their computer software systems. Last year the author then asked HCD to provide the information in a different format, and HCD declined to do so. In response, the author introduced this bill to require HCD to provide the information in a specified format. In the meantime, HCD has provided the information in a comma delimited format (i.e., Excel) for Santa Clara County and reports that it will do so for all 58 counties. It is unclear, therefore, why this bill is needed as HCD will already have met its requirement long before the bill becomes law. 3.Double referral . The Rules Committee referred this bill to both the Transportation and Housing Committee and to the Governance and Finance Committee. Therefore, should this bill pass this committee, it will be referred to the Senate Governance and Finance Committee. Assembly Votes: Floor: 78-0 Appr: 16-0 R&T: 9-0 HCD: 7-0 POSITIONS: (Communicated to the Committee before noon on Wednesday, June 8, 2011) SUPPORT: California Assessors' Association (sponsor) California Association of County Treasurers and Tax Collectors Santa Clara County Assessor Western Manufactured Housing Communities OPPOSED: None received. AB 585 (FONG) Page 4