BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  AB 2046|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  AB 2046
          Author:   Allen (D) and Huffman (D)
          Amended:  5/21/12 in Assembly
          Vote:     21

           
           SENATE GOVERNANCE & FINANCE COMMITTEE  :  6-1, 7/3/12
          AYES:  Wolk, Dutton, DeSaulnier, Hernandez, Kehoe, Liu
          NOES:  Fuller
          NO VOTE RECORDED:  La Malfa, Yee

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 8/16/12
          AYES:  Kehoe, Walters, Alquist, Dutton, Lieu, Price, 
            Steinberg
          
          ASSEMBLY FLOOR  :  48-25, 5/31/12 - See last page for vote


           SUBJECT  :    Property taxation: change in ownership

           SOURCE  :     Author


           DIGEST  :    This bill extends provisions applicable to 
          mobile home parks to transfers of floating home marinas to 
          current tenants of berths at the marina.  This bill 
          excludes these transfers from the definitions of change of 
          ownership, thereby precluding reassessment of the marina to 
          fair market value upon transfer, so long as specified 
          conditions are met.

           ANALYSIS  :    Section One of Article XIII of the California 
          Constitution (Constitution) provides that all property is 
                                                           CONTINUED





                                                               AB 2046
                                                                Page 
          2

          taxable unless explicitly exempted by the Constitution or 
          federal law.  The Constitution limits the maximum amount of 
          any ad valorem tax on real property at 1% of full cash 
          value, usually the purchase price, plus any 
          locally-authorized bonded indebtedness.  Assessors 
          reappraise property whenever it is purchased, newly 
          constructed, or when ownership changes.  However, a change 
          of ownership generally does not include any situation where 
          one person continues to own or reside in the home, such as 
          placing property in a trust, creating a life estate, or 
          purchasing the land under a mobile home.  

          This bill extends provisions applicable to mobile home 
          parks to transfers of floating home marinas to current 
          tenants of berths at the marina.  This bill excludes these 
          transfers from the definitions of change of ownership, 
          thereby precluding reassessment of the marina to fair 
          market value upon transfer, so long as:

           The transfer is to a nonprofit corporation, stock 
            cooperative corporation, limited equity stock 
            cooperative, or other entity formed buy tenants to 
            purchase the marina.

           The currently renting tenants seeking to purchase the 
            marina total at least 51% of its berths through the 
            ownership of an aggregate of at least 51% of the voting 
            stock of the entity described above. 

           Should any of the tenants that are excluded from the 
            reassessment under this bill subsequently sell or 
            transfer their share, that pro rata share shall be 
            reassessed to fair market value, unless the marina has 
            been converted to a condominium, stock cooperative 
            ownership, or limited equity cooperative ownership, or is 
            otherwise precluded.  

          This bill further requires a floating home marina that does 
          not utilize recorded deeds to file a report on or before 
          February 1 of each year with:

           The full names and mailing addresses of each owner, 

           The situs address including berth and dock number of each 







                                                               AB 2046
                                                                Page 
          3

            unit, 

           The date ownership was acquired, and

           The Department of Housing and Community Development decal 
            number.

          New resident owners, purchasers, or transferees of a 
          floating home in a park must file a preliminary change in 
          ownership report or a change in ownership statement.  This 
          bill imports a definition of "floating home marina" from 
          the Civil Code and "pro rata portion of the real property" 
          from the mobile home park exclusion.

           Comments
           
          Assessing mobile homes for property tax purposes generally 
          differs from typical assessment:  one taxpayer (the mobile 
          homeowner) is assessed for the value his/her structure, 
          while another (the mobile home park owner) pays tax on the 
          park under the structure, unless the owner both owns the 
          home and the park, in which case he/she is assessed for 
          both.  When tenants who rent the individual spaces in the 
          park want to buy it, state law provides that the transfer 
          does not constitute a change-in-ownership subject to 
          reassessment, subject to specified conditions.   However, 
          once excluded, any subsequent change of ownership of the 
          shares of stock or other equity ownership in the park 
          purchased by the former renters results in a pro rata 
          change in ownership, that particular share in the park 
          would be reassessed to current market value.

          As fixed structures with no means of self-propulsion that 
          rest in permanent berths in marinas, floating homes are 
          subject to property taxes.  Floating homes are connected to 
          utilities and services.  Floating home marinas are 
          privately owned and charge homeowners monthly berthage 
          fees.  Five marinas of 400 floating homes can be found in 
          Richardson Bay in Sausalito, California. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Senate Appropriations Committee:







                                                               AB 2046
                                                                Page 
          4


             Based on limited data, the Board of Equalization 
             estimates that this bill will result in a statewide 
             reduction in property tax revenues of approximately 
             $212,000 annually.  Assuming 50% of the statewide 
             property tax revenues offset General Fund obligations to 
             schools pursuant to Proposition 98, the State General 
             Fund impact would be approximately $106,000 due to 
             increased state backfill provided to schools.  Actual 
             General Fund impacts would depend upon a number of 
             factors.

             Likely minor reimbursable mandate costs related to the 
             imposition of new duties on local tax officials related 
             to the new change in ownership exclusion.  (General 
             Fund)

           SUPPORT  :   (Verified  8/20/12)

          A Dock, Waldo Point Harbor (Sausalito)
          Commodore Dock (Sausalito)
          Floating Homes Association, Inc.
          Gate 6  Dock (Sausalito)
          Harbor Equity Group, Inc.
          Kappas West Pier (Sausalito)
          Marin County Assessor-Recorder-County Clerk


           ASSEMBLY FLOOR  :  48-25, 5/31/12
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Block, 
            Bonilla, Bradford, Brownley, Buchanan, Butler, Campos, 
            Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer, 
            Fong, Fuentes, Furutani, Galgiani, Gatto, Gordon, Hall, 
            Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, 
            Lara, Bonnie Lowenthal, Ma, Mitchell, Pan, Perea, V. 
            Manuel Pérez, Portantino, Skinner, Solorio, Swanson, 
            Torres, Wieckowski, Williams, Yamada, John A. Pérez
          NOES:  Achadjian, Bill Berryhill, Blumenfield, Conway, 
            Cook, Donnelly, Beth Gaines, Garrick, Gorell, Grove, 
            Hagman, Halderman, Harkey, Jeffries, Jones, Knight, 
            Logue, Miller, Morrell, Nestande, Nielsen, Olsen, Silva, 
            Smyth, Wagner
          NO VOTE RECORDED:  Charles Calderon, Fletcher, Mansoor, 
            Mendoza, Monning, Norby, Valadao







                                                               AB 2046
                                                                Page 
          5



          AGB:dk  8/20/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****