BILL ANALYSIS Ó SENATE GOVERNANCE & FINANCE COMMITTEE Senator Lois Wolk, Chair BILL NO: AB 253 HEARING: 6/19/13 AUTHOR: Levine FISCAL: Yes VERSION: 5/2/13 TAX LEVY: No CONSULTANT: Lui SUBDIVISION MAP ACT Extends subdivision requirements to floating home marinas that apply to the conversion of mobilehome parks. Background During World War II, the Marinship shipyard in Sausalito was built to construct "Liberty Ships" for the U.S. Navy. After the war, the shipyard was decommissioned, and military vessels, like landing crafts, were abandoned. In the 1950s and 1960s, individuals began living in and around the former shipyard in Richardson's Bay (Marin County). Many former barges, tugboats, and ferries have been converted to residences. Today, most of these houseboats resemble traditional single-family homes. State law defines a floating home as a stationary structure that has no mode of power on its own, is dependent on utilities, and has a permanent continuous hookup to shoreside sewage. They are subject to the property tax (AB 2409, Filante, 1985). Floating home marinas are generally privately owned and charge homeowners monthly berthage fees. Approximately 500 home berths are permitted in six designated residential marinas -- five in Marin County, and one in Alameda County. In response to haphazard and uncoordinated filling of San Francisco Bay, the Legislature enacted the McAteer-Petris Act of 1965, which created the San Francisco Bay Conservation and Development Commission (SB 309, McAteer). Floating homes in the San Francisco Bay must comply with the San Francisco Bay Plan, which limits the construction and modification of floating homes. Floating homes must also comply with local regulations regarding design, safety, and location. AB 253 -- 5/2/13 -- Page 2 Owners of floating homes generally stay in the same place for decades, affixed to a berth, and have created communities and associations for governance. Currently, marina residents can form cooperatives or condominiums to purchase a marina, and state law provides a process for marina residents to notify a marina owner of their intent to purchase the marina (AB 929, Filante, 1990). Last year, at the request of residents of floating home marinas, the Legislature deemed transfers of a floating home marina to an entity formed by tenants purchasing the marina not be a change of ownership for property tax purposes (AB 2046, Allen, 2012). Residents of floating home marinas are asking lawmakers for similar protections as those granted to mobile home park residents when parks are converted to resident ownership. Proposed Law Assembly Bill 253 extends to floating home marinas several requirements that apply to the conversion of mobilehome parks. I. Public report . Current law requires that anyone who plans to sell subdivided lands must file with the Department of Real Estate an application for a public report, which includes a description of the land, provisions made for public utilities, any liens, and an estimate of existing or proposed assessment. The purchase of a mobilehome park by a nonprofit corporation is exempt from the requirement to file an application for a public report if it purchases a mobilehome park, if all of the following occur: A majority of the shareholders or members of the nonprofit corporation constitute a majority of the homeowners of the mobilehome park, and a majority of the nonprofit corporations' board directors are homeowners of the mobilehome park. All members of the corporation are residents of the mobilehome park. A permit to issue securities is obtained from the Department of Corporations. All tenants' funds for the purchase of the mobilehome park are deposited in escrow until the document transferring title of the mobilehome park to the nonprofit corporation is recorded. AB 253 -- 5/2/13 -- Page 3 Assembly Bill 253 exempts a floating home marina from the requirement for a public report, under the same specified conditions. II. Written notice and disclosure . Current law requires a subdivider of a mobilehome park that is proposed to be converted to resident ownership, prior to filing a notice of intention, to disclose to homeowners and park residents, by written notice, the tentative price of the subdivided interest proposed to be sold. The disclosure notice must include a statement that the tentative price is non-binding, and the provider of the information is not liable. The notice must not be construed to authorize the subdivider of a mobilehome park to offer to sell or lease or accept money for the sale or lease of subdivided interests in the park, or to engage in other prohibited activities, with regard to subdividing the park into ownership interests, before to the issuance of a public report. Assembly Bill 253 requires a subdivider of a floating home marina, before filing a notice of intention, to disclose to specified information in writing to homeowners and residents of the marina. III. Report on the impact of the conversion . Current law requires a subdivider, when filing a tentative or parcel map for a subdivision that converts a mobilehome park to another use, to file a report on the impact of the conversion on displaced residents of the mobilehome park. The report must address the availability of adequate replacement space in mobilehome parks. The subdivider must make a copy of the report available to each mobilehome park resident at least 15 days before an advisory agency or legislative body hears the map. The legislative body that is authorized to approve, conditionally approve, or disapprove the map, can require the subdivider to take any steps to mitigate any adverse impact of the conversion. Any local agency may enact more stringent measures regarding local regulation of conversions of mobilehome parks. A subdivision that is created from the conversion of rental to resident ownership is not required to file a report on the impact of the conversion on displaced residents of the mobilehome park. AB 253 -- 5/2/13 -- Page 4 Assembly Bill 253 requires a subdivider, at the time of filing a tentative or parcel map for a subdivision that converts a floating home marina to another use, to file a report, as specified, on the impact of the conversion on displaced residents of the floating home marina, subject to the same conditions that apply to mobilehome parks. IV. Conversion of rental to resident ownership . Current law requires a subdivider, when filing a tentative or parcel map for a subdivision to be created from the conversion of a rental mobilehome park to resident ownership, to avoid the economic displacement of all nonpurchasing residents in a specified manner. Assembly Bill 253 extends the same requirements to the conversion of a rental floating home marina to resident ownership. V. Petition . Current law waives the requirement for a parcel map or a tentative and final map when at least two-thirds of the mobilehome owners, who are tenants in the mobilehome park, sign a petition indicating their intent to purchase the park for conversion to resident ownership, and a field survey is performed, except if any of the four specified conditions exist. Assembly Bill 253 waives the requirement for a parcel map or a tentative and final map, when at least two-thirds of the owners of floating homes who are tenants in the floating home marina sign a petition indicating their intent to purchase the marina to convert it to resident ownership, and if other conditions are met. The bill also specifies the form and content of the floating home marina petition and disclosure statement. Current law prohibits a local agency, if a tentative or parcel map is required, from imposing any offsite design or improvement requirements unless they are necessary to mitigate an existing health or safety condition. The mitigation of a health or safety concern must not reduce the number or change the location of mobilehome spaces. Assembly Bill 253 provides that the mitigation must also not reduce the number or change the location of floating home marina berths. AB 253 -- 5/2/13 -- Page 5 State Revenue Impact No estimate. Comments 1. Purpose of the bill . The Subdivision Map Act allows mobile home tenants to purchase their park and distribute the ownership through a common interest development, like a condominium, where individual owners use common property and facilities, and are governed through a homeowners association. If residents are interested in purchasing the floating home marina, they have two options: a condominium or a cooperative. In a common interest development, a resident would own the floating home's berth, whereas in a cooperative, a resident buys a share of the marina. Although existing law authorizes the formation of a cooperative or condominium, AB 253 facilitates the creation of a condominium association, in the event that tenants want to purchase their marina as a group. Further, the floating home resident group may face difficulty in securing a loan and insurance, because financing a home marina is rare and a cooperative is a relatively uncommon form of ownership. According to the author, the bill "removes a significant financial barrier and will benefit marina owners by providing them with a buyer with an interest in the marina." AB 253 extends to floating home marinas the same statutory provisions that allow mobilehome parks to convert to residential ownership. 2. Mandate . The California Constitution requires the State to reimburse local governments' costs for a new or higher level of service. Legislative Counsel says that AB 253 creates a new state mandated local program by increasing the level of service provided by local agencies. AB 253 declares that no reimbursement is necessary because a local agency can levy service charges, fees, or assessments to offset the costs of the bill's requirements. 3. Technical . AB 253 conflicts with AB 1317 (Frazier), which enacts conforming statutory and name changes to reflect the Governor's Reorganization Proposal Number 2 (2012). Effective July 1, 2013, the Department of Corporations will become a division in the new Department AB 253 -- 5/2/13 -- Page 6 of Business Oversight. The Committee may wish to consider amending the bill to conform to the name changes set forth in GRP 2: On page 4, line 16, after "of" insert "Business Oversight, Division of" Assembly Actions Assembly Local Government: 9-0 Assembly Housing and Community Development:7-0 Assembly Appropriations: 17-0 Assembly Floor: 74-0 Support and Opposition (6/13/13) Support : Sausalito Floating Homes Association; Supervisor Kathrin Sears, Marin County. Opposition : Unknown.