Amended in Senate July 11, 2013

Amended in Senate July 2, 2013

Amended in Assembly April 29, 2013

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 692

Introduced by Assembly Members Torres and V. Manuel Pérez

February 21, 2013

An act to amend Sections 50781, 50782, and 50786 of, and to add Section 50784.5 to, the Health and Safety Code, relating to mobilehomes, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 692, as amended, Torres. Mobilehomes: loans.

Existing law authorizes the Department of Housing and Community Development to make loans from the Mobilehome Park Purchase Fund, a continuously appropriated fund, to qualified mobilehome park residents, resident organizations, and nonprofit housing sponsors or local public entities to finance conversion of the parks to resident ownership and to make monthly housing costs affordable. Existing law begin insert requires a specified regulatory agreement to be recorded against the mobilehome park if a loan is made to a qualifying nonprofit housing sponsor or local public entity pursuant to these provisions. Existing law also end insert requires the provision of specified information to the department before making loans for mobilehome park conversions.

This bill would change the name of the fund to the Mobilehome Park Rehabilitation and Park Purchase Fund and authorize the department to provide loans from the fund to the owner of a mobilehome park for the purpose of rehabilitating park infrastructure, including water, sewage, and electrical systems. The bill would specify that the purpose of these loans would also be to bring mobilehome parks into compliance with applicable health and safety standards. The bill would require the department to consider specified criteria in determining eligibility for, and the amount of, loans made from the fund. begin insert The bill would require a regulatory agreement to be recorded against the mobilehome park if a loan is made to the owner of a mobilehome park and would require the agreement to contain provisions to prevent displacement of park residents. end insert The bill would also require the provision of specified information to the department before making these loans.

By authorizing a new purpose for the use of continuously appropriated funds, this bill would make an appropriation.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 50781 of the Health and Safety Code is
amended to read:

50781.  

Unless the context otherwise requires, the following
definitions given in this section shall control construction of this
chapter:

(a) “Affordable” means that, where feasible, low-income
residents should not pay more than 30 percent of their monthly
income for housing costs.

(b) “Conversion costs” includes the cost of acquiring the
mobilehome park, the costs of planning and processing the
conversion, the costs of any needed repairs or rehabilitation, and
any expenditures required by a governmental agency or lender for
the project.

(c) “Department” means the Department of Housing and
Community Development.

(d) “Fund” means the Mobilehome Park Rehabilitation and Park
Purchase Fund created pursuant to Section 50782.

(e) “Housing costs” means the total cost of owning, occupying,
and maintaining a mobilehome and a lot or space in a mobilehome
park. The department’s regulations shall specify the factors
included in these costs and may, for the purposes of calculating
affordability, establish reasonable allowances.

(f) “Individual interest in a mobilehome park” means any interest
that is fee ownership or a lesser interest that entitles the holder to
occupy a lot or space in a mobilehome park for a period of not less
than either 15 years or the life of the holder. Individual interests
in a mobilehome park include, but are not limited to, the following:

(1) Ownership of a lot or space in a mobilehome park or
subdivision.

(2) A membership or shares in a stock cooperative, as defined
in Section 11003.2 of the Business and Professions Code, or a
limited equity housing cooperative, as defined in Section 33007.5
of this code.

(3) Membership in a nonprofit mutual benefit corporation that
owns, operates, or owns and operates the mobilehome park.

(g) “Low-income resident” means an individual or household
that is a lower income household, as defined in Section 50079.5.
However, personal assets shall not be considered in the calculation
of income, except to the extent that they actually generate income.

(h) “Low-income spaces” means those spaces in a mobilehome
park operated by a resident organization, a qualified nonprofit
housing sponsor, or a local public entity that are occupied by
low-income residents.

(i) “Mobilehome park” means a mobilehome park, as defined
in Section 18214, or a manufactured home subdivision created by
the conversion of a mobilehome park, as defined in Section 18214,
including a senior park, to resident ownership or ownership by a
qualified nonprofit housing sponsor or local public entity.

(j) “Program” means the Mobilehome Park Rehabilitation and
Park Resident Ownership Program.

(k) “Qualified nonprofit housing sponsor” means a nonprofit
public benefit corporation, as defined in Part 2 (commencing with
Section 5110) of Division 2 of the Corporations Code, that (1) has
received its tax-exempt status under Section 501(c)(3) of the
Internal Revenue Code, (2) is not affiliated with or controlled by
a for-profit organization or individual, (3) has extensive experience
with the development and operation of publicly subsidized
affordable housing, (4) the department determines is qualified by
experience and capability to own and operate a mobilehome park
that provides housing affordable to low-income households, and
(5) has formal arrangements for ensuring resident participation or
input in the management of the park that may include, but not be
limited to, membership on the board of directors. “Qualified
nonprofit housing sponsor” also means a limited partnership where
all of the general partners are nonprofit mutual or public benefit
corporations that meet the requirements of paragraphs (1) to (5),
inclusive.

(l) “Resident organization” means a group of mobilehome park
residents who have formed a nonprofit corporation, cooperative
corporation, or other entity or organization for the purpose of
acquiring the mobilehome park in which they reside and converting
the mobilehome park to resident ownership. The membership of
a resident organization shall include at least two-thirds of the
households residing in the mobilehome park, or in each park of a
combination of parks where the residents of two or more parks
combine to form a single resident organization. The two-thirds of
households in the resident organization at the time of funding the
park need not be the same households that were residing in the
park when the application for assistance was submitted to the
department. A household’s membership in the resident organization
when the application was submitted to the department shall not be
a requirement for that household to receive a loan or assistance
under this chapter.

(m) “Resident ownership” means, depending on the context,
either the ownership by a resident organization of an interest in a
mobilehome park that entitles the resident organization to control
the operations of the mobilehome park for a term of no less than
15 years, or the ownership of individual interests in a mobilehome
park, or both.

SEC. 2.  

Section 50782 of the Health and Safety Code is
amended to read:

50782.  

(a) The Mobilehome Park Rehabilitation and Park
Purchase Fund is hereby created in the State Treasury and,
notwithstanding Section 13340 of the Government Code or any
other law, is continuously appropriated to the department for the
purpose of providing loans pursuant to this chapter and for related
administrative costs of the department. Notwithstanding Section
16305.7 of the Government Code, any moneys received by the
department pursuant to this chapter, and any other sources,
repayments, interest, or new appropriations, shall be deposited in
the fund. Except as described in subdivision (b), moneys in the
fund shall not be subject to transfer to any other fund pursuant to
any provision of Part 2 (commencing with Section 16300) of
Division 4 of Title 2 of the Government Code, except the Surplus
Money Investment Fund. The department may require the transfer
of moneys in the fund to the Surplus Money Investment Fund for
investment pursuant to Article 4 (commencing with Section 16470)
of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government
Code. Notwithstanding Section 16305.7 of the Government Code,
all interest, dividends, and pecuniary gains from the investments
shall accrue to the fund.

(b) Notwithstanding any other law, the Controller may use the
moneys in the Mobilehome Park Rehabilitation and Park Purchase
Fund for loans to the General Fund as provided in Sections 16310
and 16381 of the Government Code. However, interest shall be
paid on all moneys loaned to the General Fund from the
Mobilehome Park Rehabilitation and Park Purchase Fund. Interest
payable shall be computed at a rate determined by the Pooled
Money Investment Board to be the current earning rate of the fund
from which loaned. This subdivision does not authorize any transfer
that will interfere with the carrying out of the object for which the
fund was created.

SEC. 3.  

Section 50784.5 is added to the Health and Safety
Code, to read:

50784.5.  

(a) The department may make loans from the fund
to the owner of a mobilehome park for the purpose of rehabilitating
park infrastructure, including water systems, sewage systems, and
electrical systems. The purpose of providing loans pursuant to this
section is to bring parks into compliance with all applicable health
and safety standards while maintaining the monthly housing costs
for low-income residents at an affordable level.

(b) All of the following shall apply to loans provided pursuant
to this section:

(1) Loans shall be for a term of no more than 30 years and shall
bear interest at a rate of 3 percent per annum, unless the department
finds that a lower interest rate is necessary and will not jeopardize
the financial stability of the fund.

(2) The department may establish flexible repayment terms if
the terms are necessary to reduce the monthly housing costs for
low-income residents to an affordable level, and do not represent
an unacceptable risk to the security of the fund.

(3) If the loan recipient changes the use of the park or sells the
park during the term of the loan, the remaining balance of the loan
shall be due in full.

(4) Loans shall be for the minimum amount necessary to bring
the park into compliance with all applicable health and safety
standards and maintain the monthly housing costs of low-income
residents at an affordable level.

(5) Funds shall not be used to reduce the monthly housing costs
for residents who are not of low begin delete income, end delete begin insert income or to end insert reduce
monthly housing costs for low-income residents to less than 30
percent of their monthly income.

(6) Subject to the restrictions of this subdivision, funds may be
used to finance the costs of relocating a mobilehome park to a
more suitable site within the same jurisdiction if the department
determines that the cost of the relocation, including any and all
relocation costs to the affected households, is a more prudent
expenditure of funds than the costs of needed or repetitive repairs
to the existing park. Funds shall not be used to relieve a park owner
of any responsibility for covering the costs of mitigating the
impacts of a park closure as may be provided for by local ordinance
or pursuant to Section 65863.7 or 66427.4 of the Government
Code.

(c) In determining the eligibility for and amount of loans
pursuant to this section, the department shall take into
consideration, among other factors, all of the following:

(1) The current health and safety conditions in the park and the
likelihood that conditions would be remedied without the loan.

(2) The percentage of spaces in the park that are currently
occupied by low-income residents, which in no case shall be less
than 30 percent.

(3) The reasonableness of the costs relating to the repairs,
rehabilitation, construction, or other costs.

(4) Any administrative and security factors affecting the
department’s program operation and administration.

(5) Whether or not the project complements the implementation
of a local housing program to preserve or increase the supply of
housing for persons and families of low or moderate income.

(6) Whether or not state funds are utilized in the most efficient
and effective manner.

(7) The age of the park and the age of the infrastructure that
will be rehabilitated with the loan proceeds.

(d) Before providing financing pursuant to this section, the
department shall require provision of, and approve, at least all of
the following:

(1) Verification that either no park residents shall be
involuntarily displaced as a result of the infrastructure rehabilitation
project or the impacts of the displacement shall be mitigated as
required under state and local law. For purposes of this
requirement, compliance with Section 66427.5 of the Government
Code shall be conclusively presumed to have mitigated economic
displacement.

(2) Projected costs and sources of funds for all rehabilitation
activities.

(3) Projected operating budget for the park after the
infrastructure rehabilitation project.

(4) A management plan for the operation of the park.

SEC. 4.  

Section 50786 of the Health and Safety Code is
amended to read:

50786.  

(a) The department shall adopt regulations for the
administration and implementation of this chapter.

(b) The department shall obtain the best available security for
loans made pursuant to this chapter. The security may include a
note, deed of trust, assignment of lease, or other form of security
on real or personal property that the department determines is
adequate to protect the interests of the state. To the extent
applicable, these documents and any regulatory provisions shall
be recorded or referenced in a recorded document in the office of
the county recorder of the county in which the mobilehome park
is located.

(c) The degree of continuing regulatory control with respect to
park operations and resident loans exercised by the department in
making loans pursuant to this chapter shall be commensurate with
the level of financial assistance provided and in all cases shall be
adequate to protect the state’s security interest and ensure the
accomplishment of the purposes of the program authorized by this
chapter. The regulatory requirements shall be set forth in a
regulatory agreement, deed of trust, or other lien, and any violation
of these requirements shall be considered a violation of a security
document. If loans are made to a qualifying nonprofit housing
begin delete sponsor or end delete begin insert sponsor, a end insert local public entity, begin insert or the owner of a
mobilehome park, end insert a regulatory agreement shall be recorded against
the mobilehome park. This regulatory agreement shall contain
provisions limiting occupancy, rents, and park operation for the
begin delete original end delete begin insert entire end insert loan term. begin insert In the case of a loan made to the owner
of a mobilehome park pursuant to Section 50784.5, this regulatory
agreement shall contain provisions to prevent displacement of all
residents. end insert The department may release individual spaces from the
regulatory agreement only if they are purchased by residents who
occupy them.

(d) Before providing financing for a park conversion pursuant
to this chapter, the department shall require provision of, and
approve, at least all of the following:

(1) Verification at the time of application and prior to funding
that at least two-thirds of the households residing in the
mobilehome park support the plans for acquisition and conversion
of the park.

(2) Verification that either no park residents shall be
involuntarily displaced as a result of the park conversion or the
impacts of the displacement shall be mitigated as required under
state and local law. For purposes of this requirement, compliance
with Section 66427.5 of the Government Code shall be
conclusively presumed to have mitigated economic displacement.

(3) Verification that the conversion is consistent with local
zoning and land use requirements, other applicable state and local
laws, and regulations and ordinances.

(4) Projected costs and sources of funds for all conversion
activities.

(5) Projected operating budget for the park during and after the
conversion.

(6) A management plan for the conversion and operation of the
park.

(7)  If necessary, a relocation plan for residents not participating
that is in compliance with Chapter 16 (commencing with Section
7260) of Division 7 of Title 1 of the Government Code.

(e) The department shall, to the greatest extent feasible, do all
of the following:

(1) Require participation by cities and counties in loan
applications submitted pursuant to this chapter.

(2) Contract with private lenders or local public entities to
provide program administration and to service loans made pursuant
to this chapter.

(3) Give priority to applications for resident-owned parks.

(f) The department may provide technical assistance to loan
applicants, or may contract with a qualified nonprofit entity to
provide that technical assistance, and may include the reasonable
costs of the technical assistance as a part of the loan principal.