BILL ANALYSIS Ó
AB 587
Page 1
Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
587 (Chau) - As Amended April 30, 2015
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|Policy |Housing and Community |Vote:|7 - 0 |
|Committee: |Development | | |
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| |Judiciary | |10 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
Yes
SUMMARY:
This bill establishes a tax abatement program until 2019,
allowing mobilehome owners to bring their title into compliance
without having to pay all of the past due taxes and fees on the
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home, often accrued by a previous owner. The bill also creates
a temporary moratorium, coinciding with the abatement program,
on evictions that are based on lack of accurate title, as long
as the park resident has applied for the abatement program and
completes the title transfer within a specified time.
FISCAL EFFECT:
1)Significant costs to HCD of $360,000 (Mobilehome Manufactured
Home Revolving Fund) in 2015-16, 2016-17, and 2017-18 to fund
five positions to process the anticipated increase in
applications. HCD estimates approximately 100,000 mobilehome
owners could be eligible to participate in the tax abatement
program. If 10% of those eligible participate, 30,000
additional applications for registration and titling will be
generated over the 3-year period.
2)Foregone property tax revenues to local taxing entities,
unknown but potentially in the low millions of dollars,
resulting from the abatement program provisions that cap the
amount of delinquent property taxes owed and waive interest
and penalties. These losses are not reimbursable under the
bill. Staff notes that not all past taxes are forgiven under
this bill, but rather only a portion of the taxes accrued by
the current owner (applicant). Past owners are still liable
for their taxes and penalties owed.
3)Potentially reimbursable costs to county tax collectors to
implement the program.
COMMENTS:
1)Purpose. According to the author, there are thousands,
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perhaps tens of thousands, of homeowners who believe they own
their homes but never had title properly transferred to them.
Because of the sometimes informal nature of mobilehome sales,
buyers and sellers may not be aware that delinquent taxes and
fees prevent title from transferring. Sellers may not even be
aware that a delinquency exists because of, for example,
limited notification requirements for vehicle license fee
(VLF) delinquencies, or outdated ownership information at the
county or state level. In these situations, a buyer may only
become aware of the delinquency when he or she tries to
transfer title at HCD. If a seller does not pay the
delinquent fees or taxes and associated penalties, and the
buyer cannot pay them but has already purchased the
mobilehome, they are left with few options other than to keep
the home with an outdated title.
The three-year abatement program proposed by this bill would
reduce past due taxes and fees by capping the amount owed and
waiving penalties and interest. According to the author, this
encourages homeowners with outdated title to come forward and
apply to transfer title into their names, thereby updating
state and county records to ensure accurate VLF and local
property tax (LPT) billing in the future. The bill further
encourages owners to come forward by creating a temporary
moratorium on evictions based on lack of accurate title as
long as the park resident has applied for the abatement
program.
2)Background. HCD is responsible for the titling and
registration of mobilehomes. Homes that were purchased new
prior to July 1, 1980 were treated as vehicles and not subject
to LPT, but rather to an "in lieu" VLF paid annually to HCD.
Mobilehomes that were purchased after July 1, 1980 are
generally subject to LPT. Homeowners have the option to
voluntarily transfer their homes from the VLF system to the
LPT system, but not vice-versa.
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Prior to transferring title of a mobilehome, a buyer of a home
on the LPT system must obtain a Tax Clearance Certificate
(TCC) from the county tax collector indicating that all
property taxes have been paid. Similarly, if the mobilehome
is on the VLF system, all past due fees and penalties must be
paid to HCD prior to transfer of title, as well as a use tax.
Regardless of whether a mobilehome is on the VLF or LPT
system, delinquent fees or taxes prevent HCD from amending the
title of that home under existing law. If a buyer cannot pay,
and the seller will not pay or cannot be located, the buyer is
left without legal proof of ownership of the home, and HCD,
the county tax collector, and the county tax assessor may not
have up-to-date ownership information for the home.
Nonconformance with HCD's titling and registration
requirements can cause a number of problems for mobilehome
owners, including preventing them from legally making repairs
to the home, insuring the home, and from transferring
ownership of the home to another party. Nonconformance may
also subject the homeowner to eviction from a park under
current law.
3)Arguments in Support. Advocates for mobilehome owners as well
as many homeowners' associations believe this bill provides a
fair and commonsense approach to "ensure that mobilehome
owners are not caught in an untenable position due to the
liabilities of a previous owner, and ensures that they will
not be evicted from their mobilehome park due to lack of
compliance with local or state laws, but rather be allowed to
remain in their home."
They further note that in addition to unraveling problems
caused by years of bad registration practices, the bill
"provides the framework for ensuring in the future that state
and local government has procedures in place to ensure that
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title is properly transferred when a home is sold... and that
they can collect fees and taxes and ensure their records are
accurate and up-to-date."
4)Arguments in Opposition. The California Association of County
Treasurers and Tax Collectors (CACTTC) oppose this bill unless
significantly amended to, among other things, eliminate any
abatement of taxes-the central feature of the bill. CACTTC
disputes the premise of the bill that many people purchasing a
mobilehome do not realize the necessary steps that must be
taken to properly transfer title and ownership of the home.
In addition, CACTTC objects to the large financial losses
that, it asserts, counties would incur if this bill were to
become law.
5)Related legislation.
a) AB 682 (Williams), pending in this Committee, would
authorize a person to have specified alternation,
conversion, and repairs made to a mobilehome, for purposes
of implementing the Mobilehome park Utility Upgrade
Program, without filing an application with HCD.
b) AB 999 (Daly), pending in this Committee, would
establish due process requirements for mobilehome park
owners to dispose of an abandoned mobilehome without first
being required to pay any unpaid property taxes on the
mobilehome.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
AB 587
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