BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 587 (Chau)
Version: June 20, 2016
Hearing Date: June 28, 2016
Fiscal: Yes
Urgency: No
TH
SUBJECT
Mobilehomes: Payments: Nonpayment or Late Payments
DESCRIPTION
This bill establishes, until December 31, 2019, a tax amnesty
program for owners of mobilehomes who have not registered their
ownership interest with the Department of Housing and Community
Development (HCD). This tax amnesty program authorizes HCD to
release specified liens imposed and waive all outstanding
charges assessed by the department prior to December 31, 2015,
as specified, in order to allow an owner to register or transfer
registration of a manufactured home or mobilehome, as specified.
This bill also alters the content of information to be provided
annually to residents of mobilehome parks.
BACKGROUND
Under existing law, mobilehomes are taxed either as vehicles
under the Vehicle License Fee program, or as property subject to
local property taxes. When sold as new, the Manufactured
Housing Act of 1980 (Health & Saf. Code 18000 et seq.) requires
mobilehome dealers to register and establish legal title of a
mobilehome with HCD in the name of the new owner. HCD issues
title to the new registered owner or to the lien holder in cases
where the home is financed. Until 2001, HCD used to issue
owners of mobilehomes registration decals - much like an
automobile's - which the owner was required to place in a
specific location outside the mobilehome. However, in 2000, the
Legislature passed AB 984 (Correa, Ch. 23, Stats. 2000), which
eliminated this requirement, and instead left to HCD and its
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inspectors the duty to enforce compliance with titling and
registration requirements.
Unlike the formal sale process for real property, transferring
ownership of a mobilehome is often done informally, and as a
consequence, parties to a sale transaction may not realize that
a mobilehome must be re-registered and titled in the name of the
new owner or purchaser. Consequently, California now has an
unknown number of mobilehomes that are improperly registered or
titled, leading to difficulties in collecting property taxes or
vehicle license fees from the appropriate party, and obstructing
the ability to sell or transfer these homes to new owners unless
all past due taxes and fees - which may be the responsibility of
another party - are paid in full.
This bill creates an amnesty program that would allow owners of
unregistered or untitled mobilehomes to register their property
without having to pay the full amount of unpaid taxes and fees.
It would authorize HCD to issue new title and registration
documents, and for a local tax assessor to issue a tax clearance
certificate, when an applicant provides documentation
demonstrating ownership of a mobilehome and their date of
acquisition, and the applicant pays both the charges assessed by
the department between the time the applicant took ownership or
December 31, 2015, whichever is later, and the taxes owed from
the date of sale, without penalties or interest, not to exceed
the amounts attributable one year prior to January 1, 2017.
This bill would also modify an annual notice provided to
mobilehome park residents by park management educating them on
the need to register and title a mobilehome in the name of the
new owner upon sale.
CHANGES TO EXISTING LAW
1.Existing law , the Mobilehome Residency Law (MRL), governs the
relationship between park owners or managers and the residents
and homeowners in mobilehome parks and manufactured housing
communities. (Civ. Code Sec. 798 et seq.)
Existing law specifies terms and conditions that must appear
in a rental agreement governing a mobilehome. Existing law
requires a specified notice to be provided by mobilehome park
management annually providing notice of certain rights and
responsibilities of parties under the MRL. (Civ. Code Sec.
798.15.)
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This bill modifies the content of the above notice to, among
other things, state:
homeowners must pay rent, utility charges, and
reasonable incidental service charges in a timely manner.
Failure to comply could be grounds for eviction from the
park. (Civil Code Section 798.56);
if you sell your home, you are required to provide a
manufactured home and mobilehome transfer disclosure
statement to the buyer prior to sale. (Civil Code Section
1102.6d) When a home is sold, the owner is required to
transfer the title to the buyer. The sale of the home is
not complete until you receive the title from the seller.
The buyer must also file paperwork with the Department of
Housing and Community Development to register the home in
his or her name. (Civil Code Sections 798.70-798.74);
in California, mobilehome owners must pay annual
property tax to the county tax collector or an annual fee
in lieu of taxes to the Department of Housing and Community
Development (HCD). If you are unsure which to pay, contact
HCD. Failure to pay taxes or in lieu fees can have serious
consequences, including losing your home at a tax sale; and
for more information on registration, titling, and
taxes, contact: the Department of Housing and Community
Development www.hcd.ca.gov (800) 952-8356; County Tax
Collector, www.cacttc.org (for listing); or call your local
county government.
1.Existing law provides that HCD shall withhold the registration
or transfer of registration of any manufactured home,
mobilehome, or floating home which is subject to local
property taxation, other than a new manufactured home,
mobilehome, or floating home for which application is being
made for an original registration, until the applicant
presents a tax clearance certificate or a conditional tax
clearance certificate issued by the tax collector of the
county where the manufactured home, mobilehome, or floating
home is located. (Health & Saf. Code Sec. 18092.7.)
Existing law provides that nonpayment of specified fees and
penalties that are due on a mobilehome, manufactured home,
commercial coach, truck camper, or floating home shall
constitute a lien in favor of the State of California in the
amount owing. Until the amount of the lien is paid to HCD,
the department shall not do either of the following:
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amend the permanent title record of the manufactured
home, mobilehome, commercial coach, truck camper, or
floating home which is the subject of the lien for the
purpose of transferring any ownership interest or
transferring or creating any security interest in the
manufactured home, mobilehome, commercial coach, truck
camper, or floating home; or
issue any duplicate, substitute, or new certificate of
title, registration card, or copy of a registration card
with respect to the manufactured home, mobilehome,
commercial coach, truck camper, or floating home which is
the subject of the lien. (Health & Saf. Code Sec.
18116.1.)
This bill states that when application is made to HCD for
registration or transfer of registration of a manufactured
home or mobilehome, and the applicant is not currently the
registered owner, with respect to all charges assessed by the
department prior to the date the title or interest in the
manufactured home or mobilehome was transferred to the
applicant, the department shall release specified liens
imposed and waive all outstanding charges assessed by the
department, if all of the following requirements are met:
the applicant provides documentation demonstrating to
the satisfaction of the department ownership and the date
of acquisition of ownership interest;
the application is made prior to December 31, 2019;
the applicant pays any charges assessed by the
department during the period between the time the applicant
took ownership interest or December 31, 2015, whichever is
later, and the time the applicant applies for relief; and
the applicant has not previously filed for relief, as
specified.
This bill specifies that if the applicant meets the above
requirements and the other specified requirements, the
department shall waive the outstanding charges, fees, or
penalties, amend the title record, and issue a duplicate,
substitute, or new certificate of title, registration card, or
copy of a registration card with respect to the manufactured
home or mobilehome.
This bill states that for specified amounts owing, HCD may
establish a long term payment program of up to five years.
The department may provide that any amounts owing under the
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payment program shall constitute a lien in favor of the State
of California in the amount owing and shall be paid in full if
the manufactured home or mobilehome is subsequently
transferred.
This bill specifies that if the manufactured home or
mobilehome for which an application has been submitted and
approved is subject to local property taxation, the department
shall issue a conditional transfer of title. Upon
presentation of a completed tax liability certificate, if the
applicant meets specified requirements, the department shall
amend the title record and issue a duplicate, substitute, or
new certificate of title.
1.Existing law directs the county tax collector to issue a tax
clearance certificate or a conditional tax clearance
certificate when the tax collector finds that no local
property tax is due or is likely to become due, or that any
applicable local property taxes have been paid or are to be
paid in a manner not requiring the withholding of registration
or the transfer of registration. Existing law specifies that
a tax clearance certificate shall be used to permit
registration of used manufactured homes. (Rev. & Tax. Code
Sec. 5832.)
This bill states, prior to January 1, 2020, a person with a
specified conditional transfer of title may apply to the tax
collector to issue either a tax liability or tax clearance
certificate. The county tax collector shall issue a tax
liability certificate if the person pays the taxes reasonably
owed from the date of sale as shown on the conditional
transfer of title, without penalties or interest, and not to
exceed the amounts attributable one year prior to January 1,
2017.
This bill states that upon issuance of a tax clearance or
liability certificate, the applicant shall be listed as the
owner of record for all local property tax purposes and the
home shall not be subject to lien or seizure based on
specified unpaid taxes, penalties, or interest.
This bill does not relieve any owner other than the applicant
from tax liability, including penalties and interest, arising
from nonpayment prior to the date of sale, or prohibit a
county tax collector from collecting delinquent taxes,
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penalties, or interest due prior to the date of sale, from any
owner other than the applicant.
This bill makes other conforming changes to existing law.
COMMENT
1.Stated need for the bill
According to the author:
Mobilehomes are an important source of affordable housing
statewide. The Department of Housing and Community
Development (HCD) is responsible for titling mobilehomes.
Mobilehomes that were purchased new after July 1980 are
generally subject to local property taxes (LPT). Homes that
were purchased new prior to July 1980 are not subject to LPT,
but rather an "in lieu" vehicle license fee paid annually to
HCD. To transfer title of a mobilehome, an owner on the LPT
system must obtain a Tax Clearance Certificate from the County
Tax Collector. Similarly, if the mobilehome is on the
"in-lieu" system, past due fees must be paid to HCD prior to
transfer of title.
Mobilehomes are regularly sold on a somewhat informal basis.
For example, a buyer pays cash for the home, obtains a bill of
sale, and takes possession of the property. The problem
arises when the buyer subsequently tries to transfer title
into his or her name and discovers that the previous owner
fell behind on their tax bill. If the buyer is unable to pay,
then the title cannot transfer. As a result, some buyers are
in a situation where they paid for their home but have no
meaningful proof of ownership, which can cause a host of other
issues such as the inability to legally make repairs to the
home.
AB 587 establishes a tax abatement program for mobilehome
owners who are unable to transfer title of their homes into
their names due to tax delinquencies that may have been
incurred by prior owners. The abatement program would run for
three years, starting in January 2017. Eligible homeowners
would apply for the abatement program with HCD. If a
mobilehome is on the local property tax system, then the
County Tax Collector would also be involved in processing and
approving the tax abatement. AB 587 also refines the exiting
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title transfer process by requiring sellers to obtain a
transfer clearance certificate from HCD (indicating that HCD
may legally amend the title).
2.Increasing compliance with title and registration requirements
The three-year tax and fee amnesty program created by this bill
would incentivize mobilehome owners lacking legal title to their
home to obtain title and begin paying taxes and fees as required
by law. The Western Center on Law and Poverty, a co-sponsor of
this bill, states:
There is a growing crisis in California: thousands, perhaps
tens of thousands, of homeowners who believe they own their
manufactured home, but have never had title properly
transferred to them. As a result, these homeowners do not
have clear title to the homes. In many cases, without his or
her name on state and local records, the homeowner is
accumulating growing back taxes and fees that could stretch
into the thousands of dollars. Without title in their name,
these homeowners also face the risk that the prior owner could
re-appear and claim ownership. Moreover, they may be
prevented from selling, insuring, and obtaining permits to
safely maintain their homes.
. . .
A growing number of manufactured homes in California are being
transferred without the proper paperwork being filed with HCD
to transfer title into the new owner's name. Whether because
of lack of knowledge of the law, fraud by the seller, or other
reason, the result is that unpaid taxes and/or fees continue
to accumulate. Not only does this expose the new owner to
potentially thousands of dollars in taxes and penalties, but
it also puts a cloud on the homeowner's title.
. . .
AB 587 would establish an abatement program to give homeowners
an opportunity to bring title into their name without having
to pay certain outstanding amounts owing. It also provides
the framework for ensuring that in the future, the state and
local government has procedures in place to ensure that title
is properly transferred when a home is sold.
3.Opposition concerns
The tax amnesty program proposed in this bill would eliminate a
potential party from whom HCD or a local tax assessor could
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collect back property taxes and registration fees, and would
relieve current owners of their obligation to pay up to three
years' worth of back taxes and fees. Depending on the level of
applicants, this amnesty program could result in the loss of
significant revenue to affected counties and the department.
The California State Association of Counties, writing in
opposition, states:
We recognize that AB 587 would serve as an opportunity for a
large number of existing mobilehome owners to come into
compliance for registration and tax obligations, despite
lacking the necessary documentation to do so under the current
system. Any amnesty program requires a balance of losses in
light of potential benefits. As such, we respectfully request
consideration of the following:
further narrowing of the amnesty window from three to
two years, similar to other tax amnesty programs;
maintaining a level of obligation for taxes owed and
their associated penalties and interest; and
promoting future compliance for mobilehome owners to
remain in good standing for registration and tax
obligations.
Staff notes that this bill would not relieve a prior mobilehome
owner from their tax liabilities, including penalties and
interest, accruing prior to the date of sale, and would not
prohibit a county tax collector from collecting delinquent
taxes, penalties, or interest from that prior owner.
Support : Cabrillo Wetland Village HOA; Educational Community
for Homeowners; Fountain Valley Estates Homeowners Association;
GSMOL Chapter 708; GSMOL Chapter 1128; GSMOL Homeowners
Association at San Joaquin Village Mobile Park; Las Casas
Homeowners Association; Northern Santa Barbara County
Manufactured Homeowners Team; Oceanside Manufactured Homeowners
Alliance; Orcutt Ranch Home Owners Association; Prothero
Homeowners Association; Ranch Club Mobile Estates Homeowner
Association; San Luis Obispo Mobilehome Residents Assistance
Panel; San Marcos Mobilehome Residents Association; Sandpiper
Homeowner's Association; Santa Cruz County Manufactured/Mobile
Homeowners Association; Santee Mobilehome Owner's Action
Committee; Sea Oaks Mobilehome Park; Sonoma Valley GSMOL; Trico
Mobile Estates HOA; 295 Individuals
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Opposition : California Association of County Treasurers and Tax
Collectors; California State Association of Counties; Rural
County Representatives of California
HISTORY
Source : California Rural Legal Assistance Foundation; Golden
State Manufactured Home Owner's League (GSMOL); Western Center
on Law and Poverty
Related Pending Legislation : SB 434 (Allen, 2015) would require
the assessor to notify the Department of Housing and Community
Development (HCD), the legal owner, and each assessee whose
manufactured home is to be placed on the local assessment role.
This bill would also require HCD to transfer a manufactured home
that is subject to the vehicle license fee to local property
taxation when it is found that the home has been rebuilt and is
no longer mobile. This bill is pending in the Assembly
Committee on Housing and Community Development.
Prior Legislation :
AB 999 (Daly, Ch. 376, Stats. 2015) amended the Mobilehome
Residency Law to, among other things, authorize the management
of a mobilehome park to enforce a warehouse lien and to
designate a mobilehome for disposal without requiring the
management or other person enforcing the lien to pay past or
current vehicle license fees or to obtain a tax clearance
certificate. This bill also authorized the management of a
mobilehome park to dispose of an abandoned mobilehome and its
contents without requiring the management to pay past or current
vehicle license fees or to obtain a tax clearance certificate.
AB 1457 (Keeley, Ch. 772, Stats. 2001) relieved certain
mobilehome park residents of additional property tax liability
for escape assessments when the assessor failed to act, and
forgave certain outstanding tax bills, but prohibited refunds.
AB 984 (Correa, Ch. 23, Stats. 2000) See Background.
SB 415 (Craven, Ch. 506, Stats. 1991) required that unless
specified liens in favor of the State of California are paid to
HCD, the department is prohibited from amending the permanent
title record of a commercial coach, truck camper, or floating
home which is the subject of the lien for the purpose of
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transferring any ownership interest or transferring or creating
any security interest thereon and is prohibited from issuing any
duplicate, substitute, or new certificate of title or
registration card.
AB 2227 (Mays, Ch. 796, Stats. 1991) provides for a system of
taxing manufactured and mobilehomes first sold as new on or
after July 1, 1980.
Prior Vote :
Senate Transportation and Housing Committee (Ayes 10, Noes 0)
Assembly Floor (Ayes 78, Noes 0)
Assembly Appropriations Committee (Ayes 17, Noes 0)
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Housing and Community Development Committee (Ayes 7,
Noes 0)
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