BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 587|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 587
Author: Chau (D)
Amended: 8/15/16 in Senate
Vote: 27
SENATE TRANS. & HOUSING COMMITTEE: 10-0, 6/14/16
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth
NO VOTE RECORDED: Wieckowski
SENATE JUDICIARY COMMITTEE: 6-1, 6/28/16
AYES: Jackson, Anderson, Hertzberg, Leno, Monning, Wieckowski
NOES: Moorlach
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 78-0, 6/1/15 - See last page for vote
SUBJECT: Mobilehomes: payments: nonpayment or late payments
SOURCE: California Rural Legal Assistance Foundation
Golden State Manufactured-Home Owners
League
Western Center on Law and Poverty
DIGEST: This bill creates an abatement program for mobilehome
owners who cannot transfer title into their names due to
delinquent taxes and fees that may have been incurred by prior
owners.
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ANALYSIS:
Existing law:
1)Requires mobilehome park management, prior to February 1 of
each year, to provide a notice to all homeowners which
contains, among other things, the following:
a) The Mobilehome Residency Law establishes the rights and
responsibilities of homeowners and park management and a
copy can be obtained from management at no charge.
b) A list of rights and responsibilities for homeowners and
park management, including but not limited to the
following: management may require certain upgrades; the
sale of a mobilehome; management's rights to enter the
space upon which a mobilehome resides and for what purpose;
and rules and regulations for improvements or alterations
to a mobilehome.
2)Requires mobilehomes sold as new prior to July 1, 1980, to pay
a vehicle license fee (VLF), and requires annual payment to
the Department of Housing and Community Development (HCD).
Non-payment of the VLF constitutes a lien on the mobilehome,
and prohibits HCD from issuing a duplicate or new certificate
of title or registration card or amending the permanent title
record of the mobilehome that is the subject of that lien.
3)Provides that mobilehomes not subject to the VLF are subject
to local property tax (LPT) until the applicant presents a tax
clearance certificate (TCC) or conditional TCC issued by the
county tax collector. The county tax collector shall issue a
TCC to a mobilehome owner if specified requirements are met.
A TCC may indicate that no LPT is due or is likely to become
due, or that any applicable LPT has been paid or will be paid
in a manner not requiring the withholding of registration or
the transfer of registration.
4)Requires specified information to be included in a rental
agreement between the management and the homeowner,
establishing the terms and conditions of a park tenancy.
Management of a mobilehome park may terminate a tenancy for
failure of the homeowner or resident to comply with a local
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ordinance or state law or regulation relating to mobilehomes
within a reasonable time after the homeowner receives a notice
of noncompliance from the appropriate governmental agency.
5)Prohibits any person from using or causing to be used, or
permitting to be used for occupancy, a mobilehome that does
not conform to HCD's registration requirements. Requires a
tenancy to be terminated by the management for failure of the
homeowner or resident to comply with a state law or regulation
within a reasonable amount of time after the homeowner
receives a notice of noncompliance from the appropriate
governmental agency.
This bill creates an abatement program for mobilehome owners who
cannot transfer title into their names due to delinquent taxes
and fees that may have been incurred by prior owners.
Specifically, this bill:
1)Amends the Management Notice to All Homeowners in the
following ways: adds that when a mobilehome is sold, the owner
is required to transfer the title to the buyer; adds that in
California, mobilehome owners must pay annual property tax to
the county tax collector fee in lieu of taxes to HCD; and adds
that information on registration, titling, and taxes can be
found at the HCD Web site and provides a phone number,
provides the Web site for a listing of the county tax
collector, and instructs homeowners to call the local county
government.
2)Creates an abatement process for mobilehome owners if the
following requirements are met:
a) The applicant is not currently the registered owner.
b) The applicant provides documentation demonstrating
ownership and the date of acquisition of ownership
interest, to HCD's satisfaction.
c) The application is made prior to December 31, 2019.
d) The applicant pays any charges assessed by HCD during
the period between the times the applicant took ownership
interest or December 31, 2015, whichever is later, and the
time the applicant applies for relief.
e) Any lien under the Property Tax Postponement program has
been satisfied.
f) The applicant has not previously filed for relief under
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this section.
3)Requires HCD to 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, if the applicant meets the
requirements of the abatement program and is subject to the
VLF.
4)Provides that HCD may establish a long-term payment program of
up to five years, and may take out a lien in favor of the
state in the amount owing after the applicant takes ownership,
which must be paid in full if the mobilehome is later
transferred. Failure to make payments required by the plan is
a violation of the program and HCD may suspend, revoke, or
cancel the certificate of title.
5)Provides that, if the applicant is eligible for the abatement
program and the mobilehome is subject to the LPT, HCD must
issue a conditional transfer of title. Requires HCD to amend
the title record and issue a duplicate, substitute, or new
certificate of title if the applicant presents a completed tax
liability certificate and meets the requirement of the
abatement program.
6)Requires a county tax collector to issue a tax liability or
tax clearance certificate to a person with a conditional
transfer of title who applies for the certificate prior to
January 1, 2019, and pays the reduced taxes under the
abatement program. The reduced taxes include those 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,
2016. Upon the issuance of a tax liability certificate, the
applicant shall be listed as the owner of record for all LPT
tax purposes and the home shall not be subject to lien or
seizure based on any taxes abated pursuant to this program.
7)Provides that the abatement program does not relieve any owner
other than the applicant from tax liability, including
penalties and interest, arising from the non-payment prior to
the date of sale and does not prohibit a county tax collector
from collecting delinquent taxes, penalties, or interest due
prior to the date of sale, from any owner other than the
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applicant.
8)Provides that on or after January 1, 2020, it is unlawful for
any person to use, cause, or permit to be used for occupancy,
any mobilehome, wherever the mobilehome is located, that does
not conform to HCDs registration requirements, provided that
HCD has provided notice to the occupant of the registration
requirements and any registration fees due.
Comments
1)Purpose. According to the author, the problem this bill seeks
to address has been festering for more than 30 years. There
are thousands, perhaps tens of thousands, of homeowners who
believe they own their homes, but never had title properly
transferred to them. Mobilehomes are an important source of
affordable housing statewide and are regularly sold on an
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
prior owner fell behind on their tax bill. If the buyer is
unable to pay, 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. This bill creates a tax abatement program for
mobilehome owners who are unable to transfer title of their
home into their name due to tax delinquencies incurred by
prior owners. The program would run for three years,
beginning January 2017, and eligible homeowners would apply
through HCD.
2)Background. HCD is responsible for titling and registering
mobilehomes. Mobilehomes purchased before July 1, 1980, are
treated as vehicles and subject to a VLF rather than an LPT.
Mobilehomes purchased after July 1, 1980, however, are subject
to LPT. Before transferring title of a mobilehome, a buyer of
a mobilehome subject to LPT must obtain a TCC from the county
tax collector, indicating that all property taxes have been
paid. If a mobilehome is subject to VLF, the buyer must pay
all fees and penalties to HCD before title can be transferred.
Non-payment of VLF constitutes a lien on the mobilehome in
favor of the state, and nonpayment of LPT means the county tax
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collector can pursue collection of the delinquent LPT in the
same way as other delinquent taxes on the unsecured roll. If
either of these situations arises, HCD cannot amend the title
to reflect the new owner's name, and therefore the new owner
cannot obtain proof of ownership over the home.
Without proper title to a mobilehome, a buyer may face a
number of issues. Current law provides that the buyer may be
subject to eviction from a mobilehome park because parks are
prohibited from renting to homes that do not conform to HCD's
registration requirements. Additionally, buyers cannot
legally make repairs to the home, insure their home, or
transfer ownership to another person.
3)Widespread problem. Buying and selling mobilehomes often
transpires informally, which means that buyers and sellers may
not be aware of delinquent taxes and fees that prevent the
transfer of title. Presently, there are few notification
requirements for VLF delinquencies, and a buyer may only
become aware of a delinquency when he or she attempts to
transfer title of an already purchased mobilehome. If a
seller does not pay these delinquent fees and a buyer is
unable to do so, there is little else the buyer can do.
This abatement program allows a buyer to transfer title in his
or her name in instances where the mobilehome is subject to
delinquent fees or taxes. For mobilehomes subject to VLF,
applicants must first prove ownership to HCD and, upon the
payment of reduced charges assessed by HCD or entry into a
payment plan, title could transfer. For mobilehomes subject
to LPT, HCD would issue the applicant a "conditional title"
that is then taken to the county tax collector. Once the
applicant pays a reduced LPT pursuant to the abatement
program, the tax collector would update their property tax
records and issue a tax liability certificate. This tax
liability certificate would permit HCD to transfer title.
The abatement program would not relieve any prior owners from
liability for the non-payment of taxes, and does not prohibit
a county tax collector from collecting delinquent taxes,
penalties, or interest due prior to the date of sale, from any
owner other than the applicant. This bill further clarifies
that after January 1, 2020, it will be unlawful for anyone to
use a mobilehome that does not conform to HCD's registration
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requirements, provided that HCD has provided notice to the
occupant of the registration requirements and any registration
fees due.
4)Opposition. The California Association of County Treasurers
and Tax Collectors (CATTC) oppose this bill unless amended to
remove any abatement of taxes, which is the central purpose of
the bill. CATTC disputes that people purchasing mobilehomes
in California do not understand the necessary steps to
property transfer title and ownership of mobilehomes. CATTC
contends that by removing a county's ability to enforce tax
collection on taxes in arrears and assess penalties in
interest, this bill would remove the fiscal incentive to pay
taxes in a timely manner. The California State Association of
Counties proposes reducing the length of the program to two
years, 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
HCD administrative costs of approximately $360,000 annually
for three years to process an estimated 10,000 titling and
registration applications each year for the duration of the
program. These costs would likely be offset by application
fee revenues. (Mobilehome-Manufactured Home Revolving Fund)
Unknown, potentially significant, foregone state revenues a
result of the requirement that HCD waive specified past due
charges, fees, and penalties if an applicant meets specified
requirements. This impact would be partially mitigated to the
extent a portion of these revenues would have otherwise
remained uncollected in the absence of the abatement program.
(General Fund, various mobilehome-related special funds)
Unknown significant foregone property tax revenues as a result
of the specified limit on the amount of delinquent taxes that
an applicant would pay to the county tax collector in exchange
for a tax clearance or liability certificate. This impact
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would be partially mitigated to the extent a portion of these
revenues would have otherwise remained uncollected in the
absence of the abatement program. Senate Appropriations staff
notes that any impacts to the K-14 school share of the
property tax revenues are generally backfilled by the State
General Fund. (General Fund, local funds)
Unknown foregone local revenues as a result of the requirement
that county tax collectors waive all property tax penalties
and interest that would otherwise be owed by eligible
participants in the abatement program. (local funds)
Unknown reimbursable state-mandated local costs for county tax
collectors to establish administrative procedures and issue
tax clearance or liability certificates to eligible
participants in the abatement program. (General Fund)
SUPPORT: (Verified8/12/16)
California Rural Legal Assistance Foundation (co-source)
Golden State Manufactured-Home Owners League (co-source)
Western Center on Law and Poverty (co-source)
Cabrillo Wetland Village HOA, Inc.
Educational Community for Homeowners
Fountain Valley Estates Homeowners Association
Golden State Manufactured-home Owners League, Chapter 1128
Golden State Manufactured-home Owners League, Chapter 708
Golden State Manufactured-home Owners League, Chapter 776
Golden State Manufactured-home Owners League, Sonoma Valley
Los Casas Homeowners Association
Northern Santa Barbara County Manufactured Homeowners Team
Oceanside Manufactured Homeowners Alliance
Orcutt Ranch Home Owners Association
Prothero Mobile Estates Homeowners' Association
Ranch Club Homeowners Association
San Joaquin Village Mobile Park Homeowners Association
San Louis Obispo Mobilehome Residents Assistance Panel
San Marcos Mobilehome Residents Association
Santa Cruz County Manufactured/Mobile Homeowners Association
Santee Mobile Home Owner's Action Committee
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Sea Oaks Mobilehome Park Homeowners Association
Sierra Homeowners Association
Trico Mobile Estates Homeowners Association
188 individuals
OPPOSITION: (Verified8/12/16)
California Association of County Treasurers and Tax Collectors
California State Association of Counties
Rural County Representatives of California
ASSEMBLY FLOOR: 78-0, 6/1/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Gipson, Obernolte
Prepared by:Alison Dinmore / T. & H. / (916) 651-4121
8/15/16 20:10:01
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