BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        AB 999|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  AB 999
          Author:   Daly (D)
          Amended:  7/15/15 in Senate
          Vote:     21  

           SENATE TRANS. & HOUSING COMMITTEE:  8-0, 6/23/15
           AYES:  Beall, Allen, Bates, Gaines, Galgiani, Leyva, Mendoza,  
            Roth
           NO VOTE RECORDED:  Cannella, McGuire, Wieckowski

           SENATE JUDICIARY COMMITTEE:  6-0, 7/7/15
           AYES:  Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski
           NO VOTE RECORDED:  Anderson

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/17/15
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           ASSEMBLY FLOOR:  74-0, 5/22/15 (Consent) - See last page for  
            vote

           SUBJECT:   Mobilehomes:  disposal


          SOURCE:   Western Manufactured Housing Communities Association

          
          DIGEST:   This bill allows mobilehome park owners to dispose of  
          abandoned mobilehomes without being required to pay a  
          homeowner's unpaid property taxes, either through a specified  
          due process proceeding or through enforcement of a warehouse  
          lien.

          ANALYSIS: 








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          Existing law:

          1)Defines a mobilehome as "abandoned" when it is 1) located in a  
            mobilehome park on a site for which no rent has been paid for  
            the prior 60 days, 2) unoccupied, and 3) believed to be  
            abandoned by reasonable standards.  A mobilehome can be deemed  
            abandoned if it meets the above criteria and is also  
            uninhabitable due to total or partial destruction that cannot  
            be fixed.

          2)Establishes procedures for mobilehomes that have been  
            determined to be abandoned and allows mobilehome park  
            management (referred to hereafter as "management") to sell the  
            home and its contents following a court-supervised process.   
            This procedure includes posting and mailing a notice of belief  
            of abandonment, filing a court petition and receiving a  
            judicial declaration of abandonment at a court hearing, taking  
            an inventory of the contents of the mobilehome, and posting  
            and mailing notice of intent to sell the abandoned mobilehome  
            and its contents.  

            The management may not make money above the total amount due  
            to them, as determined by the court at the time of hearing on  
            the petition, from the public sale of the home and its  
            contents by this process.  The unclaimed amount above what  
            management is entitled to must be paid to the county treasurer  
            within 30 days, at which point it may be reclaimed by the  
            former homeowner for up to one year.

          3)Requires management to provide the purchaser with a copy of  
            the judgment of abandonment and evidence of the sale.  The  
            Department of Housing and Community Development (HCD) or the  
            Department of Motor Vehicles (DMV) are required to register  
            title to the purchaser after receipt of this paperwork.  The  
            title is required to be passed to the purchaser free of any  
            prior interest, including any security interest or lien,  
            excepting a lien of state due to nonpayment of fees and  
            penalties.

          4)Requires management to have a warehouse lien against a  
            mobilehome owner for the costs of dismantling and moving, if  
            appropriate, as well as storage, if the homeowner does not  
            respond to a notice of termination of tenancy within 60 days.   







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            A warehouse lien is superior to all other liens, except a lien  
            of state.

          This bill:

          1)Defines "dispose" or "disposal" as the removal and destruction  
            of an abandoned mobilehome from a mobilehome park, thus making  
            it unusable for any purpose.

          2)Adds the requirement that a mobilehome cannot be permanently  
            affixed to the ground to be considered abandoned. 

          3)Establishes procedural regulations to obtain a judicial  
            declaration of abandonment for purposes of disposal.  The  
            management is required to: 

             a)   Declare in the court petition that they will dispose of  
               the abandoned mobilehome, and therefore will not seek a tax  
               clearance certificate.
             b)   Declare whether they intend to sell the contents of the  
               abandoned mobilehome before its disposal.
             c)   Send the county tax collector and HCD a copy of the  
               court petition as notification that they plan to dispose of  
               the abandoned mobilehome.  

          4)Authorizes management to dispose of an abandoned mobilehome  
            following the judgment of abandonment, but not less than 10  
            days following the notice of disposal (below).

          5)Establishes procedural regulations for the disposal of an  
            abandoned mobilehome by management.  The management is  
            required to:

             a)   Enter the abandoned mobilehome and complete an inventory  
               of the contents and submit the inventory to the courts  
               within 10 days following a judgment of abandonment.
             b)   Post and mail a notice of intent to dispose of the  
               abandoned mobilehome and its contents, announcing the date  
               of disposal, to the homeowner, any known registered owner,  
               any known holder of security interest, the county tax  
               collector, and HCD.
             c)   Submit to the court, county tax collector, and HCD,  
               within 30 days of the date of disposal of an abandoned  
               mobilehome and its contents, a statement that the abandoned  







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               mobilehome and its contents were disposed of, with  
               supporting documentation.
             d)   Submit to the court, county tax collector, and HCD,  
               within 30 days of the date of disposal or the date of the  
               sale of its contents, a statement that the abandoned  
               mobilehome was disposed of with supporting documentation  
               and an accounting of the moneys received from the sale and  
               disposition of the money and the items contained in the  
               inventory.

          6)Relieves management from the obligation of obtaining a tax  
            clearance certificate to dispose of an abandoned mobilehome  
            and dispose of its contents, following these procedures.   
            However, if contents are sold, management will be subject to  
            the tax clearance certificate requirements.

          7)Authorizes any person having a right to possession of the  
            abandoned mobilehome to recover and remove it from the  
            premises, at any time prior to the disposal, upon payment to  
            the management of all rent or other charges due, including  
            reasonable costs of storage and other costs awarded by the  
            court.  Following receipt of payment and removal of the  
            mobilehome, management is required to immediately file an  
            acknowledgement of satisfaction of judgment.

          8)Relieves management from the obligation of obtaining a tax  
            clearance certificate after enforcing the warehouse lien and  
            obtaining approval from HCD to designate the mobilehome for  
            salvage, provided management notifies the county tax collector  
            and HCD and applies to have the mobilehome designated for  
            salvage.

          Comments
          
          Purpose of the bill.  According to the author and sponsor, each  
          year manufactured homes/mobilehomes are abandoned in  
          manufactured housing communities.  Under current law, management  
          must proceed with a warehouse lien to dispose of an abandoned  
          property.  These homes are often not worth the cost of  
          rehabilitation and must be salvaged (destroyed).  However,  
          before an owner may legally complete the warehouse lien, he or  
          she is required to pay any past-due personal property tax owed  
          on the property to the county tax collector. Frequently, the  
          taxes owed can exceed the value of the home.  The author and  







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          sponsor believe this is an unfair burden on the mobilehome park  
          owner.  

          The author and sponsor contend that this bill will benefit  
          landlords, residents, and tax collectors by creating a new  
          method to expeditiously deal with abandoned property, which may  
          ultimately allow for replacement of these abandoned,  
          tax-delinquent homes with newer homes.

          Disposal.  This bill creates a definition for disposal, namely  
          that to dispose of an abandoned mobilehome means to "remove it  
          from a mobilehome park and destroy it, thus making it unusable  
          for any purpose."  This is an important distinction to make  
          because the procedure authorized by this bill requires  
          management to destroy an abandoned mobilehome upon removal from  
          the park and does not allow management to resell it to others.   
          Sale of a mobilehome is still permissible under separate,  
          existing regulations.

          Tax liability.  Under existing law, owners of mobilehome parks  
          must follow a specified court-supervised abandonment proceeding  
          to dispose of a mobilehome when the homeowner has not only  
          stopped paying rent on the site, but apparently abandoned the  
          mobilehome itself, leaving it unoccupied and in a condition  
          rendering it uninhabitable and unattractive for resale.  In many  
          cases, the property is burdened with unpaid property taxes owed  
          by the homeowner - taxes which create an obstacle to disposal  
          and removal of the home by management.  This is because current  
          law requires the unpaid taxes to be paid off before title to the  
          mobilehome can be transferred to the park management, even for  
          the purpose of disposal.  This bill would allow management to  
          dispose of an abandoned mobilehome without first being required  
          to pay the unpaid property taxes on the home.

          This bill should not result in any tax abatement because under  
          existing law, the registered owner of the home ultimately  
          remains responsible for unpaid taxes after those taxes are  
          transferred from the secured roll to the unsecured roll for tax  
          collection.

          This bill does not change procedures for the sale of abandoned  
          mobilehomes.  Current law dictating priority for the proceeds of  
          the sale still applies when the park owner elects to sell an  
          abandoned mobilehome, thus ensuring that proceeds will go  







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          towards paying off tax liens or other obligations on the home.  

          This bill clarifies that management is only relieved of its  
          obligation to obtain a tax clearance certificate if the  
          mobilehome alone or the mobilehome and its contents are  
          disposed.  If the contents are sold, management is still  
          required to obtain a tax clearance certificate.  Any proceeds  
          from the sale of contents must go towards paying past due taxes,  
          as is required in current law for the sale of an abandoned  
          mobilehome.

          Due process for disposing of an abandoned mobilehome.  This bill  
          establishes due process procedures for disposal of abandoned  
          mobilehomes and their contents - provisions that largely track  
          those currently governing the sale of abandoned mobilehomes.  As  
          a prerequisite, the management must first post a notice of  
          belief of abandonment on the mobilehome for a minimum of 30 days  
          and mail copies of the notice to the homeowner and any known  
          lienholders.  To further protect due process for the homeowner  
          who may wish to contest abandonment, existing law requires the  
          management to file a petition for judicial declaration of  
          abandonment and serve it upon the homeowner, as well as any  
          known lienholders on the home.  Because the bill seeks to  
          relieve park management from clearing unpaid taxes on the home,  
          the bill requires management to declare its intent in the  
          petition to not seek a tax clearance certificate, and then  
          requires notification to the county tax collector and HCD by  
          mailing a first-class a copy of the petition.  If, at the  
          hearing on the petition, the petitioner shows sufficient  
          evidence that the criteria for abandonment are satisfied and no  
          party establishes a right to possession or security interest in  
          the mobilehome, then the court shall enter a judgment of  
          abandonment.

          Warehouse lien.  A warehouse lien is a procedure that management  
          may use to gain ownership of a home for termination of tenancy.   
          Under existing law, HCD approval of this process requires a free  
          and clear title.  This bill allows management to enforce a  
          warehouse lien without obtaining a tax clearance certificate to  
          designate the mobilehome for salvage.  While separate from the  
          court-monitored judicial declaration of abandonment process, the  
          warehouse lien process provides the registered owner with a  
          notice of termination and allows 60 days for a response.








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          FISCAL EFFECT:   Appropriation:    Yes         Fiscal  
          Com.:YesLocal:   Yes

          According to the Senate Appropriations Committee, this bill will  
          incur:

          1)Minor costs to HCD to process notices of mobilehome disposal  
            and other specified information, offset by fee revenues.  
            (Mobilehome Revolving Fund)

          2)Minor annual losses of delinquent mobilehome property tax  
            revenues, likely in the low tens of thousands annually, by  
            relieving management from paying back taxes and fees prior to  
            taking possession of a mobilehome for disposal.  Property tax  
            revenues that would otherwise have accrued to schools must be  
            backfilled by the General Fund, pursuant to Proposition 98  
            minimum funding guarantees. 

          3)Minor annual fee revenue gains, likely in the low tens of  
            thousands annually, related to the new fee of up to $45 that  
            must be paid to HCD with a notice of disposal. (Mobilehome  
            Revolving Fund)

          4)Non-reimbursable mandate costs related to the creation of a  
            new crime of perjury.  The bill requires specified information  
            for completing the disposal process to be submitted to HCD  
            under penalty of perjury.


          SUPPORT:   (Verified8/19/15)


          Western Manufactured Housing Communities Association (source)
          California Mobilehome Parkowners Alliance



          OPPOSITION:   (Verified8/19/15)


          None received

          ASSEMBLY FLOOR:  74-0, 5/22/15
          AYES:  Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla,  







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            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, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, Patterson, Perea, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark  
            Stone, Thurmond, Ting, Wagner, Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Alejo, Jones, O'Donnell, Olsen, Waldron,  
            Weber

          Prepared by:Christine Hochmuth / T. & H. / (916) 651-4121
          8/19/15 21:04:23


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