BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 999|
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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,
AB 999
Page 8
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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